DS9 Document EFTA00807802

1 2 3 4 5 6 7 8 9 I0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RUTAN & TUCKER, LLP Richard K. Howell (State Bar No. [email protected] 1 Anton • ou evar Costa Mcsa, C Telephone: Facsimile: ate Bar No. Bar No. , Suite 1400 is -1931 Attorneys for Plaintiff PROTEMPO LIMITED ELECTRONICALLY FILED Superior Court of California. County of San Francisco 12/22/ 2O17 Clerk of the Court BY DAVID YU! N Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN FRANCISCO PROTEMPO LIMITED, Plaintiff, vs. ALIPHCOM, INC. d/b/a JAWBONE, a California corporation, HOSAIN RAHMAN, an individual, JASON CHILD, an individual, and DOES 1 through 10, inclusive Defendants. Case No. CGC-17-559617 SECOND AMENDED COMPLAINT FOR: (1) Promissory Fraud; (2) Fraud and Intentional Deceit; (3) Negligent Misrepresentation; (4) Breach of Contract (Direct Claims); (5) Unjust Enrichment; (6) Breach of Warranty; (7) Conversion; (8) Account Stated; (9) Open Book Account; (10) Breach of Contract (Assigned Claims); (11) Account Stated (Assigned Claims); (12) Open Book Account (Assigned Claims); (13) Violation of Penal Code section 496(a). RlItail 11 Tucker, LLP attorneys et taw 2152/033019-0002 11786640.1 912/2107 SECOND AMENDED COMPLAINT EFTA00807802 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiff Protempo Limited ("Protempo") alleges the following on information and belief: INTRODUCTION I. This action concerns the fraudulent and otherwise wrongful conduct of defendants AliphCom, Inc. cl/b/a Jawbone ("Jawbone"), its Chief Executive Officer Hosain Rahman ("Rahman"), and its Chief Financial Officer, Jason Child ("Child"), in making or directing the making of materially false statements and promises to Protempo before Protempo contracted with Jawbone, to induce Protempo to pay Jawbone at least $1.9 million, making or directing the making of false statements and promises of performance in the parties' contract itself, and thereafter breaching that contract. Rahman and Child knew the statements were false when they were made, and knew Jawbone would not and could not perform when the false promises were made, but nevertheless participated in, directed, and authorized the making of the false statements and promises. Then, when Protempo and Jawbone entered into their agreement, Jawbone breached the agreement in numerous respects. As a result of Jawbone, Rahman and Child's fraudulent and wrongful conduct, Protempo has incurred millions of dollars in damages for which Protempo now seeks to hold the Defendants accountable. PARTIES 2. Protempo is, and at all material times mentioned herein was, a New Zealand corporation authorized to do business and doing business in California. 3. Jawbone is, and at all relevant times herein mentioned was, a California corporation organized and existing under and by virtue of the laws of the State of California, and which has its principal place of business in the State of California, County of San Francisco. 4. Rahman is, and at all relevant times mentioned herein was, an individual residing in the State of California, County of San Francisco. Rahman, at all relevant times mentioned herein, was serving as the Chief Executive Officer of Jawbone. 5. Child is, and at all relevant times mentioned herein was, an individual residing in the State of California, County of San Francisco. Child, at all relevant times mentioned herein, was serving as the Chief Financial Officer of Jawbone. 6. Protempo is presently unaware of the true names and capacities of defendants Does &Wart & Tucker. LLP attorneys et taw 2152(01)019-0002 11786640 1 412/21/17 SECOND AMENDED COMPLAINT EFTA00807803 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 through 10, inclusive, and therefore sues these defendants by such fictitious names. Protempo will amend this Complaint to show the true names and capacities of such fictitiously-named defendants when the same have been ascertained or upon proof at trial. Protempo is informed and believes and based thereon alleges that each of the fictitiously-named defendants is in some capacity legally responsible for the events and damages alleged herein. 7. At all relevant times mentioned herein, certain of the defendants, including the Doe defendants, were acting as the partners, agents, servants, employees, alter egos, successors or predecessors in interest, or conspirators, of others of the defendants, and were acting within the course and scope of such relationship, with the knowledge, express or implied, of each such other named defendant. Protempo sometimes refers to Jawbone, Rahman, Child and Does 1 through 10 herein collectively as "Defendants." OPERATIVE FACTS 8. Protempo contracts with electronics manufacturers to remarket excess or trailing- edge but still functional and salable products. 9. Jawbone was at one time considered a richly-valued maker of wearable gadgets and wireless speakers. By mid-2016, however, unbeknownst to Protempo, Jawbone was on increasingly shaky financial footing, as it struggled to pay key vendors and keep inventory in stock. 10. On or about April 29, 2016, Protempo entered into an agreement (the "Original Agreement") with Jawbone whereby Jawbone promised to provide brand-new products free and clear of all encumbrances in exchange for payment by Protempo. Child signed the Original Agreement on behalf of Jawbone. A true and correct copy of the Original Agreement is attached hereto and incorporated herein as Exhibit A. 11. On June 2, 2016 and June 9, 2016, the parties amended the Original Agreement to add additional products which Jawbone would sell to Protempo. True and correct copies of these amendments arc attached hereto and incorporated herein as Exhibits B and C. 12. In August and September 2016, both Rahman and Child engaged in and directed negotiations with Protempo for entry into a third amendment to the Original Agreement to sell RuLin L Tucker, LLP attorneys at law 2152/0330194002 11786640.1 al2/21/17 -3- SECOND AMENDED COMPLAINT EFTA00807804 1 2 3 4 5 6 7 8 9 10 I1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Protempo what Jawbone represented was an additional $2.1 million of purportedly brand-new, unencumbered products, ready for distribution. However, during the course of those negotiations, Rahman and Child made and directed, approved, ratified and encouraged the making of several misrepresentations and false promises, with the knowledge — shared by Rahman and Child and others at Jawbone — that the statements were false and that Jawbone would not and could not perform as promised. 13. On or about September II, 2016, Rahman and Child directed Steve Jordan of Jawbone in writing and otherwise to encourage Protempo to immediately purchase a remaining Jawbone inventory of products — which Jawbone had set aside to meet customer warranty claims — in Tijuana, Mexico, so that Jawbone could quickly receive from Protempo a cash infusion to continue Jawbone's flagging operations and meet overdue payment obligations to Jawbone's vendors. 14. In a September 12, 2016 e-mail, Mr. Jordan wrote to Adam Brown of Protempo that Rahman and Child "are looking to sell all remaining customer care units" to Protempo, attaching an inventory of new, customer care units supposedly available for sale to Protempo. 15. On September 14, 2016, following the parties' negotiations and Defendants' making of the false statements and promises alleged herein, Jawbone and Protempo entered into their third amended agreement ("Amended Agreement") whereby Jawbone promised to sell an additional $2,121,161 worth of products to Protempo. A true and correct copy of the Amended Agreement is attached hereto and incorporated herein as Exhibit D. 16. More specifically, between August 27, 2016 and September 14, 2016 (among other times), at both Rahman's and Child's direction, and with their approval, ratification and encouragement, Jawbone made numerous false statements and promises to Protempo, including, but not limited to, the following: • During a face-to-face meeting in San Francisco on or about August 27, 2016. Mr. Jordan of Jawbone informed Adam Brown. Adam Burke and Mark Priscott of Protempo that Jawbone had an inventory of brand-new products available for sale to Protempo. On or about September 10. 2016. and again on or about September Rutan a Tucker. LIP attorneys at taw 2152/011019.0002 11786640.1 012421/17 -4- SECOND AMENDED COMPLAINT EFTA00807805 11, 2016, via e-mail and video conference calls, Mr. Jordan of Jawbone represented to Adam Brown and Mark Priscott of Protemno that the products discussed on August 27,2016 were new, functioning. re-sellable, and available for immediate purchase by and delivery to Protemno, and were suitable for resale to Protempo's network of distributors. o These representations were further set forth at Exhibit A of the Amended Agreement, identifying $2,121,161 worth of specified products to be sold S and made available to Protempo. The Amended Agreement also 9 incorporated and reaffirmed the representations set forth at Section 5.3.1, I 0 subsection (c) of the Original Agreement, stating that "the Products arc 1 1 brand new and are not refurbished or used stock." The Amended 12_ Agreement additionally incorporated and reaffirmed the Original 13 Agreement's statement that "Jawbone holds all right, title, and interest in 14 and to the Products, and the Products are free and clear of all liens, security 15 interest, and other third party claims to ownership of the Products" (Ex. A, 16 § 5.2.1(b)). 17 o The true facts — of which Rahman and Child were aware when they directed 18 the false representations be made, and when Child signed the Amended 19 Agreement, and Rahman directed that the Amended Agreement be signed 20 were that: 21 • The products were subject to a lien in favor of North American 22 Production Sharing, Inc. ("NAPS"), as a result of Jawbone's failure 23 to pay hundreds of thousands of dollars in storage and handling fees; 24 • As a result of Jawbone's intention not to pay and failure to pay its 25 outstanding invoices to NAPS, NAPS would not release the 26 products to Protempo; 27 • Jawbone did not have $2,121,161 worth of products available for 28 Protempo, and several months after entry into the Amended Pular & LLP attorneys a: ISW 2152/033019-0002 11736640.1 312/21117 -5- SECOND AMENDED COMPLAINT EFTA00807806 1 9 10 1 1 I2 14 I5 16 17 18 19 20 21 22 23 24 25 26 27 28 Agreement, had only delivered a fraction of the products Protempo was promised; • Jawbone was short thousands of units to be provided to Protempo, many of which were units that were not fit for retail sales and did not pass quality tests; and, • Many of the same products promised to Protempo were already committed to use by Jawbone to fulfill customer warranty claims. • During a September 11.2016 video conference. Mr. Jordan reiterated to Adam Brown of Protempo that the products were brand-new, in working order. and could be and would be subject to warranties Jawbone would honor as to Protempo's distributor customers. o These representations were further set forth in the Amended Agreement, which provided (as incorporated from the Original Agreement and reaffirmed in the Amended Agreement) that "the Products are brand new and are not refurbished or used stock" (Ex. A, § 5.2.1(c)); and that "Jawbone offers a limited warranty to end-user purchasers of its Products . . . . Distributor shall direct end-user purchasers to Jawbone for resolution of any Product warranty claims" (Ex. A, § 5.2.2). o The true facts — of which Rahman and Child were aware when they directed the false representations be made, and when Child signed the Amended Agreement, and Rahman directed that the Amended Agreement be signed — were that: • The products were significantly aged, and were highly defective or otherwise inoperative, and could not be re-sold; • The products had an exorbitantly high rate of consumer complaints, thus reinforcing that the products were significantly faulty and/or not in working condition; and, • Jawbone was not honoring warranties on its products, and had no Rutan 6 Tuck•,. LIP allOmayS at law 2152,0330194002 11786(40.1 912/21/11 -6- SECOND AMENDED COMPLAINT EFTA00807807 S I 2 I5 16 17 IS 19 20 21 22 23 24 25 26 27 28 intention of honoring warranties on the products Defendants intended that Protempo purchase. • During the e-mails, videoconferences and meetings taking place on September 10, 11 and 12, 2016 (among other times), Mr. Jordan and Matt DeBenedetti, among others at Jawbone, represented to the identified Protempo emaoyees that the products Jawbone intended that Protempo purchase would be delivered or made available by Jawbone in a timely fashion, and in time for Protempo to have the products for the crucial holiday sales season. o Exhibit A to the Amended Agreement likewise identified $2,121,161 worth of specified products to be sold and made immediately available to Protempo. o The true facts — of which Rahman and Child were aware when they directed the false representations be made, and when Child signed the Amended Agreement, and Rahman directed that the Amended Agreement be signed — were that: ■ Shipment of the products was dependent on funding from Jawbone; and, ■ Jawbone would not be able to timely pay its vendors, which would delay shipment of the products. 17. Rahman and Child knew these statements were false and that Jawbone would not and could not keep these promises to Protempo; nevertheless, Child signed the parties' agreements, and Rahman directed that the agreements be signed with knowledge of their falsity and Jawbone's intention not to perform and inability to perform. 18. Immediately following the parties' entry into the Amended Agreement, Protempo paid Jawbone the full required $1,910,794, and expected to timely receive the brand-new, unencumbered products it had been promised and had purchased. 19. Only after Jawbone had taken Protempo's $1,910,794 payment did Protempo discover that Defendants' representations and promises were false. Rutin it Tucker. LLP attorneys at law 2152/033019-0002 117866401a12/21)11 -7- SECOND AMENDED COMPLAINT EFTA00807808 1 2 3 4 5 6 7 8 9 10 11 12 13 14 I5 16 17 18 19 20 21 22 23 24 25 26 27 28 20. NAPS refused to release the products Protempo had purchased absent payment in full of Jawbone's $450,000 debt for overdue storage and handling fees. Despite repeated requests by Protempo to Jawbone to pay Jawbone's debt to NAPS so Protempo could obtain the products it had purchased, Jawbone refused, leaving Protempo with no viable alternative but to pay NAPS the $450,000 on Jawbone's behalf to obtain release of Protempo's products and allow Protempo to fulfill its own obligations to downstream distributors. NAPS and Protempo executed a contract ("Assignment of Debt") by which NAPS assigned its entire right, title, and interest in Jawbone's debt to Protempo. 21. As a result of Jawbone's false representations and promises, and its failure to pay NAPS to allow release of the products, the products were delivered to Protempo late, causing Protempo to miss out on sales during the crucial holiday season and to lose Protempo's largest deal with a distributor. 22. When Protempo finally received and could inspect the products it purchased under the Amended Agreement, it discovered that $129,624 worth of products were missing. Additionally, after taking delivery of the products and providing them for distribution, Protempo discovered for the first time that numerous batches of Jawbone's UP2 wearable fitness product were dead on arrival (including, for example, dead irreplaceable batteries and other malfunctions) and the products experienced massive failure rates. 23. Rahman, Child and others at Jawbone nevertheless led Protempo to believe otherwise and withheld information from Protempo in negotiating the parties' agreement, committing a blatant "bait and switch" involving millions of dollars of faulty and encumbered products in a desperate attempt to obtain the immediate cash infusion Jawbone required to pay its mounting debts. 24. Jawbone's actions have caused significant injury to Protempo. To date, $1,234,621 worth of Jawbone's UP2 product purchased by Protempo under the parties' agreements are defective and unsellable. In addition to its resulting financial damages, Protempo has suffered significant disruptions to its business and to several of its important relationships with distributors and others. Jawbone has also refused to reimburse Protempo the $450,000 debt that Protempo was Rut an a newer. Li, at f OrneyS at law 2152/033019-0002 1146640.1 e12121111 -8- SECOND AMENDED COMPLAINT EFTA00807809 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 forced to pay NAPS in order to secure the release of the purchased products; failed to deliver the missing products totaling $129,624; and failed to take any action to remedy the product shortfall, such as refunding Protempo's overpayment or delivering the promised products. Jawbone has also failed to fix or otherwise address or remedy the numerous defective products it sold to Protempo. 25. Protempo's damages are on-going and far exceed the jurisdictional minimum of this Court. Despite oral and written demands by Protempo, Defendants have failed and refuse to compensate Protempo for its damages. FIRST CAUSE OF ACTION (For Promissory Fraud Against All Defendants) 26. Protcmpo reallcges and incorporates by reference Paragraphs 1 through 25, above, as if set forth in their entirety. 27. Between August and September 2016, at both Rahman's and Child's direction, and with their involvement, approval, ratification and encouragement, Defendants made the false promises of performance, orally (in face-to-face meetings and phone calls), and in writing (including by e-mail), to Protempo's identified employees, including but not limited to Adam Brown, Mark Priscott, and others, as set forth at Paragraph 16 of this Complaint. 28. At the time Defendants made the promises to Protempo, Defendants had no intention of performing them. 29. Defendants made their promises with the intent to induce Protempo to pay its $1.9 million to Jawbone and enter into the Amended Agreement. 30. Protempo, at the time the promises were made and at the time Protempo took the actions herein alleged, was ignorant of Defendants' secret intention not to perform, and Protempo could not, in the exercise of reasonable diligence, have discovered Defendants' secret intention. In reliance on Defendants' promises, Protempo paid its $1.9 million to Jawbone and entered into the Amended Agreement. If Protempo had known of Defendants' actual intentions, Protempo would not have taken such actions. 31. Defendants failed to abide by their promises as herein alleged, including but not Ru1an a Tucht,1.1.1. attcrneys et low 2152/033019.0002 11786640107121/17 -9- SECOND AMENDED COMPLAINT EFTA00807810 1 2 3 4 5 6 7 8 9 10 11 12 13 14 I5 16 17 18 19 20 21 22 23 24 25 26 27 28 limited to as alleged at Paragraph 16 of this Complaint. 32. As a proximate result of Defendants' fraudulent conduct, Protempo has and \\ill continue to suffer general, consequential, and compensatory damages, as alleged above. 33. The acts of Defendants were done with a conscious disregard of Protempo's rights, and with the specific intent to defraud Protempo into providing an up-front payment of $1,910,794 and to pay other sums, such as to constitute fraud, oppression and malice under California Civil Code section 3294. By virtue of Defendant's willful and wrongful conduct, Protempo is entitled to punitive and exemplary damages. SECOND CAUSE OF ACTION (For Fraud And Intentional Deceit Against All Defendants) 34. Protempo realleges and incorporates by reference Paragraphs 1 through 33, above, as if set forth in their entirety. 35. Between August and September 2016, at both Rahman's and Child's direction, and with their involvement, approval, ratification and encouragement, Defendants made the false statements and misrepresentations, orally (in face-to-face meetings and phone calls), and in writing (including by e-mail), to Protempo's identified employees, including but not limited to Adam Brown, Mark Priscott, and others, as set forth at Paragraph 16 of this Complaint. 36. The representations made by Defendants were in fact false, and the true facts were as set forth at Paragraph 16. 37. When Defendants made their representations, they knew them to be false and made these representations with the intention to deceive and defraud Protempo and to induce Protempo to pay its $1.9 million to Jawbone and enter into the Amended Agreement, or with the expectation that Protempo would so act. 38. Protempo, at the time Defendants made their representations and at the time Protempo took the actions herein alleged, was ignorant of the falsity of Defendants' representations and believed them to be true. In reliance on these representations, Protempo was induced to and did pay its $1.9 million to Jawbone and entered into the Amended Agreement. Had Protempo known the actual facts, it would not have taken such actions. Protempo's reliance Roan A Tucker. LIP AffOrlityS at law -10- 21321033019-0002 11786601 012/21/17 SECOND AMENDED COMPLAINT EFTA00807811 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 on Defendants' representations was justified because, inter alia, Protempo could not, in the exercise of reasonable diligence, have discovered the true facts (for example, the products at issue were stored on other continents, and their condition was known only to Defendants, and Protempo was without the necessary internal information for Jawbone). 39. As a proximate result of Defendants' fraudulent conduct, Protempo has and will continue to suffer general, consequential, and compensatory damages, as alleged above. 40. The acts of Defendants were done with a conscious disregard of Protempo's rights, and with the specific intent to defraud Protempo into providing an up-front payment of $1,910,794 and to pay other sums, such as to constitute fraud, oppression and malice under California Civil Code section 3294. By virtue of Defendant's willful and wrongful conduct, Protempo is entitled to punitive and exemplary damages. THIRD CAUSE OF ACTION (For Negligent Misrepresentation Against All Defendants) 41. Protempo rcalleges and incorporates by reference Paragraphs 1 through 40 above, as if set forth in their entirety. 42. Between August and September 2016, at both Rahman's and Child's direction, and with their involvement, approval, ratification and encouragement, Defendants made the false statements and misrepresentations, orally (in face-to-face meetings and phone calls), and in writing (including by e-mail), to Protempo's identified employees, including but not limited to Adam Brown, Mark Priscott, and others, as set forth at Paragraph 16 of this Complaint. 43. As set forth at Paragraph 16 of this Complaint, the information Defendants provided to Protempo was in fact false. The true facts, of which Protempo was ignorant, were that (i) the products were subject to NAPS' claim for substantial unpaid fees; (ii) NAPS would not release the products until its unpaid fees were paid; (iii) Jawbone did not have the inventory to fulfill its agreement with Protempo; and (iv) many of the products were inoperative and highly defective. 44. If Defendants did not intentionally lead Protempo to believe false information as alleged above, then Defendants had no reasonable grounds to believe the information they Rutin 8 Tucker, LLP 8110/1/0y$ at law 3152/071019.0002 11786610.1 812/21/17 -Il- SECOND AMENDED COMPLAINT EFTA00807812 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 provided was true. 45. Defendants intended for Protempo to rely on such negligent misrepresentations, and Protempo did reasonably rely on the misrepresentations as alleged above. 46. As a direct, proximate, and foreseeable result of Defendants' conduct, Protempo has and will continue to suffer general, consequential, and compensatory damages, as alleged above. FOURTH CAUSE OF ACTION (DIRECT CLAIMS) (For Breach of Contract Against Jawbone and DOES 1-10) 47. Protempo realleges and incorporates by reference Paragraphs 1 through 46, above. as if set forth in their entirety. 48. On or about September 14, 2016 Protempo entered into the Amended Agreement with Jawbone, whereby Jawbone promised to provide brand-new products free and clear of all encumbrances in exchange for payment in the amount of $2,121,161 by Protempo. 49. Protempo has performed all terms, conditions, and agreements on its part to be performed under the Amended Agreement. 50. Jawbone has materially breached its obligations to Protempo under the Agreement by failing to deliver $129,624 worth of products which Protcmpo purchased, and failing to honor the warranties set forth in the Agreement, among other breaches. 51. The Amended Agreement contains an implied covenant of good faith and fair dealing, which includes a covenant that neither party will deprive the other party of the intendcd benefits of the agreement. When a condition in a contract involves the performance of an act within the control of a party, the party has a duty to make a good faith effort to satisfy the condition. 52. As a result of the conduct alleged above, and in particular, failing to deliver the full product for which Protempo paid, Jawbone breached the implied covenant of good faith and fair dealing. 53. As a direct and proximate result of Jawbone's breach of the Amended Agreement, Protempo has been damaged in an amount to conform to proof at trial, but in no event less than Rutan & Tucker. UP attorneys at taO' 21521073019-0001 117866401 412/21/17 -12- SECOND AMENDED COMPLAINT EFTA00807813 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 $129,624, plus any and all accrued interest. FIFTH CAUSE OF ACTION (For Unjust Enrichment Against Jawbone and DOES 1-10) 54. Protempo realleges and incorporates by reference Paragraphs 1 through 53, above, as if set forth in their entirety. 55. By virtue of its wrongful conduct toward Protempo alleged above, and specifically, as a result of its failure to compensate Protempo for its out-of-pocket expenditures (including payment of Jawbone's $450,000 debt to NAPS), Jawbone has been unjustly enriched. 56. It would be manifestly unjust for Jawbone to retain any of the benefits it has gained through its wrongful conduct. Subject to and as alleged above, unless the Court orders restitution to Protempo, Jawbone will unjustly benefit from its actions. SIXTH CAUSE OF ACTION (For Breach of Warranty Against Jawbone and DOES 1-10) 57. Protempo realleges and incorporates by reference Paragraphs 1 through 56, above, as if set forth in their entirety. 58. Pursuant to the Original Agreement and each of its subsequent amendments, Jawbone represented and warranted that products were unencumbered, were brand-new and not refurbished, and were not previously used. 59. Jawbone breached the express warranties contained in the parties' agreements regarding the quality of product sold to Protempo by delivering to Protempo products that were dead on arrival and products which showed massive failure rates. In particular, the UP2 products Jawbone sold to Protempo contained faulty batteries incapable of holding a charge. As a result of such breaches, Protempo did not receive products as warranted by Jawbone. 60. After discovering the defects in the products sold and delivered to Protempo in breach of Jawbone's express warranties, Protempo timely informed Jawbone both orally and in writing of such breaches and of the nature of the damages suffered by Protempo as a result of such breaches. Despite such notice, Jawbone has failed and refused and continues to fail and refuse to respond to such notice or to otherwise compensate Protempo for the damages it has suffered. Puna 14 Tustin, LLP attorneys at law 21521033019.0002 11786640 1312/21/17 -13- SECOND AMENDED COMPLAINT EFTA00807814 I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 61. As a direct and proximate result of Jawbone's breaches of warranties to Protempo, Protempo has been damaged in an amount in excess of the jurisdictional minimum of this Court. Protempo will establish the full nature and extent of its damages according to proof at the time of trial, but currently believes its damages to exceed $1,234,621. 62. In addition to the monetary damages it has suffered, as a direct and proximate result of Jawbone's decision to intentionally place a significant amount of knowingly defective and faulty product into the market, Protempo has also suffered significant business disruptions and related losses. SEVENTH CAUSE OF ACTION (For Conversion Against Jawbone and DOES 1-10) 63. Protempo realleges and incorporates by reference Paragraphs 1 through 62, alio% e. as if set forth in their entirety. 64. Protempo has, and at all times relevant herein did have, the immediate right to possession of the products for which it paid. 65. By the conduct alleged in this Complaint, Jawbone knowingly and intentionally interfered with Protempo's property by refusing, without justification, to turn over possession to Protempo of the products which Protempo purchased, despite the fact that the products lawfully belong to Protempo. Jawbone has no rights to Protempo's property and is wrongfully retaining and refusing to deliver Protempo's property despite multiple proper demands from Protempo that the property be delivered. 66. As a direct and proximate result of Jawbone's unlawful conversion, Protempo has suffered and will continue to suffer actual damages, including costs incurred attempting to mitigate damages, and legal costs and expenses. Protempo is entitled to immediate possession of the property (Le., the products it purchased) in an amount to be proven at trial. 67. The acts and omissions of Jawbone were knowing, intentional, malicious, and oppressive, and were done with the intent and design to damage Protempo. For these reasons, Protempo is entitled to recover punitive damages in an amount to be determined at the time of trial. Rutin 8 tutkor.I.LP attorneys et ?SW 71524013019-0003 117866401612,21/17 -14- SECOND AMENDED COMPLAINT EFTA00807815 1 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EIGHTH CAUSE OF ACTION (For Account Stated Against Jawbone and DOES 1-10) 68. Protempo realleges and incorporates by reference Paragraphs 1 through 67, above, as if set forth in their entirety. 69. Within the last two years, Jawbone became indebted to Protempo on an account stated in the amount of at least $450,000. 70. Protempo is informed and believes and on that basis alleges that although repeated demands for payment have been made and Jawbone admitted that it owed the $450,000 and promised to pay that amount, the principal sum due to Protempo — currently $450,000, plus interest thereon at the maximum legal rate according to proof— remains due, owing, and unpaid from Jawbone to Protempo on an account stated. NINTH CAUSE OF ACTION (For Open Book Account Against Jawbone and DOES 1-10) 71. Protempo realleges and incorporates by reference Paragraphs 1 through 70 above, as if set forth in their entirety. 72. Within the last year, Jawbone has become indebted to Protempo on an open book account in the principal sum of $579,624, which includes Jawbone's unpaid debt of $450,000 to NAPS and the $129,624 worth of products Jawbone failed to deliver to Protempo. 73. Protempo has kept an account of the debits and credits involved in the transactions. Although repeated demands for payment have been made, as of the date of this Complaint, there is now due, owing, and unpaid the principal sum of $579,624 together with interest accruing thereon. TENTH CAUSE OF ACTION (ASSIGNED CLAIMS) (For Breach of Contract Against Jawbone and DOES 1-10) 74. Protempo realleges and incorporates by reference Paragraphs 1 through 73, above. as if set forth in their entirety. 75. Pursuant to the Assignment of Debt, NAPS "grant[ed], assign[ed], transfer[ed] and set[] over unto [Protempo] its entire right, title and interest in and to the Debt, including without limitation, all rights, benefits and advantages of [NAPS] to be derived therefrom[.]" Protempo is Rutin 4 Tudor, LLP attorneys at law 2132,013019.0002 11796640.1 al 2,21/17 -15- SECOND AMENDED COMPLAINT EFTA00807816 1 2 3 4 5 6 7 8 9 I0 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 informed and believes and based thereon alleges that NAPS acquired a warehouseman's lien on the products Jawbone was storing in its facility. 76. As a result of the Assignment of Debt, Protempo is entitled to enforce NAPS's warehouseman's lien to the extent allowed by applicable law. 77. Protempo is informed and believes and based thereon alleges that NAPS and Jawbone had an agreement, by which Jawbone was required to pay NAPS for all storage and handling fees NAPS incurred from storing Jawbone's products. 78. Protempo is informed and believes and based thereon alleges that NAPS has performed all terms, conditions, and agreements on its part to be performed under the agreement, except for those that were excused, waived, and/or discharged by Jawbone's conduct, including Jawbone's fraud and deceit, or which Jawbone is prevented or estopped to assert. 79. Jawbone has breached its obligations to NAPS by failing to pay $450,000 in storage and handling fees. 80. Protempo is informed and believes and based thereon alleges that the agreement between NAPS and Jawbone contained an implied covenant of good faith and fair dealing, which includes a covenant that neither party will deprive the other party of the intended benefits of the agreement. When a condition in a contract involves the performance of an act within the control of a party, the party has a duty to make a good faith effort to satisfy the condition. 81. As a result of the conduct alleged above, and in particular, failing to pay NAPS the storage and handling fees, Jawbone breached the implied covenant of good faith and fair dealing. 82. As a direct and proximate result of Jawbone's breach of its obligations to pay its storage and handling fees, NAPS, and by assignment, Protempo, has been damaged in an amount to conform to proof at trial, but in no event less than $450,000, plus any and all accrued interest. ELEVENTH CAUSE OF ACTION (ASSIGNED CLAIMS) (For Account Stated Against Jawbone and DOES 1-10) 83. Protempo realleges and incorporates by reference Paragraphs 1 through 82 above, as if set forth in their entirety. 84. Pursuant to the Assignment of Debt, NAPS "grant[ed], assignred), transfer[ed] and Rusin a Tudor, LLP attorneys of law 21521033019.0002 11766640.1 a12/21/17 -16- SECOND AMENDED COMPLAINT EFTA00807817 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 sell] over unto [Protempo] its entire right, title and interest in and to the Debt, including without limitation, all rights, benefits and advantages of [NAPS] to be derived therefrom[.]" 85. Within the last two ycars, Jawbone became indebted to NAPS on an account stated in the amount of at least $450,000. 86. Protempo is informed and believes and on that basis alleges that although repeated demands for payment have been made and Jawbone admitted that it owed $450,000 and promised to pay that amount, the principal sum due to NAPS, and by assignment, to Protempo — currently $450,000, plus interest thereon at the maximum legal rate according to proof — remains due, owing, and unpaid from Jawbone to NAPS, and by assignment, Protempo on an account stated. TWELFTH CAUSE OF ACTION (ASSIGNED CLAIMS1 (For Open Book Account Against Jawbone and DOES 1-10) 87, Protempo realleges and incorporates by reference Paragraphs 1 through 86, above, as if set forth in their entirety. 88. Pursuant to the Assignment of Debt, NAPS "grant[ed], assign[ed], transfer[cd] and seta over unto [Protempo] its entire right, title and interest in and to the Debt, including without limitation, all rights, benefits and advantages of [NAPS) to be derived therefrom[.]" 89. Within the last year, Jawbone has become indebted to NAPS, and by assignment. Protempo on an open book account in the principal sum of $450,000. 90. NAPS, and by assignment, Protempo has kept an account of the debits and credits involved in the transactions. 91. Although repeated demands for payment have been made, as of the date of this Complaint, there is now due, owing and unpaid the principal sum of $450,000 together with interest accruing thereon. THIRTEENTH CAUSE OF ACTION (Violation of Penal Code section 496(a) Against All Defendants) 92. Protempo realleges and incorporates by reference Paragraphs 1 through 91, above, as if set forth in their entirety. 93. Defendants induced Protempo to remit payment of $1,910,794 under false Rutin I Inciter, LLP attOrneys at law 21521033019-0002 11786640 1212f/1/17 -17- SECOND AMENDED COMPLAINT EFTA00807818 1 2 3 4 5 6 7 8 9 10 11 12 1? 14 I5 16 Iti 19 20 21 22 23 24 25 26 27 28 pretenses as alleged herein, including but not limited to as set forth at Paragraphs 12 through 18. Therefore Defendants obtained Protempo's money in a manner constituting theft pursuant to Penal Code section 496(a). 94. Penal Code section 496(c) permits a person who has been injured by a violation of Penal Code section 496(a) to bring a civil action pursuant thereto for treble damages. 95. As a direct and proximate cause of the foregoing acts and omissions of Defendants, Protempo been damaged in an amount to be proven at trial, but not less than $1,910,794. 96. Pursuant to Penal Code section 496(c), such sum shall be trebled. Plaintiffs are informed and believe that Defendants liability therefore exceeds $5,732,382. PRAYER FOR RELIEF WHEREFORE, Protempo prays for judgment against Defendants as follows: 1. For damages in an amount to conform to proof at trial, but no less than $1,814,245; 2. For interest in the maximum amount allowed by law; 3. For treble damages pursuant to Penal Code section 496(e); 4. For exemplary and punitive damages pursuant to Civil Code section 3294; 5. For attorneys' fees and costs of suit incurred herein as may be allowed by law; and 6. For such other and further relief as the court deems just and proper. I )ated: December 22, 2017 Rutin & rud,x, LLP attorneys et low -18- 2152/0330194002 I 17166i0.I al2/21/17 SECOND AMENDED COMPLAINT EFTA00807819 EXHIBIT A EFTA00807820 DocuSign Enveope ID: CE6E53F8-24C2-4B98-8306-. C89959845 NON-EXCLUSIVE SALES & DISTRIBUTION AGREEMENT This NON-EXCLUSIVE SALES & DISTRIBUTION AGREEMENT ("Agreement"), is effective as of April 29, 2016 ("Effective Date") by and between ALIPUCOM, dba Jawbone, a California corporation, with offices at 99 Rhode Island St., San Francisco, CA 94103 USA ("Jawbone") and PROTEMPO LIMITED, a New Zealand corporation, with offices at 21 Taylors Road, Momingside, Auckland 1025, New Zealand ("Distributor"). 1. Products & Pricing. Products. Jawbone and Distributor are entering into a non-exclusive commercial relationship for the distribution and sale in the Territory to Distributor of the Jawbone-branded products ("Products"), as further set forth on Exhibit A. Jawbone may, in its sole discretion, and without incurring any liability to Distributor, change the features, or discontinue the sale, of any of the Products, provided Jawbone provide at least 6 months notice before any information becomes public regarding the discontinuing of support for the Jawbone app. Additional Jawbone products may be added to this Agreement only upon the mutual written agreement of the parties. Distributor shall be permitted to sell the Products to and through its own authorized resellers and shall use commercially reasonable efforts to ensure that its authorized resellers perform in accordance with the terms of this Agreement, and to monitor for and inform Jawbone of any deviances. 1.2. Prices. Prices are defined on Exhibit A. Jawbone will not offer price protection or other support for the Products should market prices change. 1.3. No Returns. Subject to Section 5.2.1(c) and except in respect of Rejected Goods (as defined herein), no returns are authorized for the Products for any reason. 1.4. Exclusivity: Right of First Refusal; Subject to Section 1.5 below and except for direct sales to Jawbone's corporate wellness customers in connection with Jawbone's corporate wellness program, Jawbone will not sell or agree to sell Products to any customer other than Distributor for the period between the Effective Date through July 31, 2016 ("Exclusivity Period"). Following the Exclusivity Period and through December 31, 2016, in the event that Jawbone wishes to sell any additional quantities of Products beyond the amounts set forth on Exhibit A, Distributor shall have a right of first refusal ("ROM") for thirty (30) days to purchase such Products. The ROFR will begin upon Jawbone submitting a written offer via email for Products to Distributor, and all other terms of this Agreement will apply to such offer. In the event of expiration or Distributor's rejection of the ROFR, Jawbone is free to sell the Products to any other third parties, provided that the terms offered to third parties are substantially the same as those offered to Distributor. For clarification, the offering of amended terms or prices for the purchase of Products on more favourable terms shall constitute a new offer and Distributor shall receive a new ROFR. 1.5. Sales on Jawbone's Web Store. Notwitbstandin an thin to the contra in this Agreement, Jawbone will continue selling Products on its own web store ("Jawbone Web Store"). Uoless otherwise a eed in writing by Distributor, Jawbone will offer the Products at prices at or above the "Minimum ' prices set forth in the table on Exhibit A. 2. Order Process & Shipping. 2.1. PO Submission. Distributor shall purchase Products by issuing one or more Purchase Orders ("POs") via email to the address specified in Exhibit B, or as otherwise specified in writing by Jawbone. The PO shall be signed by Distributor's authorized representative. The PO shall specify ordered Products, Jawbone's product number, any internal product numbers assigned by Distributor, quantity, unit price, total price of order per Product, complete shipping address and instructions, PO number, line item number, Distributor point of contact information, and any other special instructions. 2.2. PO Acceptance: All POs from Distributor are subject to acceptance by written confirmation by Jawbone. Jawbone is under no obligation to accept any PO. Jawbone shall, in writing within five (5) business days of Page 1 of 4 EFTA00807821 DoteSign Envelope ID: EE6C53r0-24C2-489R-0374-:. ..:89959845 receipt, accept a PO or offer a proposed modification to the PO terms. Except as otherwise agreed in writing by the Parties, accepted POs are non-cancellable. This Agreement applies to all quotations made and POs accepted by Jawbone and is an integral part of the sales contract between Jawbone and Distributor. Whenever this Agreement conflicts with or is expanded or added to by any terms and conditions of Distributor's purchase order, this Agreement shall govern and supersede the terms and conditions of Distributor's PO. 2.3. Shipping; Delivery. Jawbone shall ship Products FOB Origin to one of three shipping points located in the America or EMEA designated by Jawbone (each, a "Jawbone FOB Point") as set forth in Exhibit A. The Jawbone FOB Point shall be determined on a case-by-case basis depending on the nearest location for the inventory of Products requested by Distributor. Jawbone is responsible for shipping costs to the Jawbone FOB Point, and Distributor is responsible for any and all shipping costs thereafter. For purposes of this Agreement, "Delivery" shall occur once the Products are delivered to the Distributor's carrier at the Jawbone FOB Point. Title and risk of loss for damage to the Products passes to Distributor upon Delivery. Notwithstanding the foregoing, as between Distributor and Jawbone, title to any software incorporated in the products remains with Jawbone. Jawbone shall use commercially reasonable efforts to Deliver the Products within the delivery date(s) specified on the applicable accepted Purchase Order. Delivery date(s) to be mutually agreed by the parties. Within three (3) business days of the Distributor receiving the Products at the Jawbone FOB Point as specified on the accepted Purchase Order, those goods having been released to the freight forwarder of the Distributor, ("Inspection Period"), Distributor shall notify Jawbone and Jawbone's outside legal counsel referred to in Section 3 below of any Products that do not conform with the accepted Purchase Order; to the representations set forth in Section 5.2.1; which have been delivered damaged due to inadequate packing by Jawbone; or which were delivered more than 10 days after the agreed delivery date ("Rejected Products"). Distributor agrees that, alter the Inspection Period, and except for any Rejected Products, all other Products shall be deemed irrevocably accepted ("Product Acceptance"). 3. Payment; Taxes. Jawbone shall invoice Distributor for each accepted PO at the address set forth in Exhibit B. Following acceptance by Jawbone of a PO, payment in U.S. dollars shall be deposited by Distributor into Jawbone's outside legal counsel's escrow account (the "Escrow") pursuant to the payment instructions set forth on Exhibit B and provided that Jawbone's outside legal counsel has entered into the undertaking set out in Exhibit C. Payment into the Escrow for the full amount of Products subject to the accepted PO is required in advance of shipping. Upon Product Acceptance, Distributor will timely notify via email Jawbone's outside legal counsel to release the corresponding amount of funds in Escrow to Jawbone. If Products that are the subject of the accepted PO are not Delivered by Jawbone within ten (10) business days of Distributor paying funds into Escrow, or if the Distributor provides written notification of Rejected Products as set forth in Section 2.3 above, then outside legal counsel will immediately refund the corresponding amount of the funds to the Distributor and, in the case of Rejected Products, Distributor will immediately return such Rejected. Products to Jawbone at the Jawbone FOB Point Distributor shall be responsible for payment of all taxes (other than taxes based on Jawbone's income), fees, duties (not including import and customs duties), and other governmental charges, and any related penalties and interest, arising from the payment of the Product price to Jawbone or delivery of Product to Distributor. 4. Confidentiality. On August 19, 2015, the parties executed a Mutual Non-Disclosure Agreement ("NDA"), the terms and conditions of which are incorporated herein. For the avoidance of doubt, the terms of this Agreement are Confidential Information (as that term is defined in the NDA). 5. Representation and Warranties. 5.1. By Distributor. Distributor represents, warrants, and covenants to Jawbone that: (a) it has the authority to enter into the Agreement, and that the persons signing the Agreement on behalf of Distributor arc authorized to sign; and (b) it shall not make any false or misleading representations about Jawbone or the Product(s). 5.2. By Jawbone. 5.2.1. Jawbone represents, warrants, and covenants to Distributor that: (a) it has the authority to enter into the Agreement, and the persons signing the Agreement on behalf of Jawbone are authorized to sign; (b) as of the date of this Agreement, Jawbone holds all right, title, and interest in and to the Products, and the Page 2 of 4 EFTA00807822 DecoSign Envelope ID: EE6E53F8-24C2-4096-8306, X39959845 Products are free and clear of all liens, security interest, and other third party claims to ownership of the Products; and (c) the Products are brand new and are not refurbished or used stock. 5.2.2. Jawbone offers a limited warranty to end-user purchasers of its Products as further described in the user manual and at httas://iawbone.com/warranty. Distributor shall direct end-user purchasers to Jawbone for resolution of any Product warranty claims. Except as set forth in this Section 5.2.2, no other warranties apply to the Products. 5.2.3. Exclusive Warranties. TO THE EXTENT PERMITTED BY APPLICABLE LAWS, THE FOREGOING WARRANTIES ARE DISTRIBUTOR'S SOLE AND EXCLUSIVE WARRANTJES. JAWBONE SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. 6. Termination. This Agreement shall terminate on December 31, 2016. Either party may terminate this Agreement in the event of a material breach which is not cured within five (5) days notice to the party in breach. All terms that by their nature should survive the termination or expiration of this Agreement shall survive where necessary to effectuate the intent of the parties. 7. Limitation of Liability. TO THE EXTENT PERMITTED BY APPLICABLE LAWS, IN NO EVENT SHALL JAWBONE OR ITS SUPPLIERS BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSSES OR DAMAGES WHATSOEVER (INCLUDING WITHOUT LIMITATION, LOSS OF PROFITS, OTHER COMMERCIAL LOSS, OR COST OF PROCUREMENT OF SUBSTITUTE GOODS), EVEN IF JAWBONE HAS BEEN ADVISED OF 771E POSSIBILITY OP SUCH POTENTIAL LOSSES OR DAMAGES. IN NO EVENT SHALL JAWBONE'S CUMULATIVE LIABILITY UNDER OR IN CONNECTION WITH THE AGREEMENT EXCEED THE AGGREGATE CONSIDERATION PAID BY DISTRIBUTOR TO JAWBONE I IEREUNDER. THIS LIMITATION OF LIABILITY IS CUMULATIVE, WITH ALL PAYMENTS FOR CLANS IN CONNECTION WITH THE AGREEMENT BEING AGGREGATED TO DETERMINE SATISFACTION OF 771E LIMIT. THE EXISTENCE OF ONE OR MORE CLAIMS SHALL NOT ENLARGE THE LIMIT. DISTRIBUTOR ACKNOWLEDGES THAT THE PRICE CHARGED TO DISTRIBUTOR HEREUNDER FOR THE PRODUCTS REFLECTS THE ALLOCATION OF RISK SET PORN IN THE AGREEMENT AND THAT JAWBONE WOULD NOT ENTER INTO THE AGREEMENT WITHOUT THESE LIMITATIONS ON ITS LIABILITY. IN ADDITION, JAWBONE DISCLAIMS ALL LIABILITY OF ANY KIND ON BEHALF OF JAWBONE'S SUPPLIERS AND LICENSORS. 8. Miscellaneous. 8.1. No Relationship. Nothing set forth in this Agreement creates or shall be deemed to create a partnership, joint venture, or agency relationship between Distributor and Jawbone. Distributor's relationship to Jawbone is that of an independent contractor, neither party is an agent or partner of the other, and nothing contained in the Agreement shall be construed to give either party the power to direct or control the day-to-day activities of the other. Distributor shall not have, and shall not represent to any third party that it has, any authority to act on behalf of Jawbone. All financial obligations associated with Distributor's business are the responsibility of Distributor. 8.2. Licenses and Bacon. Distributor agrees to comply with all applicable laws, including export laws. Distributor shall obtain any required non-U.S. governmental authorizations, including without limitation any import licenses and foreign exchange permits, from the appropriate authorities. Distributor shall provide proof of compliance with required non-U.S. governmental authorization to Jawbone upon request. 8.3. Notices. Notices to Distributor and Jawbone hereunder must be given by personal delivery or overnight courier to Distributor at 21 Taylors Road, Morningside, Auckland, New Zealand, Attn Mark Priscott and to Jawbone at 99 Rhode Island St., San Francisco, CA 94103 USA, Atm: General Counsel. 8.4. Waiver: Severabilitv. The failure of a party to require performance by the other party of any provision of the Agreement does not affect the (1111 right to require such performance at any time thereafter; nor does a waiver by either party of a breach of any provision thereof a waiver of the provision itself. The invalidity or unenforceability of any provision set forth herein do not in any way affect the validity or enforceability of any other provision. Page 3 of 4 EFTA00807823 DocuSignEnvelopeaCESES3F8-24C2489842406-, 289959845 8.5. Force Majeure, In no event shall either party be responsible for any breach of the Agreement (except the payment of money owed) due to the occurrence of any events beyond its reasonable control, including, but not limited to war, insurrection, governmental action, acts of God, or any other similar causes beyond the control of a party, provided that such party uses reasonable efforts, under the circumstances, to notify the other party of the circumstances causing the delay and to resume performance as soon as possible. 8.6. General. This Agreement, including any Exhibits and documents referred to herein or attached hereto, constitutes the entire and exclusive statement of agreement between the parties with respect to the subject matter and it supersedes any prior or contemporaneous oral or written communications between the parties. In the event of conflict between the terms of this Agreement and the terms of any Exhibit hereto, the terms of the Agreement shall govern. Neither party may assign this Agreement without the other party's prior written consent (not to be unreasonably withheld). Any attempted assignment in violation of the foregoing shall be void. This Agreement may only be modified by a written document executed by the parties. This Agreement shall be construed in accordance with the laws of the State of California without regard to conflict of law principles. The United Nations Convention on Contracts for the International Sale of Goods does not apply to the Agreement. Each party irrevocably submits to the exclusive jurisdiction of the courts of the State of California located in San Francisco County and the courts of the United States in the Northern District of California for the purpose of any suit, action or other proceeding arising out of the Agreement or any transaction contemplated hereby; provided, however, that either party may take action in any court having jurisdiction to protect its Confidential Information and intellectual property rights. The official text of the Agreement (and any Exhibits thereto or notice submitted hereunder) shall be in English. In the event of any dispute concerning the construction or meaning of the Agreement, reference shall be made only to the Agreement as written in English and not to any translation into another language. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed. Distributor Signature: [.-- Demisliwdfri, AkArt Prisatt Jawbone F riovrnw- .36-Set", Oast Signature: Printed Name: Mark Priscott Printed Name: Jason Child Title: General Manager Title: Chief Financial Officer Date: 4/29/2016 Date: Page 4 of 4 4/29/2016 EFTA00807824 DowSign Envelope ID: EE6E53r8.24C24B88.8306-. a9991845 EXHIBIT A Products: Product Price Units Cash Payment Minimum Prices MINI $39.00 49,582 $1,933,698 129.99 UP4 (version as of 4/28/2016) $25.75 11,553 $297,490 119.99 UP3 (version as of 4/28/2016) $29.00 204,716 $5,936,764 99.99 UP2 Rope $18.00 118,126 $2,126,268 79.99 UP2 $17.00 54,685 $929,645 79.99 UP MOVE Black $10.00 10,000 $100,000 S 49.99 UP Move Colors $6.50 154,649 $1,005,219 49.99 Total 603,311 $12,329,083 Territory: Worldwide Jawbone FOB Point: Americas EMEA -1MM EU EMEA - Luzern ( APAC 2290 Enrico Fermi Dr, Suite 19 San Diego, CA 92154 Logistic1c9 areal Westpoint D2 Hale 3, 6.p. 1070 Lozomo 900 55 Slovak Republic Blancbardstown Business & Technology Park Snugborough Road Dublin 15 [TBD) Ver. 20071127 )21729 v2/CD EFTA00807825 DocuSIgn Envelope ID: EEEIES3F8,2402-489B113Dt ,C59959845 EXHIBIT B ADDRESSES AND PAYMENT INSTRUCTIONS Distributor Addresses an bone Addresses Send invoices to: Distributor Name: Protempo Limited Distributor Address: 21 Taylors Road, Morningside, Auckland, New Zealand finance®protempo.com Send Distributor Purchase Orders to: and or as otherwise directed by Jawbone in writing Escrow ItiformatIon: General Trust Account City National Bank San Francisco Private Client Services 150 California Street, Suite 1200 San Francisco CA 94111 ABA Swift o c: I 6L Account Name: Coo/ LLP Attorney Trust Account Account Wire Details: FBO AliphCom Payment Instructions: Payment is due prior to shipping of Products. Payment shall be by wire in U.S. dollars. Wire instructions for the Escrow will be sent in an encrypted email, and Distributor will need4o sign into the Cooley LLP email gateway to retrieve the wire instructions. 321729 v2tC0 EFTA00807826 DocuSign Envelope ID: EESE53F8.24C2-4(3984330t .C89959845 EXHIBIT C ESCROW AGENT UNDERTAKING Ladies and Gentlemen, Cooley LLP ("Cooley") is counsel to Aliphcom d/ib/a Jawbone ("Jawbone") from time to time on a variety of matters. It has come to Cooley's attention that Jawbone and Protempo Limited ("Protempo") are contemplating a transaction in the form attached to this letter (*Agreement") and that, in connection with the Agreement, the parties would like Cooley to provide an escrow account ("Escrow") for handling payment of monies owed. In this regard, Cooley agrees to bold in the Escrow any monies paid by Protempo in connection with the Agreement. Cooley will only release such funds from the Escrow to Jawbone or Protempo as required by Section 3 of the Agreement and only and strictly as required by Section 3 of the Agreement. Cooley agrees to release funds to Jawbone or Protempo immediately upon receiving Protempo's instructions regardin Product Ace tance or Rejected Products. All communications to Cooley shall be sent via email to The parties acknowledge and agree that Cooley is not acting as a fiduciary or agent to Jawbone, Protcmpo, or any other third party with respect to any funds deposited into the Escrow, and Cooley accepts no fiduciary duties with respect to these funds. Sincerely, Craig D. Jacoby ACKNOWLEDGED AND AGREED. JAWBONE e--DbouSIgned by: ,'x.5014. Cita %-402.3 o PROTEMPO -. 00nuepn•a by: hot eviscie 3r 1729 I 729 v2/C0 EFTA00807827 EXHIBIT B EFTA00807828 DoeuSIgn Envelope ID: 13A553538-1873-4C7E-5861- 3A88438ca AMENDMENT NO.1 TO NON-EXCLUSIVE SALES & DISTRIBUTION AGREEMENT This Amendment No. 1 ("Amendment") to that certain Agreement (as herein defined) is entered into as of June 2, 2016, (tbe "Amendment Effective Date") by and between AliphCom, dba Jawbone, a California corporation, with offices at 99 Rhode Island St., San Francisco, CA 94103 USA ("Jawbone") and Protempo Limited, a New Zealand corporation, with offices at 21 Taylors Road, Morningside, Auckland 1025, New Zealand ("Distributor"). Capitalized terms not otherwise defined herein shall have the meaning specified in the Agreement. RECITALS WHEREAS Jawbone and Distributor previously entered into a Non-Exclusive Sales & Distribution Agreement dated April 29, 2016 (the "Agreement"); and WHEREAS the panics would like to add additional Products to be sold under the Agreement; NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby amend the Agreement as set forth below: I. Section I.I. shall be deleted in its entirety and replaced with the following: 1.1 Products. Jawbone and Distributor arc entering into a non-exclusive commercial relationship for the distribution and sale in the Territory to Distributor of the Jawbone- branded products ("Products"), as further set forth on an Exhibit A. Additional Jawbone products may be added to this Agreement only upon the mutual written agreement of the parties and by adding an additional Exhibit A (e.g., Exhibit A-1, Exhibit A-2, etc.) with any corresponding details for such transaction. Each Exhibit A (e.g., Exhibit A, Exhibit A-1, Exhibit A-2, etc.) shall collectively be defined as "Exhibit A." Jawbone may, in its sole discretion, and without incurring any liability to Distributor, change the features, or discontinue the sale, of any of the Products, provided Jawbone provide at least 6 months notice before any information becomes public regarding the discontinuing of support for the Jawbone app. Distributor shall be permitted to sell the Products to and through its own authorized resellers and shall use commercially reasonable efforts to ensure that its authorized resellers perform in accordance with the terms of this Agreement, and to monitor for and inform Jawbone of any deviances. 2. Exhibit A-I (attached hereto) is hereby added to the Agreement. 3. Except as expressly amended herein, all other terms and conditions of the Agreement shall remain in full force and effect. (signature page follows) 321729 v2/CO EFTA00807829 DocuSign Erveiope ID: 6A5S3538-1873-4C7E-8861• MI3643804 IN WITNESS WHEREOF, each of the undersigned parties has caused this Amendment to be executed and delivered as of the Amendment Effective Date. Distributor [ Oecteigned by: Signature:kalif rivelf upir.11. Printed Name: Mark Priscott Title: General Manager Date: 6/9/2016 )2O29 v2,CO Jawbone OecuSloned Irr c e Signature imijo s Oath ZWAMIA5F4S1... Printed Name: Jason Child Title: CFO Date 6/9/2016 EFTA00807830 DowSion Envelope ID: 6A553538-1873-4C7E•8881• 3A/30438C4 EXHIBIT A-1 Products: 6 ' ,1: 6 4:24;2016 Product Price Pre-packed units To be packed units Total Units Cash Payment Minimum Jawbone.com prtces UP2 Rope 514.40 13,126 46,874 60,000 $864,000 579.99 UP3 (version as of 4/28/2016) $23.20 24,380 22,620 47,000 $1,090,400 $99.99 GRAND TOTALS 37,506 • 69,494 107,000 51,954,400 Payment Terms: Notwithstanding the payment instructions in Section 3 of the Agreement, payment for the Products set forth on this Exhibit A-1 shall be in the form of a direct cash payment to Jawbone pursuant to the wire instructions set forth below. Payment-in-full by Distributor for all Products subject to this Exhibit A-1 is due by June 9, 2016. Jawbone will not ship the Products until payment-in-full is received. Distributor shall be responsible for payment of all taxes (other than taxes based on Jawbone's income), fees, duties (not including import and customs duties), and other governmental charges, and any related penalties and interest, arising from the payment of the Product price to Jawbone or delivery of Product to Distributor. Wire Instructions: Company Name: AliphCom Bank: Wells Fargo Bank Bank Account Routing / ABA II Beneficiary: AliphCom SWIFT: WFBIUS6S Address: WELLS FARGO BANK, N.A. PO BOX 63020, SAN FRANCISCO, CA 94163 Jawbone POE Point: Americas EMEA — IMM EU EMEA - Luzern APAC 2290 Enrico Fermi Dr., Suite 19 San Diego, CA 92154 LogistickY areal Westpoint D2 Hala 3, e.p. 1070 Lozomo 900 55 Slovak Republic Blanchardstown Business & Technology Park Snugborough Road Dublin 15 [TBD) 321729 v2/CD EFTA00807831 EXHIBIT C EFTA00807832 [locoSign Envelope ID: 6A553538-1873-4C7E-886M ABB438De AMENDMENT NO. 2 TO NON-EXCLUSIVE SALES & DISTRIBUTION AGREEMENT This Amendment No. 2 ("Second Amendment") to that certain Agreement (as herein defined) is entered into as of June 9, 2016, (the "Second Amendment Effective Date") by and between AliphCom, dba Jawbone, a California corporation, with offices at 99 Rhode Island St., San Francisco, CA 94103 USA ("Jawbone") and Protempo Limited, a New Zealand corporation, with offices at 21 Taylors Road, Momingside, Auckland 1025, New Zealand ("Distributor"). Capitalized terms not otherwise defined herein shall have the meaning specified in the Agreement. RECITALS WHEREAS Jawbone and Distributor previously entered into a Non-Exclusive Saks & Distribution Agreement dated April 29, 2016 (the "Agreement"), and a First Amendment to the Agreement dated June 2, 2016 (the "First Amendment," and together with the Agreement, the "Agreement"); WHEREAS the parties would like to add additional Products to be sold under the Agreement; NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby amend the Agreement as set forth below: 1. Exhibit A-2 (attached hereto) is hercby added to the Agreement. 2. Except as expressly amended herein, all other terms and conditions of the Agreement shall remain in full force and effect. (signature page follows) 121729 v2/O3 EFTA00807833 DoneDien Envelope ID: 6A553538-1873-4C7E-68614 AD8438C4 TN WITNESS WHEREOF, each of the undersigned parties has caused this Second Amendment to be executed and delivered as of the Second Amendment Effective Date. Distributor E at:aped by: Signature: Atarfe visa+ Jawbone LOcctagred by: Signature: .3MCIA, UAL 079906.1.5e491. Printed Name: Mark Priscott Printed Name: Jason Child Title: General Manager Tide: CFO Date: 6/9/2016 Date: 6/9/2016 321729 v2/CO EFTA00807834 DocuSign Envelope ID: 6ASS3538-1/373-407E-8861-I. ABBOBC4 EXHIBIT A-2 Products: Ship by: 6/22/2016 Payment due by: 6/9/2016 Product Price Total Units Cash Payment alb prices ERA 2.0 $7.20 1,995 $14,364 N/A ERA 2.0-SB $18.00 218 $3,924 N/A ICON S4.80 558 $2,678 N/A JAMBOX $13.03 2,554 $33,279 N/A JB2X $3.60 77 $277 N/A MINI JAMBOX $31.98 13,781 $440,716 $129.99 UP24 57.65 624 $4,774 N/A GRAND TOTALS 19,807 $500,012 Payment Terms: Notwithstanding the payment instructions in Section'3 of the Agreement, payment for the Products set forth on this Exhibit A-2 shall be in the form of a direct cash payment to Jawbone pursuant to the wire instructions set forth below. Payment-in-fa by Distributor for all Products subject to this Exhibit A-I is due by June 9, 2016. Jawbone will not ship the Products until payment-in-full is received. Distributor shall be responsible for payment of all taxes (other than taxes based on Jawbone's income), fees, duties (not including import and customs duties), and other governmental charges, and any related penalties and interest, arising from the payment of the Product price to Jawbone or delivery of Product to Distributor. Wire Instructions: Company Name: AliphCom Bank: Wells Fargo Bank Bank Account #: Routing / ABA # Beneficiary: AliphCom SWIFT: WFBIUS6S Address: WELLS FARGO BANK, M. PO BOX 63020, SAN FRANCISCO, CA 94163 Jawbone FOB Point: 321729 v2ICO EFTA00807835 DocuSgn Envelope ID: 6A553539.1073-4C7E-8861-1 A88438C4 Americas EMEA — IMM EU EMEA - Luzern APAC 2290 Enrico Fermi Dr., Suite 19 San Diego, CA 92154 LogisticV areill Westpoint D2 Hala 3, Cp. 1070 Lozomo 900 55 Slovak Republic Blanchardstown Business & Technology Park Snugborough Road Dublin 15 (TBD) 321729 v2/C0 EFTA00807836 EXHIBIT D EFTA00807837 Deo.Sion Envelope ID 13C1CO3FD-7761-484A-13ADE-E5E8892CrEOF AMENDMENT NO. 3 TO NON-EXCLUSIVE SALES & DISTRIBUTION AGREEMENT This Amendment No. 3 ("Third Amendment") to that certain Agreement (as herein defined) is entered into as of September 14, 2016, (the "Third Amendment Effective Date") by and between AliphCom, dba Jawbone, a California corporation, with offices at 99 Rhode Island SL, San Francisco, CA 94103 USA ("Jawbone") and Protempo Limited, a New Zealand corporation, with offices at 21 Taylors Road, Momingside, Auckland 1025, New Zealand ' ("Distributor"). Capitalized terms not otherwise defined herein shall have the meaning specified in the Agreement. RECITALS WHEREAS Jawbone and Distributor previously entered into a Non-Exclusive Sales & Distribution Agreement dated April 29, 2016, as amended on June 2, 2016 and June 9, 2016 (collectively, the "Agreement"); WHEREAS the parties would like to further amend the Agreement as set forth herein; NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby amend the Agreement as follows: 1. Section 1.1. shall be deleted in its entirety and replaced with the following: 1.1 Products. Jawbone and Distributor are entering into a non-exclusive commercial relationship for the distribution and sale in the Territory to Distributor of the Jawbone-branded products ("Products"), as further set forth on an Exhibit A. Additional Jawbone products may be added to this Agreement only upon the mutual written agreement of the parties and by adding an additional Exhibit A (e.g., Exhibit A-I, Exhibit A-2, etc.) with any corresponding details for such transaction. Each Exhibit A (e.g., Exhibit A, Exhibit A-I, Exhibit A-2, etc.) shall collectively be defined as "Exhibit A." Jawbone may, in its sole discretion, and without incurring any liability to Distributor, change the features, or discontinue the sale, of any of the Products, provided Jawbone provides at least 12 (twelve) months notice before any information becomes public regarding the discontinuing of support for the Jawbone app. Distributor shall be permitted to sell the Products to and through its own authorized resellers and shall use commercially reasonable efforts to ensure that its authorized resellers perform in accordance with the terms of this Agreement, and to monitor for and inform Jawbone of any deviances. 2. Section 1A. shall be deleted in its entirety and replaced with the following: 1.4 Exclusivity; Right of First Refusal. Subject to Section 1.5 below and except for direct sales to Jawbone's corporate wellness customers in connection with Jawbone's corporate wellness program, Jawbone will not sell or agree to sell Products to any customer other than Distributor for the period between the Effective Date through July 31, 2016 ("Exclusivity Period"). Following the Exclusivity Period and through April 1, 2017, in the event that Jawbone wishes to sell any additional quantities of Products beyond the amounts set forth on Exhibit A, Distributor shall have a right of first refusal ("ROFR") for thirty (30) days to purchase such Products. The ROFR will begin upon Jawbone submitting a written offer via email for Products to Distributor, and all other terms of this Agreement will apply to such offer. In the event of expiration or Distributor's rejection of the ROFR, Jawbone is free to sell the Products to any other third parties, provided that the terms offered to third parties are substantially the same as those offered to Distributor. For clarification, the offering of amended terms or prices for the purchase of Products on mote favourable terms shall constitute a new offer and Distributor shall receive a new ROFR. 321729 v2/C0 EFTA00807838 DocuSign Envelope ID: 6D1CO3F0.7761-484A4ADE•ESEB892CFEOF 3. Exhibit A-3 (attached hereto) is hereby added to the Agreement. 4. Except as expressly amended herein, all other terms and conditions of the Agreement shall remain in MI force and effect. (signature page follows) 321729 v2/C0 EFTA00807839 DowSian Envelope ID: 6C1CO3F04761-484A-BADE-E5EB892CFEOF IN WITNESS WHEREOF, each of the undersigned parties has caused this Second Amendment to be executed and delivered as of the Second Amendment Effective Date. Distributor Docaored by: Jawbone PocvSared ty kart. Pit ULtStik• all Signature: Signature: 4710 .60INCC ail Printed Name: Mark Priscott Printed Name: Jason Child Title: General Manager Title: CFO Date: 9/14/2016 Date: 9/14/2016 321729,4/CO EFTA00807840 DecoSign Envelope 11): 6C1CO3FD-7761.184A-SAGE-3.-5EB592CFEOF EXHIBIT A-3 Products: Pick up by 9/23 4-6 Wk L ad Tette Product TJ Retail Volume Lucre Rasa Volume TJ Bulk Units Total Utdb Retail Price New Belk Price Retail Bulk 9/16 Cash Cash due on final shipment release Total Cads UP3 16,291 5,769 57,355 79,415 516.24 513.27 5338.254 $665,318 $1,023,572 593,783 51,119,355 ERA 2-0 939 582 3.160 4,681 55.04 $3.60 $7.666 $11.376 $19,042 1- $19,042 EPA 2.0.513 709 55 47 811 $12.60 59.00 [9.626 5423 510,019 5- $10,049 BIG 329 126 685 1.140 55930 $4230 527,073 529,113 $56,185 1- $56,185 JAMBOX 721 139 6. 866 59.12 5632 $7,84) $39 $7.882 2- 17382 MINI 1.725 I 24 1,750 322.39 $15.99 538,645 $344 139,029 5- 539.029 UP MOVE 30306 152 22353 53,009 54.55 53.25 $139.494 $72,641 1212.135 5- $212,135 UP2 1.420 772 19,896 72,0$8 110.08 51035 $22,095 $143,251 5165,347 $66,694 $232,041 UP2 Rope 15,176 7,177 14,763 37,116 $10.08 510.24 5225,318 $106,294 $331,612 $44,891 $376,503 UP24 493 2.413 106 3.014 $536 53.83 $15,587 $406 $15,993 1. 515,993 UP4 37$ 0 1,796 2,174 511.03 514.55 $6,815 $23,132 $29348 52,999 512,947 Total 68,689 17,146 120389 206,064 $856417 $1,052,376 31,910,794 5210,367 52,121361 Notes: • Cash due to Jawbone bank account by COB 9/16/2016. • If Retail and Luzern Retail units to be ready for Distributor pickup by 9/23/2016. • TI Bulk units require packout before they can be shipped, and will be held at the Americas FOB Point until packaging arrives. Packout will occur at Americas FOB Point. Distributor is liable for all costs associated with packout of the Ti Bulk units (e.g., packaging, labor), which costs are reflected in Ti Bulk units pricing above. Jawbone estimates packout of the TJ Bulk units will require 4.6 weeks from the time that packaging materials are received at the Americas FOB Point. The parties shall work together in good faith to determine shipment quantities and intervals of the TJ Bulk units. The UP3 and UP4 TJ Bulk units will be packed in Frustration Free Packaging (FFP). Payment Terms: Notwithstanding the payment instructions in Section 3 of the Agreement, payment for the Products set forth on this Exhibit A-3 shall be in the form of a direct cash payment to Jawbone pursuant to the wire instructions set forth below. Payment-in-hill by Distributor for all Products subject to this Exhibit A-3 is due by September 16, 2016. Jawbone will not ship the Products until payment-in-hill is received. Distributor shall be responsible for payment of all taxes (other than taxes based on Jawbone's income), fees, duties (not including import and customs duties), and other governmental charges, and any related penalties and interest, arising from the payment of the Product price to Jawbone or delivery of Product to Distributor. 321729 YUCO EFTA00807841 DowSign Envelope ID: PC IC03FD-7761 -484A4ADE-E5E8892CFE0F Wire Instructions: Company Name: AliphCom Bank: Wells Fargo Bank Bank Account #: Routing / ABA tin Beneficiary: AliphCom SWIFT: WFBIUS6S Address: WELLS FARGO BANK,.. PO BOX 63020, SAN FRANCISCO, CA 94163 Jawbone FOB Point: Americas EMEA (for Ti Retail units and (for Luzern Retail units) Ti Bulk units) 2290 Enrico Fermi Dr., Blanchardstown Suite 19 Business & San Diego, CA 92154 Technology Park Snugborough Road Dublin 15 321729 v2/CO EFTA00807842 PROOF OF SERVICE 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2l 22 23 24 25 26 27 28 STATE OF CALIFORNIA, COUNTY OF ORANGE I am employed by the law office of Rutan & Tucker, LLP in the County of Orange, State of California. I am over the age of 18 and not a party to the within action. My business address is 611 Anton Boulevard, Suite 1400, Costa Mesa, California 92626-1931. On December 22, 2017, I served on the interested parties in said action the within: SECOND AMENDED COMPLAINT FOR: (1) Promissory Fraud; (2) Fraud and Intentional Deceit; (3) Negligent Misrepresentation; (4) Breach of Contract (Direct Claims); (5) Unjust Enrichment; (6) Breach of Warranty; (7) Conversion; (8) Account Stated; (9) Open Book Account; (10) Breach of Contract (Assigned Claims); (11) Account Stated (Assigned Claims); (12) Open Book Account (Assigned Claims); (13) Violation of Penal Code section 496(a). as stated below: Brian D. Murray Loeb & Loeb LLP 10100 Santa Monixa Blvd., Suite 2200 Los Angeles, CA 90067 Attorneys for Defendant Jason Child Jeffrey Goldenhersh Skadden, Arps, Slate, Meagher & Flom LLP 300 South Grant Avenue Los Angeles, CA 90071 Attorneys for Defendant Hosain Rahman (BY FEDEX) by depositing in a box or other facility regularly maintained by FedEx, an express service carrier, or delivering to a courier or driver authorized by said express service carrier to receive documents, a true copy of the foregoing document in sealed envelopes or packages designated by the express service carrier, addressed as shown above, with fees for overnight delivery provided for or paid. Executed on December 22, 2017, at Costa Mesa, California. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Melody Conour (Type or print name) (Signature) EFTA00807843