Settlement Agreement.pdf

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SETTLEMENT AGREEMENT

SEAN P. REIS (SBN # 184044)

sreis@edelson.com

EDELSON MCGUIRE, LLP

30021 Tomas Street, Suite 300

Rancho Santa Margarita, CA 92688

Telephone: 949.459.2124

Fax: 949.459.2123

MICHAEL J. ASCHENBRENER (pro hac vice)

maschenbrener@edelson.com

CHRISTOPHER L. DORE (pro hac vice)

cdore@edelson.com

EDELSON MCGUIRE, LLC

350 N. LaSalle St., Suite 1300

Chicago, IL 60654

Telephone: 312.589.6370

Fax: 312.589.6378

STEVEN KAUFHOLD

skaufhold@AkinGump.com

CHAD A. STEGEMAN

cstegeman@AkinGump.com

AKIN GUMP STRAUSS HAUER & FELD, LLP

580 California Street, Suite 1500

San Francisco, CA 94104

Telephone: 415.765.9562

Fax: 415.765.9501

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MICHAEL TURNER, an individual, on behalf

of himself and all others similarly situated,

Plaintiff,

STORM8, LLC, a California Limited Liability

Company,

Defendant.

)

Case No. 09-cv-05234-CW

SETTLEMENT AGREEMENT

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SETTLEMENT AGREEMENT

SETTLEMENT AGREEMENT

This Settlement Agreement (“Agreement” or “Settlement Agreement”) is entered into

as of May _______, 2010, by and among (i) Michael Turner (the “Named Plaintiff”), (ii) the

Settlement Class (as defined herein) (the Settlement Class and the Named Plaintiff are

collectively herein referred to as “Plaintiff” unless otherwise noted), and (iii) Defendant

Storm8, LLC. The Plaintiff and the Defendant are collectively referred to herein as the

“Parties.” This Settlement Agreement is intended by the Parties to fully, finally and forever

release, resolve, discharge and settle the Released Claims (as the term is defined below),

upon and subject to the terms and conditions of this Settlement Agreement, and subject to the

final approval of the Court.

RECITALS

Plaintiff Michael Turner alleged that between March 2009 and August 2009,

Defendant Storm8 harvested his wireless phone number and the wireless phone numbers of

approximately 3.5 million other persons and that the collection of numbers occurred without

notice or consent by any individual. Defendant stored these phone numbers for several

months.

On November 4, 2009, Plaintiff brought a putative class action against the

Defendant, claiming that the unauthorized access and removal of his wireless telephone

number was a breach of contract and in violation of the Computer Fraud and Abuse Act (18

U.S.C. § 1030), the California Computer Crime Law (Cal. Penal Code § 502), and

California’s Unfair Competition Law (Cal. Bus. and Prof. Code § 17200). This Action was

filed in the United States District Court for the Northern District of California and assigned

to the Honorable Claudia Wilken. Hereafter, “the Court” shall refer to Judge Wilken or any

judge who shall succeed her as the Judge in this Action.

In March of 2010, the Parties agreed to take part in a mediation conducted by

the Honorable Eugene Lynch (ret.) of JAMS. The Parties submitted detailed confidential

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SETTLEMENT AGREEMENT

mediation briefs to Judge Lynch, setting forth their respective views as to the strengths of

their cases and the perceived weaknesses in their opponent’s case. On March 18, 2010,

counsel for the Parties, as well as representatives of Defendant Storm8, met at the JAMS

office in San Francisco with Judge Lynch. The Parties reached agreement in principle as to

the terms of the settlement further described herein.

Pursuant to the terms of the agreement between the Parties, Plaintiff seeks to

file an Amended Complaint against the Defendant substantially in the form attached hereto

as Exhibit A. Defendant stipulates to Plaintiff filing the proposed Amended Complaint for

the sole purpose of effectuating a one-class settlement as set forth herein.

At all times, the Defendant has denied and continues to deny any wrongdoing

whatsoever and has denied and continues to deny that it committed, or attempted to commit,

any wrongful act or violation of law or duty alleged in the Action and contend that they have

acted properly in all regards in connection with the design and dissemination of its gaming

software. Defendant maintains that it respects the privacy of its users.

Defendant also denies: (1) each and all of the claims and contentions alleged

by Plaintiff in the Action; (2) all charges of wrongdoing or liability against it arising out of

any conduct, statements, acts or omissions alleged in the Action; and (3) that Plaintiff or the

Settlement Class are entitled to any form of damages based on the conduct alleged in the

Action. In addition, Defendant maintains that it has meritorious defenses to the claims

alleged in the Action and it was prepared to vigorously defend the action. Finally, Plaintiff

and Class Counsel acknowledge that they have located no evidence of Defendant’s use of the

phone numbers collected by Defendant. Nonetheless, taking into account the uncertainty and

costs inherent in any litigation, Defendant has concluded that further defense of the Action

could be protracted, burdensome, and expensive, and that it is desirable and beneficial to

them that the Action be fully and finally settled and terminated in the manner and upon the

terms and conditions set forth in this Agreement. This Agreement is a compromise, and the

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SETTLEMENT AGREEMENT

Agreement, any related documents, and any negotiations resulting in it shall not be construed

as or deemed to be evidence of or an admission or concession of liability or wrongdoing on

the part of Defendant, with respect to any claim of any fault or liability or wrongdoing or

damage whatsoever.

Plaintiff believes that the claims asserted in the Action have merit.

Nonetheless, Plaintiff and Class Counsel recognize and acknowledge the expense and length

of continued prosecution of the Action against Defendant through trial and any subsequent

appeals. Plaintiff and Class Counsel also have taken into account the uncertain outcome and

risks of any litigation, especially in complex actions, as well as the difficulties and delays

inherent in such litigation. Therefore, Plaintiff believes that it is desirable that the Released

Claims be fully and finally compromised, settled and resolved with prejudice, and barred

pursuant to the terms set forth herein. Based on their evaluation, Class Counsel have

concluded that the terms and conditions of this Agreement are fair, reasonable and adequate

to the Settlement Class, and that it is in the best interests of the Settlement Class to settle the

claims raised in the Action pursuant to the terms and provisions of this Agreement.

The Parties agree that the Action was resolved in good faith, following arm’s

length bargaining presided over by a neutral and highly-experienced mediator, and that the

settlement reflected herein confers substantial benefits upon the Parties.

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among

Plaintiff, the Settlement Class, and each of them, and Defendant, by and through their

respective undersigned counsel that, subject to final approval of the Court after a hearing or

hearings as provided for in this Settlement Agreement, in consideration of the benefits

flowing to the Parties from the Settlement set forth herein, that the Action and the Released

Claims shall be finally and fully compromised, settled and released, and the Action shall be

dismissed with prejudice, upon and subject to the terms and conditions of this Agreement.

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SETTLEMENT AGREEMENT

AGREEMENT

DEFINITIONS.

As used in this Settlement Agreement, the following terms have the meanings

specified below:

1.1

“Action” refers to the above captioned case, Turner v. Storm8, LLC (09-cv-

05234-CW) (N.D. Cal.) currently pending before the Judge Wilken in the Northern District

of California.

1.2

“Settlement Administration Expenses” means the expenses incurred by the

Defendant in effectuating the terms of this Settlement, including but not limited to, carrying

out the agreed methods of Notice and distributing the in-game relief to the Settlement Class.

1.3

“Class Counsel” means Michael Aschenbrener and Christopher Dore of

Edelson McGuire, LLC.

1.4

“Class Representative” means the Named Plaintiff in this Action, Michael

Turner.

1.5

“Court” means the Honorable Claudia Wilken or any judge who shall

succeed her as the Judge in this Action.

1.6

“Defendant” means Storm8, Inc., a Delaware Corporation and Storm8, LLC

a California Limited Liability Company (collectively “Storm8”).

1.7

“Defendant’s Counsel” means Steven Kaufhold and Chad Allen Stegeman of

Akin Gump Strauss Hauer & Feld LLP.

1.8

“Effective Date of Settlement” or “Effective Date” means the first date by

which all of the events and conditions specified in Section 9.1 have been met and have

occurred.

1.9

“Final Approval Hearing” means the hearing before the Court where the

Parties will request the Final Judgment and Order of Dismissal with Prejudice to be entered

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by the Court approving the Settlement, approving the Fee Award, and the incentive awards to

the Class Representative.

1.10 “Fee Award” means the amount of attorneys’ fees and reimbursement of

expenses awarded by the Court to Class Counsel.

1.11 “Final” means one business day following the later of the following events:

(i) the date upon which the time expires for filing or noticing any appeal of the Court’s Final

Judgment and Order of Dismissal With Prejudice approving the Settlement; (ii) if there is an

appeal or appeals, other than an appeal or appeals solely with respect to attorneys’ fees and

reimbursement of expenses, the date of completion, in a manner that finally affirms and

leaves in place the Final Judgment and Order of Dismissal With Prejudice without any

material modification, of all proceedings arising out of the appeal or appeals (including, but

not limited to, the expiration of all deadlines for motions for reconsideration or petitions for

review and/or certiorari, all proceedings ordered on remand, and all proceedings arising out

of any subsequent appeal or appeals following decisions on remand); or (iii) the date of final

dismissal of any appeal or the final dismissal of any proceeding on certiorari.

1.12 “Final Judgment and Order of Dismissal With Prejudice” means the Final

Judgment and Order to be entered by the Court approving the Settlement after the Final

Approval Hearing.

1.13 “Mandatory Pop-Up Message” refers to a full screen box containing text

that appears in a Storm8 game when the software is first launched and prevents a consumer

from accessing any other part of the game without first clicking an “OK,” “ACCEPT,” or

similar button.

1.14 “Mediator” means Honorable Eugene F. Lynch of JAMS.

1.15 “Nationwide” means the 50 states in the United States of America and its

territories.

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1.16 “News Feed” refers to the section of a Storm8 game appearing on the startup

home screen that informs consumers of recent events occurring within the game (in real time)

such as messages from other users, attacks, software updates, and messages from Storm8

itself. Strom8 has the ability to place a message in the “News Feed” that will remain in there

for a fixed period of time.

1.17 “Notice” means the Notice of Pendency and Proposed Settlement of Class

Action and Final Approval Hearing, which is to be sent to Settlement Class Members

substantially in the manner set forth in this Agreement and substantially in the forms attached

hereto as Exhibits B & C.

1.18 “Preliminary Approval Order” means the proposed order preliminarily

approving the Settlement and directing notice thereof to the Settlement Class.

1.19 “Parties” or “Settling Parties” means Plaintiff Michael Turner, the

Settlement Class and the Defendant Storm8.

1.20 “Person” shall have the broadest meaning possible and shall mean, without

limitation, any individual, corporation, partnership, limited partnership, limited liability

company, association, joint stock company, estate, legal representative, trust, unincorporated

association, government or any political subdivision or agency thereof, and any business or

legal entity and their spouses, heirs, predecessors, successors, representatives, or assigns.

1.21 “Plaintiff” means Michael Turner and the Settlement Class Members.

1.22 “Points” means “Favor Points,” “Honor Points,” “Loyalty Points,” “Master

Points” and all other names assigned to the points Storm8 sells for use within its various

games.

1.23 “Released Claims” means any and all actual, potential, filed, known or

unknown, fixed or contingent, claimed or unclaimed, suspected or unsuspected, claims,

demands, liabilities, rights, causes of action, contracts or agreements, extra-contractual

claims, damages, punitive, exemplary or multiplied damages, expenses, costs, attorneys’ fees

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SETTLEMENT AGREEMENT

and or obligations (including “Unknown Claims” as defined below), whether in law or in

equity, accrued or unaccrued, direct, individual or representative, of every nature and

description whatsoever, whether based on federal, state, local, statutory or common law or

any other law, rule or regulation, including the law of any jurisdiction outside the United

States, against the Released Party, arising out of any facts, transactions, events, matters,

occurrences, acts, disclosures, statements, misrepresentations, omissions or failures to act

relating to the removal and storage of phone numbers belonging to the Settlement Class that

were or could have been alleged or asserted in the Action relating to such removal and

storage, belonging to Plaintiff and each of them and any of their present or past heirs,

executors, estates, administrators, predecessors, successors, assigns, parents, subsidiaries,

associates, affiliates, employers, employees, agents, consultants, independent contractors,

insurers, directors, managing directors, officers, partners, principals, members, attorneys,

accountants, financial and other advisors, investment bankers, underwriters, lenders, and any

other representatives of any of these Persons and entities (including, without limitation, any

claims, whether direct, derivative, representative or in any other capacity, arising under

federal, state, local, statutory or common law or any other law, rule or regulation, including

the law of any jurisdiction outside of the United States) that relate in any way to any actual or

alleged violation of law, misstatement or omission, breach of duty, negligence or fraud or

any other actual or alleged wrongdoing or misconduct.

1.24 “Released Party” means Storm8, and any and all of its present or past heirs,

executors, estates, administrators, predecessors, successors, assigns, parents, subsidiaries,

associates, affiliates, employers, employees, agents, consultants, independent contractors,

Insurers, directors, managing directors, officers, partners, principals, members, attorneys,

accountants, financial and other advisors, investment bankers, underwriters, shareholders,

lenders, auditors, investment advisors, legal representatives, successors in interest, assigns

and Persons, firms, trusts, corporations, officers, directors, other individuals or entities in

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which Storm8 has a controlling interest or which is related to or affiliated with it, or any

other representatives of any of these Persons and entities.

1.25 “Settlement” or “Settlement Agreement” means the settlement

contemplated by this Settlement Agreement.

1.26

“Settlement Benefit” means the benefits a Settlement Class Member may

receive pursuant to this Settlement Agreement.

1.27 “Settlement Class” means “all persons in the United States who downloaded

and accessed any version of any Storm8 game that was released or updated prior to August

30, 2009 on an Apple iPhone.” Excluded from the Class are Defendant, its legal

representatives, assigns, and successors, and any entity in which Defendant has a controlling

interest. Also excluded is the judge to whom this case is assigned and the judge’s immediate

family.

1.28

“Settlement Class Member” or “Class Member” means a Person who falls

within the definition of the Settlement Class as set forth above and who has not submitted a

valid request for exclusion.

1.29 “Preliminary Approval” means the Court’s certification of the Settlement

Class for settlement purposes, preliminary approval of the Settlement, and approval of the

form of the Settlement Class Notice.

1.30

“Unknown Claims” means claims that could have been raised in this

litigation and that the Plaintiff or any or all other Persons and entities whose claims are being

released, or any of them, do not know or suspect to exist, which, if known by him, her or it,

might affect his, her or its agreement to release the Released Party or the Released Claims or

might affect his, her or its decision to agree, object or not to object to the Settlement. Upon

the Effective Date, Plaintiff and all other Persons and entities whose claims are being

released shall be deemed to have, and shall have, expressly waived and relinquished, to the

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fullest extent permitted by law, the provisions, rights and benefits of § 1542 of the California

Civil Code, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

WHICH THE CREDITOR DOES NOT KNOW OR

SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE

TIME OF EXECUTING THE RELEASE, WHICH IF

KNOWN BY HIM OR HER MUST HAVE MATERIALLY

AFFECTED HIS OR HER SETTLEMENT WITH THE

DEBTOR.

Upon the Effective Date, Plaintiff and all other Persons and entities whose claims are being

released, also shall be deemed to have, and shall have, waived any and all provisions, rights

and benefits conferred by any law of any state or territory of the United States, or principle of

common law, or the law of any jurisdiction outside of the United States, which is similar,

comparable or equivalent to § 1542 of the California Civil Code. Plaintiff acknowledges that

he may discover facts in addition to or different from those that they now know or believe to

be true with respect to the subject matter of this release, but that it is his intention to finally

and forever to settle and release the Released Claims, notwithstanding any Unknown Claims

they may have, as that term is defined in this Paragraph.

SETTLEMENT RELIEF

2.1

Prospective Relief. In fulfillment of this Settlement Agreement, Storm8

agrees that:

(a)

Within thirty (30) days of the Effective Date, Storm8 will place its

can be found at http://forum.storm8.com/showthread.php?t=28. Additionally, the privacy

policy will provide clear notice of all data Storm8 collects through its mobile software,

including all personally identifiable information and all non-personally identifiable

information. Further, the privacy policy must be available from, at a minimum, the main

page of Storm8, www.storm8.com. Notwithstanding the foregoing, this subsection is subject

to applicable law.

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(b)

In all future versions of any mobile software created and distributed by

Storm8 for the iPhone, Storm8 will only remove and store consumers’ phone numbers from

their wireless telephones in a manner consistent with Storm8’s Privacy Policy then in effect.

(c)

Within thirty (30) days of the Effective Date, Storm8 will place a

notice of the above stated privacy policy on the pre-install page in the mobile iTunes Store

and the desktop iTunes Store including, but not limited to, the URL of the privacy policy

(subject to approval by Apple, Inc.). This notice will state, at a minimum, as follows:

“Storm8 respects your privacy. To view Storm8’s privacy policy, please visit

www.storm8.com/privacy.”

2.2

In-Kind Relief. Defendant agrees to distribute to each Class Member in-kind

relief of forty-five (45) Points per each device owned by a Settlement Class Member. In the

instance where a Class Member has downloaded more than one Storm8 game, the Class

Member will be provided an opportunity to choose which game to apply the points by

denying to apply the Points to an opened game until acceptance occurs in another game, after

which the ability to accept points in all other games will cease. Class Members are entitled

to only one distribution of Points per device, regardless of the number of games downloaded

and/or installed. Distribution of points to all Settlement Class Members will occur upon their

accessing Storm8 games within ninety (90) days of the Effective Date. Points will be

available for one year after the Effective Date.

RELEASES

3.1

The obligations incurred pursuant to this Settlement Agreement shall be a full

and final disposition of the Action and any and all Released Claims, as to the Released Party.

3.2

Upon the Effective Date, Plaintiff, and the Settlement Class Members, shall be

deemed to have, and by operation of the Final Judgment and Order of Dismissal with

Prejudice shall have, fully, finally, and forever released, relinquished and discharged the

Released Party from all Released Claims.

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NOTICE TO THE CLASS

4.1

One (1) week after the entry of the Preliminary Approval Order, the

Defendant shall cause the Settlement Class Notice describing the Final Approval Hearing and

the terms of the Settlement embodied in this Settlement Agreement to be disseminated to

Settlement Class Members as provided herein. Such notice shall comport with due process

and be effectuated pursuant to the agreed methods of Notice

4.2

The agreed methods of Notice shall include:

(a)

In-Game Notice. One (1) week after Preliminary Approval of the

Settlement, Notice shall be provided to Class Members through an in-game notification

message. The message will initially appear as a Mandatory Pop-Up Message within the

games so that all class members opening the games will see the message, and thereafter

remain as a posted message in the games’ News Feeds so that class members have continued

access to the in-game notification for thirty (30) days after the Effective Date .(Examples

attached as Exhibit D.) The text of the In-Game Notice shall be substantially in the form of

Exhibit B.

(b)

Internet Publication Notice. One (1) week after Preliminary Approval

of the Settlement, Notice shall be provided on a website, to be established and administered

by the Defendant (wholly separate from www.storm8.com), which shall inform Class

Members of their rights and obligations under this Settlement Agreement. The Internet

Publication Notice shall be substantially in the form of Exhibit C hereto.

(c)

The Internet Publication Notice shall be discontinued no earlier than

ninety (90) days after the Effective Date.

(d)

Class Action Fairness Act (“CAFA”) Notice. Pursuant to 28 U.S.C.

§ 1715, not later than fifteen (15) days after the proposed settlement is filed, Defendant shall

serve upon the Attorneys General of each of the fifty United States, and the Attorney General

of the United States, notice of the proposed settlement, which shall include (1) a copy of the

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Complaint and all materials filed with the Complaint or notice of how to electronically access

such materials; (2) notice of all scheduled judicial hearings in the Action; (3) all forms of

Notice to the Settlement Class; and (4) a copy of this Agreement. The Defendant shall serve

upon the above-referenced government official the names of Settlement Class Members who

reside in each respective state and the share of the claims of such members to the entire

settlement, or if not feasible, a reasonable estimate of the number of class members residing

in each state and the estimated proportionate share of the claims of such members to the

entire settlement.

4.3

The Notice shall advise the Settlement Class of their rights, including the right

to opt out of, comment upon, and/or object to the Settlement Agreement or its terms. The

Notice shall specify that any objection to this Settlement Agreement, and any papers

submitted in support of said objection, shall be received by the Court at the Final Approval

Hearing, only if, on or before a date forty-five (45) days after Notice is sent or such other

date as shall be approved by the Court and stated in the Notice, the Person making an

objection shall file notice of his or her intention to do so and at the same time (a) file copies

of such papers he or she proposes to submit at the Final Approval Hearing with the Clerk of

the Court and (b) send copies of such papers via mail, hand or overnight delivery service to

both Class Counsel and Defendant’s Counsel.

4.4

The cost of the agreed methods of Notice, including the In-Game Notice, the

Internet Publication Notice, and the CAFA Notice and all other parts making up the agreed

methods of Notice, are Settlement Administration Expenses to be paid by the Defendant.

4.5

Any member of the Settlement Class who intends to object to this Settlement

Agreement must file and serve on Class Counsel, Defendant’s Counsel, and the Court a

formal signed written objection, and include his/her name and address, include all arguments,

citations, and evidence supporting the objection (including copies of any documents relied

on), state that he or she is a member of the Settlement Class, state whether the objector

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intends to appear at the Final Approval Hearing, and state whether any such appearance shall

be with or without counsel. Any member of the Settlement Class who fails to timely file a

written objection and notice of his or her intent to appear at the Final Approval Hearing in

accordance with the terms of paragraph or as detailed in the Notice, and at the same time

provide copies to designated counsel for the Parties, shall not be permitted to object to this

Settlement Agreement at the Final Approval Hearing, and shall be foreclosed from seeking

any review of this Settlement Agreement by appeal or other means.

4.6

A member of the Settlement Class may opt out of the Settlement Class within

forty-five (45) days after Defendant distributes the In-Game Notice, or by a date approved by

the Court and specified in the Notice. In order to exercise the right to opt out, a member of

the Settlement Class must timely send a request for exclusion to Class Counsel and

Defendant’s Counsel. Except for those members of the Settlement Class who have properly

opted out, all Class Members will be bound by this Settlement Agreement and the Judgment

to be entered following final approval of this Settlement Agreement and entry of the Final

Judgment and Order of Dismissal with Prejudice. Any member of the Settlement Class who

elects to opt out shall not: (i) be bound by any orders or the Final Judgment and Order of

Dismissal with Prejudice; (ii) be entitled to relief under this Settlement Agreement; (iii) gain

any rights by virtue of this Settlement Agreement; or (iv) be entitled to object to any aspect

of this Settlement Agreement. The request for exclusion must be personally signed by the

Person requesting exclusion. So called “mass” or “class” opt-outs shall not be allowed. To

be valid, an opt-out must be postmarked or received by the date specified in the Notice.

SETTLEMENT ADMINISTRATION

5.1

The Defendant shall, under the supervision of Class Counsel and the Court,

administer the relief provided by this Settlement Agreement by carrying out the agreed

methods of Notice and distributing the Settlement Benefit. The Defendant shall maintain

reasonably detailed records of its activities under this Settlement Agreement. The Defendant

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shall maintain all such records as are required by applicable law in accordance with its

normal business practices and such records will be made available to Class Counsel and

Defendant’s Counsel upon request. The Defendant shall also provide reports and other

information to the Court as the Court may require. The Defendant shall provide Class

Counsel with information concerning notice, administration and implementation of the

Settlement. Should the Court request, the Defendant shall submit a timely report to the Court

summarizing the work performed by the Defendant in its capacity as Settlement

Administrator.

5.2

Class Counsel and Defendant’s Counsel shall receive all exclusion forms and

other requests from Class Members to exclude themselves from the Settlement.

5.3

The deadline for opting out of or objecting to the Settlement Agreement shall

be forty-five (45) days after Defendant distributes the In-Game Notice, and any opt-out or

objection must be postmarked or received by that deadline to be timely.

5.4

The Final Approval Hearing shall be ninety (90) days after CAFA Notice is

given or such date as ordered by the Court.

5.8

Any Class Member who does not, in accordance with the terms and conditions

of this Settlement, seek exclusion from the Class will be entitled to receive the Settlement

Benefit and any other benefits pursuant to this Settlement, and will otherwise be bound

together with all Class Members by all of the terms of this Settlement, including the terms of

the Final Judgment and Order of Dismissal with Prejudice to be entered in the Action and the

Releases provided for in the Settlement, and will be barred from bringing any action against

the Released Party concerning the Released Claims.

TERMINATION OF SETTLEMENT

6.1

The named Plaintiff in this Action, on behalf of the Settlement Class, or

Defendant, shall have the right to terminate this Settlement by providing written notice of

their election to do so (“Termination Notice”) to all other Parties hereto within ten (10) days,

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of any of the following events: (i) the Court’s refusal to grant Preliminary Approval of this

Agreement in any material respect;; (ii) the Court’s refusal to enter the Final Judgment and

Order of Dismissal with Prejudice in this Action in any material respect; (iii) the date upon

which the Final Judgment and Order of Dismissal with Prejudice is modified or reversed in

any material respect by the Court of Appeals or the Supreme Court; or (v) the date upon

which an Alternative Judgment, as defined in paragraph 9.1 of this Agreement is modified or

reversed in any material respect by the Court of Appeals or the Supreme Court.

PRELIMINARY APPROVAL ORDER AND FINAL APPROVAL ORDER

7.1

Promptly after the execution of this Settlement Agreement, Class Counsel and

Defendant’s Counsel shall jointly submit this Agreement together with its Exhibits to the

Court and shall move the Court for Preliminary Approval of the Settlement set forth in this

Agreement, certification of a class for settlement purposes only, appointment of Class

Counsel and Class Representative, and entry of a Preliminary Approval Order, which order,

at the Court’s leave, shall set a Final Approval Hearing date and approve the Notice for

dissemination in accordance with the agreed methods of Notice, substantially in the form of

the Exhibits hereto.

7.2

At the time of the submission of this Settlement Agreement to the Court as

described above, Class Counsel and Defendant’s Counsel shall request that, after Notice is

given, the Court hold a Final Approval Hearing and approve the Settlement of the Action as

set forth herein.

7.3

After Notice is given, the Parties shall request and, at the Court’s leave, obtain

from the Court a Final Judgment and Order of Dismissal with Prejudice. The Final Judgment

and Order of Dismissal with Prejudice will (among other things):

(a)

find that the Court has personal jurisdiction over all Settlement Class

Members and that the Court has subject matter jurisdiction to approve the Settlement

Agreement, including all Exhibits thereto;

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(b)

approve the Settlement Agreement and the proposed settlement as fair,

reasonable and adequate as to, and in the best interests of the Settlement Class Members;

direct the Parties and their counsel to implement and consummate the Settlement Agreement

according to its terms and provisions; and declare the Settlement Agreement to be binding

on, and have res judicata and preclusive effect in all pending and future lawsuits or other

proceedings maintained by or on behalf of Plaintiff and all other Settlement Class Members,

as well as their heirs, executors and administrators, successors and assigns;

(c)

find that the agreed methods of Notice implemented pursuant to the

Settlement Agreement (a) constitute the best practicable notice under the circumstances,

(b) constitute notice that is reasonably calculated, under the circumstances, to apprise

Settlement Class Members of the pendency of the Action, their right to object to or exclude

themselves from the proposed Settlement and to appear at the Final Approval Hearing,

receive notice, and (d) meet all applicable requirements of the Federal Rules of Civil

Procedure, the Due Process Clause of the United States Constitution and the rules of the

Court;

(d)

find that Plaintiff and Class Counsel adequately represented the

Settlement Class for purposes of entering into and implementing the Agreement;

(e)

dismiss the Action (including all individual claims and Settlement

Class claims presented thereby) on the merits and with prejudice, without fees or costs to any

party except as provided in the Settlement Agreement;

(f)

incorporate the Release set forth above, make the Release effective as

of the date of the Final Judgment and Order of Dismissal with Prejudice, and forever

discharge the Released Party from any claims or liabilities arising from or related to the facts,

circumstances, or subject matter of this Action;

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(g)

bar and enjoin all Settlement Class Members who have not been

excluded from the Settlement Class from filing, commencing, prosecuting, intervening in, or

participating (as class members or otherwise) in, any lawsuit in any jurisdiction based on or

arising out of the removal and storage of Class Member’s phone numbers by Defendant;

(h)

authorize the Parties, without further approval from the Court, to agree

to and adopt such amendments, modifications and expansions of the Settlement Agreement

and its implementing documents (including all Exhibits to this Agreement) as (a) shall be

consistent in all material respects with the Final Judgment and Order of Dismissal with

Prejudice, or (b) do not limit the rights of Settlement Class Members;

(i)

without affecting the finality of the Final Judgment and Order of

Dismissal with Prejudice for purposes of appeal, retain jurisdiction as to all matters relating

to administration, consummation, enforcement and interpretation of the Settlement

Agreement and the Final Judgment and Order of Dismissal with Prejudice, and for any other

necessary purpose; and

(j)

incorporate any other provisions, as the Court deems necessary and

just.

CLASS COUNSEL’S ATTORNEYS’ FEES AND REIMBURSEMENT OF

EXPENSES; INCENTIVE AWARD.

8.1

Subject to the Court’s approval, the Parties have agreed that Defendant shall

pay to Class Counsel the sum of $125,000 for attorneys’ fees and expenses in this Action.

Defendant shall pay the Fee Award in four installments as follows: (1) Class Counsel shall,

within seven (7) days after the Effective Date, be paid $31,250; (2) Class counsel shall be

paid a second installment of $31,250 within ninety (90) days after the first payment; (3) Class

Counsel shall be paid a third installment of $31,250 within one hundred and eighty (180)

days after the first payment; (4) Class Counsel shall be paid a fourth installment of $31,250

within two hundred and seventy (270) days after the first payment.

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SETTLEMENT AGREEMENT

8.2

Defendant agrees that such fee is reasonable and was reached following arms’

length negotiations with the help of a Mediator, and only after class relief was agreed upon.

Defendant further agrees that it will not oppose such an award, directly or indirectly. Any

payment of the Fee Award shall be paid via electronic transfer to an account designated by

Class Counsel in a letter to Defendant’s Counsel providing the necessary information for

electronic transfer. Class Counsel agrees that in no event shall Defendant pay or be

obligated to pay in excess of $125,000 for Class Counsel attorneys’ fees and expenses.

8.3

In addition to any award to which they may be entitled under the Settlement

Agreement, and in recognition of his efforts on behalf of the Settlement Class, Michael

Turner, the Class Representative, shall, subject to the approval of the Court, be awarded an

incentive award of $2,500. Defendant agrees that it shall not oppose such award, directly or

indirectly. These sums shall be paid to in recognition of the Plaintiff’s time and effort serving

as the Class Representative in this litigation. Defendant shall pay such amounts via check to

the Class Representative and such check shall be sent care of Class Counsel within seven (7)

days after the Effective Date.

CONDITIONS OF SETTLEMENT, EFFECT OF DISAPPROVAL,

CANCELLATION OR TERMINATION.

9.1

The Effective Date of this Settlement Agreement shall not occur unless and

until each of the following events occurs and shall be the date upon which the last (in time)

of the following events occurs:

(a)

The Court has entered the Preliminary Approval Order;

(b)

The Court has approved the Settlement, following Notice to the

Settlement Class and a Final Approval Hearing, as provided in the Federal Rules of Civil

Procedure, and has entered the Final Judgment and Order of Dismissal with Prejudice, or a

judgment substantially consistent with this Agreement; and

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SETTLEMENT AGREEMENT

(c)

The Final Judgment and Order of Dismissal with Prejudice has

become Final, as defined above, or, in the event that the Court enters an order and final

judgment in a form other than that provided above (“Alternative Judgment”) and that has the

consent of the Parties, such Alternative Judgment becomes Final.

9.2

If some or all of the conditions specified in Section 9.1 are not met, or in the

event that this Settlement Agreement is not approved by the Court, or the Settlement set forth

in this Agreement is terminated or fails to become effective in accordance with its terms, then

this Settlement Agreement shall be canceled and terminated subject to Section 9.3 unless

Class Counsel and Defendant’s Counsel mutually agree in writing to proceed with this

Agreement. If any Party is in material breach of the terms hereof, any other Party, provided

that it is in substantial compliance with the terms of this Agreement, may terminate this

Agreement on notice to all of the Parties.

9.3

If this Agreement is terminated or fails to become effective for the reasons set

forth in Sections 9.1 and 9.2 above, the Parties shall be restored to their respective positions

in the Action as of the date of the signing of this Agreement. In such event, any Final

Judgment and Order of Dismissal with Prejudice or other order entered by the Court in

accordance with the terms of this Agreement shall be treated as vacated, nunc pro tunc.

10.

CONFIRMATORY DISCOVERY

10.1 Storm8 agrees to engage in limited confirmatory discovery, consisting of

responding to written interrogatories, for the purpose of confirming that Storm8 retained

exclusive possession of the collected numbers before permanently destroying the numbers.

10.2 Storm8 will provide a statement under penalty of perjury to the effect that the

collected phone numbers remained in the possession of Storm8 at all times and that Storm8

has destroyed the list of collected numbers. A final version of this statement will be

incorporated into this Agreement and filed with the Court along with the Parties Motion for

Preliminary Approval. A draft of this statement is attached as Exhibit E.

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SETTLEMENT AGREEMENT

10.3 Storm8 will provide a statement under penalty of perjury stating exactly what

data it is currently collecting from its customers through its games. A final version of this

statement will be incorporated into this Agreement and filed with the Court along with the

Parties Motion for Preliminary Approval. A draft of this statement is attached as Exhibit F.

11.

MISCELLANEOUS PROVISIONS

11.1 The Parties (a) acknowledge that it is their intent to consummate this

Settlement Agreement; and (b) agree, subject to their fiduciary and other legal obligations, to

cooperate to the extent reasonably necessary to effectuate and implement all terms and

conditions of this Agreement and to exercise their reasonable best efforts to accomplish the

foregoing terms and conditions of this Agreement. Class Counsel and Defendant’s Counsel

agree to cooperate with one another in seeking Court approval of the Preliminary Approval

Order, the Settlement Agreement, and the Final Judgment and Order of Dismissal With

Prejudice, and promptly to agree upon and execute all such other documentation as may be

reasonably required to obtain final approval of the Settlement

11.2 The Parties intend this Settlement Agreement to be a final and complete

resolution of all disputes between them with respect to the Released Claims by Plaintiff and

the Settlement Class, and each or any of them, on the one hand, against the Released Party,

on the other hand. Accordingly, the Parties agree not to assert in any forum that the Action

was brought by Plaintiff or defended by Defendant, in bad faith or without a reasonable

basis.

11.3 Whether or not the Effective Date occurs or this Settlement Agreement is

terminated, neither this Agreement nor the Settlement contained herein, nor any act

performed or document executed pursuant to or in furtherance of this Agreement or the

Settlement:

(a)

is, may be deemed, or shall be used, offered or received against the

Released Party, as an admission, concession or evidence of, the validity of any Released

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SETTLEMENT AGREEMENT

Claims, the truth of any fact alleged by the Plaintiff, the deficiency of any defense that has

been or could have been asserted in the Action, or of any alleged wrongdoing, liability,

negligence, or fault of the Released Party;

(b)

is, may be deemed, or shall be used, offered or received against

Defendant, as an admission, concession or evidence of any fault, misrepresentation or

omission with respect to any statement or written document approved or made by the

Released Party;

(c)

is, may be deemed, or shall be used, offered or received against

Plaintiff or the Settlement Class, or each or any of them, as an admission, concession or

evidence of, the infirmity or strength of any claims raised in the Action, the truth or falsity of

any fact alleged by Defendant, or the availability or lack of availability of meritorious

defenses to the claims raised in the Action;

(d)

is, may be deemed, or shall be used, offered or received against the

Released Party, as an admission or concession with respect to any liability, negligence, fault

or wrongdoing as against any Parties to the Settlement Agreement, in any civil, criminal or

administrative proceeding in any court, administrative agency or other tribunal. However,

the Settlement, this Agreement, and any acts performed and/or documents executed in

furtherance of or pursuant to this Agreement and/or Settlement may be used in any

proceedings as may be necessary to effectuate the provisions of this Agreement. However, if

this Settlement Agreement is approved by the Court, any Party may file this Settlement

Agreement and/or the Final Judgment and Order of Dismissal with Prejudice in any action

that may be brought against such Party or Parties in order to support a defense or

counterclaim based on principles of res judicata, collateral estoppel, release, good faith

settlement, judgment bar or reduction, or any other theory of claim preclusion or issue

preclusion or similar defense or counterclaim;

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SETTLEMENT AGREEMENT

(e)

is, may be deemed, or shall be construed against Plaintiff and the

Settlement Class, or each or any of them, or against the Released Party, as an admission or

concession that the consideration to be given hereunder represents an amount equal to, less

than or greater than that amount that could have or would have been recovered after trial; and

(f)

is, may be deemed, or shall be construed as or received in evidence as

an admission or concession against Plaintiff and the Settlement Class, or each and any of

them, or against the Released Party, that any of Plaintiff’s claims are with or without merit or

that damages recoverable in the Action would have exceeded or would have been less than

any particular amount.

11.4 The headings used herein are used for the purpose of convenience only and

are not meant to have legal effect.

11.5 The waiver by one Party of any breach of this Agreement by any other Party

shall not be deemed as a waiver of any other prior or subsequent breaches of this Agreement.

11.6 All of the Exhibits to this Settlement Agreement are material and integral

parts thereof and are fully incorporated herein by this reference.

11.7 This Agreement and its Exhibits set forth the entire agreement and

understanding of the Parties with respect to the matters set forth herein, and supersede all

prior negotiations, agreements, arrangements and undertakings with respect to the matters set

forth herein. No representations, warranties or inducements have been made to any Party

concerning this Settlement Agreement or its Exhibits other than the representations,

warranties and covenants contained and memorialized in such documents. This Agreement

may be amended or modified only by a written instrument signed by or on behalf of all

Parties or their respective successors-in-interest.

11.8 Except as otherwise provided herein, each Party shall bear its own costs.

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SETTLEMENT AGREEMENT

11.9 Plaintiff represents and warrants that he has not assigned any claim or right or

interest therein as against the Released Party to any other Person or party and that he is fully

entitled to release the same.

11.10 Each counsel or other Person executing this Settlement Agreement, any of its

Exhibits, or any related settlement documents on behalf of any Party hereto hereby warrants

and represents that such Person has the full authority to do so and has the authority to take

appropriate action required or permitted to be taken pursuant to the Agreement to effectuate

its terms.

11.11 This Agreement may be executed in one or more counterparts. All executed

counterparts and each of them shall be deemed to be one and the same instrument provided

that counsel for the Parties to this Agreement all exchange original signed counterparts. A

complete set of original executed counterparts shall be filed with the Court.

11.12 This Settlement Agreement shall be binding upon, and inure to the benefit of,

the successors and assigns of the Parties hereto and the Released Party.

11.13 The Court shall retain jurisdiction with respect to implementation and

enforcement of the terms of this Agreement, and all Parties hereto submit to the jurisdiction

of the Court for purposes of implementing and enforcing the Settlement embodied in this

Agreement.

11.14 This Settlement Agreement is deemed to have been prepared by counsel for

all Parties, as a result of arms’ length negotiations among the Parties. Whereas all Parties

have contributed substantially and materially to the preparation of this Agreement, it shall not

be construed more strictly against one party than another.

11.15 Any disputes arising out of this Settlement Agreement shall be resolved under

the laws of the State of California.

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SETTLEMENT AGREEMENT

11.16 Where this Settlement Agreement requires notice to the Parties, such notice

shall be sent to the undersigned counsel: Michael Aschenbrener, Edelson McGuire, LLC, 350

North LaSalle Street, Suite 1300, Chicago, Illinois 60654; Steven Kaufhold, Akin Gump

Strauss Hauer & Feld LLP, 580 California Street, Suite 1500, San Francisco, California

94104.

Respectfully submitted,

Dated: May ___, 2010

EDELSON MCGUIRE, LLC

By:

MICHAEL ASCHENBRENER

One of the Attorneys for Plaintiff

Dated: May ___, 2010

AKIN GUMP STRAUSS

HAUER & FELD, LLP

By:

STEVEN KAUFHOLD

One of the Attorneys for Defendant

MICHAEL J. ASCHENBRENER

CHRISTOPHER L. DORE

EDELSON MCGUIRE, LLC

350 N. LaSalle St., Suite 1300

Chicago, IL 60654

Telephone: 312.589.6370

Fax: 312.589.6378

STEVEN KAUFHOLD

CHAD A. STEGEMAN

AKIN GUMP STRAUSS HAUER & FELD, LLP

580 California Street, Suite 1500

San Francisco, CA 94104

Telephone: 415.765.9562

Fax: 415.765.9501