Document:

Exhibit 10.1 – Management Agreement between Lee Enterprises, Inc. and BH Media Group, Inc.

 

	
CONFIDENTIAL

	
 

	
EXECUTION COPY

MANAGEMENT AGREEMENT

This MANAGEMENT AGREEMENT (this "Agreement") is entered into as of June 26, 2018, by and between BH Media Group, Inc., a Delaware corporation ("BH"), and Lee Enterprises, Incorporated, a Delaware corporation ("Lee").  BH and Lee are each referred to herein as a "Party," and are referred to together as the "Parties."

WHEREAS, BH is a Berkshire Hathaway Inc. ("Berkshire") company that owns and operates daily and weekly newspapers and other publications and related digital platforms;

WHEREAS, Lee is a leading provider of local news, information and advertising in primarily midsize markets; and

WHEREAS, BH and Lee are entering into this Agreement in order for Lee to manage certain of BH's newspapers and corresponding digital sites, as more fully set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties hereby agree as follows:

ARTICLE I

 TERM

The term of this Agreement (the "Term") will begin on July 2, 2018 (the "Start Date") and, unless sooner terminated pursuant to Section 4.1, will continue for five (5) fiscal years ending June 25, 2023, and may thereafter be extended for successive one (1) fiscal year  periods on such terms as may be mutually agreed by the Parties. The one (1) fiscal year period beginning on the Start Date and each successive period during the Term is referred to as a "Contract Year."

ARTICLE II

 MANAGEMENT OF NEWSPAPERS

2.1 Appointment of Lee.  Effective as of the Start Date, BH hereby grants Lee the sole authority to manage and operate BH's publications as listed on Exhibit A, which list may be updated by mutual written agreement, and the digital versions of such publications, in all formats, mediums and platforms (the "Newspapers") under the terms of this Agreement, provided that BH is retaining editorial control over local news coverage and the editorial pages. BH will cooperate with Lee in carrying out Lee's management of the Newspapers, including by having BH's personnel perform their responsibilities in accordance with Lee's decisions. BH is not transferring any assets, liabilities or personnel to Lee under this Agreement.

2.2 Annual Budget Process.  Prior to the start of each Contract Year, or as soon as reasonably possible thereafter, the Parties will jointly participate in an annual budget review process, during which BH will approve an operating and capital budget reasonably acceptable to it that includes specific revenue and expense initiatives and business transformation initiatives. Specific decisions around operations, sales and news will be approved or rejected by BH during such process.

2.3 Lee's Decision-Making Authority. Lee will have the flexibility to implement revenue initiatives and business transformation initiatives consistent with the annual operating and capital budgets. Lee will have the right to make any decisions that are consistent with the annual operating and capital budgets and any decisions made in the annual budget review process or that are otherwise permitted by Exhibit B. BH will be bound by any decision made by Lee that Lee reasonably and in good faith believed to be within Lee's decision-making authority, but if BH objects to any such decision and it is subsequently determined not to have been within Lee's decision-making authority, the decision will be reversed to the extent feasible.  In its performance of its management services, including the Transition Services, Lee shall exercise the same care and attention to managing the Newspapers in a manner compliant in all material respects with laws, regulations and contractual obligations applicable to them as it exercises in the management of its own business.

 

 

  

2.4 Relationship Managers.  Each Party will designate a relationship manager, who will have overall responsibility for the relationship between the Parties under this Agreement (each a "Relationship Manager"). Each Party's Relationship Manager will have full authority to act on behalf of such Party with respect to all matters related to this Agreement.  Lee's initial Relationship Manager is Kevin D. Mowbray, and BH's initial Relationship Manager is Ted Weschler. Each Party may designate a new Relationship Manager at any time by providing written notice thereof to the other Party.

2.5 Revenue and Expenses. All revenue from the Newspapers will belong to BH, and any such revenue that is collected by Lee will be collected on behalf of BH and as BH directs, will, to the maximum extent feasible, be collected in the form of checks or other transfers payable to BH or the Newspapers, and will be promptly deposited or otherwise transferred to accounts of BH as BH directs. Lee will cause any sales or use tax payable in connection with any such revenue to be collected from the subscriber, advertiser, or other purchaser, as the case may be, and to be remitted to the appropriate taxing authority, in accordance with the historical practice of BH and the Newspapers or as BH may otherwise direct.  BH will maintain levels of cash and working capital available for the Newspapers in line with historical practice, or as otherwise anticipated by the annual budget process, and will pay all accounts payable and payroll for the Newspapers.  Lee will have authority to write checks or otherwise direct payment for payment of all such accounts payable and payroll amounts, except that any payments to Lee or to an entity that controls, is controlled by or under common control with Lee or any person who is an officer, director or employee of Lee, shall additionally require signature or other authorization by the BH Relationship Manager.

2.6 Exclusions. For the avoidance of doubt, BH includes the following legal entities: Catamaran Media Company, LLC, World Investments, Incorporated and Palace Building Master Tenant, LLC. It is the intent of BH to transfer the ownership of World Investments, Incorporated out of BH as soon as practicable after execution of this Agreement. This Agreement excludes management of or any responsibility for World Investments, Incorporated and Palace Building Master Tenant, LLC. The following legal entities are not subsidiaries of BH, and therefore this Agreement excludes management of or any responsibility for: BH Holding LLC (which owns and operates a broadcast television station), The Buffalo News, Inc., and the Berkshire Hathaway Consolidated Pension Plan and any other defined benefit pension plans related to the Newspapers, which are all the responsibility of Berkshire.

ARTICLE III

 FINANCIAL TERMS

3.1 Financial Reports; EBITDA.  Lee will be responsible for the preparation of the quarterly and annual unaudited financial reporting packages on a consolidated basis for BH, consistent with the practices followed by BH as of the date of this Agreement as those may be changed in accordance with changes made by Berkshire in its consolidation practices with respect to its consolidated subsidiaries generally, including financial statements for the period covered ("Berkshire Reporting Financial Statements") and all other information Berkshire reasonably requests to permit consolidation of BH's financial results in Berkshire's consolidated financial statements for the periods covered, and with such reporting packages furnished to Berkshire within 20 days after the end of each calendar quarter and calendar year.  In addition, Lee will prepare monthly unaudited financial reports in accordance with historical practice for the Newspapers for each month, which will be provided to Berkshire within 30 days after the end of each such month ("Newspaper Financial Statements").  Following the end of each Contract Year, Lee will also prepare 

2

 

annual unaudited Newspaper Financial Statements together with an EBITDA calculation of the Newspapers for the Contract Year. The Berkshire Reporting Financial Statements and the Newspaper Financial Statements will be prepared in accordance with U.S. generally accepted accounting principles, as consistently applied by Berkshire with respect to BH's business.  The calculation of EBITDA will be based on the Newspaper Financial Statements and will include or exclude certain items as set forth in Exhibit C.  Lee will provide BH with copies of or access to supporting documentation reasonably requested by BH.  If BH disagrees with Lee's calculation of EBITDA for a Contract Year, it will promptly inform Lee of such disagreement, and the Relationship Managers will cooperate in good faith to resolve the disagreement in a manner consistent with the spirit and intent of this Agreement.  The books and records maintained by Lee, including the books and records relating to BH used in preparing the quarterly and annual financial reporting packages or in preparing or filing any tax reports or returns, shall be the property of BH and made available to BH or Berkshire or their representatives upon the request of BH or Berkshire and, in any event, furnished to BH or Berkshire upon termination of this Agreement.  In addition, Berkshire and its outside auditors will be granted full access as needed to any other books and records of Lee relating to the Berkshire Reporting Financial Statements and the management services and Shared Services provided by Lee hereunder, as may be needed by Berkshire to prepare its quarterly and annual consolidated financial statements, to audit or review such statements, and for tax, internal audit or internal control purposes of BH or Berkshire.

3.2 Fees.  BH will pay to Lee a fixed fee for each Contract Year in the amount specified in the table below (each a "Fixed Fee"). Each Fixed Fee will be paid in four (4) equal installments at least ten (10) business days before the last business day of each of Lee's fiscal quarters. If the EBITDA for a Contract Year exceeds $34,000,000, then BH will also pay to Lee a variable fee for such Contract Year (each a "Variable Fee"), calculated as (i) the amount of such excess, multiplied by (ii) the percentage specified in the table below for the applicable Contract Year. The variable fee will be paid within ten (10) business days after Lee's delivery of the Newspaper Financial Statements for the relevant Contract Year. Notwithstanding the above, in the event of early termination pursuant to Section 4.1 the Fixed Fee will be prorated for the portion of the Contract Year that has expired prior to termination, and the $34,000,000 base used for calculating excess EBITDA will also be prorated on the same basis.

	
Contract Year

	
Fixed Fee

	
Variable Fee

	
1

	
$5,000,000

	
33.3%

	
2

	
$5,000,000

	
33.3%

	
3

	
$5,000,000

	
50%

	
4

	
$5,000,000

	
50%

	
5

	
$5,000,000

	
50%

3.3 Reimbursement for Shared Services and Expenses.  Lee's business includes the performance of certain shared services among its business units. Lee may determine, subject to Section 2.3, that the Newspapers will obtain certain shared services from Lee (the "Shared Services"). The performance of the Shared Services will be in lieu of internal BH charges and in addition to Lee's management of the Newspapers hereunder.  BH will reimburse Lee for Lee's internal allocated costs (on an "at cost" basis without mark-up) for performing the Shared Services, as reasonably determined by Lee in a manner consistent with its internal practices for cost and expense allocation among its business units. Payments to Lee for Shared Services will be made on a monthly basis. Payments to Lee will require approval from the Relationship Managers.

3

3.4 Additional Incentives.  Lee may earn additional, mutually agreed upon incentives for sales of real estate and other mutually agreed upon actions. Berkshire Hathaway, in any event, is not obligated to use Lee's services in the sale of real estate.

3.5 Taxes.  BH will be responsible for the payment of any and all taxes, including sales, use, service, excise, receipts, value added and other transaction related taxes, arising from the Newspapers or applicable to the payments made to Lee hereunder, except for Lee's income taxes.

3.6 Audit Rights.  BH will have the right, at its own expense, to have a third-party auditor reasonably acceptable to Lee examine Lee's books and records relating to the calculation of the amounts payable by BH under this Agreement for the then-most recently completed Contract Year, and if the amount paid by BH as Variable Fee pursuant to Section 3.2 is determined (i) to have exceeded the amount payable, Lee shall reimburse BH the amount of such excess or (ii) to be less than the amount payable, BH shall pay the difference, in each case within ten (10) business days after such determination.

ARTICLE IV

 TERMINATION

4.1 Termination.

(a)                Either Party may terminate this Agreement upon written notice to the other Party if:

		 (i)	
the EBITDA for a Contract Year (as calculated pursuant to Section 3.1) is less than $20,000,000; or

		(ii)	
the other Party voluntarily files for bankruptcy or insolvency, or is subject to an involuntary filing for bankruptcy or insolvency that is not dismissed within 60 days.

(b)               BH may terminate this Agreement upon written notice to Lee if:

		(i)	
any person or group of related persons has become the beneficial owner of more than 50% of Lee's voting equity interests or Lee sells all or substantially all of its assets to a third party; or

		(ii)	
Lee has not refinanced or otherwise satisfied its Senior Secured Notes prior to February 13, 2022 or its Second Lien Term Notes prior to November 15, 2022.

4.2 Transition Services.  Upon the expiration or earlier termination of this Agreement, Lee will provide transition services (including Shared Services) to BH to enable BH to operate the Newspapers for a transition period of up to 24 months. The nature and extent of such transition services shall be such as would permit BH to continue receiving the services, including Shared Services, it was receiving at the time of such termination and shall otherwise be as mutually agreed by the Parties, and compensation for such transition services (including Shared Services) shall be at Lee's cost without mark-up.

4.3 Survival.  The following provisions will survive expiration or termination of this Agreement for any reason:  Section 2.1 (for Transition Services), Section 2.2 (for Transition Services), Section 2.3 (for Transition Services), Section 2.4 (for Transition Services), Section 2.5 ( for Transition Services), Section 3.1 (for one (1) year and for Transition Services), Section 3.3 (for Transition Services), Section 3.5, Section 3.6 (for one (1) year), Section 4.2, this Section 4.3, and Section 5.2, and Article III (with respect to unpaid amounts ), Article VI, Article VII, Article VIII, Article IX and Article X.

4

ARTICLE V

WARRANTIES; DISCLAIMER

5.1 Mutual.  Each Party represents, warrants and covenants that:  (i) it is duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it was organized; (ii) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action, and this Agreement constitutes a legal, valid and binding obligation of such Party, enforceable in accordance with its terms; and (iii) the execution, delivery and performance of this Agreement by such Party of this Agreement and the performance of its obligations hereunder do not and will not breach or violate any laws or regulations to which such Party is subject or any agreement, obligation or restriction by which such Party is or becomes bound.

5.2 DISCLAIMER OF WARRANTIES.  EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES, AND BOTH PARTIES HEREBY DISCLAIM, ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT.

ARTICLE VI

 LIMITATION OF LIABILITY

EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS ARTICLE, IN NO EVENT WILL LEE'S AGGREGATE LIABILITY ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT EXCEED THE GREATER OF (i) $5,000,000 OR (ii) THE FEES PAID BY BH UNDER SECTION 3.2 FOR THE CONTRACT YEAR MOST RECENT TO THE DATE OF THE MOST RECENT CLAIM FOR DAMAGES BY BH MULTIPLIED BY TWO (2), WHETHER BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR ANY OTHER THEORY, AND EVEN IF LEE HAS BEEN ADVISED OF THE POSSIBILITY THEREOF. IN NO EVENT WILL THIS ARTICLE BE CONSIDERED TO HAVE FAILED OF ITS ESSENTIAL PURPOSE. The limitations of liability set forth in this Article will not apply to Lee's indemnification obligations under Section 9.2.

ARTICLE VII

 EXCLUSION OF CONSEQUENTIAL DAMAGES

EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS ARTICLE, IN NO EVENT WILL LEE BE LIABLE FOR LOST PROFITS OR FOR ANY EXEMPLARY, PUNITIVE, INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT, WHETHER BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR ANY OTHER THEORY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY THEREOF. IN NO EVENT WILL THIS ARTICLE BE CONSIDERED TO HAVE FAILED OF ITS ESSENTIAL PURPOSE. The exclusion of damages set forth in this Article will not apply to a Party's indemnification obligations under Section 9.2 with respect to damages required to be paid to a third party.

5

 

ARTICLE VIII

CONFIDENTIALITY

8.1 Confidential Information. Each Party may receive or have access to Confidential Information of the other Party (the Party receiving or having access is referred to as the "Receiving Party" and the other Party is referred to as the "Providing Party"). "Confidential Information" means information, whether in oral, written, electronic or other form, that is marked or otherwise identified as confidential or which by the nature of the information or the circumstances of its disclosure should reasonably be understood to be confidential, but excludes information that:  (i) was already in the Receiving Party's possession; (ii) is or becomes publicly available other than through a breach of this Article by the Receiving Party; (iii) the Receiving Party lawfully receives from a third party; or (iv) is independently developed by the Receiving Party. The terms of this Agreement will be considered to be the Confidential Information of each Party.

8.2 Obligations.  The Receiving Party will protect the Providing Party's Confidential Information from disclosure using at least the same degree of care that the Receiving Party uses to protect its own Confidential Information of a similar nature (but in no event less than a reasonable degree of care). The Receiving Party may disclose the Providing Party's Confidential Information to its personnel and other third parties as the Receiving Party reasonably determines is necessary for carrying out the purposes of this Agreement, provided that such personnel and other third parties are subject to confidentiality obligations consistent with this Article.

8.3 Required Disclosure. Nothing in this Agreement prohibits the Receiving Party from disclosing any Confidential Information of the Providing Party as required by applicable law or regulations, including without limitation such disclosures relating to this Agreement as may be required under the federal or state securities laws; provided that the Receiving Party will use commercially reasonable efforts to give the Providing Party advance notice of any third-party request for such disclosure (to the extent permitted by applicable law) so that the Providing Party may seek an appropriate protective order or other remedy at the Providing Party's expense.

ARTICLE IX

LIABILITIES

9.1 BH Obligations; Indemnification by BH.  Except for third-party claims subject to indemnification by Lee under Section 9.2, and subject to and without limiting any remedies available to BH for breach of contract claims against Lee arising under this Agreement, (a) BH is responsible to Lee and liable to it for all liabilities, costs and expenses of Lee arising from Lee's management of the Newspapers hereunder (including those resulting from decisions made by Lee in accordance with Section 2.3) (collectively, the "BH Obligations"), and will assume, perform, discharge and fulfill when due and, to the extent applicable, comply with all of the BH Obligations in accordance with their respective terms, and (b) BH will indemnify and hold harmless Lee (and its directors, officers, employees and representatives) from the BH Obligations and from all damages, liabilities, costs and expenses ("Losses") arising from third-party claims made against Lee relating to Lee's management of the Newspapers hereunder (including claims by BH's personnel for employment-related claims). Lee shall give BH prompt notice of any lawsuits or charges filed, claims asserted, or investigations commenced against BH or the Newspapers to Lee's knowledge and shall provide BH with all information reasonably requested by it regarding any such matters.  If BH reasonably concludes that any such matter may result in a loss greater than $5 million it may assume the management of any such matter by notice to Lee. Any legal settlement in excess of $1 million to be paid by BH or the Newspapers requires the approval of the BH Relationship Manager.

6

9.2 Indemnification by Lee.  Lee will indemnify and hold harmless BH (and its directors, officers, employees and representatives) from all Losses from third-party claims to the extent arising from Lee's willful misconduct or bad faith in the performance of its management obligations under this Agreement.

9.3 Procedures.  Each Party will promptly notify the other of any claim subject to indemnification hereunder (provided that any delay in providing notice will not relieve the indemnifying Party of its indemnification obligations except to the extent the indemnifying Party is actually prejudiced by such delay). The indemnified Party may elect to control the defense of a claim. If the indemnified Party does not elect to control the defense of a claim, then the indemnifying Party will do so.  Neither Party will settle, compromise or offer to settle or compromise any such claim without the other Party's consent, not to be unreasonably withheld.

ARTICLE X

MISCELLANEOUS

10.1 Notices.  Any notice to be given hereunder will be in writing and delivered personally, sent by reputable overnight courier service (charges prepaid and signature required), or sent by registered or certified mail (postage prepaid and return receipt requested), in each case according to the instructions set forth below. Such notices will be deemed given: if personally delivered, at the time of delivery; if sent by overnight courier service, at the time of delivery as reported by the courier service; and if sent by U.S. registered or certified mail, at the time of delivery as reported by the U.S. post office.

	
If to BH:

 

BH Media Group, Inc.

c/o Berkshire Hathaway Inc.

3555 Farnam Street

Omaha, Nebraska 68131

Attn:  Ted Weschler

	
With a copy to (which will not constitute notice):

 

Chief Financial Officer

Berkshire Hathaway Inc.

3555 Farnam Street

Omaha, Nebraska 68131

Attn:  Marc D. Hamburg

	 	 
	
If to Lee:

 

Lee Enterprises, Incorporated

201 N. Harrison St.

Davenport, IA  52801

Attn:  Kevin D. Mowbray

  

	
With a copy to (which will not constitute notice):

 

Lane & Waterman LLP

 220 N. Main St., Ste. 600

Davenport, IA  52801

Attn:  C. D. Waterman III

  

10.2 Assignment.  The Parties acknowledge that BH would not be entering into this Agreement except for its experience with and confidence in the management and expertise of Lee and its ability to perform the services to be performed hereunder and that Lee would not be entering into this Agreement except for its experience with and confidence in the management of BH, so that for each Party the identity of the other Party is critical to performance of this Agreement.  Therefore the Parties agree that neither Party may assign this Agreement (or any rights or obligations), including by operation of law, without the other Party's prior written consent, which may be withheld in the other Party's discretion. This Agreement will be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns.  Any attempt to assign this Agreement (or any rights or obligations) other than as permitted by this Section will be null and void.

10.3 Entire Agreement; Amendment; Waiver.  This Agreement (including the Exhibits) constitutes the entire agreement between the Parties regarding the subject matter hereof, and supersedes any prior and contemporaneous understandings, agreements or representations by or between the Parties. This Agreement

7

may be amended only by a written instrument executed and delivered by both Parties.  No agreement extending or waiving any provision of this Agreement will be valid or binding unless it is in writing and is executed and delivered by or on behalf of the Person against which it is sought to be enforced.

10.4 Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be valid and enforceable under applicable law.  If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, such provision shall be ineffective only to the extent of such prohibition, illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

10.5 No Third-Party Beneficiaries. Except as set forth in the Parties' indemnification obligations, there are no third-party beneficiaries under this Agreement.

10.6 Independent Contractors.  The Parties are independent contractors, and nothing in this Agreement creates a partnership, joint venture, agency or fiduciary relationship between the Parties. Lee's obligations and duties to BH are limited to those expressly set forth in this Agreement. Nothing in this Agreement creates any employment relationship between a Party and the other Party's personnel.

10.7 Governing Law; Consent to Jurisdiction.  This Agreement will be interpreted and construed in accordance with, and any and all claims arising out of or relating to this Agreement, whether arising in contract, tort, or statute, will be governed by the laws of the State of Delaware, including its statutes of limitations, without giving effect to any conflict-of-laws or other rule that would result in the application of the laws of a different jurisdiction. Each Party hereby irrevocably submits to the exclusive jurisdiction of the federal and state courts located in Wilmington, Delaware for the purpose of any claims arising out of or relating to this Agreement.

10.8 Waiver of Jury Trial.  Each Party waives, to the fullest extent permitted by applicable law, any right it may have to trial by jury in respect of any cause of action arising out of this Agreement.

10.9 Interpretation.  The word "including" and variations thereof means "including without limitation." The word "will" means "shall." The words "hereof," "hereunder," "herein" and words of similar import refer to this Agreement as a whole. The descriptive headings of this Agreement are inserted for convenience only and will not constitute a part of this Agreement.  Each Party has participated in the drafting of this Agreement and it will be interpreted without construing any provision against the drafter.

10.10 Counterparts. This Agreement may be executed in counterparts (including by means of facsimile or scanned and emailed signature pages), any one of which need not contain the signatures of more than one (1) party, but all such counterparts taken together shall constitute one and the same agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

8

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above.

BH MEDIA GROUP, INC.

/s/ Terry J. Kroeger 

Name: Terry J. Kroeger

Title:   President

LEE ENTERPRISES, INCORPORATED

/s/ Mary E. Junck 

Name:  Mary E. Junck

 Title:    Executive Chairman

 

 

[Signature Page to Management Agreement]

 

EXHIBIT A

NEWSPAPERS*

	
Omaha Group

	 	
Charlottesville Group

	 	
Fredericksburg Group

	
   Omaha World-Herald

	 	
   Charlottesville Daily Progress

	 	
   Fredericksburg Free-Lance Star

	
   Bellevue Leader

	 	
   Orange County Review

	 	
   Print Innovators

	
   Papillion Times

	 	
   Madison County Eagle

	 	
   Culpeper Star Exponent

	
   Ralston Recorder

	 	
   Greene Country Record

	 	 
	
   Gretna Breeze

	 	
   Waynesboro News Virginian

	 	 
	
   The Base

	 	 	 	
Florence Group

	 	 	 	 	
   Florence Morning News

	 	 	
Bristol Group

	 	
   The (Hartsville) Messenger

	
Richmond Group

	 	
   Bristol Herald Courier

	 	
   Marion Star/Mullins Enterprise

	
   Richmond Times Dispatch

	 	
   Richlands News-Press

	 	
   Lake City News & Post

	
   The Mechanicsville Local

	 	
   Washington County News

	 	
   The Weekly Observer (Hemingway)

	
   The Goochland Gazette

	 	
   The Bland County Messenger

	 	 
	
   Powhatan Today

	 	
   The Floyd Press

	 	
Council Bluffs Nonpareil

	 	 	
   Smyth County News & Messenger

	 	 
	 	 	
   Wytheville Enterprise

	 	
Grand Island Independent

	
Tulsa Group

	 	 	 	 
	
   Tulsa World

	 	
Martinsville Group

	 	
North Platte Telegraph

	
   Broken Arrow Ledger

	 	
   Martinsville Bulletin

	 	 
	
   Owasso Reporter

	 	
   Franklin News-Post

	 	
York News-Times

	
   Sand Springs Leader

	 	 	 	 
	
   Skiatook Journal

	 	
   Winston-Salem Journal

	 	
Kearney Group

	
   Wagoner Tribune

	 	 	 	
   Kearney Hub

	
   Tulsa Business and Legal Review

	 	
Greensboro Group

	 	
   Central Nebraska Publications

	 	 	
   Greensboro News & Record

	 	 
	 	 	
   Reidsville Review

	 	
Scottsbluff Group

	
Alabama Group

	 	
   Eden News

	 	
   Scottsbluff Star-Herald

	
   Dothan Eagle and Enterprise Ledger

	 	
   The (Madison) Messenger

	 	
   Gering Courier

	
   Army Flier - Military

	 	 	 	
   Hemingford Ledger

	
   Opelika Auburn News

	 	
North Carolina 

	 	 
	
   Jackson County Floridan

	 	
Community Group

	 	
Central Weeklies Group

	
   The Eufaula Tribune

	 	
   Statesville Record & Landmark

	 	
   Suburban Print Facility

	
   Alabama Newspapers Regional

	 	
   Mooresville Tribune

	 	
   Ashland Gazette

	
 

Bryan-College Station Eagle

	 	
   The (Morganton) News Herald

	 	
   Wahoo Newspaper

	
 

Waco Tribune Herald

	 	
   The (Marion) McDowell News

	 	
   Waverly News

	
 

Roanoke Times

	 	
   Concord Independent Tribune

	 	
   Clarinda Herald Journal

	 	 	
   Hickory Daily Record

	 	
   Denison Bulletin & Review

	
Lynchburg Group

	 	
   Western North Carolina Regional

	 	
   Logan/Woodbine Location

	
   Lynchburg News & Advance

	 	 	 	
   Shenandoah Valley News

	
   Amherst New Era Progress

	 	
Atlantic City Group

	 	
 

Lexington Clipper Herald

	
   Danville Register & Bee

	 	
   Press of Atlantic City

	 	 
	 	 	
   Catamaran Media

	 	 
	 	 	
   Atlantic City Weekly

	 	 
	 	 	 	 	 
	 	 	 	 	 

*Including any print and digital publications associated with the above titles

 

A-1

EXHIBIT B

OPERATING FRAMEWORK

Decisions that do not require approval by BH, unless specifically rejected in the annual budget process:

	
·

	
Reducing staff and non-union benefits to be consistent with Lee staffing and benefits

	
·

	
Adjusting ad rates consistent with past practices which are approved by the publisher

	
·

	
Spending for unbudgeted capital expenditures under $0.1 million

	
·

	
Reducing employees that are eliminated in conjunction with Lee consolidation and transformation strategies

	
·

	
Paying severance consistent with past BH policies

	
·

	
Entering into contracts with Lee's third-party vendors or Lee's internal services that are at rates substantially similar or lower than those charged to Lee's newspapers.

Decisions that require specific approval by BH, if not approved in the annual budget process:

(the underlined headings are provided for convenience and do not identify decisions requiring approval separate from the bullet items)

Compensation and labor matters:

	
·

	
Determination of the compensation of top BH executive management, including entering into employment contracts

	
·

	
Entering into contracts with existing unions or with newly-formed bargaining units

	
·

	
Adjusting total annual compensation of an employee by more than $100,000

Actions relating to publication:

	
·

	
Changes in days of publication

	
·

	
Additional circulation pricing actions

	
·

	
Outsourcing printing

Asset sales, purchases and contract matters with respect to BH:

	
·

	
Acquiring, disposing or closing a newspaper or business

	
·

	
Entering into contracts, leases or commitments over $1.0 million

	
·

	
Selling an asset, real or personal property, with sales price over $0.5 million

Insurance matters with respect to BH:

	
·

	
Purchasing of property, casualty and liability insurance coverages

	
·

	
Settling of insurance claims over $0.5 million

	
·

	
Using proceeds received from insurance loss settlements

Other matters:

	
·

	
Placing liens on assets of BH

	
·

	
Adopting new accounting principles for BH, except as required by GAAP

	
·

	
Shared Services

B-1

EXHIBIT C

EBITDA

As set forth in Section 3.1, EBITDA will be calculated in accordance with GAAP.

The EBITDA calculations will include the following:

	
·

	
Fixed Fees to Lee

	
·

	
Fees for Shared Services

	
·

	
Severance costs

The EBITDA calculations will exclude the following:

	
·

	
Non-cash charges including depreciation, amortization, impairments of fixed or intangible assets and the like

	
·

	
Capital gains and losses resulting from the sale of assets

	
·

	
Variable Fees to Lee

	
·

	
Expenses arising from circumstances existing prior to the Start Date (including any such expenses continuing after the Start Date), even if paid on or after the Start Date, and any corresponding insurance proceeds or similar reimbursement

  

C-1pi-ex101_6.htm

Execution Copy

 

Exhibit 10.1

 
Impinj, Inc.
400 Fairview Avenue North, Suite 1200

Seattle, WA 98109

June 20, 2018

Sylebra HK Company Limited

28 Hennessy Road, Floor 20

Wan Chai, Hong Kong

Attn:Dan Gibson

Gentlemen:

This letter (this “Agreement”) constitutes the agreement between (a) Impinj, Inc. (“Company”) and (b) Sylebra HK Company Limited (“Sylebra”) and each of the other related Persons (as defined below) set forth on the signature pages to this Agreement and their respective Affiliates (as defined below) and Associates (as defined below) (all such Persons, the “Sylebra Group”). Company and the Sylebra Group are together the “Parties.”

1.Appointment of New Director. Promptly following the execution of this Agreement, Company’s Board of Directors (the “Board”) and all applicable committees of the Board shall take all action necessary to (a) increase the size of the Board from six to seven directors, and (b) appoint Daniel P. Gibson (the “Designee”) as a Class II director of Company with a term expiring at Company’s 2018 Annual Meeting of Stockholders (the “2018 Meeting”). The Board shall, in connection with the 2018 Meeting, nominate the Designee to stand for election with the other Class II directors of the Board.

2.Compliance with Laws and Company Policies. If requested by Company, Sylebra will cause the Designee to agree in writing, during the term of any service as a director of Company, to comply with all laws, policies, procedures, processes, codes, rules, standards and guidelines applicable to members of the Board, including Company’s code of conduct, insider trading policy, Regulation FD policy, related party transactions policy and corporate governance guidelines, in each case as amended from time to time.

3.Confidentiality. For so long as the Designee is serving as a director on the Board, he may provide confidential information of Company that the Designee learns in his capacity as a director of Company, including discussions or matters considered in meetings of the Board or Board committees (collectively, “Company Confidential Information”), to Representatives of the Sylebra Group following the execution of the a confidentiality agreement in the form attached as Exhibit A, which shall govern the Sylebra Group’s obligations with respect to the confidential information of the Company provided in connection with this Agreement. The Sylebra Group and its Representatives will not use any Company Confidential Information for any purpose other than in connection with Sylebra’s investment in Company. The Designee and the Sylebra Group and its 

9134039_11

Representatives will not, without the prior written consent of Company, otherwise disclose any Company Confidential Information to any other Person. For the avoidance of doubt, the obligations under this paragraph 3 shall be in addition to, and not in lieu of, the Designee’s confidentiality obligations under Delaware law and the charter, bylaws and applicable corporate governance policies of Company, the current versions of which have been made available to the Designee prior to the execution of this Agreement.

4.No Fiduciary Restriction. Notwithstanding anything to the contrary in this Agreement, the Designee, during his service as a director of Company, will not be prohibited from acting in his capacity as a director or from complying with his fiduciary duties as a director of Company (including voting on any matter submitted for consideration by the Board, participating in deliberations or discussions of the Board, and making suggestions or raising any issues or recommendations to the Board).

5.Director Benefits. The Designee will be entitled to the same director benefits as other members of the Board, including (a) compensation for his service as a director and reimbursement for his expenses on the same basis as all other non-employee directors of Company; (b) equity-based compensation contemplated by Company’s Director Compensation Policy, and (c) the same rights of indemnification and directors’ and officers’ liability insurance coverage as the other non-employee directors of Company as such rights may exist from time to time.

6.Recusal of the Designee. The Sylebra Group acknowledges that the Board or any of its committees may recuse the Designee from any Board or committee meeting or portion thereof at which the Board or such committee is evaluating or taking action with respect to (a) the exercise of any of Company’s rights or enforcement of any of the obligations under this Agreement; (b) any action taken in response to actions taken or proposed by any member of the Sylebra Group with respect to Company; or (c) any proposed transaction between Company and any member of the Sylebra Group.

7.Standstill. During the Restricted Period, no member of the Sylebra Group will, and Sylebra will cause the Representatives of each member of the Sylebra Group not to, in any way, directly or indirectly (in each case, except as expressly permitted by this Agreement), without the prior consent of the Board:

(a)with respect to Company or the Voting Securities, (i) initiate, make participate in or encourage any “solicitation” (as such term is used in Regulation 14A (the “Proxy Rules”) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of proxies or consents with respect to the election or removal of directors or any other matter or proposal; (ii) become a “participant” (as such term is used in the Proxy Rules) in any such solicitation of proxies or consents with respect to any stockholder meeting of Company; or (iii) seek to advise, encourage or influence any Person with respect to the voting or disposition of any Voting Securities;

(b)initiate, propose or otherwise “solicit” (as such term is used in the Proxy Rules) Company’s stockholders to approve any shareholder proposal, whether made pursuant to 

	
9134039_11 
	
-2-

Rule 14a-4 or Rule 14a-8 of the Proxy Rules or otherwise, or cause or encourage any Person to initiate or submit any such shareholder proposal;

(c)(i) seek, alone or in concert with others, election or appointment to, or representation on, the Board; (ii) nominate or propose the nomination of, or recommend the nomination of, or encourage any Person to nominate or propose the nomination of or recommend the nomination of, any candidate to the Board; or (iii) seek, alone or in concert with others, or encourage any Person to seek, the removal of any member of the Board;

(d)other than solely with other members of the Sylebra Group with respect to Voting Securities now or subsequently owned by them, (i) form, join (whether or not in writing), encourage, influence, advise or participate in a partnership, limited partnership, syndicate or other group, including a “group” as defined pursuant to Section 13(d) of the Exchange Act, with respect to any Voting Securities; (ii) deposit any Voting Securities into a voting trust, arrangement or agreement; or (iii) subject any Voting Securities to any voting trust, arrangement or agreement;

(e)(i) make any unsolicited offer or proposal (with or without conditions) with respect to any merger, acquisition, recapitalization, restructuring, disposition or other business combination involving any member of the Sylebra Group and Company; or (ii) solicit a third party to, on an unsolicited basis, make an offer or proposal (with or without conditions) with respect to any merger, acquisition, recapitalization, restructuring, disposition or other business combination involving Company, or publicly encourage, initiate or support any third party in making such an unsolicited offer or proposal; or

(f)other than with other any member of the Sylebra Group, enter into any agreements, understandings or arrangements (whether written or oral) with, or advise, finance, assist or encourage, any Person in connection with any of the foregoing.

Nothing in this paragraph 7 shall be deemed to (i) prohibit the Sylebra Group or its Affiliates from communicating privately with Company’s directors, officers, shareholders and representatives; provided that such private communications would not be reasonably determined to trigger public disclosure obligations for any party or would not circumvent any of the Sylebra Group’s obligations under paragraphs 7(a) through 7(f) and paragraph 8, and are made in compliance with all existing confidentiality obligations of the Sylebra Group and the Designee with respect to Company and this Agreement; or (ii) impose any restriction on the Designee discharging his fiduciary duties as a director of Company.

8.Non-Disparagement. During the Restricted Period, no Party shall, and each Party shall not permit, any of its Representatives to make any public statement that constitutes or would reasonably be expected to constitute disparaging or impugning remarks on, or take any action reasonably likely to damage the reputation of, the other Party or its directors, officers, principals or partners. This paragraph 8 will not (a) apply to any statement made in connection with any action to enforce this Agreement; or (b) prohibit any person from reporting what it believes, upon advice of counsel, to be violations of federal law or regulation to any governmental authority pursuant to Section 21F of the Exchange Act or Rule 21F promulgated thereunder.

	
9134039_11 
	
-3-

9.No Compensation Arrangements. The members of the Sylebra Group will not, directly or indirectly, compensate or agree to compensate the Designee for his service as a director of Company with any cash, securities (including any rights or options convertible into or exercisable for or exchangeable into securities or any profit sharing agreement or arrangement) or other form of compensation directly or indirectly related to Company or its securities.

10.Compliance with Securities Laws. The Sylebra Group acknowledges that it understands its obligations under the U.S. securities laws. Company will use commercially reasonable efforts to notify the Sylebra Group reasonably in advance of when any “open window” director trading periods begin and end.

11.Compliance with this Agreement. Sylebra will cause the other members of the Sylebra Group to comply with the terms of this Agreement and will be responsible for any breach of the terms of this Agreement by any such member, in each case whether or not such member is a party to this Agreement.

12.Definitions. As used in this Agreement, the term (a) “Person” will be interpreted broadly to include, among others, any individual, general or limited partnership, corporation, limited liability or unlimited liability company, joint venture, estate, trust, group, association or other entity of any kind or structure; (b) “Affiliate” has the meaning set forth in Rule 12b-2 promulgated under the Exchange Act and will include Persons who become Affiliates of any Person after the date of this Agreement; (c) “Associate” has the meaning set forth in Rule 12b-2 promulgated under the Exchange Act and will include Persons who become Associates of any Person after the date of this Agreement, but will exclude any Person not controlled by or under common control with the related Person; (d) “beneficially own,” “beneficially owned” and “beneficial ownership” has the meaning set forth in Rule 13d-3 promulgated under the Exchange Act; (e) “business day” means any day other than a Saturday, Sunday or a day on which the Federal Reserve Bank of San Francisco is closed; (f) “Representatives” means (i) a Person’s Affiliates and Associates and (ii) its and their respective directors, officers, employees, partners, principals, members, managers, consultants, legal or other advisors, agents and other representatives acting in a capacity on behalf of, in concert with or at the direction of such person or its Affiliates or Associates (g) “Restricted Period” means the period from the date of this Agreement until termination of this Agreement pursuant to paragraph 16; and (h) “Voting Securities” means the shares of Company’s common stock and any other securities of Company entitled to vote in the election of directors, or securities convertible into, or exercisable or exchangeable for, such shares or other securities, whether or not subject to the passage of time or other contingencies.

13.Interpretations. The words “include,” “includes” and “including” will be deemed to be followed by the words “without limitation.” The word “or” is not exclusive. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement, instrument, law, rule or statute defined or referred to in this Agreement means, unless otherwise indicated, such agreement, instrument, law, rule or statute as from time to time amended, modified or supplemented. The measure of a period of one month or year for purposes of this Agreement will be the day of the following month or year corresponding to the starting date. If no corresponding date exists, then the end date of such period being measured will be the next actual 

	
9134039_11 
	
-4-

day of the following month or year (for example, one month following February 18 is March 18 and one month following March 31 is May 1).

14.Representations of the Sylebra Group. Each member of the Sylebra Group, severally and not jointly, represents that (a) its authorized signatory set forth on the signature page to this Agreement has the power and authority to execute this Agreement and any other documents or agreements to be entered into in connection with this Agreement and to bind such member; (b) this Agreement has been duly authorized, executed and delivered by it and is a valid and binding obligation of such member, enforceable against it in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles; (c) this Agreement does not and will not violate any law, any order of any court or other agency of government, its organizational documents or any provision of any agreement or other instrument to which such member or any of its properties or assets is bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such agreement or other instrument, or result in the creation or imposition of, or give rise to, any material lien, charge, restriction, claim, encumbrance or adverse penalty of any nature whatsoever; and (d) as of the date of this Agreement, it has not, directly or indirectly, compensated or agreed to compensate the Designee for his service as a director of Company with any cash, securities (including any rights or options convertible into or exercisable for or exchangeable into securities or any profit sharing agreement or arrangement) or other form of compensation directly or indirectly related to Company or its securities. The Sylebra Group represents and warrants that as of the date of this Agreement, it is the beneficial owner of an aggregate of 3,899,063 shares of Company’s common stock.

15.Representations of Company. Company represents that this Agreement (a) has been duly authorized, executed and delivered by it and is a valid and binding obligation of Company, enforceable against Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles; (b) does not require the approval of the stockholders of Company; and (c) does not and will not violate any law, any order of any court or other agency of government, Company’s certificate of incorporation or bylaws, each as amended from time to time, or any provision of any agreement or other instrument to which Company or any of its properties or assets is bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such agreement or other instrument, or result in the creation or imposition of, or give rise to, any material lien, charge, restriction, claim, encumbrance or adverse penalty of any nature whatsoever.

16.Termination. Sylebra shall only have the right to terminate this Agreement upon (a) the resignation of the Designee from the Board and (b) delivery to Company of advance written notice of such termination at least five business days prior to the date of such termination. Company shall have the right to terminate this Agreement upon delivery to Sylebra of advance written notice of such termination at least five business days prior to the date of such termination. Each of paragraph 3 and paragraphs 17 through 26 shall survive the termination of this Agreement to the extent permitted under applicable law.

	
9134039_11 
	
-5-

17.Specific Performance. Each Party acknowledges and agrees that money damages would not be a sufficient remedy for any breach (or threatened breach) of this Agreement by it and that, in the event of any breach or threatened breach of this Agreement, (a) the Party seeking specific performance will be entitled to injunctive and other equitable relief, without proof of actual damages; (b) the Party against whom specific performance is sought will not plead in defense that there would be an adequate remedy at law; and (c) the Party against whom specific performance is sought agrees to waive any applicable right or requirement that a bond be posted. Such remedies will not be the exclusive remedies for a breach of this Agreement, but will be in addition to all other remedies available at law or in equity.

18.Entire Agreement; Binding Nature; Assignment; Waiver. This Agreement, including all exhibits hereto, constitutes the only agreement between the Parties with respect to the subject matter of this Agreement and it supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written. This Agreement binds, and will inure to the benefit, of the Parties and their respective successors and permitted assigns. No Party may assign or otherwise transfer either this Agreement or any of its rights, interests, or obligations under this Agreement without the prior written approval of the other Party. Any purported transfer requiring consent without such consent is void. No amendment, modification, supplement or waiver of any provision of this Agreement will be effective unless it is in writing and signed by the affected Party, and then only in the specific instance and for the specific purpose stated in such writing. Any waiver by any Party of a breach of any provision of this Agreement will not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a Party to insist upon strict adherence to any term of this Agreement on one or more occasions will not be considered a waiver or deprive that Party of the right to insist upon strict adherence to that term or any other term of this Agreement in the future.

19.Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, then the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement that is held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable, and this Agreement will otherwise be construed so as to effectuate the original intention of the Parties reflected in this Agreement. The Parties further agree to replace such invalid or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the purposes of such invalid or unenforceable provision.

20.Governing Law; Forum. This Agreement is governed by and will be construed in accordance with the laws of the State of Delaware. Each of the Parties (a) irrevocably and unconditionally consents to the exclusive personal jurisdiction and venue of the Court of Chancery of the State of Delaware and any appellate court thereof (unless the federal courts have exclusive jurisdiction over the matter, in which case the United States District Court for the District of Delaware and any appellate court thereof will have exclusive personal jurisdiction) for any lawsuit, claim or proceeding before any court (each, “Legal Proceeding”) arising out of or related to this Agreement; (b) agrees that it will not attempt to deny or defeat such personal jurisdiction with respect to any Legal Proceeding by motion or other request for leave from any such court; (c) agrees that it will not bring any Legal Proceeding arising out of or relating to this Agreement or otherwise in any court other than the such courts; and (d) waives any claim of improper venue or any claim 

	
9134039_11 
	
-6-

that those courts are an inconvenient forum for any Legal Proceeding arising out of or related to this Agreement. The Parties agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in paragraph 23 or in such other manner as may be permitted by applicable law, will be valid and sufficient service thereof.

21.Waiver of Jury Trial. EACH OF THE PARTIES, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF ANY OF THEM. No Party will seek to consolidate, by counterclaim or otherwise, any action arising out of or related to this Agreement in which a jury trial has been waived with any other action in which a jury trial cannot be or has not been waived.

22.Third Party Beneficiaries. This Agreement is solely for the benefit of the Parties and is not enforceable by any other Person.

23.Notices. All notices, consents, requests, instructions, approvals and other communications provided for in, and all legal process in regard to, this Agreement will be in writing and will be deemed validly given, made or served (a) upon receipt, when delivered personally; (b) upon confirmation of receipt, when sent by email (but only if such confirmation is not automatically generated); or (c) one business day after deposit with a nationally recognized overnight delivery service. The addresses for such communications are as follows. At any time, any Party may, by notice given in accordance with this paragraph 23 to the other Party, provide updated information for notices pursuant to this Agreement.

(a)If to Company:

Impinj, Inc.

400 Fairview Avenue North, Suite 1200

Seattle, WA 98109

Attn:General Counsel

Email:Ymorikubo@Impinj.com

	
9134039_11 
	
-7-

with a copy (which will not constitute notice) to:

Wilson Sonsini Goodrich & Rosati

Professional Corporation

701 Fifth Avenue, Suite 5100

Seattle, WA 98104

Attn:Patrick J. Schultheis

Michael Nordtvedt

Douglas K. Schnell

Fax:(206) 883-2699

	
 
	
Email:
	
pschultheis@wsgr.com, mnordtvedt@wsgr.com, dschnell@wsgr.com

(b)If to the Sylebra Group:

Sylebra HK Company Limited

28 Hennessy Road, Floor 20

Wan Chai, Hong Kong

Attn:Daniel Gibson

Matthew Whitehead

Email:dg@sylebra.com, mw@sylebra.com

with a copy (which will not constitute notice) to:

 

Sidley Austin LLP

39/F, Two Int’l Finance Centre

Central, Hong Kong

Attn:Effie Vasilopoulos

	
 
	
Email:
	
evasilopoulos@sidley.com

24.Representation by Counsel. Each of the Parties acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed this Agreement with the advice of such counsel. Each Party and its counsel cooperated and participated in the drafting and preparation of this Agreement, and any and all drafts of this Agreement exchanged among the Parties will be deemed the work product of all of the Parties and may not be construed against any Party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any Party that drafted or prepared it is of no application and is expressly waived by each of the Parties, and any controversy over interpretations of this Agreement will be decided without regard to events of drafting or preparation.

25.Counterparts. This Agreement and any amendments to this Agreement may be executed in one or more textually-identical counterparts, all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart. Any such counterpart, to the extent delivered by fax or .pdf, .tif, .gif, .jpg or similar attachment to electronic mail (any such delivery, an “Electronic Delivery”), will be treated 

	
9134039_11 
	
-8-

in all manner and respects as an original executed counterpart and will be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No Party may raise the use of an Electronic Delivery to deliver a signature, or the fact that any signature or agreement or instrument was transmitted or communicated through the use of an Electronic Delivery, as a defense to the formation of a contract, and each Party forever waives any such defense, except to the extent such defense relates to lack of authenticity.

26.Headings. The headings set forth in this Agreement are for convenience of reference purposes only and will not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or any term or provision of this Agreement.

[Signature page follows.]

	
9134039_11 
	
-9-

 

Very truly yours,

IMPINJ, INC.

	
 
	
By:
	
/s/ Yukio Morikubo

	
 
	

	
Name:Yukio Morikubo

	
 
	

	
Title:General Counsel

ACCEPTED AND AGREED

as of the date written above:

SYLEBRA HK COMPANY LIMITED

	
By:
	
/s/ Matthew Whitehead

	

	
Name:Matthew Whitehead

	

	
Title:Director

SYLEBRA CAPITAL MANAGEMENT

	
By:
	
/s/ Daniel Gibson

	

	
Name:Daniel Gibson

	

	
Title:Director

DANIEL P. GIBSON

	
/s/ Daniel Gibson
	

 

 

EXHIBIT A

Impinj, Inc.

400 Fairview Avenue North, Suite 1200

Seattle, WA 98109

CONFIDENTIAL

June [●], 2018

Sylebra HK Company Limited

Sylebra Capital Management

28 Hennessy Road, Floor 20

Wan Chai, Hong Kong

Attn: Dan Gibson

Re:Confidentiality Letter Agreement

Ladies and Gentlemen:

This letter agreement shall become effective upon the appointment of Daniel P. Gibson (the “Designee Director”) to the Board of Directors (the “Board”) of Impinj, Inc., a Delaware corporation (the “Company” or “Impinj”), pursuant to the letter agreement, dated as of June [●], 2018 (the “Agreement”), by and among the Company, on the one hand, and Sylebra HK Company Limited, Sylebra Capital Management and the Designee Director, on the other hand. Capitalized terms used and not otherwise defined herein have the meanings given to such terms in the Agreement.

Upon the terms of, and subject to the conditions in, this letter agreement, the Designee Director, during the period during which he is serving as a director of the Company, may privately disclose Proprietary Information (as defined herein) to any full-time employee (an “Employee”) of Sylebra HK Company Limited or Sylebra Capital Management (together the “Stockholders”) who needs to know such information for the sole purpose of advising the Stockholders on their investment in the Company. Notwithstanding anything to the contrary in this letter agreement, it is understood and agreed that the Designee Director shall not disclose to any Employee (a) any confidential or proprietary information of any third party that the Company is prohibited from disclosing pursuant to a contractual or other legal obligation or duty of confidentiality; or (b) any legal advice or other information that is identified as, or would reasonably be expected to be identified as, protected by the Company’s attorney-client privilege or attorney work-product privilege (both with respect to internal or external legal counsel). In addition, the Designee Director will not take any action pursuant to this letter agreement with the purpose of waiving the Company’s attorney-client privilege or attorney work-product privilege.

“Proprietary Information” is all (a) information concerning or relating to the Company or any of its subsidiaries that is furnished (whether on or after the date of this letter agreement) to the Designee Director (regardless of the manner in which it is furnished, including in written or electronic format or orally, gathered by visual inspection or otherwise) by or on behalf of the 

 

Company; (b) information about any third party (which information was provided to Impinj subject to an applicable confidentiality obligation to such third party); and (c) any notes, analyses, reports, models, compilations, studies, interpretations, documents, records or extracts thereof containing, referring, relating to, based upon or derived from such information, in whole or in part. Proprietary Information does not include information that (i) is or becomes generally available to the public other than as a result of a disclosure by the Designee Director or the Stockholders in violation of this letter agreement; (ii) was available to the Stockholders prior to disclosure by the Designee Director, Impinj or its Representatives, but only if the source of such information was not known by the Stockholders to be bound by a confidentiality obligation to Impinj with respect to such information; (iii) becomes available to the Stockholders from a person other than the Designee Director, Impinj or its Representatives who is not otherwise known by the Stockholders to be bound by a confidentiality obligation to Impinj or any of its Representatives with respect to such information; or (iv) was or is independently developed by the Stockholders or their Representatives without reference to or use of the Proprietary Information. For purposes of this letter agreement, (x) “Representative” means, as to any person, its directors, officers, employees, limited and general partners, controlling persons, affiliates, other representatives and advisors (including, without limitation, financial advisors, attorneys, consultants and accountants); and (y) “person” will be broadly interpreted to include, without limitation, the media and any corporation, partnership, limited liability company, trust, association, joint venture, governmental or regulatory agency or body, or any other entity, group or individual.

Subject to the following paragraph of this letter agreement, unless otherwise agreed to in writing by Impinj, the Stockholders will, and will cause the Employees to, (i) keep all Proprietary Information confidential and not disclose or reveal any Proprietary Information to any person; (ii) not use, or permit any Proprietary Information to be used, for any purpose other than in connection with evaluating the Stockholders’ investment in the Company; and (iii) not disclose to any person any Proprietary Information or the terms, conditions or any other facts relating thereto. The Stockholders will be responsible for any breach of the terms of this letter agreement by the Employees as if they were parties to this letter agreement. The Stockholders will, and will cause the Employees to, undertake reasonable precautions to safeguard and protect the confidentiality of the Proprietary Information and to prevent prohibited or unauthorized disclosure or uses of the Proprietary Information. Notwithstanding the foregoing, nothing in this letter agreement shall restrict the Designee Director’s ability to seek the advice of his own counsel with respect to any aspect or query concerning his service as a Director of the Company.

If the Stockholders or any Employee is requested pursuant to, or required by, applicable law or regulation, or by legal, judicial or regulatory process, to disclose any Proprietary Information or any other information the disclosure of which is restricted by this letter agreement, then the Stockholders will, or will cause such Employee to, promptly provide Impinj with, to the extent legally permissible, notice of such request, requirement or process in order to enable Impinj to (i) seek an appropriate protective order or other remedy; (ii) consult with the Stockholders with respect to Impinj taking steps to resist or narrow the scope of such request, requirement or process; or (iii) waive compliance, in whole or in part, with the terms of this letter 

-2-

 

agreement. If such protective order or other remedy is not obtained or Impinj waives compliance, in whole or in part, with the terms of this letter agreement, then the Stockholders will, and will cause such Employee to, use its commercially reasonable efforts to (i) disclose only that portion of the Proprietary Information or such other information that is legally required to be disclosed; (ii) promptly notify Impinj of the nature, scope and contents of the information so disclosed; and (iii) ensure that all Proprietary Information or such other information that is so disclosed will be accorded confidential treatment. Upon full compliance with the provisions of this paragraph, such disclosure may be made without any liability hereunder.

The Stockholders agree that (a) none of the Company or its Representatives shall have any liability to the Stockholders or the Employees resulting from the selection, use or content of the Proprietary Information; and (b) none of the Company or its Representatives makes any representation or warranty, express or implied, as to the accuracy or completeness of any Proprietary Information. This letter agreement shall not create any obligation on the part of the Company or its Representatives to provide the Stockholders or any Employee with any Proprietary Information, nor shall it entitle the Stockholders or any Employee (other than the Designee Director in his capacity as a director of the Company and pursuant to the terms of the Agreement) to participate in any meeting of the Board or any committee thereof.  This letter agreement shall not prohibit the Designee Director from sharing Proprietary Information with the Stockholders or their Representatives subject to the terms herein. All Proprietary Information shall remain the property of the Company. No person shall, by virtue of any disclosure or use of any Proprietary Information pursuant to this letter agreement, acquire any rights with respect thereto, and all such rights shall remain exclusively with the Company. The Stockholders will not, and will cause the Employees not to, initiate contact with any person concerning any Proprietary Information other than as permitted by the terms of the Agreement; provided, however, the restrictions set forth in this sentence shall not apply to the Designee Director, acting in his capacity as a director of the Company; provided, further, the restrictions set forth in this sentence shall not apply to communications or contacts between the Designee Director and the Company’s Chief Legal Officer pursuant to this letter agreement or relating to notices required or permitted under the Agreement.

Each Party is aware, and will advise its Representatives who are informed of the matters that are the subject of this letter agreement, of the restrictions imposed by the United States securities laws on the purchase or sale of securities by any person who has received material non-public information from the issuer of such securities and on the communication of such information to any other person when it is reasonably foreseeable that such other person is likely to purchase or sell such securities in reliance upon such information. The Stockholders each agree that it will not use or permit any person to use, and will use its commercially reasonable efforts to ensure that none of its Representatives will use or permit any third party to use, any Proprietary Information or any of the facts or matters referred to in this letter agreement in contravention of the United States securities laws or any other applicable securities laws, including in each case any rules or regulations promulgated thereunder.

-3-

 

Immediately following the termination of this letter agreement in accordance with its terms, the Stockholders will, and will cause their Representatives to, promptly destroy the Proprietary Information and any copies thereof and confirm in writing to the Company that all such material has been destroyed in compliance with this letter agreement; provided, however, that the Stockholders will be permitted to retain Proprietary Information to the extent necessary to comply with applicable law, professional standards or the Stockholders’ bona fide document retention policies of general application, or to the extent disclosed publicly in compliance with this letter agreement. To the extent that any Proprietary Information is retained pursuant to the proviso in the preceding sentence, the Stockholders and their Representatives shall continue to be bound by the obligations contained herein with respect to such Proprietary Information retained by the Stockholders for such period of time as prescribed by this letter agreement.

Each Party acknowledges that (i) the other Parties would be irreparably injured by a breach of this letter agreement by such Party or its Representatives and (ii) monetary remedies would be inadequate to protect the non-breaching Party against any actual or threatened breach or continuation of any breach of this letter agreement. Without prejudice to any other rights and remedies otherwise available to any Party, each Party will be entitled to equitable relief by way of injunction or otherwise if any other Party or any of its Representatives breaches or threatens to breach any of the provisions of this letter agreement. Such remedy will not be deemed to be the exclusive remedy for a breach of this letter agreement but will be in addition to all other remedies available at law or equity to the non-breaching party.

It is understood and agreed that no failure or delay by any Party in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder.

Each Party irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (the “Chancery Court”) for any action, suit or proceeding arising out of or relating to this letter agreement (and agrees not to commence any action, suit or proceeding relating thereto except in the Chancery Court). To the extent that the Chancery Court would not have subject matter jurisdiction over any such action, suit or proceeding, each Party irrevocably and unconditionally consents to submit to the exclusive jurisdiction of any state or federal court in the State of Delaware (such courts, together with the Chancery Court, the “Chosen Courts”). Each Party irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of or relating to this letter agreement in the Chosen Courts, and further irrevocably and unconditionally waives and agrees not to plead or claim in any Chosen Court that any such action, suit or proceeding brought in any Chosen Court has been brought in an inconvenient forum. The Parties agree that a final judgment no longer subject to appeal in any such dispute will be conclusive and may be enforced in other jurisdictions by suits on the judgment or in any other manner provided by law. EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

-4-

 

This letter agreement contains the entire agreement between the Parties concerning the subject matter contained herein and supersedes all prior agreements, arrangements, understandings or undertakings by or between the Parties, whether written or oral, with respect to the subject matter contained herein, including, without limitation, that certain Confidentiality Letter Agreement, dated as of March 25, 2018, by and between the Company and Sylebra HK Company Limited. No modification of this letter agreement or waiver of the terms and conditions hereof will be binding upon any Party unless approved in writing by each other Party.

Except as otherwise set forth herein, this letter agreement and the obligations and restrictions hereunder shall terminate 18 months following the termination of the Agreement; provided however, that any liability for breach of this letter agreement prior to such termination shall survive such termination.

If any term or provision of this letter agreement, or any application thereof to any circumstances, will, to any extent and for any reason, is held to be invalid or unenforceable, the remainder of this letter agreement, or the application of such term or provision to circumstances other than those to which it is held invalid or unenforceable, will not be affected thereby and will be construed as if such invalid or unenforceable provision had to such extent never been contained herein and each term and provision of this letter agreement will be valid and enforceable to the fullest extent permitted by law.

This letter agreement will inure to the benefit of and be binding upon each of the Parties and their respective successors, except that no Party may assign this letter agreement without the prior written consent of the other Parties.

This letter agreement may be signed in one or more counterparts (including by fax or .pdf) that, when taken together, will constitute one and the same instrument.

***

 

-5-

 

Please confirm your agreement with the foregoing by signing and returning to the undersigned a copy of this letter agreement.

Very truly yours,

IMPINJ, INC.

	
 
	
By:
	

Name:

Title:

Accepted and agreed as of
the date written above:

SYLEBRA HK COMPANY LIMITED

By:

Name: 

Title: 

SYLEBRA CAPITAL MANAGEMENT

By:

Name: 

Title: 

DANIEL P. GIBSON

 

 

 

[Signature Page to Confidentiality Letter Agreement]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00284-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00284-of-00352.parquet"}]]