Document:

EX-10.2

 Exhibit 10.2 

EMPLOYMENT AGREEMENT 
 This
EMPLOYMENT AGREEMENT (the “Agreement”) made and entered into by and between GigOptix, Inc., a Delaware corporation (the “Company”) and Darren Ma (the “Executive” and, with the Company, the
“Parties”), dated as of December 17, 2014 (the “Effective Date”). 
 WHEREAS, the Company wishes to
retain the services of the Executive to work for the Company as its Vice President and Chief Financial Officer (herein referred to as the “Position” or “VP and CFO”) upon the terms and conditions hereinafter set
forth; and 
 WHEREAS, in consideration for continued service in the Position, the Executive has agreed to enter into and be bound by the
terms of this Agreement. 
 For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company
and the Executive agree as follows: 
 1. Employment, Term. Subject to the terms and conditions set forth in this Agreement, the
Company hereby employs Executive on a full-time basis in the Position. The Executive’s employment shall continue until terminated as provided herein. The term of this Agreement is hereafter referred to as “the term of this
Agreement” or “the term hereof.” 
 2. Capacity and Performance. 

(a) During the term hereof, the Executive shall serve the Company as its VP and CFO reporting to the chief executive officer of the Company
(the “CEO”). 
 (b) During the term hereof, the Executive shall be employed by the Company on a full-time basis. The
Executive shall have the duties and responsibilities assigned to the position by the Company from time to time and such other duties and responsibilities, reasonably consistent with the position, with respect to the business operations of the
Company, as may be assigned by the Company from time to time. 
 (c) Subject to business travel as necessary or desirable for the
performance of the Executive’s duties and responsibilities hereunder, the Executive’s primary worksite during the term hereof shall be at the location of the Company’s offices in San Jose, CA, USA as of the Effective Date (the
“Location”) or such other site as the Company may select from time to time, provided such site is no more than thirty-five (35) miles from the Location unless the Executive has expressly consented in writing thereto. 

(d) During the term hereof, the Executive shall devote his full business time and best efforts, business judgment, skill and knowledge
exclusively to the advancement of the business and interests of the Company and to the discharge of the duties and responsibilities hereunder. During the term of this Agreement, the Executive may engage in passive management of his personal
investments and in such community and charitable activities as do not individually or in the aggregate give rise to a conflict of interest or otherwise interfere with the performance of the duties and responsibilities hereunder. It is agreed that
the Executive shall not accept membership on a board of directors or other governing board of any Person (as defined in Section 12 hereof) or engage in any other business activity without the prior approval of the CEO. It also is agreed that if
the CEO subsequently determines, and gives notice to the Executive, that any such membership or activity, previously approved, is materially inconsistent with the Executive’s obligations under Section 6, Section 7 or Section 8 of
this Agreement or gives rise to a material conflict of interest, the Executive shall cease such activity promptly following notice from the Company. 

3. Compensation and Benefits. As compensation for all services performed by the Executive under and during the term hereof and subject
to performance of the Executive’s duties and of the obligations of the Executive to the Company and its Affiliates, pursuant to this Agreement or otherwise: 

(a) Salary. As of the Effective Date, the Company shall pay the Executive a base salary at the rate of one hundred and seventy five
thousand Dollars ($175,000) per annum, paid in accordance with the normal payroll practices of the Company and, commencing January 1, 2015, at the rate of one hundred and eighty thousand Dollars ($180,000) per annum, and thereafter subject to
annual review by the Board or its compensation committee and to increase, but not decrease (unless all salaries of executives are decreased proportionately), in the discretion of such committee or the Board. The Executive’s base salary, as from
time to time increased (or decreased in accordance with the foregoing sentence), is hereafter referred to as the “Base Salary.” 

 (b) Bonus Compensation. For each fiscal year of the Company completed during the term
hereof, subject to the condition set forth in the final sentence of this provision, the Executive shall have the opportunity to earn an annual bonus (“Annual Bonus”) under the executive incentive plan then applicable to executives
of the Company generally, as in effect from time to time, with the actual amount of each Annual Bonus being determined by the Board or its designated committee based on the achievement of target objectives established by the Board or its designated
committee after consultation with the CEO with the Board or such designated committee to determine whether such target objectives have been achieved. Any Annual Bonus due to the Executive hereunder will be payable not later than two and one-half
months following the close of the fiscal year for which the bonus was earned or as soon as administratively practicable thereafter, within the meaning of Section 409A of the Internal Revenue Code and the regulations promulgated thereunder, each
as amended (“Section 409A”). Except as otherwise provided in Section 4 hereof, the Executive must be employed on the date annual bonuses are paid under the Company’s executive incentive plan in order to be eligible to earn
an Annual Bonus for the preceding fiscal year. 
 (c) Equity Participation. The Executive has been granted restricted stock units
(“RSUs”) by the Company prior to the Effective Date. Any further equity awards granted to the Executive during his employment with the Company shall be at the discretion of the Board (or its designated committee). 

(d) Employee Benefit Plans. During the term hereof, the Executive shall be entitled to participate in all “Employee Benefit
Plans,” as that term is defined in Section 3(3) of ERISA, including both health and welfare plans and retirement plans, from time to time in effect for executives of the Company generally, except to the extent any of the Employee
Benefit Plans provides a benefit otherwise provided to the Executive under this Agreement (e.g., a severance pay plan). In such case, the Executive will receive the form of the benefit provided under this Agreement and not the Employee Benefit
Plan. The Executive’s participation shall be subject to the terms of the applicable Employee Benefit Plan documents and generally applicable Company policies. 

(e) Paid Time Off. During the term hereof, the Executive will be eligible to earn paid time off at the rate of seventeen (17) days
per year, to be taken at such times and intervals as shall be determined by the Executive, subject to the reasonable business needs of the Company and the approval of the CEO. Paid time off shall otherwise be governed by the policies of the Company,
as in effect from time to time, including with regard to accrual. 
 (f) Business Expenses. The Company will pay or reimburse the
Executive for all reasonable, customary and necessary business expenses incurred or paid by the Executive in the performance of his duties and responsibilities hereunder, subject to any maximum annual limit and other restrictions on such expenses
set by the Board (or its designated committee), to such reasonable substantiation, documentation and submission deadlines as may be specified by the Company from time to time. Any such reimbursement that would constitute nonqualified deferred
compensation subject to Section 409A shall be subject to the following additional rules: (i) no reimbursement of any such expense shall affect the Executive’s right to reimbursement of any other such expense in any other taxable year;
(ii) reimbursement of the expense shall be made, if at all, not later than the end of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement shall not be subject to liquidation
or exchange for any other benefit. 
 (g) Directors & Officers Insurance Coverage. During the term hereof, the Company shall
provide the Executive the same coverage under any directors and officers (“D&O”) liability insurance that the Company elects to maintain as it provides to its other executives and, after the termination of his employment
hereunder, the same coverage under any D&O liability insurance it elects to maintain, as it provides its other former executives. The Company shall be under no obligation hereunder, however, to maintain any D&O liability insurance. 

 4. Termination of Employment and Opportunity to Earn Post-Employment Compensation.
Notwithstanding the provisions of Section 2 hereof, the Executive’s employment hereunder shall terminate during the term hereof under the following circumstances: 

(a) Death. In the event of the Executive’s death during the term hereof, the Executive’s employment hereunder shall
immediately and automatically terminate. In such event, the Company shall pay as a lump sum to the Executive’s estate, no later than March 15th of the year following the year in which the Date of Termination (as defined in Section 12
hereof) occurs, the Final Compensation (as also defined in Section 12 hereof). In addition to Final Compensation: 
 (A) The Company
will pay to the Executive’s estate an Annual Bonus for the fiscal year in which the Date of Termination occurs (the “Termination Year”), determined by multiplying the Annual Bonus the Executive would have received for the
Termination Year (if any), had he continued employment through the date annual bonuses for the Termination Year were paid to Company executives generally, by a fraction, the numerator of which shall be the number of days the Executive was employed
during the Termination Year, through the Date of Termination, and the denominator of which shall be 365 (the “Final Pro-Rated Bonus”). The Final Pro-Rated Bonus will be paid to the Executive’s estate on the same date that
annual bonuses for the Termination Year are paid to Company executives generally under its executive incentive plan, but no later than March 15th of the year following the Termination Year. 

(B) The Company will pay the full premium cost of health and dental plan coverage for each of Executive’s qualified beneficiaries until
the expiration of the period of twelve (12) months immediately following the Date of Termination or, if earlier, until the date the qualified beneficiary ceases to be eligible for coverage continuation under the federal law commonly known as
“COBRA”; provided, however, that in order to be eligible for the Company’s payments hereunder the qualified beneficiary must elect in a timely manner to continue coverage under the Company’s health and dental plans under
COBRA and must notify the Company promptly if the qualified beneficiary ceases to be eligible for such coverage under COBRA at any time during such twelve (12) month period. 

(C) The Company will pay the Executive’s estate compensation monthly, at the rate of one-twelfth of the Base Salary in effect for the
Termination Year, for that period immediately following the Date of Termination, not to exceed six (6) Months of compensation. 
 (b)
Disability. 
 (i) The Company may terminate the Executive’s employment involuntarily hereunder, upon notice to the Executive,
in the event that the Executive becomes disabled during his employment through any illness, injury, accident or condition of either a physical or psychological nature and, as a result, is unable to perform substantially all of the duties and
responsibilities hereunder, notwithstanding the provision of any reasonable accommodation. In the event of such termination, and provided that the Executive satisfies in full all of the conditions set forth in Section 4(g) hereof, then, in
addition to Final Compensation (which the Company shall pay as a lump sum no later than March 15th of the year following the Termination Year), the Company shall provide the Executive the following: 

(A) The Company will pay the Executive a Final Pro-Rated Bonus for the Termination Year, paid at the time annual bonuses are paid to Company
executives generally under its executive incentive plan, but no later than March 15th of the year following the Termination Year, and only if the Executive has signed and not revoked a Release of Claims within the Claims Release Period. 

(B) If the Executive satisfies the Release of Claims requirement in Section 4(g)(i), then the Company will pay the full premium cost of
health and dental plan coverage for Executive and his qualified beneficiaries until the expiration of the period of six (6) months immediately following the Date of Termination or, if earlier, until the date the Executive and his qualified
beneficiaries cease to be eligible for coverage continuation 

 
under COBRA; provided, however, that in order to be eligible for the Company’s premium payments hereunder, the Executive and each qualified beneficiary must elect in a timely manner to
continue coverage under the Company’s health and dental plans under COBRA and must notify the Company promptly if the Executive or any of his qualified beneficiaries ceases to be eligible for such coverage under COBRA during such twelve
(12) month period. 
 (ii) If any question shall arise as to whether during any period the Executive is disabled through any illness,
injury, accident or condition of either a physical or psychological nature so as to be unable to perform substantially all of the duties and responsibilities hereunder, the Executive may, and at the request of the Company shall, submit to a medical
examination by a physician selected by the Company to whom the Executive or the Executive’s duly appointed guardian, if any, has no reasonable objection to determine whether the Executive is so disabled and such determination shall for the
purposes of this Agreement be conclusive of the issue. If such question shall arise and the Executive shall fail to submit to such medical examination, the Company’s determination of the issue shall be binding on the Executive. 

(c) By the Company for Cause. The Company may terminate the Executive’s employment hereunder for Cause at any time upon notice to
the Executive setting forth in reasonable detail the nature of such Cause. For purposes of this Agreement, “Cause” shall be limited to: (i) Executive’s indictment, charge or conviction of, or plea of nolo contendere to,
(A) a felony or (B) any other crime involving fraud or material financial dishonesty or (C) any other crime involving moral turpitude that might be reasonably expected to, or does, materially adversely affect the Company or any of its
Affiliates, whether that effect is to economics, to reputation or otherwise; (ii) Executive’s gross negligence or willful misconduct with regard to the Company or any of its Affiliates, which has a material adverse impact on Company or any
of its Affiliates, whether economic or to reputation or otherwise; (iii) Executive’s refusal or willful failure to substantially perform the duties or to follow a material lawful written directive of the CEO or the Board within the
scope of the Executive’s duties hereunder which refusal or failure remains uncured or continues thirty (30) days after written notice from the CEO or the Board which references the potential for a “for Cause” termination and
specifies in reasonable detail the nature of the refusal or willful failure which must be cured; (iv) Executive’s theft, fraud or any material act of financial dishonesty related to the Company or any of its Affiliates; (v) the
failure by the Executive to disclose any legal impediments to the employment by the Company or breach of any of the obligations to a former employer in connection with the employment by the Company (e.g., the disclosure or use of proprietary
confidential information of a former employer on behalf of the Company without such former employer’s consent); provided that Executive has been provided with written notification of any of such failure or breach and has been given five
(5) days to present any mitigating, corrective or clarifying information to the CEO or the Board; (vi) the Executive’s breach or violation of those provisions of this Agreement setting forth the Executive’s obligations with
respect to confidentiality, non-competition and non-solicitation; or (vii) the Executive’s breach of any other material provision of this Agreement unless corrected by the Executive within thirty
(30) days of the Company’s written notification to the Executive of such breach. In the event of such termination, the Company shall make no payments to the Executive under this Agreement other than provision of Final Compensation, which
will be paid no later than March 15th of the year following the Termination Year. Any equity in the Company held by the Executive on the Date of Termination hereunder shall be governed by the terms of the Company’s equity incentive plans
and the Executive’s agreements thereunder and shall not be governed by this Agreement. 
 (d) By the Company other than for
Cause. The Company may terminate the Executive’s employment hereunder other than for Cause at any time upon notice to the Executive. In the event of such termination and provided that the Executive satisfies the conditions set forth in
Section 4(g)(i) and as otherwise provided herein, then, in addition to Final Compensation, the Executive, as compensation for him satisfying those conditions, shall be entitled to earn the following (in the aggregate, “Post-Employment
Compensation”): 
 (i) The Company will pay the Executive a Final Pro-Rated Bonus for the Termination Year, paid at the time
annual bonuses for that year are paid to Company executives generally under its executive incentive plan, but no later than March 15th of the year following the Termination Year, and only if the Executive has signed and not revoked a Release of
Claims within the Claims Release Period. 
 (ii) The Company will pay the Executive compensation monthly, at the rate of one-twelfth of the
Base Salary in effect for the Termination Year, for each consecutive month (up to six (6) months) immediately following the Date of Termination that the Executive satisfies in full all of the conditions set forth in Section 4(g)

 
hereof. Should the Executive cease to satisfy in full any of the conditions set forth in Section 4(g) hereof at any time during the six-month period
immediately following the Date of Termination, the Company will not make any further payment to the Executive under this paragraph (ii). Such monthly payments shall commence on the next regular Company payday that is at least five (5) business
days following the later of the effective date of the Release of Claims or the date the Release of Claims, signed by the Executive, is received by the Person designated by the Company to receive notices on its behalf in accordance with
Section 17 hereof (provided, however, that if the Claims Release Period, as defined in Section 4(g) below, spans two taxable years, the payments shall commence in the second taxable year). 

(iii) If the Executive satisfies the Release of Claims requirement in Section 4(g)(i), then the Company will pay the full premium cost
of health and dental plan coverage for Executive and his qualified beneficiaries until the earliest to occur of (A) the date the Executive elects to cease meeting the conditions set forth in Section 4(g) hereof, (B) the expiration of
six (6) months following the Date of Termination, (C) the date the Executive becomes eligible for participation in health and dental plans of another employer or (D) the date the Executive ceases to be eligible for participation under
the Company’s health and dental plans under COBRA; provided, however, that, in order to be eligible for the Company’s payments hereunder, the Executive and each of his qualified beneficiaries must elect in a timely manner to
continue coverage under the Company’s health and dental plans under COBRA. 
 (iv) 50% of Executive’s outstanding unvested equity
awards shall vest and 50% of the remaining undelivered shares shall be delivered for such awards that are of stock units, including RSUs. 

(e) By the Executive for Good Reason. The Executive may terminate the employment hereunder for Good Reason, whether preceding or
following a Change of Control, by providing notice to the Company of the condition giving rise to the Good Reason no later than thirty (30) days following the occurrence of the condition, by giving the Company thirty (30) days to remedy
the condition and by terminating employment for Good Reason within thirty (30) days thereafter if the Company fails to remedy the condition. For purposes of this Agreement, “Good Reason” shall mean the occurrence of any one or
more of the following events without the Employee’s consent: (i) a material breach of this Agreement by the Company; (ii) a material diminution of the Executive’s title from that of VP and CFO or a material adverse change in the
Executive’s significant duties, authority or responsibilities, taken as a whole, that effectively constitutes a demotion; (iii) any reduction in (except to the extent all executives receive a proportional decrease) or failure to pay the
Base Salary; or (iv) any relocation of the Executive’s primary worksite to a site that is more than thirty-five (35) miles from the assigned Location without his consent in accordance with this Agreement. In the event of termination
in accordance with this Section 4(e), and provided that the Executive satisfies the conditions set forth in Section 4(g) hereof, then, in addition to Final Compensation (which the Company shall pay as a lump sum no later than
March 15th of the year following the Termination Year), the Company shall provide the Executive the same opportunity (utilizing the same time and form of payment) to earn Post-Employment Compensation as he would have received had the employment
been terminated by the Company other than for Cause under Section 4(d) hereof. 
 (f) By the Executive Other than for Good
Reason. The Executive may terminate his employment hereunder at any time upon sixty (60) days’ notice to the Company. In the event of termination of the Executive pursuant to this Section 4(f), the CEO may elect to waive the
period of notice, or any portion thereof, and, if the CEO so elects, the Company will pay the Executive the Base Salary for the initial sixty (60) days of the notice period (or for any remaining portion of thereof). 

(g) Conditions. The Executive’s eligibility to receive and retain any Post-Employment Compensation, as set forth in Section 4
hereof, is subject to satisfaction of all of the following as well as the covenant of confidentiality set forth in Section 6 below and the assignment of rights to Intellectual Property (as hereafter defined), but with the express understanding
and agreement of the parties that the Executive is free to elect not to comply with clause (i) below and is free not to forbear from competition or solicitation as set forth in clauses (ii), (iii) and (iv) immediately below, but
that his right to Post-Employment Compensation under this Agreement is expressly conditioned on compliance with said clause (i) and the forbearance required under all of said clauses (ii), (iii) and (iv), as well as full satisfaction of
the obligations under the covenant of confidentiality and assignment of rights to Intellectual Property (which obligations are not optional and shall survive any termination, howsoever occurring). The conditions to receipt of Post-Employment
Compensation are as follows: 
 (i) The Executive’s execution and return, to the Person designated by the Company to receive notices
on its behalf in accordance with Section 17 hereof, of a timely and effective release of claims in the form attached hereto and marked Exhibit A (“Release of Claims”). Such a Release of Claims will be timely and
effective if it is signed by the Executive, submitted to the Company, and becomes irrevocable within 28 days following termination of employment (such 28-day period, the “Claims Release Period”). The Release of Claims creates
legally binding obligations and the Company therefore advises the Executive to consult an attorney before signing it. 

 (ii) Forbearance by the Executive for six (6) months following the Date of Termination from
competition with the business of the Company and its Affiliates anywhere in the world where the Company or any of those Affiliates is doing business, whether as owner, partner, investor, consultant, agent, employee, co-venturer or otherwise.
Specifically, but without limiting the foregoing, in order to satisfy this condition, the Executive must forbear from engaging in any activity that is competitive, or is in preparation to engage in competition, with the business of the Company and
its Affiliates and further the Executive must forbear from working or providing services, in any capacity, whether as an employee, independent contractor or otherwise, whether with or without compensation, for or to any Person engaged in the
business of the Company and its Affiliates. The business of the Company and its Affiliates is optical network equipment. The foregoing condition, however, shall not fail to be met solely due to the Executive’s passive ownership of less than 3%
of the equity securities of any publicly traded company. 
 (iii) Forbearance by the Executive for six (6) months following
the Date of Termination from any direct or indirect solicitation or encouragement of any of the Customers of the Company or any of its Affiliates to terminate or diminish his relationship with the Company or any of its Affiliates and from any direct
or indirect solicitation or encouragement of any of the Customers or Prospective Customers of the Company or any of its Affiliates to conduct with the Executive or with any other Person any business or activity which such Customer or Prospective
Customer conducts or could conduct with the Company or any of its Affiliates. For purposes of this Section 4(g), a Customer is a Person which was such at any time during the twelve (12) months immediately preceding the Date of Termination
and a Potential Customer is a Person contacted by the Company or any of its Affiliates to become a Customer at any time within twelve (12) months prior to the Date of Termination other than by general advertisement, provided in each case,
however, that the Executive had contact with such Customer or Potential Customer through his employment or his other associations with the Company or any of its Affiliates or had access to Confidential Information that would assist in his
solicitation of such Customer or Potential Customer in competition with the Company or any of its Affiliates. 
 (iv) Forbearance by the
Executive for six (6) months following the Date of Termination from directly or indirectly hiring or otherwise engaging the services of any employee, independent contractor or other agent providing services to the Company or any of its
Affiliates and from soliciting any such employee, independent contractor or agent to terminate or diminish his/her/its relationship with the Company or any of its Affiliates (notwithstanding the foregoing, any longer period provided for in the
Confidentiality, Nondisclosure and Nonsolicitation Agreement with the Company shall not be superseded by the preceding language). For purposes of this Section 4(g), an employee, independent contractor or agent means any Person performing
services for the Company or any of its Affiliates in such capacity at any time during the twelve (12) months immediately preceding the Date of Termination. 

(h) Timing of Payments. Notwithstanding anything to the contrary in this Agreement, if at the time of the Executive’s separation
from service the Executive is a “specified employee,” as hereinafter defined, any and all amounts payable under this Agreement on account of that separation from service that constitute deferred compensation subject to Section 409A,
as determined by the Company in its reasonable good faith discretion, and that would (but for this provision) be payable within six (6) months following the date of termination, shall instead be paid on the next business day following the
expiration of that six month period. Also, for purposes of this Agreement, the phrase “termination of employment” and correlative phrases mean a “separation from service” as defined in Treas. Regs.§1.409A-1(h), and the
term “specified employee” means an individual determined by the Company to be a specified employee under Treas. Regs.§1.409A-1(i). For the avoidance of doubt, any tax liability to which the Executive is subject under Section 409A
shall be solely the Executive’s responsibility. 

 5. Effect of Termination. The provisions of this Section 5 shall apply to any
termination of the Executive’s employment under this Agreement, whether pursuant to Section 4 or otherwise. 
 (a) Provision by
the Company of Final Compensation, if any, to which the Executive is entitled and Post-Employment Compensation, if any, which the Executive has the opportunity to earn under Section 4(d) or 4(e) hereof and does earn in accordance with
Section 4(g) shall constitute the entire obligation of the Company to the Executive hereunder following termination of his employment with the Company. The Executive shall promptly give the Company notice of all facts necessary for the Company
to determine the amount and duration of its obligations in connection with any termination pursuant to Section 4 hereof. 
 (b) Except
for health and dental plan participation continued in accordance with COBRA, the Executive’s participation in Employee Benefit Plans shall terminate pursuant to the terms of the applicable Plan Documents based on the Date of Termination without
regard to any Post-Employment Compensation earned by the Executive, or any other payment to him hereunder, following the Date of Termination. 

(c) Provisions of this Agreement shall survive any termination if so provided herein or if necessary or desirable to accomplish the purposes
of other surviving provisions, including without limitation the conditions to earning Post-Employment Compensation set forth in Section 4(g) and the obligations of the Executive under Sections 6 and 7 hereof. The Executive recognizes that,
except as expressly provided in accordance with Sections 4(d), 4(e) and 4(g) (with respect to Post-Employment Compensation) or Section 4(f) (with respect to Base Salary for any notice period waived), no compensation is earned after termination
of employment. 
 6. Confidential Information. 

(a) The Executive acknowledges that the Company and its Affiliates continually develop Confidential Information (as defined in Section 12
hereof); that the Executive may develop Confidential Information for the Company or its Affiliates; and that the Executive may learn of Confidential Information during the course of employment. The Executive will comply with the policies and
procedures of the Company and its Affiliates for protecting Confidential Information and shall not disclose to any Person or use, other than as required by applicable law or for the proper performance of his duties and responsibilities to the
Company and its Affiliates, any Confidential Information obtained by the Executive incident to his employment or other association with the Company or any of its Affiliates. The Executive understands that the restrictions set forth in this
Section 6(a) shall continue to apply after his employment terminates, regardless of the reason for such termination. 
 (b) All
documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of the Company or any of its Affiliates and any copies, in whole or in part, thereof (in the aggregate, the
“Documents”), whether or not prepared by the Executive, shall be the sole and exclusive property of the Company and its Affiliates. The Executive shall safeguard all Documents and shall surrender to the Company at the time his
employment terminates, or at such earlier time or times as the CEO or the Board or its designee may specify, all Documents and all other property of the Company and its Affiliates then in the Executive’s possession or control. 

7. Assignment of Rights to Intellectual Property. The Executive shall promptly and fully disclose all Intellectual Property (as defined
in Section 12 hereof) to the Company. The Executive hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) the Executive’s full right, title and interest in and to all Intellectual Property. The
Executive agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of further assurance or
confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company to enforce any patents, copyrights or other proprietary rights to the Intellectual Property. The Executive will not charge the
Company for time spent in complying with these obligations. The Executive acknowledges his understanding that any provision of this Agreement requiring him to assign rights to Intellectual Property does not apply to any invention that qualifies
under California Labor Code §2870, which is reproduced in Exhibit B (“Written Notification to the Employee”), attached hereto, which the Executive here acknowledges that he has received. All copyrightable works that
the Executive creates during the course of his employment by the Company and which pertains to the business of the Company or 

 
is suggested by any work performed by the Executive for the Company or makes use of Confidential Information shall be considered “work made for hire” and, upon creation, shall be owned
exclusively by the Company. Further, the Executive hereby waives, expressly and irrevocably, any and all moral rights he may have as an author, whether arising under the copyright laws of the United States or any other jurisdiction or at common law
or otherwise, with respect to any copyrighted works prepared by the Executive in the course of his employment, including without limitation the right to attribution of authorship, the right to restrain any distortion, mutilation or other
modification of any such work and the right to prohibit any use of any such work in association with a product, service, cause or institution that might be prejudicial to the Company’s reputation. 

8. Restricted Activities. The Executive agrees that certain restrictions on activities during the employment are necessary to
protect the goodwill, Confidential Information and other legitimate interests of the Company and its Affiliates: 
 (a) While the Executive
is employed by the Company, the Executive shall not, directly or indirectly, whether as owner, partner, investor, consultant, agent, employee, co-venturer or otherwise, compete with the Company or any of its Affiliates anywhere in the world or
undertake any planning for competition with the Company or any of its Affiliates Specifically, but without limiting the foregoing, the Executive agrees not to engage in any manner in any activity that is directly or indirectly competitive or
potentially competitive with the business of the Company or any of its Affiliates as conducted or under consideration at any time during the Executive’s employment or to provide services in any capacity to a Person which is a competitor of the
Company or any of its Affiliates. 
 (b) The Executive agrees that, while he is employed by the Company, and excluding any activities
undertaken on behalf of the Company or any of its Affiliates in the course of his duties, the Executive will not hire or attempt to hire any employee of the Company or any of its Affiliates; assist in such hiring by any Person; encourage any such
employee to terminate his or her relationship with the Company or any of its Affiliates; or solicit or encourage any customer of the Company or any of its Affiliates to terminate or diminish its relationship with them; or solicit or encourage any
customer or potential customer of the Company or any of its Affiliates to conduct with any Person any business or activity which such customer or potential customer conducts or could conduct with the Company or any of its Affiliates. 

(c) The Executive agrees that during the employment by the Company the Executive shall not publish any work that disparages the Company or any
of its Affiliates, their management or their business or the Products. 
 9. Enforcement of Covenants. The Executive acknowledges
that he has carefully read and considered all the terms and conditions of this Agreement, including the restraints imposed upon him pursuant to Sections 6, 7 and 8 hereof. The Executive agrees that those restraints are necessary for the
reasonable and proper protection of the Company and its Affiliates and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area. The Executive further acknowledges that, were he to
breach any of the covenants contained in Sections 6, 7 or 8 hereof, the damage to the Company and its Affiliates would be irreparable. The Executive therefore agrees that the Company, in addition to any other remedies available to it, shall be
entitled to preliminary and permanent injunctive relief against any breach or threatened breach by the Executive of any of said covenants, without having to post bond. The parties further agree that, in the event that any provision of
Section 6, 7 or 8 hereof shall be determined by any court of competent jurisdiction to be unenforceable by reason of its being extended over too great a time, too large a geographic area or too great a range of activities, such provision shall
be deemed to be modified to permit its enforcement to the maximum extent permitted by law. 
 10. Conflicting Agreements. The
Executive hereby represents and warrants that the execution of this Agreement and the performance of obligations hereunder will not breach or be in conflict with any other agreement to which the Executive is a party or is bound and that the
Executive is not now subject to any covenants against competition or similar covenants or any court order or other legal obligation that would affect the performance of their obligations hereunder. The Executive will not disclose to or use on behalf
of the Company any proprietary information of his former employer or any other Person without such Person’s consent. 

 11. Indemnification. The Company shall indemnify the Executive in accordance with its
articles of organization and by-laws as in effect at the time indemnification is applicable. The Executive agrees promptly to notify the Company of any actual or threatened claim arising out of or as a result of his employment or offices with the
Company or any of its Affiliates. 
 12. Definitions. Words or phrases which are initially capitalized or are within quotation marks
shall have the meanings provided in this Section and as provided elsewhere herein. For purposes of this Agreement, the following definitions apply: 

(a) “Affiliates” means all Persons directly or indirectly controlling, controlled by or under common control with the entity
specified, where control may be by management authority, contract or equity interest. 
 (b) A “Change of Control” shall be
deemed to take place if hereafter (A) any “Person” or “group,” within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “Act”), other than the Company or any of its
Affiliates, becomes a beneficial owner (within the meaning of Rule 13d-3 as promulgated under the Act), directly or indirectly, in one or a series of transactions, of securities representing fifty percent (50%) or more of the total number of
votes that may be cast for the election of directors of the Company and two-thirds of the Board has not consented to such event prior to its occurrence or within sixty (60) days thereafter, provided that if the consent occurs after the event it
shall only be valid for purposes of this Section 12(b) if a majority of the consenting Board is comprised of directors of the Company who were such immediately prior to the event; (B) any merger or consolidation involving the Company or
any sale of all or substantially all of the assets of the Company, or any combination of the foregoing, and two-thirds of the Board has not consented to such event prior to its occurrence or within sixty (60) days thereafter, provided that if
the consent occurs after the event it shall only be valid for purposes of this Section 12(b) if a majority of the consenting Board is comprised of directors of the Company who were such immediately prior to the event; (C) within twelve
(12) months after a tender offer or exchange offer for voting securities of the Company (other than by the Company) the individuals who were directors of the Company immediately prior thereto shall cease to constitute a majority of the Board;
or (D) there occurs a closing of a sale or other disposition by the Company of all or substantially all of the assets of the Company other than to one or more of the Company’s Affiliates. 

(c) “Confidential Information” shall mean any and all information of the Company and its Affiliates that is not generally
known by those with whom the Company or any of its Affiliates competes or does business, or with whom the Company or any of its Affiliates plans to compete or do business, including without limitation (i) information related to the Products,
technical data, methods, processes, know-how and inventions of the Company and its Affiliates, (ii) the development, research, testing, marketing and financial activities and strategic plans of the Company and its Affiliates, (iii) the
manner in which they operate, (iv) their costs and sources of supply, (v) the identity and special needs of the customers and prospective customers of the Company and its Affiliates and (vi) the Persons with whom the Company and its
Affiliates have business relationships and the nature and substance of those relationships. Confidential Information also includes any information that the Company or any of its Affiliates may receive or has received from customers, subcontractors,
suppliers or others, with any understanding, express or implied, that the information would not be disclosed. Confidential Information does not include information that enters the public domain, other than through a breach by the Executive or
another Person of an obligation of confidentiality to the Company or one of its Affiliates. 
 (d) “Date of Termination”
means the date the Executive’s employment with the Company terminates, regardless of the reason for such termination. 
 (e)
“Final Compensation” means (i) Base Salary earned but not paid through the Date of Termination, (ii) pay at the final rate of the Base Salary for any paid time off earned but not used through the Date of Termination and
(iii) any business expenses incurred by the Executive but un-reimbursed on the Date of Termination, provided that such expenses and required substantiation and documentation are submitted prior to, or within sixty (60) days following, the
Date of Termination and that such expenses are reimbursable under Section 3(g) hereof and Company policies. 

 (f) “Intellectual Property” means any invention, formula, process, discovery,
development, design, innovation or improvement (whether or not patentable or registrable under copyright statutes) made, conceived, or first actually reduced to practice by the Executive solely or jointly with others, during his employment by the
Company; provided, however, that, as used in this Agreement, the term “Intellectual Property” shall not apply to any invention that the Executive develops on his own time, without using the equipment, supplies, facilities or trade secret
information of the Company or any of its Affiliates to which the Executive has access as a result of his employment, unless such invention (i) relates at the time of conception or reduction to practice of the invention (A) to the business
of the Company or (B) to the actual or demonstrably anticipated research or development of the Company or (iii) results from any work performed by the Executive for the Company. 

(g) Other than for purposes of Section 12(b), above, “Person” means an individual, a corporation, a limited liability
company, an association, a partnership, an estate, a trust and any other entity or organization, other than the Company or any of its Affiliates. 

(h) “Products” means all products planned, researched, developed, tested, manufactured, sold, licensed, leased or otherwise
distributed or put into use by the Company or any of its Affiliates, together with all services provided or planned by the Company or any of its Affiliates, during the Executive’s employment. 

13. Withholding. All payments made by the Company under this Agreement shall be reduced by any tax or other amounts required to be
withheld by the Company under applicable law. 
 14. Assignment. Neither the Company nor the Executive may make any assignment of
this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company may assign its rights and obligations under this Agreement without the consent of the
Executive in the event the Company shall hereafter effect a corporate reorganization, consolidate with, or merge into, any Person or transfer all or substantially all of its properties or assets to any Person. This Agreement shall inure to the
benefit of and be binding upon the Company and the Executive, their respective successors, executors, administrators, heirs and permitted assigns. 

15. Severability and Construction. If any portion or provision of this Agreement shall to any extent be declared illegal or
unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected
thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. This Agreement shall be interpreted and applied in all circumstances in a manner that is consistent with the intent of
the parties that, to the extent applicable, amounts earned and payable pursuant to this Agreement shall constitute short-term deferrals exempt from the application of Section 409A and, if not exempt, that amounts earned and payable pursuant to
this Agreement shall not be subject to the premature income recognition or adverse tax provisions of Section 409A. 
 16.
Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of either party to require the performance of any term or obligation of this Agreement, or the waiver by either
party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach. 

17. Notices. Any and all notices, requests, demands and other communications provided for by this Agreement shall be in writing and
shall be effective when delivered in person, consigned to a reputable national courier for next day or next business day delivery or deposited in the United States mail, postage prepaid, registered or certified, and addressed to the Executive at his
last known address on the books of the Company or, in the case of the Company, to it at 130 Baytech Drive, San Jose, CA 95134, or to such other address as either party may specify by notice to the other actually received. 

18. Entire Agreement. This Agreement contains the entire agreement of the parties, and supersedes all prior agreements, whether written
or oral, with respect to the Executive’s employment and all related matters, except for the agreements set forth on Exhibit C hereto, which shall remain in effect. 

 19. Amendment. This Agreement may be amended or modified only by a written instrument
signed by the Executive and by an expressly authorized representative of the Board. 
 20. Headings. The headings and captions in
this Agreement are for convenience only and in no way define or describe the scope or content of any provision of this Agreement. 
 21.
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. 

22. Governing Law. This is a California contract and shall be construed and enforced under and be governed in all respects by the laws
of the State of California, without regard to the conflict of laws principles thereof, and, for the avoidance of doubt, shall include both the statutory and common law of California, except to the extent preempted by federal law. 

[Remainder of page intentionally left blank. Signature page follows immediately.] 

 IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its duly authorized representative, and
by the Executive, as of the date first above written. 
  

							
	THE EXECUTIVE:	 		 	THE COMPANY:
		 		 	GIGOPTIX, INC.
				
	 /s/ Darren Ma
	 		 	By:	 	 /s/ Dr. Avi S. Katz

				
		 		 	Name:	 	Dr. Avi S. Katz
				
		 		 	Title:	 	Chief Executive Officer

 EXHIBIT A 

RELEASE OF CLAIMS 
 FOR AND IN CONSIDERATION OF
the Post-Employment Compensation that I am eligible to earn following the termination of my employment, as that term is defined in the employment agreement between me and GigOptix, Inc. (the “Company”) dated as of December 17,
2014 (the “Agreement”), which is conditioned, inter alia, on my signing this Release of Claims and to which I am not otherwise entitled, and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, I, on my own behalf and on behalf of my heirs, executors, administrators, beneficiaries, representatives and assigns, and all others connected with or claiming through me, hereby release and forever discharge the Company and its
Affiliates (as that term is defined in the Agreement) and all of their respective past, present and future officers, directors, trustees, shareholders, employees, agents, general and limited partners, members, managers, joint venturers,
representatives, successors and assigns, and all others connected with any of them (all of the foregoing, collectively, the “Released”), both individually and in their official capacities, from any and all causes of action, rights
and claims of any type or description, known or unknown, which I have had in the past, now have, or might now have, through the date of my signing of this Release of Claims, including without limitation any causes of action, rights or claims in any
way resulting from, arising out of or connected with my employment by the Company or any of its Affiliates or the termination of that employment or pursuant to any federal, state or local law, regulation or other requirement, including without
limitation Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act and the fair employment practices laws of the state or states in which I have been employed by the Company or any of
its Affiliates, each as amended from time to time, (all of the foregoing, in the aggregate, “Claims”). 
 In signing this Release of
Claims, I expressly waive and relinquish all rights and benefits afforded by Section 1542 of the Civil Code of the State of California, and do so understanding and acknowledging the significance of such specific waiver of Section 1542,
which Section states 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. 
 Thus,
notwithstanding the provisions of Section 1542, and for the purpose of implementing a full and complete release and discharge of the Released, I expressly acknowledge that this Release of Claims is intended to include in its effect, without
limitation, all Claims which I do not know or suspect to exist in my favor at the time of execution hereof, and that this Release of Claims contemplates the extinguishment of all such Claims. 

Excluded from the scope of this Release of Claims is (i) any claim arising under the terms of the Agreement after the effective date of this Release of
Claim and (ii) any right of indemnification or contribution that I have pursuant to the articles of incorporation, by-laws or other governing documents of the Company or any of its Affiliates (as that term is defined in the Agreement). 

In signing this Release of Claims, I acknowledge my understanding that I may not sign it prior to the termination of my employment, but that I may consider
the terms of this Release of Claims for up to twenty-one (21) days from the date my employment with the Company terminates. I also acknowledge that I am advised by the Company and its Affiliates to seek the advice of an attorney prior to
signing this Release of Claims; that I have had and full and sufficient time to consider this Release of Claims and to consult with an attorney, if I wished to do so, or to consult with any other person of my choosing before signing; and that I am
signing this Release of Claims voluntarily and with a full understanding of its terms. 
 I further acknowledge that, in signing this Release of Claims, I
have not relied on any promises or representations, express or implied, that are not set forth expressly in the Agreement. 
 I understand that I may revoke
this Release of Claims at any time within seven (7) days of the date of my signing by written notice to the Company c/o Human Resources or to such other designated person and/or address as the Company may specify and that this Release of
Claims shall take effect on the eighth calendar day following the date of my signing it and only if I have not timely revoked it. 

 Intending to be legally bound, I have signed this Release of Claims as of the date written below. 

 

			
	Signature:	 	  

 

			
	Date Signed:	 	  

 EXHIBIT B 

WRITTEN NOTIFICATION TO THE EMPLOYEE 
 In
accordance with California Labor Code §§ 2870 and 2872, GigOptix, Inc. (the “Company”) hereby notifies you that your acceptance, by your signing, of the Employment Agreement to which this notice is attached as Exhibit B
does not require you to assign to the Company any Intellectual Property (as defined in Section 12 of the Employment Agreement) or any other invention for which no equipment, supplies, facility or trade secret information of the Company was used
and that was developed entirely on your own time, and does not relate to the business of the Company or to the Company actual or demonstrably anticipated research or development, or does not result from any work performed by you for the Company.

 The following is the text of California Labor Code § 2870: 

§ 2870 (a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or
her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for
those inventions that either: 
 1. Relate at the time of conception or reduction to practice of the invention to the employer’s
business, or actual or demonstrably anticipated research or development of the employer; or 
 2. Result from any work performed by the
employee for the employer. 
 (b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise
excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable. 

 EXHIBIT C 

(List of Other Employment Agreements Still in Effect)ex10-1.htm

Exhibit 10.1

 

 

 

 

 

PURCHASE AGREEMENT

 

dated as of December 22, 2014,

 

among

 

BARNES & NOBLE, INC.,

 

NOOK MEDIA INC.,

 

NOOK MEDIA MEMBER TWO LLC,

 

PEARSON EDUCATION, INC.

 

and

 

PEARSON INC.

 

 

 

 

 

 

 

  

  

  

Table of Contents

Page

 

 

	
ARTICLE I

 

Purchase and Sale; Closing

 

	
SECTION 1.01.

	
Purchase and Sale of the Series B Preferred Interests and Warrants

	
1

	
SECTION 1.02.

	
Closing

	
1

	
 

ARTICLE II

 

Representations and Warranties

 

	
SECTION 2.01.

	
Representations and Warranties of the Company

	
2

	
SECTION 2.02.

	
Representations and Warranties of the Investor

	
8

	
 

ARTICLE III

 

Covenants and Additional Agreements and Acknowledgements

 

	
SECTION 3.01.

	
Further Assurances

	
10

	
SECTION 3.02.

	
Expenses

	
11

	
SECTION 3.03.

	
Confidentiality

	
11

	
SECTION 3.04.

	
Investment Agreement Termination; Releases

	
11

	
SECTION 3.05.

	
Releases

	
11

	
SECTION 3.06.

	
Acknowledgements

	
11

	
SECTION 3.07.

	
NYSE Listing of Common Shares

	
12

	
 

ARTICLE IV

 

Miscellaneous

 

	
SECTION 4.01.

	
Survival

	
12

	
SECTION 4.02.

	
Amendments, Waivers, etc

	
12

	
SECTION 4.03.

	
Counterparts and Facsimile

	
13

	
SECTION 4.04.

	
Specific Enforcement; Governing Law; Submission to Jurisdiction; Waiver of Jury Trial

	
13

	
SECTION 4.05.

	
Notices

	
14

	
SECTION 4.06.

	
Entire Agreement, etc

	
16

	
SECTION 4.07.

	
Definitions

	
16

	
SECTION 4.08.

	
Interpretation

	
17

	
SECTION 4.09.

	
Severability

	
18

	
SECTION 4.10.

	
No Third-Party Beneficiaries

	
18

 

 

  

i

  

 

 

	
SECTION 4.11.

	
Assignment

	
18

	
SECTION 4.12.

	
Public Announcements

	
18

	
SECTION 4.13.

	
Transfer Taxes

	
18

 

 

  

ii

  

 

 

PURCHASE AGREEMENT dated as of December 22, 2014 (this “Agreement”), among Barnes & Noble, Inc., a Delaware corporation (the “Company”), NOOK Media Inc., a Delaware corporation (“NMI”), NOOK Media Member Two LLC, a Delaware limited liability company (“NOOK Member Two”), Pearson Education, Inc., a Delaware corporation (the “Investor”), and Pearson Inc., a Delaware corporation (“Guarantor”). The Company, NMI, NOOK Member Two, the Investor and the Guarantor each may be referred to herein individually as a “Party” and collectively as the “Parties.”

WHEREAS NMI and NOOK Member Two together desire to purchase, and the Investor desires to sell, all of the Investor’s right, title and interest in, to and under the 89,473.68421 convertible Series B preferred limited liability company interests (the “Series B Preferred Interests”) of NOOK Media LLC (“NOOK Media”) and the 94,182.82548 warrants (the “Warrants”) to purchase Series B Preferred Interests owned by the Investor, pursuant to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, and subject to the conditions set forth herein, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE I

Purchase and Sale; Closing

SECTION 1.01. Purchase and Sale of the Series B Preferred Interests and Warrants.  On the terms and subject to the conditions set forth in this Agreement, at the Closing, (a) NMI shall purchase from the Investor all of the Investor’s right, title and interest in, to and under 85,894.73684 Series B Preferred Interests and 90,415.51246 Warrants for an aggregate purchase price equal to (i) $13,200,008.25 in cash, payable as set forth in Section 1.02(b), and (ii) 578,810 shares of common stock, par value $.001 per share (“Company Common Stock”), of the Company and (b) NOOK Member Two shall purchase from the Investor all of the Investor’s right, title and interest in, to and under 3,578.94737 Series B Preferred Interests and 3,767.31302 Warrants for an aggregate purchase price equal to (i) $550,000.34 in cash, payable as set forth in Section 1.02(b), and (ii) 24,117 shares of Company Common Stock. The purchase and sale of the Series B Preferred Interests and Warrants is referred to in this Agreement as the “Preferred Interest Purchase”.

SECTION 1.02. Closing.

(a) The closing of the Preferred Interest Purchase (the “Closing”) shall take place at the offices of Cravath, Swaine & Moore LLP, Worldwide Plaza, 825 Eighth Avenue, New York, New York 10019, immediately following the execution and delivery of this Agreement by the Company, NMI, the Investor and the Guarantor.  The date on which the Closing occurs is referred to in this Agreement as the “Closing Date”.

 

 

  

  

  

 

(b) At the Closing, the Parties will make the following deliveries and take the following actions:

     (i) the Investor shall deliver to NMI and NOOK Member Two certificates, together with appropriate instruments of transfer, representing the Series B Preferred Interests and Warrants;

    (ii) NMI shall pay, or cause to be paid, to the Investor $13,200,008.25 by wire transfer of immediately available funds to a bank account designated in writing by the Investor;

   (iii) NOOK Member Two shall pay, or cause to be paid, to the Investor $550,000.34 by wire transfer of immediately available funds to a bank account designated in writing by the Investor;

   (iv) NMI shall cause 578,810 shares of Company Common Stock (the “NMI Common Shares”) to be issued in book-entry form, duly registered in the name of the Investor, and shall provide evidence reasonably satisfactory to the Investor of such book-entry;

    (v) NOOK Member Two shall cause 24,117 shares of Company Common Stock (the “NOOK Member Two Common Shares” and, together with the NMI Common Shares, the “Common Shares”) to be issued in book-entry form, duly registered in the name of the Investor, and shall provide evidence reasonably satisfactory to the Investor of such book-entry;

 

   (vi) each Party that is a party to the Digital Business Contingent Payment Agreement dated as of December 3, 2014, between the Company, NMI and the Investor shall deliver to the other Parties an executed counterpart of the Amended and Restated Digital Business Contingent Payment Agreement; and

  (vii) each Party that is a party to the Registration Rights Agreement shall deliver to the other Parties an executed counterpart of the Registration Rights Agreement.

ARTICLE II

Representations and Warranties

SECTION 2.01. Representations and Warranties of the Company.

Except as set forth in the Company Disclosure Letter, the Company represents and warrants as of the date hereof and as of the Closing Date to the Investor and the Guarantor as follows:

(a) Organization, Standing and Corporate Power.  The Company and each of its Subsidiaries is duly organized and validly existing under the Laws of its jurisdiction of organization and has all requisite corporate or other entity power and authority to own or lease all of its properties and assets and to carry on its business as presently conducted.  Each of the 

 

 

  

2

  

 

 

Company and its Subsidiaries is duly qualified or licensed to do business and is in good standing (where such concept is recognized under applicable Law) in each U.S. jurisdiction where the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, other than where the failure to be so qualified, licensed or in good standing would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of either the Company or NMI to consummate the transactions contemplated by this Agreement.

(b) Capitalization. 

 (i) The authorized capital stock of the Company consists of 300,000,000 shares of Company Common Stock and 5,000,000 shares of preferred stock, par value $.001 per share (“Company Preferred Stock”), of which 300,000 shares of Company Preferred Stock were designated by the board of directors of the Company (the “Board”) as Series I Preferred Stock and 204,000 shares of Company Preferred Stock were designated by the Board as Series J Preferred Stock.  At the close of business on December 1, 2014, (i) 59,531,503 shares of Company Common Stock (which includes 45,660 shares of Company Common Stock granted pursuant to a Company Stock Plan that is subject to vesting or other forfeiture conditions or repurchase by the Company (such shares, the “Company Restricted Stock”)) were issued and outstanding, (ii) 7,097,695 shares of Company Common Stock were reserved and available for issuance pursuant to the Amended and Restated 2009 Incentive Plan of the Company (the “2009 Plan”), the 2004 Incentive Plan of the Company, as amended (the “2004 Plan”), and the Amended and Restated 1996 Incentive Plan of the Company (the “1996 Plan”, and collectively with the 2009 Plan and the 2004 Plan, the “Company Stock Plans”), of which 620,375 shares of Company Common Stock were subject to outstanding options to acquire shares of Company Common Stock (such options, the “Company Stock Options”), and 2,794,254 shares of Company Common Stock were subject to outstanding restricted stock units (such restricted stock units, the “Company RSUs”), (iii) 34,546,409 shares of Company Common Stock were owned by the Company as treasury stock, (iv) 214,000 shares of Series J Preferred Stock were outstanding (and such Series J Preferred Stock were convertible as of December 1, 2014 into no more than 12,000,000 shares of Company Common Stock), (v) 12,000,000 shares of Company Common Stock were reserved for issuance in connection with a conversion of the Series J Preferred Stock, and (vi) zero shares of Series I Preferred Stock were outstanding.  Except as set forth above, at the close of business on December 1, 2014, no shares of capital stock or other voting securities of or equity interests in the Company were issued, reserved for issuance or outstanding and no securities of the Company or any of its Subsidiaries convertible into or exchangeable or exercisable for shares of capital stock or other voting securities of or equity interests in the Company were issued or outstanding.  Since December 1, 2014, to the date of this Agreement, (x) there have been no issuances by the Company of shares of capital stock or other voting securities of or equity interests in the Company, other than issuances of shares upon the vesting of Company Restricted Stock pursuant to the Company Stock Plans or shares of Company Common Stock pursuant to Company Stock Options, Company RSUs, or the Company’s Amended and Restated Savings Plan (the “Company 401(k) Plan”) and the 2,737,290 shares of Company Common Stock issued to Microsoft Corporation on December 4, 2014, pursuant to the Purchase Agreement dated 

 

 

  

3

  

 

 

December 3, 2014, among the Company, NMI, Morrison Investment Holdings, Inc. and Microsoft Corporation and (y) there have been no issuances by the Company of options, warrants, rights, convertible or exchangeable securities, stock-based performance units or other rights to acquire shares of capital stock of, or other equity or voting interests in, the Company or other rights that give the holder thereof any economic interest of a nature accruing to the holders of Company Common Stock, other than issuances pursuant to the Company 401(k) plan in accordance with its terms.  All outstanding shares of Company Common Stock are, and all such shares that may be issued prior to the date hereof will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights.  There are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Company Common Stock may vote (“Voting Company Debt”).  Except for any obligations pursuant to this Agreement or as otherwise set forth above in this Section 2.01(b), as of the date of this Agreement, there are no options, warrants, rights, convertible or exchangeable securities, stock-based performance units, Contracts or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which the Company is bound (1) obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of or equity interests in, or any security convertible or exchangeable for any shares of capital stock or other voting securities of or equity interest in, the Company or any Voting Company Debt, (2) obligating the Company or any of its Subsidiaries to issue, grant or enter into any such option, warrant, right, security, unit, Contract or undertaking or (3) that give any person the right to receive any economic interest of a nature accruing to the holders of Company Common Stock.  There are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock or options, warrants, rights, convertible or exchangeable securities, stock-based performance units or other rights to acquire shares of capital stock of the Company, other than pursuant to the Company Stock Plans and the Company 401(k) Plan.

(ii) The Company Common Stock constitute the only outstanding class of securities of the Company or its Subsidiaries registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

(c) Authorization; Enforceability. 

 (i) Each of the Company and NMI has all requisite corporate power and authority to execute and deliver this Agreement and each other agreement contemplated hereby to which it is a party and to consummate the transactions contemplated hereunder and thereunder.  The execution and delivery of this Agreement and each such other agreement by each of the Company and NMI and the consummation of the transactions contemplated by, and compliance with the provisions of, this Agreement and each such other agreement by each of the Company and NMI have been duly authorized and approved by all necessary corporate action on the part of the Company and NMI, respectively.  On or prior to the date of this Agreement, the Board has duly adopted resolutions approving this Agreement and each such other agreement and the transactions 

 

 

  

4

  

 

 

contemplated hereby and thereby (and, as of the date of this Agreement, the resolutions giving effect to such corporate actions have not been rescinded, modified or withdrawn in any way). This Agreement has been duly executed and delivered by each of the Company and NMI and, assuming the due authorization, execution and delivery by each of the Investor and the Guarantor, constitutes a legal, valid and binding obligation of each of the Company and NMI, enforceable against each of the Company and NMI in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency and other Laws of general applicability relating to or affecting creditors’ rights and to general equity principles, whether considered in a proceeding at law or in equity.

(ii) No vote, consent or approval of the stockholders of the Company is required under applicable Law, under the certificate of incorporation of the Company or by-laws of the Company, or under any Contract between the Company and any stockholder of the Company, to authorize or approve this Agreement or the transactions contemplated hereby.

 

(d) No Conflict.

 (i) Neither the Company nor NMI is in violation or default of any provision of the certificate of incorporation or the by-laws of the Company or NMI, respectively.  The execution and delivery by each of the Company and NMI of this Agreement and each other agreement contemplated hereby to which it is a party do not, and the consummation of the transactions contemplated by, and compliance with the provisions of, this Agreement and each such other agreement will not, conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to the loss of a benefit under, or result in the creation of any Lien upon any of the properties or assets of the Company or any of its Subsidiaries under any provision of (A) the certificate of incorporation of the Company or the by-laws of the Company, (B) the certificate of incorporation or the by-laws of NMI or the organizational documents of Nook Media, or (C) (1) any loan or credit agreement, license, contract, lease, sublease, indenture, note, debenture, bond, mortgage or deed of trust or other agreement, arrangement or understanding (a “Contract”) to which the Company or any of its Subsidiaries is a party or by which any of their respective properties or assets are bound and that is material to the business of NMI or the Company and its Subsidiaries, taken as a whole, (2) any supranational, federal, national, state, provincial or local statute, law (including common law), ordinance, rule or regulation of any Governmental Entity (“Law”) that is material to NMI or the Company and its Subsidiaries, taken as a whole, or (3) any judgment, order or decree of any Governmental Entity (“Judgment”), in each case, applicable to the Company or any of its Subsidiaries or any of their respective properties or assets, other than, in the case of such clause (C) above, any such conflicts, violations, breaches, defaults, rights, losses or pledges, liens, charges, mortgages, encumbrances or security interests of any kind or nature (collectively, “Liens”) that would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of either the Company or NMI to consummate the transactions contemplated by this Agreement.

 

 

  

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(ii) Other than in connection or in compliance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”) and the securities or blue sky laws of the various states or, to the extent applicable, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) or any applicable antitrust, merger or competition law, no notice to, registration, declaration or filing with, review by, or authorization, consent, order, waiver, authorization or approval of, any governmental or regulatory (including any stock exchange) authorities, agencies, courts, commissions or other entities, whether federal, state, local or foreign, or applicable self-regulatory organizations (each, a “Governmental Entity”) or other third party is necessary for the consummation by the Company and NMI of the transactions contemplated by this Agreement.

(e) Authorization of Company Common Stock.  As of the Closing Date, and upon the completion of the actions to be taken at the Closing, the Common Shares (i) will be duly authorized by all necessary corporate action on the part of the Company, (ii) will be validly issued, fully paid and nonassessable, (iii) will not be subject to preemptive rights or restrictions on transfer (other than restrictions on transfer under applicable state and federal securities laws) and (iv) will be free and clear of all Liens.

 

(f) Private Offering.  None of the Company, its Subsidiaries, their Affiliates and their Representatives have, directly or indirectly, made any offers or sales of the Common Shares or solicited any offers to buy the Common Shares, under circumstances that would require registration of the Common Shares under the Securities Act.  None of the Company, its Subsidiaries, their Affiliates and their Representatives have, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause this offering of the Common Shares to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable stockholder approval provisions, including under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated.  None of the Company, its Subsidiaries, their Affiliates and their Representatives will take any action or steps referred to in the two preceding sentences that would require registration of any of the Common Shares under the Securities Act.  Assuming the accuracy of the representations made by the Investor in Section 2.02, the sale and delivery of the Common Shares hereunder are exempt from the (i) registration and prospectus delivery requirements of the Securities Act and (ii) the registration and qualification requirements of all applicable securities laws of the states of the United States.

(g) Anti-Takeover Provisions Not Applicable.  The provisions of Section 203 of the General Corporation Law of the State of Delaware as they relate to the Company do not and will not apply to this Agreement or to any of the transactions contemplated hereby.

(h) SEC Documents; Undisclosed Liabilities; Disclosure Controls and Procedures; Other.

 (i) The Company has filed all material reports, schedules, forms, statements and other documents with the Securities and Exchange Commission (the “SEC”) required to be filed by the Company pursuant to the Securities Act or the Exchange Act since April 28, 2012 (the “SEC Documents”).  As of their respective effective dates (in the case of 

 

 

  

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SEC Documents that are registration statements filed pursuant to the requirements of the Securities Act) and as of their respective dates of filing (in the case of all other SEC Documents), the SEC Documents complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable thereto, and except to the extent amended or superseded by a subsequent filing with the SEC prior to the date of this Agreement, as of such respective dates, none of the SEC Documents contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  As of the date of this Agreement, there are no outstanding or unresolved comment letters received from the SEC or its staff.  The audited consolidated financial statements and the unaudited quarterly financial statements (including, in each case, the notes thereto) of the Company included or incorporated by reference in the SEC Documents when filed complied in all material respects with the published rules and regulations of the SEC with respect thereto, have been prepared in all material respects in accordance with generally accepted accounting principles (“GAAP”) (except, in the case of unaudited quarterly statements, as permitted by Form 10-Q of the SEC or other rules and regulations of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited quarterly statements, to normal year-end adjustments).

(ii) Except for matters reflected or reserved against in the most recent consolidated balance sheet of the Company (or the notes thereto) included in the SEC Documents, neither the Company nor any of its Subsidiaries has any liabilities (whether absolute, accrued, contingent, fixed or otherwise) of any nature that would be required under GAAP, as in effect on the date of this Agreement, to be reflected on a consolidated balance sheet of the Company (including the notes thereto), except liabilities that (A) were incurred since the date of such balance sheet in the ordinary course of business or (B) are incurred in connection with the transactions contemplated by this Agreement.  There are no unconsolidated Subsidiaries of the Company or any off-balance sheet arrangements of any type (including any off-balance sheet arrangement required to be disclosed pursuant to Item 303(a)(4) of Regulation S-K promulgated under the Securities Act) that have not been so described in the SEC Documents nor any obligations to enter into any such arrangements.

 

       (iii) The Company has established and maintains disclosure controls and procedures and a system of internal controls over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act.  Since April 28, 2012, neither the Company nor the Company’s independent registered public accounting firm, has identified or been made aware of “significant deficiencies” or “material weaknesses” (as defined by the Public Company Accounting Oversight Board) in the design or operation of the Company’s internal controls and procedures which would reasonably be expected to adversely affect in any material respect the Company’s ability to record, process,

 

 

  

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summarize and report financial data, in each case which has not been subsequently remediated.  To the knowledge of the Company, there is no fraud, whether or not material, that involves the Company’s management or other employees who have a significant role in the preparation of financial statements or the internal control over financial reporting utilized by the Company and its Subsidiaries.

 

       (iv) Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, there is no action, suit, proceeding or investigation pending or, to the knowledge of the Company, threatened, against the Company or any of its Subsidiaries or any of their respective assets before or by any Governmental Entity. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, neither the Company nor any of its Subsidiaries is in default with respect to any Judgment.

 

(v) Neither the Company nor any of its Subsidiaries is in violation of any applicable Law, except where such violation would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

 (i) Brokers and Finders.  Other than Guggenheim Partners LLC, there is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of the Company or its Affiliates that is entitled to any fee or commission in connection with the transactions contemplated by this Agreement.

SECTION 2.02. Representations and Warranties of the Investor.  The Investor hereby represents and warrants as of the date hereof and as of the Closing Date to the Company and NMI that:

(a) Organization and Authority.  Each of the Investor and the Guarantor is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization and has all requisite corporate power and authority to carry on its business as presently conducted, except where the failure to be in good standing would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of either the Investor or the Guarantor to consummate the transactions contemplated by this Agreement.

(b) Authorization; Enforceability.  Each of the Investor and the Guarantor has all requisite corporate power and authority to execute and deliver this Agreement and each other agreement contemplated hereby to which it is a party and to consummate the transactions contemplated hereunder and thereunder.  The execution and delivery of this Agreement and each such other agreement by each of the Investor and the Guarantor and the consummation of the transactions contemplated by, and compliance with the provisions of, this Agreement and each such other agreement, by each of the Investor and the Guarantor have been duly authorized by all necessary corporate action on the part of the Investor and the Guarantor, respectively (and, as of the date of this Agreement, the resolutions giving effect to such corporate actions have not been rescinded, modified or withdrawn in any way).  This Agreement has been duly executed and delivered by each of the Investor and the Guarantor and, assuming the due authorization, execution and delivery by the Company and NMI, constitutes a legal, valid and binding obligation of each of the Investor and 

 

 

  

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the Guarantor, enforceable against each of the Investor and the Guarantor in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency and other Laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

(c) No Conflict.  The execution and delivery by each of the Investor and the Guarantor of this Agreement and each other agreement contemplated hereby to which it is a party do not, and the consummation of the transactions contemplated by, and compliance with the provisions of, this Agreement and each such other agreement will not, conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a benefit under, or result in the creation of any Lien upon any of the properties or assets of the Investor under, the certificate of incorporation or bylaws, or similar organizational documents, of the Investor or the Guarantor, any provision of any Contract to which the Investor or the Guarantor or any of their respective Subsidiaries is a party or by which any of its properties or assets are bound and that is material to the business of the Guarantor and its Subsidiaries, taken as a whole, or any Law that is material to the Guarantor and its Subsidiaries, taken as a whole, or Judgment, in each case, applicable to the Investor or the Guarantor or any of their respective Subsidiaries or any of its properties or assets, other than any such conflicts, violations, breaches, defaults, rights, losses or Liens that would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Investor or the Guarantor to consummate the transactions contemplated by this Agreement.

(d) Consents.  Other than in connection or in compliance with the provisions of the Securities Act and the securities or blue sky laws of the various states or, to the extent applicable, the HSR Act or any applicable antitrust, merger or competition law, no notice to, registration, declaration or filing with, review by, or authorization, consent, order, waiver, authorization or approval of any Governmental Entity is necessary for the consummation by the Investor or the Guarantor of the transactions contemplated by this Agreement.

(e) Purchase for Investment.  The Investor acknowledges that the Common Shares have not been registered under the Securities Act or under any state securities laws.  The Investor (i) is acquiring the Common Shares pursuant to an exemption from registration under the Securities Act solely for investment with no present intention or view to distribute any of the Common Shares to any person in violation of the Securities Act, (ii) will not sell or otherwise dispose of any of the Common Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, (iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Common Shares and of making an informed investment decision and has conducted an independent review and analysis of the business and affairs of the Company that it considers sufficient and reasonable for purposes of its making its investment in the Common Shares and (iv) is an “accredited investor” (as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act).

(f) Ownership of Series B Preferred Interests and Warrants.  The Investor (i) holds and has good and valid title to the Series B Preferred Interests and Warrants and the certificates representing such securities, free and clear of any Liens, proxies, voting trusts or agreements, understandings or arrangements other than those contained in the Second Amended 

 

 

  

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and Restated Limited Liability Company Agreement of NOOK Media (the “LLC Agreement”) and (ii) is the record owner thereof.  Assuming NMI has the requisite power and authority to be the lawful owner of the Series B Preferred Interests and Warrants, upon delivery to NMI at the Closing of certificates representing the Series B Preferred Interests and Warrants and other appropriate instruments of transfer, and upon consummation of the other transactions contemplated hereby, good and valid title to the Series B Preferred Interests and Warrants will pass to NMI, free and clear of any Liens, and the Series B Preferred Interests and Warrants will not be subject to any voting trust agreement or other Contract relating to the ownership, voting, distribution rights or disposition of the Series B Preferred Interests and Warrants, as applicable (other than those created or entered into by NMI).

(g) Ownership.  Neither the Investor nor any of its Affiliates beneficially owns (within the meaning of Section 13 of the Exchange Act and the rules and regulations promulgated thereunder) more than 1% of the aggregate outstanding shares of Company Common Stock, or is a party to any Contract (other than this Agreement) for the purpose of acquiring, holding, voting or disposing of, more than 1% of the aggregate outstanding shares of Company Common Stock.

(h) Brokers and Finders.  There is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of the Investor or its Affiliates that is entitled to any fee or commission in connection with the transactions contemplated by this Agreement.

ARTICLE III

Covenants and Additional Agreements and Acknowledgements

SECTION 3.01. Further Assurances.

(a) Each Party will cooperate and consult with the other Parties and use commercially reasonable efforts to prepare and file all necessary documentation, to effect all necessary applications, notices, petitions, filings and other documents, and to obtain all necessary permits, consents, orders, approvals and authorizations of, or any exemption by, all Governmental Entities and other third parties, and expiration or termination of any applicable waiting periods, necessary or advisable to consummate the transactions contemplated by this Agreement, to take actions necessary to cause the conditions to Closing to be satisfied as promptly as reasonably practicable and to perform the covenants contemplated by this Agreement.  Each Party shall execute and deliver after the Closing such further certificates, agreements and other documents and take such other actions as the other Party may reasonably request to consummate or implement such transactions or to evidence such events or matters.  Each of the Investor and the Company will have the right to review in advance, and to the extent practicable each will consult with the other, in each case subject to applicable Laws relating to the exchange of information, with respect to all the information relating to the other Party, and any of their respective Subsidiaries, which appears in any filing made with, or written materials submitted to, any third party or any Governmental Entity in connection with the transactions contemplated by this Agreement.  In exercising the foregoing right, each of the Parties agrees to act reasonably and as promptly as practicable.  Each Party agrees to keep the other Parties

 

 

  

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apprised of the status of matters relating to completion of the transactions contemplated hereby.  Each Party shall promptly furnish each other Party, to the extent permitted by applicable Laws, with copies of written communications received by them or their Subsidiaries from, or delivered by any of the foregoing to, any Governmental Entity in respect of the transactions contemplated by this Agreement.

SECTION 3.02. Expenses.  Each Party shall bear and pay its own costs, fees and expenses incurred by it in connection with this Agreement and the transactions contemplated by this Agreement.

SECTION 3.03. Confidentiality.  Each Party hereby agrees to keep confidential and to cause its respective employees, officers, directors, Affiliates and Representatives to keep confidential any and all confidential information of the Investor and the Guarantor, on the one hand, and NMI and the Company, on the other hand, including non-public information relating to their respective finances and results, trade secrets, know-how, customers, business plans, marketing activities, financial data and other business affairs that was disclosed by the Investor or the Guarantor, on the one hand, and NMI or the Company, on the other hand, or their respective Affiliates or Representatives on or prior to the date of this Agreement in connection with the transactions contemplated by this Agreement.

SECTION 3.04. Investment Agreement Termination; Releases.  Effective as of the Closing (a) all rights and obligations under the Investment Agreement dated as of December 21, 2012 (the “Investment Agreement”), among the Company, NMI, the Investor and the Guarantor shall terminate and (b) all rights and obligations of the Investor under the LLC Agreement shall terminate.

SECTION 3.05. Releases.  Effective as of the Closing, each of the Investor and the Guarantor hereby releases, remises and forever discharges each of the Company, NMI and NOOK Media and any of their respective Affiliates, directors, officers, employees and representatives from any claims, losses, liabilities, obligations or responsibilities for any and all actions or failures to take action, whether known or unknown, relating to, resulting from or arising out of the LLC Agreement, the Investment Agreement and the transactions contemplated by any of the foregoing (excluding the Commercial Agreement, dated as of January 22, 2013, between NOOK Media and the Investor, as amended, and for the avoidance of doubt any other commercial arrangements or transactions between the Parties unrelated to Pearson’s investment in NOOK Media).  Effective as of the Closing, each of the Company and NMI hereby releases, remises and forever discharges each of the Investor, the Guarantor and any of their respective Affiliates, directors, officers, employees and representatives from any claims, losses, liabilities, obligations or responsibilities for any and all actions or failures to take action, whether known or unknown, relating to, resulting from or arising out of the LLC Agreement, the Investment Agreement and the transactions contemplated by any of the foregoing (excluding the Commercial Agreement, dated as of January 22, 2013, between NOOK Media and the Investor, as amended, and for the avoidance of doubt any other commercial arrangements and transactions between the Parties unrelated to Pearson’s investment in NOOK Media).

SECTION 3.06. Acknowledgements.  The Parties acknowledge and agree that the representations and warranties set forth in Section 2.01 constitute the sole and exclusive 

 

 

  

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representations and warranties of the Company and its Subsidiaries to the Investor and the Guarantor in connection with the transactions contemplated by this Agreement and the representations and warranties set forth in Section 2.02 constitute the sole and exclusive representations and warranties of the Investor and its Subsidiaries to the Company in connection with the transactions contemplated by this Agreement, and there are no other representations, warranties, covenants, understandings or agreements, oral or written, in relation thereto between the Parties other than those incorporated therein.  Except for the representations and warranties expressly set forth in Section 2.01, each of the Investor and the Guarantor disclaims reliance on any representations or warranties, either express or implied, by or on behalf of the Company or any of its Subsidiaries or their Affiliates or Representatives. Except for the representations and warranties expressly set forth in Section 2.02, each of NMI and the Company disclaims reliance on any representations or warranties, either express or implied, by or on behalf of the Investor or any of its Subsidiaries or their Affiliates or Representatives.  The Investor and the Guarantor each represent and warrant that it is a sophisticated party.  The Investor and the Guarantor each acknowledge and agree that any financial forecasts or projections relating to the Company and NOOK Media and their respective businesses that have been provided to the Investor and the Guarantor have been provided with the understanding and agreement that neither the Company nor any of its Subsidiaries is making any representation or warranty with respect to such forecasts or projections (except as expressly set forth in Section 2.01) and that actual future results may vary from such forecasts or projections based upon numerous factors. For the avoidance of doubt, no investigation or receipt of information in connection with the transactions contemplated hereby shall affect or be deemed to modify any representation, warranty or covenant of the Company or NMI or any person’s right to any remedy hereunder with respect to any breaches thereof.

SECTION 3.07. NYSE Listing of Common Shares. The Company shall cause the Common Shares to be approved for listing on the New York Stock Exchange promptly following the Closing.

ARTICLE IV

Miscellaneous

SECTION 4.01. Survival.  The representations and warranties of the Parties set forth in Article II of this Agreement shall survive until the second (2nd) anniversary of the Closing, except that Sections 2.01(a), (b), (c) and (e) and Sections 2.02(a), (b) and (f) shall survive indefinitely.  All of the covenants or other agreements of the Parties contained in this Agreement shall survive until fully performed or fulfilled.

SECTION 4.02. Amendments, Waivers, etc.  This Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed by the Party against whom such amendment or waiver shall be enforced.  The failure of any Party to exercise any right, power or remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other Party with its obligations hereunder, shall not constitute a waiver by such Party of its right to exercise any such other right, power or remedy or to demand such compliance.

 

 

  

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SECTION 4.03. Counterparts and Facsimile.  This Agreement may be executed in two or more identical counterparts (including by facsimile), each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered (by telecopy or otherwise) to the other Parties.

SECTION 4.04. Specific Enforcement; Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

(a) This Agreement shall be governed by and construed in accordance with the Laws of the State of New York.

(b) THE PARTIES ACKNOWLEDGE AND AGREE THAT IRREPARABLE DAMAGE WOULD OCCUR IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS AGREEMENT WERE NOT PERFORMED IN ACCORDANCE WITH THEIR SPECIFIC TERMS OR WERE OTHERWISE BREACHED.  IT IS ACCORDINGLY AGREED THAT THE PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR INJUNCTIONS TO PREVENT BREACHES OR THREATENED BREACHES OF THIS AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS OF THIS AGREEMENT IN ANY COURT OF COMPETENT JURISDICTION, IN EACH CASE WITHOUT PROOF OF DAMAGES OR OTHERWISE (AND EACH PARTY HEREBY WAIVES ANY REQUIREMENT FOR THE SECURING OR POSTING OF ANY BOND IN CONNECTION WITH SUCH REMEDY), THIS BEING IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY.  THE PARTIES AGREE NOT TO ASSERT THAT A REMEDY OF SPECIFIC ENFORCEMENT IS UNENFORCEABLE, INVALID, CONTRARY TO LAW OR INEQUITABLE FOR ANY REASON, NOR TO ASSERT THAT A REMEDY OF MONETARY DAMAGES WOULD PROVIDE AN ADEQUATE REMEDY.  IN ADDITION, EACH PARTY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS ARISING HEREUNDER, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT OF THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS ARISING HEREUNDER, BROUGHT BY ANY OTHER PARTY OR ITS SUCCESSORS OR ASSIGNS SHALL BE BROUGHT AND DETERMINED EXCLUSIVELY IN ANY STATE OR FEDERAL COURT IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, SO LONG AS ONE OF SUCH COURTS SHALL HAVE SUBJECT MATTER JURISDICTION OVER SUCH LEGAL ACTION OR PROCEEDING, AND THAT ANY CAUSE OF ACTION ARISING OUT OF THIS AGREEMENT SHALL BE DEEMED TO HAVE ARISEN FROM A TRANSACTION OF BUSINESS IN THE STATE OF NEW YORK.  EACH PARTY HEREBY IRREVOCABLY SUBMITS WITH REGARD TO ANY SUCH ACTION OR PROCEEDING FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, TO THE PERSONAL JURISDICTION OF THE AFORESAID COURTS AND AGREES THAT IT WILL NOT BRING ANY ACTION RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IN ANY COURT OTHER THAN THE AFORESAID COURTS.  EACH PARTY HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, COUNTERCLAIM OR OTHERWISE, IN ANY ACTION OR PROCEEDING WITH 

 

 

  

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RESPECT TO THIS AGREEMENT, (1) ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS FOR ANY REASON, (2) ANY CLAIM THAT IT OR ITS PROPERTY IS EXEMPT OR IMMUNE FROM JURISDICTION OF ANY SUCH COURT OR FROM ANY LEGAL PROCESS COMMENCED IN SUCH COURTS (WHETHER THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF JUDGMENT, EXECUTION OF JUDGMENT OR OTHERWISE) AND (3) TO THE FULLEST EXTENT PERMITTED BY THE APPLICABLE LAW, ANY CLAIM THAT (A) THE SUIT, ACTION OR PROCEEDING IN SUCH COURT IS BROUGHT IN AN INCONVENIENT FORUM, (B) THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER OR (C) THIS AGREEMENT, OR THE SUBJECT MATTER HEREOF, MAY NOT BE ENFORCED IN OR BY SUCH COURTS.  EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY ACTION, SUIT OR OTHER PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, ON BEHALF OF ITSELF OR ITS PROPERTY, BY U.S. REGISTERED MAIL TO SUCH PARTY’S RESPECTIVE ADDRESS SET FORTH BELOW, AND NOTHING IN THIS SECTION 4.04(b) SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

(c) EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.  EACH PARTY (1) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (2) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 4.04(c).

SECTION 4.05. Notices.  Any notice required to be given hereunder shall be sufficient if in writing, and sent by facsimile transmission (provided that any notice received by facsimile transmission or otherwise at the addressee’s location on any Business Day after 5:00 p.m. (addressee’s local time) shall be deemed to have been received at 9:00 a.m. (addressee’s local time) on the next Business Day), by reliable overnight delivery service (with proof of service), or hand delivery, addressed as follows:

 

 

  

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(a) If to the Company:

  Barnes & Noble, Inc.

  122 Fifth Avenue

  New York, NY 10011

  Attention:  Vice President, General Counsel & Secretary

  Facsimile:   212-463-5683

  with a copy to (which copy alone shall not constitute notice):

  Cravath, Swaine & Moore LLP

  Worldwide Plaza

  825 Eighth Avenue

  New York, NY 10019

  Attention:  Scott A. Barshay, Esq.

                      Andrew R. Thompson, Esq.

  Facsimile:   (212) 474-3700

(b) If to the Investor:

 

  Pearson Education, Inc.

  c/o Pearson Inc.

  330 Hudson Street

  New York, NY 10013

  Attention:  Chief Corporate Finance and Strategy Officer

 

  Facsimile:   (917) 260-8859

  with a copy to (which copy alone shall not constitute notice):

  Morgan, Lewis & Bockius LLP

  101 Park Avenue

  New York, NY 10178

  Attention:  Robert W. Dickey, Esq.

  Facsimile:   (212) 309-6001

(c) If to the Guarantor:

  Pearson Inc.

  330 Hudson Street

  New York, NY 10013

  Attention:  Chief Corporate Finance and Strategy Officer

 

  

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  Facsimile:   (917) 260-8859

  with a copy to (which copy alone shall not constitute notice):

  Morgan, Lewis & Bockius LLP

  101 Park Avenue

  New York, NY 10178

  Attention:  Robert W. Dickey, Esq.

  Facsimile:   (212) 309-6001

or to such other address as any person shall specify by written notice so given, and such notice shall be deemed to have been delivered as of the date so telecommunicated, personally delivered or scheduled to be received if sent by overnight delivery service.  Any Party may notify the other Parties of any changes to the address or any of the other details specified in this paragraph; provided, however, that such notification shall only be effective on the date specified in such notice or five Business Days after the notice is given, whichever is later.  Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice as of the date of such rejection, refusal or inability to deliver.

 

SECTION 4.06. Entire Agreement, etc.  This Agreement (including all the Annexes, Exhibits, and Schedules hereto), constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, between the Parties, with respect to the subject matter hereof and thereof.

SECTION 4.07. Definitions

(a) “Affiliate” means, with respect to any specified person or entity, any other person or entity directly or indirectly controlling or controlled by, or under direct or indirect common control with, such specified person or entity; provided, that NOOK Media and its Subsidiaries shall not be deemed to be Affiliates of the Investor or the Guarantor.  For the purposes of this definition, “control”, when used with respect to any specified person, means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

(b) “Amended and Restated Digital Business Contingent Payment Agreement” means the Amended and Restated Digital Business Contingent Payment Agreement in the form attached hereto as Annex A.

(c) “beneficial owner” and “beneficial ownership” and words of similar import have the meaning assigned to such terms in Rule 13d-3 and Rule 13d-5 promulgated under the Exchange Act and a person’s beneficial ownership of securities shall be determined in accordance with the provisions of such Rules.

 

 

  

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(d) “Business Day” means any weekday that is not a day on which banking institutions in New York, New York are authorized or required by law, regulation or executive order to be closed.

(e)  “Claim” means any demand, action, claim, suit, litigation, arbitration, prosecution, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding, at law or in equity), hearing, examination or investigation.

(f)  “Company Disclosure Letter” means the letter dated as of the date of this Agreement delivered by the Company to the Investor.

(g) “Company Material Adverse Effect” means any state of facts, change, effect, condition, development, event or occurrence that has a material and adverse effect on the business, assets or properties of the Company and its Subsidiaries, taken as a whole.

(h) “Registration Rights Agreement” means the Registration Rights Agreement of the Company in the form attached hereto as Annex B.

(i)  “Representative” means, with respect to any person, the directors, officers, employees, investment bankers, financial advisors, attorneys, accountants or other advisors, agents or representatives of such person.

 

(j)   A “Subsidiary” of any person means another person, an amount of the voting securities, other voting rights or voting partnership interests of which is sufficient to elect at least a majority of its board of directors or other governing body (or, if there are no such voting interests, more than 50% of the equity interests of which) is owned directly or indirectly by such first person.  For purposes of this Agreement, “person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or Governmental Entity or other entity.  For the avoidance of doubt, NMI and Nook Media shall be deemed to be a Subsidiary of the Company, and the Investor shall be deemed to be a Subsidiary of the Guarantor.

SECTION 4.08. Interpretation.  When a reference is made in this Agreement to an Article, Section or Schedule, such reference shall be to an Article or Section of, or a Schedule to, this Agreement unless otherwise indicated.  The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.  The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  The word “or” shall not be exclusive.  All references to “$” mean the lawful currency of the United States of America.  The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term.  Except as specifically stated herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by 

 

 

  

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waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein.  Except as otherwise specified herein, references to a person are also to its permitted successors and assigns.  Each of the Parties has participated in the drafting and negotiation of this Agreement.  If an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if it is drafted by all the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of authorship of any of the provisions of this Agreement.

SECTION 4.09. Severability.  Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement in any other jurisdiction.  If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

SECTION 4.10. No Third-Party Beneficiaries.  Nothing expressed or referred to in this Agreement will be construed to give any person, other than the Parties, any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement.

SECTION 4.11. Assignment.  Except as otherwise provided herein, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the Parties (whether by operation of law or otherwise) without the prior written consent of the other Parties; provided, however, NMI’s rights, interests and obligations under this Agreement shall be permitted to be assigned without the consent of any Party solely as a result of NMI being converted into another form of entity such as a limited liability company or merging with a direct or indirect subsidiary of the Company; provided further, that the Investor shall be permitted to assign its rights, interests or obligations hereunder to any Affiliate without the consent of any Party.

SECTION 4.12. Public Announcements. Subject to each Party’s disclosure obligations imposed by Law or the rules of any stock exchange upon which its securities are listed compliance with which shall not require consultation with, or the consent of, the other Parties, the Parties will not make any public news release or other public disclosure with respect to this Agreement or the transactions contemplated hereby without first consulting with the other Parties, and, in each case, also receiving the other Parties’ consent (which shall not be unreasonably withheld, conditioned or delayed).

SECTION 4.13. Transfer Taxes. NMI shall pay any and all transfer, documentary, stamp, sales, use, registration or similar issue or transfer taxes incurred in connection with the Preferred Interest Purchase, including in connection with the issuance of the Common Shares.

[Signature Page Follows]

 

 

  

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the Parties as of the date first written above.

 

 

	 	
BARNES & NOBLE, INC.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Michael P. Huseby	 
	 	 	Name:	Michael P. Huseby	 
	 	 	Title:  	Chief Executive Officer	 
	 	 	 	 

 

 

	 	
NOOK MEDIA INC.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Michael P. Huseby	 
	 	 	Name:	Michael P. Huseby	 
	 	 	Title:  	Chief Executive Officer	 
	 	 	 	 

 

 

	 	
NOOK MEDIA MEMBER TWO LLC

	 
	 	 	 	 
	
 

	
By: 

	/s/ Michael P. Huseby	 
	 	 	Name: 	Michael P. Huseby	 
	 	 	Title:  	Chief Executive Officer	 
	 	 	 	 

 

 

 

 

[Signature Page – Purchase Agreement]

  

  

  

 

 

	 	
PEARSON EDUCATION, INC.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Philip J. Hoffman 	 
	 	 	Name:	Philip J. Hoffman 	 
	 	 	Title: 	Executive Vice President	 
	 	 	 	 

 

	 	
PEARSON INC.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Philip J. Hoffman  	 
	 	 	Name:	Philip J. Hoffman 	 
	 	 	Title:	Executive Vice President	 
	 	 	 	 

 

 

 

 

[Signature Page – Purchase Agreement]

  

  

  

 

 

Annex A

Amended and Restated Digital Business Contingent Payment Agreement

[Filed as Exhibit 10.2 of this Current Report on Form 8-K]

 

 

 

 

 

 

 

  

  

  

 

Annex B

Registration Rights Agreement

[Filed as Exhibit 10.3 of this Current Report on Form 8-K]

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