Exhibit 10.1
 
 
CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED IS OMITTED AND MARKED WITH “[***]”. AN UNREDACTED VERSION OF
THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION AS REQUIRED BY RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED.
 
Commercial Agreement

This Commercial Agreement (this “Agreement”), dated June 4, 2014 (the “Effective
Date”), is between:  Samsung Electronics America, Inc., a New York corporation
(“Samsung”), and barnesandnoble.com LLC, a Delaware limited liability company
(“NOOK Media”).

Background and Purpose

A.            The parties desire to work together to develop Tablet (defined
below) devices manufactured by Samsung, customized with NOOK Media software, and
co-branded with Samsung and NOOK Media branding (“Co-Branded Devices”), all as
more particularly set forth in this Agreement.

Agreement

Samsung and NOOK Media, therefore, agree as follows:

Section 1.
Overview

1.1          Definitions.  The terms defined in Exhibit A and in the body of
this Agreement will have their respective meanings when used in this Agreement
with initial letters capitalized.

1.2          Governance Process.  The parties will use the governance processes
in Exhibit B (the “Governance Processes”) for managing their relationship under
this Agreement.  The parties will use the Governance Processes for escalation
and resolution of issues and disputes that may arise during the performance of
this Agreement before pursuing litigation in court, except as provided in
Section 2.3 of Exhibit B.

Section 2.
Co-Branded Device Development

2.1          Selection.  NOOK Media, after good faith consultations with
Samsung,  shall have the right to select from time to time during the Term
Tablet devices from Samsung’s devices under development with suggested retail
pricing of four hundred dollars ($400) or less, including 7” and 10” form
factors, each of which will thereafter be produced, customized and co-branded by
Samsung as Co-Branded Devices; provided, however, that all such selections shall
be subject to Samsung’s written agreement and that Samsung shall allow NOOK
Media, in the event of end-of-life of the Tablet device which is under
distribution as a Co-Branded Device, to select 1 (one) replacement Tablet device
for each end of life Tablet device from the future product roadmap provided by
Samsung to NOOK Media as set forth in this Section 2.  NOOK Media shall give
Samsung written notice of any such selection.  In addition, Samsung shall
consider in good faith and to the extent commercially reasonable the co-branding
of Tablet devices with suggested retail pricing above four hundred dollars
($400).

2.1.1           To the maximum extent permitted by Samsung’s confidentiality
regime, giving effect to the Confidentiality Agreement, Samsung shall make NOOK
Media aware of its future Tablet devices on an ongoing basis in a manner at
least as favorable to NOOK Media as the product roadmap Samsung provides to
major national retailers.  At a minimum, Samsung will provide updates to NOOK
Media not less frequently than quarterly with respect to the product planning
cycles and implementation status of its future Tablet devices.
 
 
 
 

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2.1.2           Samsung shall provide design specifications for future Samsung
Tablet devices (to be customized and co-branded) to NOOK Media with sufficient
time to enable NOOK Media to develop the NOOK Media Assets (defined below) that
will be integrated into Co-Branded Devices. In any event, such design
specifications will be provided to NOOK Media no later than three (3) months
prior to the date on which forecasts for orders would be required to be provided
if such devices are selected by NOOK Media to be Co-Branded Devices, in
accordance with Section 2.1.3 below.  For clarity, the foregoing shall not
prevent Samsung from making cosmetic, non-material alterations from design
specifications submitted to NOOK Media in accordance with this section.

2.1.3           NOOK Media shall provide non-binding forecasts for orders of
Co-Branded Devices to Samsung no less than twelve (12) weeks in advance of the
proposed delivery date and will provide orders for Co-Branded Devices to Samsung
no less than four (4) weeks in advance of such proposed delivery date.

2.1.4           The parties shall discuss in good faith the inclusion of devices
other than Tablets within the scope of this Agreement.

2.2          Customization and Co-Branding.

2.2.1           The Co-Branded Devices shall include, at a minimum, (a) NOOK
branding on the Marketing Materials (Box, In-Box Quick Start Guide, and Promo
cards) and (b)(i) NOOK branding in the device boot-up sequence, (ii) the NOOK
account setup sequence (including acceptance of NOOK Media’s terms and
conditions and privacy policy) within the initial Samsung device setup where the
setup sequence shall be mutual agreed between the parties and where the NOOK
account setup may not be skipped, (iii) the NOOK homescreen as supplied by NOOK
Media (the “NOOK Homescreen Experience”) pre-installed (including NOOK widgets
specified by NOOK Media), and (iv) NOOK applications specified by NOOK Media
pre-installed in the system partition (clauses (i)-(iv), the “NOOK Media
Assets”), in all cases, in a manner acceptable to NOOK Media acting reasonably
and in good faith.  The parties acknowledge and agree that for the Launch of the
initial Co-Branded Devices specified in Section 3.1 the scope and extent of
branding contained in Exhibit C is acceptable to NOOK Media.  For so long as
Co-Branded Devices operate on an Android-based OS, all of the above shall be
subject to Android compatibility test suite requirements made publicly available
by Google.  Samsung will not pre-install on or promote with respect to
Co-Branded Devices applications, widgets or experiences that compete with any
NOOK Media Asset.

2.2.2           NOOK Media shall be responsible for providing the NOOK Media
Assets to Samsung in a manner to be agreed by the parties.  Samsung shall be
responsible for securing the NOOK Media Assets provided to it so as to prevent
unauthorized access or distribution of the NOOK Media Assets and shall, upon
NOOK Media’s request, return or destroy upon the termination or expiration of
this Agreement any NOOK Media Assets in its possession.  Following the NOOK
Media Assets being provided to Samsung, Samsung will integrate the required
co-branding elements within Co-Branded Devices as part of the production,
customization and co-branding of the Co-Branded Devices pursuant to this
Agreement.
 
 
 
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2.2.3           If NOOK Media Assets are provided within a commercially
reasonable time prior to a Samsung device launch, Samsung will work with NOOK
Media in good faith to enable Launch of Co-Branded Devices with the general
launch in the U.S. of the Samsung devices on which the Co-Branded Devices are
based and in any event in the same general timeframe as the launch of the
Samsung device.

2.2.4           Additional co-branding elements will be included in Co-Branded
Devices as agreed upon by the parties.

2.2.5           On an ongoing basis, the parties shall jointly develop use cases
to assist in determining any additional desired customization of the Co-Branded
Devices.

2.2.6           Without limiting the generality of the foregoing provisions of
this Section 2.2, all Co-Branded Device in-box collateral and promotional items
in or linked to in the user interface of Co-Branded Devices shall be subject to
NOOK Media’s prior written approval.  By way of example and not limitation, (i)
the plastic screen cling will not include messaging regarding Galaxy Perks but
will include messaging regarding signing up for a NOOK account as determined by
NOOK Media and a call to action to a NOOK Media URL, and (ii) other collateral
will not include messaging regarding signing up for a Google account or Galaxy
Perks.

2.3          Updates.

2.3.1           NOOK Media shall have the right to push updates to NOOK
applications and NOOK widgets directly to Co-Branded Devices via the Google Play
store, and Samsung shall work in good faith with NOOK Media to provide system
updates to the Co-Branded Devices on a timely basis.  Samsung shall work in good
faith to permit NOOK Media to provide, within the first twelve (12) months after
Launch, one (1) update to the NOOK Homescreen Experience for the initial
Co-Branded Devices that is not timed with such system updates.

2.3.2           Samsung shall keep NOOK Media informed as early as possible,
and any event no later than when Samsung’s software development has been
completed, about updates that Samsung proposes to push to Co-Branded Devices and
shall offer NOOK Media the opportunity to push updates to NOOK Media Assets
pre-loaded on Co-Branded Devices in connection with Samsung updates.

2.4           No Other Agreements.  For clarity, Co-Branded Devices shall not be
subject to the terms of that certain eReader Mobile Application Distribution
Agreement between NOOK Media and Samsung Electronics Co., Ltd. dated November 1,
2010.
 
 
 
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Section 3.
Initial Co-Branded Devices

3.1          Initial Co-Branded Device Availability. For the initial Co-Branded
Devices, NOOK Media hereby selects Galaxy Tab 4 7” and Galaxy Tab 4 10” Tablets,
each in two SKUs (black and white).  Samsung shall use its best efforts to make
the 7” initial Co-Branded Device available for a commercial Launch  during the
week of [***] (the “Initial Availability Date”), with the 10” initial Co-Branded
Device to follow sixty (60) days after the Launch of the Galaxy Tab 4 7”.

3.2          Name.  The initial Co-Branded Devices shall be named the “Samsung
Galaxy Tab 4 NOOK”.

3.3          Co-Branding.  The parties acknowledge and agree that for the
initial Co-Branded Devices selected in Section 3.1 the branding contained in
Exhibit C is acceptable to NOOK Media.

Section 4.
Sales and Distribution

4.1          Distribution.

4.1.1           Co-Branded Devices shall be sold by NOOK Media in Barnes & Noble
Retail Bookstores and through the bn.com and nook.com websites, and may be sold
by NOOK Media in Barnes & Noble college bookstores and through its related
websites.  NOOK Media may sell Co-Branded Devices through other retail and
e-tail channels which are mutually agreed upon between the parties in
writing.  For the avoidance of doubt, NOOK Media shall obtain Samsung’s written
consent prior to selling Co-Branded Devices through other retail and e-tail
channels.
 
4.1.2           NOOK Media and Samsung shall use commercially reasonable efforts
to discuss  the sale and distribution by Samsung of Co-Branded Devices in other
retail and e-tail channels.
 
4.2           Purchase Terms.

4.2.1           Throughout the Term, Samsung shall provide to NOOK Media on a
weekly basis Samsung’s national promotion roadmap for models on which the
Co-Branded Devices being sold by NOOK Media at the relevant time are based with
sufficient lead time, and in no event less than twelve (12) weeks in advance, to
enable NOOK Media the opportunity to offer the same price adjustment or
promotion (such price adjustment or promotion to be provided or not provided by
NOOK Media in its sole discretion).  In all cases where Samsung is providing
funding on a national basis to a partner to cover the costs for a promotion,
Samsung will provide the same funding to NOOK Media for such promotion (e.g.,
$20 off or free gift card for a limited time with the purchase of Samsung device
on which the Co-Branded Device is based at a national partner that is funded by
Samsung would also be funded by Samsung for NOOK Media).  In the event of a
permanent Samsung price reduction, Samsung shall provide a credit to NOOK Media
for the difference between the price paid by NOOK Media (actual invoice price)
and the lower price, for all remaining NOOK Media inventory of Co-Branded
Devices as of the date of such price reduction, which were purchased in the
[***] prior to such price reduction as established by the date Samsung transfers
ownership of the Co-Branded Devices to NOOK Media.  All credits contemplated by
this Section 4.2.1 shall be offset against amounts owed by NOOK Media to
Samsung.
 
 
 
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4.2.2           The purchase price paid by NOOK Media to Samsung for Co-Branded
Devices shall be equal to [***] off of Samsung’s then-current suggested retail
price.

4.2.3           Co-Branded Devices shall be sold to NOOK Media by Samsung on a
[***] basis from receipt of Co-Branded Devices, [***].

4.2.4           The only purchase and sales terms applicable to orders and
purchases of Co-Branded Devices will be those contained herein or otherwise as
mutually agreed by the parties.

4.3          Minimum Quantity Purchase Commitment.  NOOK Media shall purchase a
minimum total quantity of 1,000,000 units of Co-Branded Devices (including units
purchased for the Launch) within the first twelve (12) months after the Launch
of the initial Co-Branded Device, including [***] units of Co-Branded Devices
(including units purchased for the Launch) within first five (5) month period
after such Launch; provided, however, that if NOOK Media does not sell at least
[***] units of Co-Branded Devices by December 31, 2014, the twelve (12) month
period referred to above shall be extended by an additional three (3) months.

4.4          Shipping Terms.

4.4.1           Samsung shall be required to ship Co-Branded Devices to NOOK
Media FOB, NOOK Media’s distribution centers as specified in the relevant order;
provided, however, that in the event of delays in shipping of Co-Branded
Devices, Samsung shall be required at NOOK Media’s request to ship directly to
Barnes & Noble Retail Bookstores (FOB the bookstore) at Samsung’s cost, with
NOOK Media to specify the Barnes & Noble Retail Bookstore in such request.

4.4.2           For orders over $15,000 per “Ship to Location”, shipping costs
shall be prepaid by Samsung (“Minimum Freight Requirement”). The parties will
work in good faith to explore shipping cost allocations for orders less than
$15,000.

4.4.3           The Minimum Freight Requirement must be met on each purchase
order per “Ship to Location” in order to qualify for prepaid freight.  NOOK
Media can mix orders from various product lines to meet the Minimum Freight
Requirement.

4.4.4           Samsung shall be obligated to notify NOOK Media of potential
delays in shipping its products and specify remedies upon delay (which must
include compliance with any applicable shipping requirements contained in this
Section 4.4).

4.4.5           EDI acknowledgment of receipt of an order shall not constitute
acceptance of the order.

4.4.6           Samsung shall ship Co-Branded devices in boxes that contain five
(5) Co-Branded Devices, and such boxes shall clearly display the model and
serial numbers of the Co-Branded Devices on the outside of the box.
 
 
 
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4.5          Taxes

4.5.1           Responsibility for Own Taxes.  Each party and its respective
Affiliates are responsible for all taxes (including net income, gross receipts,
franchise and property taxes and taxes arising from transactions between such
party and its customers) imposed on such party and/or its Affiliates under
applicable laws and arising as a result of or in connection with this Agreement
and/or the transactions contemplated by this Agreement.

4.5.2           Withholding for Taxes on Payments.  If any taxes are required by
law to be withheld by the payor with respect to any payment under this
Agreement, the payor will deduct and withhold such taxes from the amount owed to
the recipient of the payment and remit such withheld taxes to the appropriate
taxing authority; provided that, the payor will furnish evidence of such
remitted taxes to the recipient as is sufficient to enable the recipient to seek
any refunds and/or credits available to it.

4.5.3           Tax Exemption Certificates.  NOOK Media shall provide a Resale
Tax Exemption Certificate for each ship to state that requires one, including
those states where Samsung is directed to drop ship to Barnes & Noble Retail
Bookstores.

4.6          No Returns Policy. Samsung and NOOK Media agree that in lieu of
NOOK Media having the right to return Co-Branded Devices to Samsung, Samsung
shall provide a no return allowance based on return rate analysis on a quarterly
basis. Except as provided below, at the end of each three (3) month period
during the Term, the return rate will be analyzed on the previous twelve (12)
months of sales from that point. The no return allowance percentage shall be
adjusted based on this quarterly assessment using the calculation set forth on
Exhibit F (“NRA Percentage”). The allowance shall be provided as a trailing
credit which shall be calculated by multiplying the NRA Percentage with the
total value of units sold by NOOK Media during the calculation period. The
parties agree that the initial allowance shall be [***] for the first six (6)
months of the Term, which shall be adjusted by the parties after six (6) months
using the calculation set forth on Exhibit F to determine the percentage for the
subsequent six (6) months.  NOOK Media shall use commercially reasonable efforts
to maximize the resale value of Customer Returns (as defined in Exhibit F).  For
the avoidance of doubt, Co-Branded Devices that are subject to a safety or
quality recall or other catastrophic failure shall not be counted toward NOOK
Media’s return allowance.

4.7          Records.  During the Term and for a period of at least seven (7)
years thereafter, each of the parties shall keep and maintain, and shall require
each of its Affiliates to keep and maintain, complete and accurate books and
records related to its compliance with all the terms and conditions of this
Agreement.

4.8          Costs.  Each party shall bear all costs it incurs in the
performance of its obligations under this Agreement except as otherwise
specified in this Agreement or mutually agreed in writing by the parties.

Section 5.
Additional Agreements

5.1          Customer Support

5.1.1           NOOK Customer Support. NOOK Media will provide Level 1 Customer
Support for Co-Branded Devices and content.  In addition, NOOK Media will handle
all customer inquiries regarding the availability of languages other than
English on Co-Branded Devices.
 
 
 
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5.1.2             Samsung Customer Support. In coordination with NOOK Media,
Samsung will provide support consistent with its then-current policies and
practices for all Samsung hardware, Samsung-Android OS, and Samsung (non-NOOK
Media) pre-load application(s) support, including providing customers with
Samsung’s standard product warranty, which support shall continue following a
termination or expiration of this Agreement for so long as Samsung continues to
provide support with respect to the devices on which Co-Branded Devices are
based.  To the extent Co-Branded Device customers receive in-warranty
replacement devices as part of Samsung’s standard product warranty service,
Samsung shall ensure that all NOOK Media Assets are included thereupon and such
replacement devices are otherwise consistent with the obligations set forth in
this Agreement.

5.1.3           Costs.  Each party will bear its own costs in providing customer
support.

5.2          Promotion

5.2.1           Marketing Fund and Demo Devices. Samsung shall be obligated to
fund a marketing fund for both the initial Launch and ongoing promotional
activities with respect to Co-Branded Devices as set forth on Exhibit D with
respect to the first twelve (12) months of the Term and Exhibit E with respect
to each subsequent twelve (12) month period during the Term.  The marketing fund
shall be used to fund promotional activities to be set forth in an annual
marketing plan agreed by the parties in good faith prior to the beginning of
each twelve (12) month period of the Term, which annual marketing plan shall
provide for an annual marketing spend by Samsung equal to the marketing
fund.   The parties agree to work in good faith to complete the marketing plans
no later than thirty (30) days prior to the Initial Availability Date and each
anniversary thereof.  Samsung shall reimburse NOOK Media for any such costs
borne by NOOK Media promptly following NOOK Media providing invoices for such
costs to Samsung.

5.2.2           Training. Samsung shall provide, and bear the cost of, training
NOOK Media customer support employees and Barnes & Noble in-store employees on
the Samsung hardware, Samsung-Android OS, and Samsung (non-NOOK Media) pre-load
application(s), both initially and on an ongoing basis.  NOOK Media shall
provide, and bear the cost of, if any, training Samsung customer support
employees on the NOOK Media Assets.

5.2.3           In-Store Demos. Except with respect to the first twelve (12)
month period of the Term, in which the following shall be funded as set forth on
Exhibit D, for each device Launched as a Co-Branded Device, (i) Samsung shall
create and install an on device demo loop and/or a demo user experience to run
on the demo units of the Co-Branded Devices that shall include NOOK branding and
start with a NOOK section; and (ii) Samsung shall also provide a video version
of the on-device demo loop and/or demo user experience that is customized for
use in the TV monitors that are in Barnes & Noble Retail Bookstores and on the
BN.com and Nook.com websites.  The content of the demo loop and/or demo user
experience, in-store TV monitor video and web videos shall be mutually
determined and agreed.
 
 
 
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5.2.4           Barnes & Noble Retail Bookstores.  NOOK Media will consult with
Samsung with respect to designated sales areas within Barnes & Noble Retail
Bookstores where the Co-Branded Devices will be displayed and sold by NOOK
Media.

5.3         [***].

5.4          Certain Notices.  Samsung shall immediately notify NOOK Media of
any safety issues with respect to Samsung’s devices that could reasonably be
expected to also occur in or relate to any Co-Branded Device.  Samsung shall
also notify NOOK Media promptly and on an ongoing basis of epidemic failure
rates and any significant product quality issues, in each case, that are
relevant to any Co-Branded Device.
 
Section 6.
Data Sharing and Privacy

6.1          Customer Data.

6.1.1           Samsung shall not market to NOOK Media customers without the
consent of NOOK Media, including marketing via email blasts, Samsung owners’
portal or Samsung Galaxy Perks’ portal.

6.1.2           Neither party shall have any rights to any customer data in the
other party’s systems, including for the avoidance of doubt NOOK Media’s data
with respect to its customers’ accounts and lockers.  Each party’s use of all
customer data it collects shall be in accordance with such party’s own privacy
policy.

6.2          Sell-Through Data.  NOOK Media shall provide Samsung with
sell-through and return data on a weekly basis during the Term beginning as of
the Launch of the Initial Co-Branded Device.

Section 7.
Confidentiality; Publicity

7.1          Publicity.  Except as expressly permitted in the Confidentiality
Agreement, neither party (nor any of its Affiliates) may make any public
announcement or disclosure with respect to this Agreement or the transactions
contemplated hereby without the consent of the other party, unless required by
applicable law, rule or regulation.  Samsung agrees to issue a joint press
release upon signature of this Agreement and prior to Launch of the Co-Branded
Devices, the timing and content of such announcement to be mutually agreed upon
between the parties. Additionally, Samsung agrees to participate in a Launch
event and provide the CEO of Samsung Electronics America, Inc., President of
Samsung Electronics America, Inc. or similarly situated Samsung senior executive
as a participant.
 
 
 
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7.2          Confidentiality. All research and development assets of either
party including but not limited to tools, binary, documents and similar shall be
deemed Confidential Information of such party as set forth under the Mutual
Non-Disclosure Agreement executed between the parties. In addition, neither
party shall reverse engineer any Co-Branded Devices; if either party has any
technical questions or issues, such party shall contact the other party to
discuss and each party shall keep all discussions confidential.

Section 8.
Intellectual Property Rights

8.1          Rights of Parties. Except as expressly licensed to the other party,
each party shall own and retain all Intellectual Property Rights with respect to
all software and content it develops or makes available under or in connection
with this Agreement.

8.2          Brand Guidelines.  Each party shall use the other party’s
trademarks and logos in accordance with the other party’s “Standard Brand
Guidelines”, copies of which have been provided to the other party prior to the
Effective Date and are incorporated by reference herein.

8.3          Licenses.

8.3.1           Samsung grants to NOOK Media a nonexclusive, nontransferable,
revocable license to use Samsung trademarks to promote and market the Co-Branded
Devices. NOOK Media acknowledges and agrees that “Samsung” and the Samsung logo
are the solely owned and validly registered trademarks and/or tradenames of
Samsung, its parent or Affiliates; provided, however, that such license shall be
permitted to be transferred in connection with a permitted assignment of this
Agreement and such license shall not be permitted to be revoked during the Term
or after the expiration or termination of this Agreement until NOOK Media has
sold or determined not to sell any unsold inventory of Co-Branded Devices.  NOOK
Media recognizes that it is not authorized to use any of the trademarks or
tradenames of Samsung for the purpose of promoting NOOK Media or the Co-Branded
Devices without the prior written approv­al of Samsung; provided, however, (i)
such written approval can be given for master versions of creative, without a
need to obtain approval for all versions of creative materials that are based on
such master versions, and (ii) the “Samsung Galaxy Tab 4 NOOK” co-branded logo
standard set forth on Exhibit C is approved by Samsung for all versions of
creative, without a need for NOOK Media to obtain approval for all creative
materials containing such co-branded logo.

8.3.2           NOOK Media grants to Samsung a nonexclusive, nontransferable,
revocable license to use NOOK Media trademarks to promote and market the
Co-Branded Devices. Samsung acknowledges and agrees that “NOOK”, “NOOK Media”,
“NOOK Books” and other associated marks and NOOK Media logos are the solely
owned and validly registered trademarks and/or tradenames of NOOK Media, its
parent or Affiliates; provided, however, that such license shall be permitted to
be transferred in connection with a permitted assignment of this Agreement and
such license shall not be permitted to be revoked prior to the expiration or
termination of this Agreement in accordance with its terms. Samsung recognizes
that it is not authorized to use any of the trademarks or tradenames of NOOK
Media for the purpose of promoting Samsung or the Co-Branded Devices without the
prior written approv­al of NOOK Media; provided, however, such written approval
can be given for master versions of creative, without a need to obtain approval
for all versions of creative materials that are based on such master versions.
 
 
 
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8.4          IP License Fees. The understanding and intent of the parties is
that the parties shall not be required to make multiple payments of patent
license fees to any patent licensor under patent license agreements for the
Co-Branded Devices.  Each party shall bear the cost of any intellectual property
license fees arising out of the materials it provides to the other party under
this Agreement.

Section 9.
Term and Termination

9.1          Term.  The term of this Agreement (the “Term”) shall commence on
the Effective Date and shall continue until the date that is two (2) years after
the Effective Date.  This Agreement shall renew automatically for successive
additional one-year terms, unless terminated by either party upon sixty (60)
days’ advance written notice prior to the end of the then current term.

9.2          Material Default.  Either party may terminate this Agreement if (i)
the other party fails to make any payment required under this Agreement when
due, which failure continues unremedied for a period of thirty (30) days after
written notice specifying such failure, or (ii) the other party materially
defaults in the performance of any of its other material obligations under this
Agreement, which material default continues unremedied for a period of sixty
(60) days after written notice specifying such failure and (iii) NOOK Media may
terminate this Agreement if Samsung fails to meet its shipping and delivery
obligations in any material respect on a timely basis, which failure continues
unremedied for a period of thirty (30) days after written notice specifying such
failure; provided that, such termination shall not be effective if such material
default is caused by the terminating party failing to comply with its
obligations under this Agreement. For clarity, NOOK Media’s termination right
set forth in clause 9.2(iii) above shall relate solely to the material failure
by Samsung to ship and deliver Co-Branded Devices and shall not include any
non-logistical related reasons for such delays. All non-logistical delays shall
be remedied in accordance with 9.2(ii).

9.3          Termination for Insolvency. Either party may terminate this
Agreement if the other party:
 

   
i.
Liquidates, dissolves, winds up its affairs, ceases to do business as a going
concern, makes a general assignment for the benefit of its creditors, is unable
to pay its debts as they becomes due, or admits in writing its inability to pay
its debts generally; or
           
ii.
(A) Voluntarily commences a case under title 11 of the United States Code or any
similar law regarding bankruptcy, insolvency, reorganization, composition or
readjustment of debts, marshaling of assets, or protection or relief from
creditors (collectively, “Bankruptcy Laws”), (B) files a petition seeking to
take advantage of any Bankruptcy Law, or (C) consents to the appointment of a
trustee, receiver, custodian, liquidator, or similar authority with respect to
all or any substantial part of its assets; or

 
 
 
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iii.
A petition or proceeding is filed or commenced against the party seeking (A) its
liquidation, reorganization, dissolution, winding-up, marshaling of assets, or
composition or readjustment of its debts, (B) the appointment of a trustee,
receiver, custodian, liquidator, or similar authority with respect to all or any
substantial part of its assets, or (C) similar relief under any Bankruptcy Law,
and such petition or proceeding shall not be dismissed within sixty (60) of such
filing or commencement.

 
9.4          Survival.  Only Sections 1.1, 1.2, 2.3.1, 2.4, 4.5, 4.6, 4.7, 4.8,
5.1.2, 6.1, 8.1, 8.3, 8.4, 10, 11 and 12, this Section 9.4 and Exhibits A, B and
F shall survive any expiration or termination of this Agreement.  However, any
expiration or termination of this Agreement shall be without prejudice to any
right or remedy of any party arising out of any breach of this Agreement,
including recovery of any amounts owing under this Agreement.

Section 10.
Indemnities and Warranties

10.1        Indemnities

10.1.1         NOOK Media Indemnity.  NOOK Media shall be solely responsible for
and shall defend, indemnify and hold harmless Samsung and its Affiliates against
and from (i) liability for any intellectual property infringement to the extent
arising out of or relating to the NOOK Homescreen Experience, NOOK Media
applications, NOOK Media-provided content or any other intellectual property
supplied by NOOK Media to Samsung under this Agreement, (ii) liability arising
from NOOK Media’s actual or alleged breach of its obligations under Section
13.13 or of its any of its representations or warranties made hereunder, and
(iii) liability in connection with the NOOK Media applications, NOOK Media
widgets or NOOK Media  updates loaded into the  Co-Branded Devices.

10.1.2         Samsung Indemnity.  Samsung shall be solely responsible for and
shall defend, indemnify and hold harmless NOOK Media and its Affiliates against
and from (i) all intellectual property infringement and product liability, in
each case, to the extent arising out of or relating to any device or any
intellectual property supplied by Samsung to NOOK Media supplied by Samsung to
NOOK Media under this Agreement, (ii) liability arising from Samsung’s actual or
alleged breach of its obligations under Section 13.13 or any of its
representations or warranties made hereunder, and (iii) liability in connection
with software loaded into the Co-Branded Devices, except for that software for
which NOOK Media is required to indemnify pursuant to Section 10.1.1.

10.2        Representations and Warranties

10.2.1         Each party represents and warrants to the other party that (a) it
has all right, power and authority to enter into, and perform its obligations
under, this Agreement, including the granting of the licenses contemplated
hereby, and this Agreement has been duly authorized, executed and delivered by
it,  and (b) the execution, delivery and performance of this Agreement by it
does not violate any material agreement between it and any third party or any
material obligation between it and any third party.
 
 
 
11

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10.2.2         Samsung represents and warrants to NOOK Media that (a) it has and
shall convey good and marketable title, free from any lien, third party claim or
encumbrance, to all Co-Branded Devices provided under this Agreement, (b) such
Co-Branded Devices will be free from known defects and (c) the Co-Branded
Devices are new and do not contain any used or refurbished components.

10.3        Disclaimer of Warranties and Indemnities.  EXCEPT AS EXPRESSLY
PROVIDED OTHERWISE IN THIS AGREEMENT, TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY PROVIDES ALL SOFTWARE, DEVICES, TECHNOLOGY, SERVICES,
CONTENT, DATA, INFORMATION AND OTHER MATERIALS UNDER THIS AGREEMENT “AS IS” AND
WITH ALL FAULTS AND WITHOUT ANY WARRANTIES, REPRESENTATIONS AND CONDITIONS OF
ANY KIND, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTIES OF OR
RELATED TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NON-INFRINGEMENT.

Section 11.
Limitations of Liability

 
11.1        Disclaimer of Consequential Damages.  EXCEPT WITH RESPECT TO THE
PARTIES’ RESPECTIVE INDEMNIFICATION OBLIGATIONS HEREUNDER OR THE PARTIES’
BREACHES OF CONFIDENTIALITY, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
CONSEQUENTIAL, INDIRECT, INCIDENTAL, OR SPECIAL DAMAGES WHATSOEVER, (INCLUDING
DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS
INFORMATION, AND THE LIKE), ARISING OUT OF THE USE OF THE CONTENT OR MATERIALS
PROVIDED OR PRODUCED BY EITHER PARTY, EVEN IF THE PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

Section 12.
Audit

12.1        Samsung Audit Rights.  Beginning after the first six (6) months of
the Term and upon at least thirty (30) days prior written notice, but no more
than once per twelve (12) month period during the Term, Samsung, or its
designee, shall have the right during normal business hours to inspect and audit
NOOK Media’s records, books and other data relating to the purchase of
Co-Branded Devices to determine NOOK Media’s compliance with this Agreement
including, but not limited to sales and any payments due Samsung by NOOK
Media.  NOOK Media shall, at Samsung’s request, provide full and complete
records which fully support any discrepancies that NOOK Media may claim exist
between amounts the Samsung claims are due from NOOK Media and amounts the NOOK
Media claims are due from NOOK Media to Samsung.   Any Samsung designee auditing
NOOK Media pursuant to this section shall be subject to the confidentiality and
non-disclosure terms of this Agreement, and Samsung shall be fully responsible
for any breach thereof.
 
 
 
12

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Section 13.
General

13.1        Independent Parties.  The parties are independent parties.  This
Agreement does not create, and should not be interpreted or construed as
creating, any agency, partnership, joint venture, franchise, and/or employment
relationship between the parties.  No party has the authority to make any
statements, representations or commitments of any kind on behalf of the other
party or to take any action binding on the other party.

13.2        Notices.  Except as otherwise agreed in writing by the parties, any
notices given under this Agreement shall be delivered either by messenger or
overnight delivery service, or sent by e-mail, return receipt requested, or
facsimile with a confirmation sent via certified or registered mail, postage
prepaid and return receipt requested, addressed to the intended recipient as set
forth below or as otherwise specified by notice given in accordance with this
Section 12.2.  Notices shall be deemed to have been given on the day when
received by the party to whom the notice is given:

To Samsung:
 
To NOOK Media:
 
Samsung Electronics America, Inc.
85 Challenger Road
Ridgefield Park, NJ 07660
Attention:  SVP, Mobile Computing-Consumer Business Division
c/o NOOK Media LLC
76 Ninth Avenue
New York, NY 10011
Attention:   Chief Financial Officer
 
With a Copy to:
 
c/o NOOK Media LLC
122 Fifth Avenue
New York, NY 10011
Attention:   General Counsel
 

13.3        Dispute Resolution; Jurisdiction; and Governing Law.  This Agreement
and all disputes arising out of or related to this Agreement shall be governed
by the laws of the State of New York, without reference to conflict of laws
principles. Any and all claims, lawsuits and disputes of any kind between the
parties arising out of or relating to this Agreement shall be resolved in
federal or state courts in the State of New York within the Borough of
Manhattan. Each party hereby waives any challenge to the jurisdiction and/or
venue of such courts over such claims, lawsuits and disputes.  If and when
applicable, each party shall use the Formal Escalation set forth in Exhibit B
before commencing any lawsuit against another party relating to this Agreement,
except as otherwise set forth in Section 2.3 of Exhibit B. Nothing shall limit
the right of a party, however, to seek a temporary restraining order and/or
other provisional remedy to preserve the status quo or to prevent irreparable
harm.

13.4        Attorneys’ Fees.  If a party employs attorneys to enforce any rights
arising out of or relating to this Agreement, the prevailing party shall be
entitled to recover its reasonable attorneys’ fees, costs and other expenses,
including the costs and fees incurred on appeal or in a bankruptcy or similar
action.
 
 
 
13

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13.5        Assignment.  (a) Neither party may assign this Agreement, or any
rights or obligations hereunder, except (i) with the other party’s express
written consent or (ii) in connection with a merger, spin-off, split-off, sale
or other transfer involving all or substantially all of the equity or assets of,
in the case of NOOK Media, the digital device and digital content business of
NOOK Media and, in the case of Samsung, the business conducted by Samsung as of
the date of this Agreement.  Any attempted assignment in violation of this
section shall be void.  Subject to the foregoing restriction on assignments,
this Agreement shall be binding on, inure to the benefit of, and be enforceable
by the parties and their respective successors and assigns.

13.6        Waivers.  A party’s delay or failure to exercise any right or remedy
shall not result in a waiver of that and/or any other right or remedy.  Failure
by a party to enforce any provision of this Agreement shall not be deemed a
waiver of future enforcement of that provision.

13.7        Invalid Provisions.  If any term of this Agreement or the
application thereof is found by a court of competent jurisdiction to be in whole
or in part invalid or unenforceable, then (a) the invalidity or unenforceability
shall not affect other terms or applications of this Agreement, (b) the
remainder of this Agreement shall continue in effect so long as this Agreement
still expresses the intent of the parties, and (c) the parties shall engage in
good faith efforts to discover and implement a means of effectuating the intent
of the parties in accordance with applicable laws.

13.8        Construction.  As used in this Agreement, the words “include” and
“including” and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words “without
limitation.”

13.9        Order of Precedence.  In the event of any direct conflict between
any terms and conditions of this Agreement and any terms and conditions of any
Exhibit and/or other document referenced in this Agreement, the terms and
conditions of this Agreement shall prevail over those of any such Exhibit and/or
other document, but solely to the extent of such conflict.  Further, the
requirements of this Agreement are in addition to the requirements of any other
document and/or agreement referenced in this Agreement, and such other documents
and agreements shall not be construed to abrogate, diminish and/or amend in any
way any of the requirements of this Agreement (for example, if an action is
permitted by such other document and/or agreement and either required or
prohibited by this Agreement, then such action shall be required or prohibited
as set forth in this Agreement).

13.10      No Third Party Beneficiaries.  This Agreement is for the benefit of
the parties and their Affiliates, as the context of the applicable provision
requires only, and shall be enforceable by the parties and their Affiliates, as
applicable only. No action may be commenced and/or prosecuted against a party by
any third party claiming as a third-party beneficiary of this Agreement.

13.11      Counterparts and Facsimile.  This Agreement may be executed on
facsimile copies and/or in counterparts, each counterpart of which shall be
deemed an original and all of which together shall constitute one and the same
Agreement.  In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.  Notwithstanding
the foregoing, if requested by a party, the other parties shall deliver original
executed copies of this Agreement to such requesting party as soon as
practicable following execution thereof.
 
 
 
14

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13.12      Entire Agreement.  This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior or contemporaneous communications regarding such subject matter, whether
written or oral, including all prior letters of intent and term sheets. This
Agreement may not be modified except by a written agreement dated subsequent to
the date of this Agreement and signed by an authorized representative of the
party against whom such modification is sought to be enforced.

13.13      Compliance with Laws.  Samsung will comply with all applicable
federal, state and local laws and regulations in performing its obligations
under the Agreement, including but not limited to laws and regulations
pertaining to product origin, design, manufacture, safety, packaging and
labeling, import/export and environmental compliance.  NOOK Media will comply
with all applicable federal, state and local laws and regulations in performing
its obligations under the Agreement.
 
13.14      Force Majeure.  Except as otherwise provided herein, neither party
shall be liable to the other party for any delays, damages or failure to act
occasioned or caused by acts of war or terrorism, forces of nature, weather,
acts of governmental authority, strikes, boycotts, act of God, or any similar
contingency beyond its control (each a “Force Majeure Event”).
 
 
[Signature Page Follows]
 
 
 
 
 

 
 
15

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This Commercial Agreement is entered into by the parties as of the date first
above written.

Samsung Electronics America, Inc.
 
barnesandnoble.com LLC
 
Signature:
/s/ Michael Abary
Signature:
/s/ Kanuj Malhotra
Name:
Michael Abary
Name:
Kanuj Malhotra
Title:
Senior Vice President
Samsung Electronics America, Inc.
Title:
CFO Nook Media LLC

 
 
 
 

 
 
 

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Exhibit A

Definitions

“Affiliate” means any legal entity that controls, is controlled by, or is under
common control with a party, whether directly or indirectly (e.g., through
successive tiers of control).  An entity is an Affiliate for only so long as
such control exists.

“Barnes & Noble” means Barnes & Noble, Inc., a Delaware corporation.

“Barnes & Noble Retail Bookstore” means a physical bookstore operated by Barnes
& Noble, Inc. or a subsidiary thereof or successor thereto, other than college
bookstores operated by Barnes & Noble College Booksellers, LLC or a subsidiary
thereof or successor thereto.

“business day” means a day other than a Saturday, Sunday or other day on which
banks located in New York City are authorized or required by law to be closed.

“Co-Branded Device” has the meaning set forth in the recitals hereto.

“Confidentiality Agreement” means the confidentiality agreement between the
parties dated August 2, 2013.

“Customer Return” has the meaning set forth in Section F.

“Customer Return Rate” has the meaning set forth in Section F.

“Effective Date” has the meaning set forth in the preamble hereto.

“Estimated Initial NRA Percentage” has the meaning set forth in Section 4.6.
 
“Force Majeure Event” has the meaning set forth in Section 13.14.

“Formal Escalation” means the process for resolving disputes under this
Agreement set forth in Section 2 of Exhibit B.

“Governance Processes” has the meaning set forth in Section 1.2.

“Initial Availability Date” has the meaning set forth in Section 3.1.

“Intellectual Property Rights” means any and all rights, whether registered or
unregistered, existing from time to time under patent law, copyright law, moral
rights law, trade secret law, trademark law, and any and all other similar
proprietary rights, as well as any and all applications, renewals, extensions,
divisionals, continuations, restorations and re-instatements thereof, now or
hereafter in force and effect worldwide.

“Launch” means the first date on which commercial availability of a Co-Branded
Device is present on retail store shelves and available for purchase by
customers in Barnes & Noble Retail Bookstores.

“law” means any applicable supranational, Federal, national, state, provincial
or local statute, law (including common law), ordinance, rule or regulation of
any governmental entity.
 
“Level 1 Customer Support” means (i) all customer support relating to the NOOK
service and associated content, and (ii) initial customer support relating to
the Co-Branded Devices generally, using end user documentation or knowledge base
FAQs that Samsung shall provide to NOOK Media.
 
 
 
A-1

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“Minimum Freight Requirement” has the meaning set forth in Section 4.4.2.

“Net Revenue” means Samsung’s projected gross revenue attributable to forecasted
NOOK Media purchases of Co-Branded Devices in a given three (3) month period
minus the NRA amount pursuant to Section 4.6 minus Samsung-provided rebates,
promotions and discounts for the given quarter.

“NOOK Homescreen Experience” has the meaning set forth in Section 2.2.1.

“NOOK Media Assets” has the meaning set forth in Section 2.2.1.

“NRA Percentage” has the meaning set forth in Section 4.6.

“Recovery Rate” has the meaning set forth in Section F.

“Tablet” means a multi-function portable computing device with a frame rate no
less than 61 frames per second.  For the avoidance of doubt, a portable device,
either color or black and white, whose function is primarily reading even if
multi-function, with a frame rate equal to or less than 60 frames per second,
shall not qualify as a Tablet.

“Term” has the meaning set forth in Section 9.1.
 
“Total Value of Returned Units” has the meaning set forth in Exhibit F.

“Total Value of Units Sold” has the meaning set forth in Exhibit F.
 
“U.S.” means the United States of America.
 
 
 
 
 
A-2

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Exhibit B

Governance Processes

1.
Executive Sponsor and Relationship Managers

 
1.1
Executive Sponsor Role.  Within thirty (30) days after the Effective Date,
Samsung and NOOK Media shall each designate one senior executive (“Executive
Sponsor”) who shall have broad responsibility for promoting the success of the
collaboration under this Agreement and authority to serve as an escalation point
for any disagreements that may arise between the parties under this Agreement.
       
1.2
Project Manager Role.  Within thirty (30) days after the Effective Date, Samsung
and NOOK Media shall each designate one person who shall be responsible for
(a) providing guidance and support for the implementation of this Agreement,
(b) managing day-to-day coordination and performance of the party that they
represent under this Agreement, and (c) managing the relationship between the
parties as it pertains to the activities contemplated under this Agreement (each
a “Project Manager”).
       
1.3
Technical Coordinator Role.  Within thirty (30) days after the Effective Date,
Samsung and NOOK Media shall each designate one person who shall be responsible
for the parties’ day-to-day technical coordination under this (each a “Technical
Coordinator”).
       
1.4
Marketing Coordinator Role.  Within thirty (30) days after the Effective Date,
Samsung and NOOK Media shall each designate one person who shall be responsible
for the parties’ day-to-day marketing coordination under this (each a “Marketing
Coordinator”).
       
1.5
Replacement of Designated Executives.  Each of NOOK Media and Samsung may
replace any of its respective Executive Sponsor, Project Manager, Marketing
Coordinator and/or Technical Coordinator by giving thirty (30) days’ prior
written notice to the other party of such replacement.
       
1.6
Meeting Frequency

   
1.6.1
Executive Sponsors.  The Executive Sponsors will meet in person or by telephone
conference or other electronic means, as needed, but not less than once per
calendar quarter during the Term (unless mutually agreed otherwise), to discuss
the status of the parties’ activities under this Agreement.
           
1.6.2
Project Managers.  The Project Managers will meet more frequently, as they deem
appropriate, in person or by telephone conference or other electronic means, to
coordinate the parties’ performance of this Agreement.
           
1.6.3
Technical Coordinators.  The Technical Coordinators will meet more frequently,
as they deem appropriate, in person or by telephone conference or other
electronic means, to coordinate the parties’ performance of the technical
objectives of this Agreement.

 
 
 
B-1

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1.6.4
Marketing Coordinators.  The Marketing Coordinators will meet more frequently,
as they deem appropriate, in person or by telephone conference or other
electronic means, to coordinate the parties’ performance of the technical
objectives of this Agreement.

2.
Formal Escalation of Issues Pertaining to this Agreement.  The parties shall use
the following process (“Formal Escalation”) for resolving disputes under this
Agreement:

 
2.1
Resolution by Project Managers.  The parties’ Project Managers shall negotiate
to resolve all disputes in good faith. If the parties’ Project Managers do not
resolve the dispute within fifteen (15) business days (or such longer period as
agreed by the parties) after commencement of negotiations to resolve such
dispute, then either party may escalate the dispute (such escalation, the
“Formal Executive Escalation”) and a mutually agreed list of the unresolved
disputes between the parties (such issues, the “Disputed Issues”) to the
Executive Sponsors.
       
2.2
Resolution by Executive Sponsors.  The parties’ Executive Sponsors shall
negotiate to resolve any escalated dispute in good faith.
       
2.3
Exclusions from Formal Escalation.  Formal Escalation does not apply to or limit
the right of a party (a) to seek a temporary restraining order and/or other
provisional remedy to preserve the status quo and/or to prevent irreparable
harm, or (b) to exercise its termination rights under the Agreement.
       
2.4
Mediation.  If the Executive Sponsors are unable to resolve such dispute within
thirty (30) business days (or such longer period as agreed by the parties) after
commencement of negotiations to resolve such dispute, then either party may
submit the dispute to non-binding mediation by a mediator jointly selected and
jointly appointed by the parties.  Both parties will share equally the
administrative costs of the mediation and the mediator’s fees and expenses, and
each party shall bear all of its other costs related to such mediation.  The
mediation shall take place in New York County, New York or in whatever
alternative forum the parties mutually agree.  If the parties are unable to
resolve the dispute within 30 business days of the appointment of the mediator
pursuant to this Section, the parties shall be free to pursue litigation in
federal or state court located in the Borough of Manhattan with respect to any
unresolved dispute.

 
 
 
B-2

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Exhibit C

NOOK Branding for Initial Co-Branded Device

Customization and Co-Branding (as set forth in Section 2.2.1, including without
limitation, the NOOK Homescreen Experience)

Marketing Materials: Box*

In-Box Materials: Quick Start Guide: Co-Branded with logo and Co-Branded Device
imagery, and instructions, featuring a NOOK section prominently toward the front
of the guide.

Promo card #1 in box will feature NOOK offer [***]
Promo card #2 in box will feature NOOK message (i.e. accessories)

*
[***]
 
 
 
C-1

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Exhibit D
 
First 12 Month Period Marketing Support

Demo Devices
 [***], including [***] per Launched Co-Branded Device for in store demos as
described in Section 5.2.3 of the Agreement.  Additional units to be provided by
Samsung to NOOK Media at NOOK Media’s price as set forth in Section 4.2.2 of the
Agreement.
 
NOOK Media shall be responsible for all costs relating to replacements of
damaged demo units.
 
Device Security Cables
[***] per device, up to [***].
 
Marketing Development Funds (MDF)
[***] of Net Revenue
 
Launch Fund
[***], including without limitation:
 
o  Email blast - [***]
o  Direct mail - [***]
o  In-store or In-mall marketing - [***]
o  Digital marketing - [***]
 
 

 
D-1

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Exhibit E
 
Marketing Support – Second 12 Month Periods

Demo Devices
NOOK Media may purchase demo units at NOOK Media’s price as set forth in Section
4.2.2 of the Agreement.
 
NOOK Media shall be responsible for all costs relating to replacements of
damaged demo units.
 
Signage/Lightboxes/Branding
As necessary only to replace signage/lightboxes/branding that names or contains
pictures of prior Co-Branded Devices.
 
Marketing Development Funds (MDF)
[***] of Net Revenue in each such 12 month period.
 
Launch Fund
Provided that NOOK Media Launches a Co-Branded Device that is not a refreshed
version of a previously Launched Co-Branded Device, [***] in each such 12 month
period for subsequent Launches, including without limitation:
 
o  Email blast - [***]
o  Direct mail - [***]
o  In-store or In-mall marketing - [***]
o  Digital marketing - [***]
 
For clarity, “refreshed version” as used in this Exhibit E means an updated
Tablet device of the same series as the previously Launched Co-Branded Device;
for example, Galaxy Tab 5.

 
E-1

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Exhibit F

NRA Calculation

The NRA Percentage shall equal:

[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
F-1

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