{"id":42156,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/commercial-agreement-barnes-amp-noble-inc-and-microsoft.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"commercial-agreement-barnes-amp-noble-inc-and-microsoft","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/commercial-agreement-barnes-amp-noble-inc-and-microsoft.html","title":{"rendered":"Commercial Agreement – Barnes & Noble Inc. and Microsoft Corp."},"content":{"rendered":"

Commercial Agreement<\/strong><\/p>\n

\n<\/p>\n

This Commercial Agreement (this “Agreement”<\/strong>), dated as of
\nthe Effective Date, is between: Microsoft Corporation, a Washington corporation
\n(“Microsoft”<\/strong>); Barnes and Noble, Inc., a Delaware corporation
\n(“B&N”<\/strong>); and the company to be formed by B&N and
\ndescribed in the Investment Agreement as “NewCo,” and identified on the
\nsignature page of this Agreement (“NewCo<\/strong>“).<\/p>\n<\/p>\n<\/p>\n

Background and Purpose<\/strong><\/p>\n

\n<\/p>\n

A.<\/strong> The parties desire to jointly invest in and expand and
\nenhance the e-book and related e-reading business currently conducted by
\nB&N. In furtherance thereof, B&N is transferring its Nook \u00ae devices,
\nonline bookstore, e-content publishing and College businesses to NewCo, and
\nMicrosoft is making an investment in NewCo, as described in the Investment
\nAgreement.<\/p>\n<\/p>\n<\/p>\n

B.<\/strong> In addition, the parties desire to enhance and expand
\nNewCo153s business through, among other things, NewCo153s development and promotion
\nof a global e-reading content experience with Microsoft153s Windows OS, Windows
\nPhone and other products, as more particularly described in this Agreement.<\/p>\n<\/p>\n<\/p>\n

Agreement<\/strong><\/p>\n

\n<\/p>\n

Section 1. Definitions; Overview of Responsibilities; Related
\nAgreements; Governance Processes; Effectiveness<\/strong><\/p>\n<\/p>\n<\/p>\n

1.1<\/strong> Definitions.<\/strong> The terms defined in
\nExhibit A<\/strong> and in the body of this Agreement will have their
\nrespective meanings when used in this Agreement with initial letters
\ncapitalized.<\/p>\n<\/p>\n<\/p>\n

1.2<\/strong> B&N Responsibilities.<\/strong> B&N will:\n<\/p>\n<\/p>\n<\/p>\n

(a) subject to the receipt of any applicable third party consents, which
\nB&N will use commercially reasonable efforts to obtain, transfer or cause
\nits Subsidiaries to transfer to NewCo all of its rights, title and interests in
\nthe E-Reading Assets and Content;<\/p>\n<\/p>\n<\/p>\n

(b) if B&N is unable to obtain any required third party consent for the
\ntransfer of any Content offered in the B&N Store immediately prior to
\ntransfer to NewCo, use commercially reasonable efforts to implement arrangements
\nto allow NewCo to make such Content available to customers of the NewCo Store;
\nand<\/p>\n<\/p>\n<\/p>\n

(c) upon NewCo153s reasonable request and at NewCo153s expense, use good faith
\nefforts to draw upon B&N153s existing relationships with publishers to assist
\nNewCo in entering into agreements with such publishers to procure Reading
\nContent for the NewCo Store; provided that this obligation shall terminate upon
\nB&N ceasing to directly or indirectly own a majority of the equity interests
\nof NewCo.<\/p>\n<\/p>\n<\/p>\n

1.3<\/strong> NewCo Responsibilities.<\/strong> NewCo will:<\/p>\n<\/p>\n<\/p>\n

(a) if B&N is unable to obtain any required third party consent for the
\ntransfer of Content offered in the B&N Store immediately prior to transfer
\nto NewCo, use commercially reasonable efforts to make such Content available to
\ncustomers of the NewCo Store;<\/p>\n<\/p>\n<\/p>\n

\n

(b) be solely responsible for acquiring and pricing all Content distributed
\nin the NewCo Windows App and the NewCo Phone App and for paying all costs
\nassociated with providing that Content;<\/p>\n<\/p>\n<\/p>\n

(c) develop and distribute a NewCo Windows App that delivers a [***]
\nexperience on Windows OS pursuant to Section 2;<\/p>\n<\/p>\n<\/p>\n

(d) enable users of Microsoft Products and Services to interact with Content
\nfrom the NewCo Store pursuant to Section 3;<\/p>\n<\/p>\n<\/p>\n

(e) use the Microsoft Commerce Platform and Microsoft ID System for commerce
\ntransactions in the NewCo Apps and Microsoft Products and Services with the
\nNewCo Store pursuant to Section 4;<\/p>\n<\/p>\n<\/p>\n

(f) expand the geographies and catalog of the NewCo Store pursuant to Section
\n5;<\/p>\n<\/p>\n<\/p>\n

(g) develop and distribute the NewCo Phone App pursuant to Section 6; and<\/p>\n<\/p>\n<\/p>\n

(h) share with Microsoft the Net Revenue pursuant to Section 7.1;<\/p>\n<\/p>\n<\/p>\n

provided that nothing in the foregoing clauses (c)-(h) shall expand or modify
\nin any way the rights or obligations of any party under this Agreement.<\/p>\n<\/p>\n<\/p>\n

1.4<\/strong> Microsoft Responsibilities.<\/strong> Microsoft
\nwill:<\/p>\n<\/p>\n<\/p>\n

(a) assist NewCo153s development and certification of the NewCo Windows App
\npursuant to Sections 2.1.3 and 2.2;<\/p>\n<\/p>\n<\/p>\n

(b) make available the Windows Store for distribution of the NewCo Windows
\nApp by NewCo pursuant to Section 2.5.1;<\/p>\n<\/p>\n<\/p>\n

(c) [***];<\/p>\n<\/p>\n<\/p>\n

(d) explore enabling users of Microsoft Products and Services to interact
\nwith Content from the NewCo Store as provided for in Section 3;<\/p>\n<\/p>\n<\/p>\n

(e) enable use of the Microsoft Commerce Platform and Microsoft ID System for
\ncommerce transactions in the NewCo Apps and the Microsoft Products and Services
\nwith the NewCo Store pursuant to Section 4;<\/p>\n<\/p>\n<\/p>\n

(f) assist NewCo in obtaining certification of the NewCo Phone App pursuant
\nto Section 6.1.3; and<\/p>\n<\/p>\n<\/p>\n

(g) share Net Revenue with NewCo, make Advances to NewCo, and make
\noperational cost payments to NewCo, in each case, as provided for in Section 7;\n<\/p>\n<\/p>\n<\/p>\n

2<\/p>\n

\n

\n

provided that nothing in the foregoing clauses (a)-(g) shall expand or modify
\nin any way the rights or obligations of any party under this Agreement.<\/p>\n<\/p>\n<\/p>\n

1.5<\/strong> NewCo is the E-Reading Business for
\nB&N.<\/strong> During the Term, B&N will not compete, will ensure that
\nnone of its Subsidiaries compete, will exercise such rights as it has to prevent
\nAffiliates under its control from competing, and following becoming aware that
\nan Affiliate that is not under NewCo153s control is doing so, will use its good
\nfaith efforts to encourage such Affiliate not to compete, with NewCo in the
\nbusiness of selling or making available Reading Content or similar e-reading
\ncontent, e-reader software or e-reader devices. For the avoidance of doubt,
\nsales by B&N of Reading Content and NewCo e-reader devices pursuant to a
\nreferral arrangement with NewCo shall not constitute competition with NewCo.<\/p>\n<\/p>\n<\/p>\n

1.6<\/strong> Related Agreements.<\/strong> Concurrently with
\nthe execution of this Agreement:<\/p>\n<\/p>\n<\/p>\n

(a) B&N and Microsoft are entering into the Investment Agreement;<\/p>\n<\/p>\n<\/p>\n

(b) B&N and Microsoft are entering into the Patent Agreement; and<\/p>\n<\/p>\n<\/p>\n

(c) B&N and Microsoft are entering into the NDA.<\/p>\n<\/p>\n<\/p>\n

1.7<\/strong> Governance Processes.<\/strong> The parties will
\nuse the Governance Processes in Exhibit B<\/strong> for managing their
\nrelationship under this Agreement and will use it for escalation and resolution
\nof issues and disputes that may arise during the performance of this Agreement
\nbefore pursuing arbitration or litigation in court, except as provided in
\nSection 3.3 of Exhibit B<\/strong>.<\/p>\n<\/p>\n<\/p>\n

1.8<\/strong> Effectiveness.<\/strong> This Agreement will be
\neffective only as of the date that all of the following conditions are met
\n(“Effective Date<\/strong>“):<\/p>\n<\/p>\n<\/p>\n

(a) this Agreement has been signed by authorized representatives of each
\nparty;<\/p>\n<\/p>\n<\/p>\n

(b) the Closing and the NewCo Formation Transactions (as defined in the
\nInvestment Agreement) have occurred; and<\/p>\n<\/p>\n<\/p>\n

(c) the Dismissal has occurred.<\/p>\n<\/p>\n<\/p>\n

Microsoft and B&N are signing this Agreement upon signature of the
\nInvestment Agreement. NewCo will sign this Agreement upon Closing.<\/p>\n<\/p>\n<\/p>\n

Section 2. Development and Distribution of NewCo Windows App<\/strong>\n<\/p>\n<\/p>\n<\/p>\n

2.1 Development<\/strong><\/p>\n<\/p>\n<\/p>\n

2.1.1<\/strong> NewCo Windows App. <\/strong>NewCo will develop
\nand obtain certification of the NewCo Windows App (including subsequent versions
\nand updates) in accordance with this Agreement and the App Developer Agreement.
\nNewCo will complete development, obtain certification and commercially release
\nthe first version of the NewCo Windows App for Windows 8 (both x86 and ARM) in
\nthe Windows Store with a target Launch Date of [***]. This first version of the
\nNewCo Windows App will provide at least the following functionality: [***] and a
\nWindows metro-style user interface. Subsequent versions will also include
\nsupport for all Content types in the NewCo Store and all Consumption
\nExperiences. The NewCo Windows App will be provided at no cost to end users.<\/p>\n<\/p>\n

3<\/p>\n

\n

\n<\/p>\n

2.1.2<\/strong> Updates. <\/strong>NewCo will develop updates
\nto the NewCo Windows App, including updates for new versions of Windows OS,
\nbeginning on the Launch Date and through the end of the Term. NewCo will
\ndistribute each updated or new version of the NewCo Windows App through the
\nWindows Store after it has been certified pursuant to the App Developer
\nAgreement.<\/p>\n<\/p>\n<\/p>\n

2.1.3<\/strong> Certification.<\/strong> NewCo will submit each
\nversion of the NewCo Windows App to Microsoft for certification and distribution
\nthrough the Windows Store. Each submission will be treated in accordance with
\nthe then-current App Developer Agreement. NewCo will make good faith efforts to
\naddress any issues raised during the certification process in a timely fashion,
\nand Microsoft will use its good faith efforts to assist NewCo in completing the
\ncertification process as promptly as practicable, to ensure that the NewCo
\nWindows App is available according to the agreed schedule. [***]. –<\/p>\n<\/p>\n<\/p>\n

2.2<\/strong> Technical Assistance.<\/strong> Microsoft will
\nprovide such assistance and support, and devote such Microsoft or Microsoft
\nAffiliate employee resources, as may be reasonably requested by NewCo to enable
\nNewCo to develop and launch the first NewCo Windows App in accordance with the
\nspecifications and timeline described in Section 2.1.1.<\/p>\n<\/p>\n<\/p>\n

2.3<\/strong> End User Support.<\/strong> As between Microsoft
\nand NewCo, NewCo will be responsible for providing, and will use commercially
\nreasonable efforts to provide, end user support for the NewCo Windows App, the
\nNewCo Store, and NewCo153s Content distribution services.<\/p>\n<\/p>\n<\/p>\n

2.4<\/strong> [***] Requirement<\/strong><\/p>\n<\/p>\n<\/p>\n

2.4.1<\/strong> [***]<\/p>\n<\/p>\n<\/p>\n

2.4.2<\/strong> [***]<\/p>\n<\/p>\n<\/p>\n

2.4.3<\/strong> Windows Features and Functionality.<\/strong>
\nNewCo will make good faith commercially reasonable efforts to enhance the NewCo
\nWindows App to exploit features and functionality available through Windows and
\nits extended Microsoft ecosystem.<\/p>\n<\/p>\n<\/p>\n

2.5 Discovery and Distribution<\/strong><\/p>\n<\/p>\n<\/p>\n

2.5.1<\/strong> Windows Store. <\/strong>Microsoft will make
\nthe Windows Store available for distribution of the NewCo Windows App by NewCo.
\nFrom the Launch Date through the end of the Term, NewCo will distribute the
\nNewCo Windows App (as certified) through the Windows Store pursuant to and in
\naccordance with the App Developer Agreement and Windows Store Terms of Use at no
\ncost to the customer. [***]<\/p>\n<\/p>\n

4<\/p>\n

\n

\n

2.5.2<\/strong> [***]<\/p>\n<\/p>\n<\/p>\n

2.5.3<\/strong> [***]<\/p>\n<\/p>\n

2.6<\/strong> Microsoft Reader. <\/strong>If Microsoft creates
\na reader, Microsoft may include an interface to the NewCo Store in that reader
\nand may surface in that reader all Content purchased by customers from the NewCo
\nStore.<\/p>\n<\/p>\n<\/p>\n

2.7<\/strong> [***]<\/p>\n<\/p>\n<\/p>\n

2.8<\/strong> NewCo Study.<\/strong> [***] For the avoidance of
\ndoubt, none of the other requirements of this Agreement (including the [***]
\nrequirements set forth in Sections 2.4 and 6.3 and the revenue share
\nrequirements set forth in Section 7) will apply to any NewCo Study Application.\n<\/p>\n<\/p>\n<\/p>\n

Section 3. Microsoft Products and Services<\/strong><\/p>\n<\/p>\n<\/p>\n

3.1<\/strong> Enabling Microsoft Products and
\nServices.<\/strong> The parties will in good faith explore the scenarios
\ndescribed in this Section 3, subject to the Microsoft product and service
\nstrategy. Upon Microsoft153s request and reasonable advance notice (in any event,
\nnot less than 3 months153 advance notice), NewCo will use good faith efforts to
\nenable Microsoft Products and Services to be used with the NewCo Store and
\ndistribution system in the following scenarios, the delivery and nature of which
\nwill be subject to the Microsoft product and service strategy:<\/p>\n<\/p>\n<\/p>\n

(a) [***]<\/p>\n<\/p>\n<\/p>\n

(b) [***]<\/p>\n<\/p>\n<\/p>\n

(c) [***]<\/p>\n<\/p>\n

(d) [***]<\/p>\n<\/p>\n<\/p>\n

(e) [***]<\/p>\n<\/p>\n<\/p>\n

(f) [***]<\/p>\n<\/p>\n<\/p>\n

(g) [***]<\/p>\n<\/p>\n<\/p>\n

(h) [***]<\/p>\n<\/p>\n<\/p>\n

3.2<\/strong> NewCo Store APIs.<\/strong> NewCo will provide
\nreasonable advance notice to Microsoft of any substantive changes to the NewCo
\nAPIs, protocols and formats referenced in Sections 3.1(a), (b) and (c) above
\n(“NewCo APIs”<\/strong>).<\/p>\n<\/p>\n

5<\/p>\n

\n

\n<\/p>\n

3.3<\/strong> Branding.<\/strong> Microsoft will not
\nwhite-label (which for the avoidance of doubt includes rebranding or presenting
\nas Microsoft153s) the NewCo Store or obscure NewCo153s branding or the fact the
\nNewCo Store is the NewCo Store, including in Microsoft Products and Services.\n<\/p>\n<\/p>\n<\/p>\n

Section 4. Microsoft Commerce Platform, User IDs, and Consumption of
\nContent<\/strong><\/p>\n<\/p>\n<\/p>\n

4.1<\/strong> Microsoft Commerce Platform.<\/strong> NewCo
\nwill, subject to Section 5 and compliance with applicable law, use the Microsoft
\nCommerce Platform for commerce transactions as follows:<\/p>\n<\/p>\n<\/p>\n

4.1.1<\/strong> NewCo Windows App<\/strong>. NewCo will use the
\nMicrosoft Commerce Platform as the primary and default mechanism to facilitate
\npayment by end users for Reading Content in the NewCo Windows App, except that
\nend users will be able to choose to use a different commerce mechanism in
\nexceptional cases, as determined by NewCo in good faith, that include NewCo or
\nB&N gift card use (which the Microsoft Commerce Platform cannot support),
\nNewCo B2B purchase transactions and other transactions if the end user so
\nrequests. NewCo will ensure that the NewCo Windows App will provide for in-app
\npurchasing, will not link out of the NewCo Windows App to complete purchases of
\nContent and will have in all material respects the same or better purchase
\nexperience as purchasing in a browser on a Windows Device. Commerce transactions
\nin the NewCo Windows App will be subject to the terms of the App Developer
\nAgreement [***].<\/p>\n<\/p>\n<\/p>\n

4.1.2<\/strong> Browsers on a Windows Device<\/strong>. NewCo
\nwill make the Microsoft Commerce Platform an available option for processing
\npayments by end users who have IDs in the Microsoft ID System for Reading
\nContent purchased from the NewCo Store in a browser on a Windows Device.<\/p>\n<\/p>\n<\/p>\n

4.1.3<\/strong> Microsoft Products and Services.<\/strong>
\nPurchases of Content using Microsoft Products and Services will use the
\nMicrosoft Commerce Platform.<\/p>\n<\/p>\n<\/p>\n

4.1.4<\/strong> NewCo Phone App.<\/strong> NewCo will use the
\nWP Marketplace as the in-application commerce transaction platform, when
\navailable, for commerce transactions in the NewCo Phone App, including payments
\nand fees associated with Content acquisition and subscriptions (if available).
\nNewCo will ensure that the NewCo Phone App will provide for in-app purchasing
\nand will not link out of the NewCo Phone App to complete purchases of Content.
\nCommerce transactions in the NewCo Phone App will be subject to the terms of the
\nApplication Provider Agreement [***].<\/p>\n<\/p>\n<\/p>\n

4.1.5<\/strong> Payments to Publishers<\/strong>. NewCo may
\nchoose to either:<\/p>\n<\/p>\n<\/p>\n

(i) pay publishers outside the Microsoft Commerce Platform; or<\/p>\n<\/p>\n<\/p>\n

(ii) use the Microsoft Commerce Platform to facilitate payments to publishers
\nthat are associated with Reading Content acquisition, subscription, upgrades and
\ncollection of taxes for transactions in the NewCo Windows App and, at NewCo153s
\noption, in a browser on a Windows Device, to the extent allowed by law where
\nNewCo has complied with the requirements of the Microsoft Commerce Platforms
\nTerms with respect to such payments to such publishers.<\/p>\n<\/p>\n

6<\/p>\n

\n

\n<\/p>\n

If Microsoft does not have sufficient relationships with or information from
\nsuch publishers, it will process all pay-outs with respect to Content
\nacquisitions from such publishers to NewCo. Also, the Microsoft Commerce
\nPlatform will not be able to facilitate payments to publishers for end user
\npurchases that are not processed by the Microsoft Commerce Platform, except,
\nupon satisfaction of the conditions contemplated by the Microsoft Commerce
\nPlatform Terms, for payments to publishers for purchases by the Existing User
\nBase that are not processed by the Microsoft Commerce Platform.
\n“Existing User Base<\/strong>” means U.S. customers of NewCo as of the
\nEffective Date.<\/p>\n<\/p>\n<\/p>\n

4.2<\/strong> Microsoft ID System<\/strong>. NewCo will use the
\nMicrosoft ID System as follows:<\/p>\n<\/p>\n

4.2.1<\/strong> General<\/strong>. NewCo will make good faith
\nefforts to enable a user experience that will make the Microsoft ID System the
\nprimary and default mechanism by which users of Windows Devices log into the
\nNewCo Store via the NewCo Apps. NewCo will make good faith efforts to provide
\nthe Microsoft ID System as an option for such users to log into the NewCo Store
\nvia a browser on a Windows Device. (NewCo will use the Microsoft ID System for
\nend user purchases of Content using Microsoft Products and Services and the
\nNewCo Phone App as provided in Sections 3 and 6 respectively). NewCo will not
\nrequire users of the NewCo Windows App or a browser on a Windows Device to use a
\nNewCo identification. NewCo will enable use of the Microsoft ID System by end
\nusers on NewCo devices and software clients for other platforms to access
\nReading Content purchased by such end users, and any annotations thereto.<\/p>\n<\/p>\n<\/p>\n

4.2.2<\/strong> Microsoft Commerce Platform<\/strong>. NewCo
\nwill use the Microsoft ID System for all end user purchases transacted in the
\nMicrosoft Commerce Platform.<\/p>\n<\/p>\n<\/p>\n

4.2.3<\/strong> Other IDs<\/strong>. Nothing in this Agreement
\nrequires NewCo to restrict end users from creating or using NewCo
\nidentifications or prevents NewCo from requiring use of its identifications or
\nsubmission of payment information outside the NewCo Windows App, browsers on a
\nWindows Device, the NewCo Phone App, and Microsoft Products and Services.<\/p>\n<\/p>\n<\/p>\n

4.2.4<\/strong> Future Development<\/strong>. NewCo and
\nMicrosoft will work jointly and in good faith to enable the following:<\/p>\n<\/p>\n<\/p>\n

(a) subject to applicable privacy laws and any limitations contained in the
\nterms of publisher and digital content agreements, creating an associated NewCo
\naccount for users logging into the NewCo Store using an ID on the Microsoft ID
\nSystem by providing the following Microsoft ID System information with respect
\nto such users: email address, first and last name, physical address and any
\nother Microsoft ID System information necessary in connection with engaging in
\nthe activities referred to below with respect to such users (each if available
\nto Microsoft as part of its Microsoft ID System) solely for use in (i)
\nfulfilling purchases or consumption by end users of Reading Content from the
\nNewCo Store, (ii) making and reflecting disbursements to publishers for sales of
\ntheir Reading Content in the NewCo Store, and (iii) providing customer support
\nto end users or publishers in relation to such purchases or sales. Microsoft
\nwill provide such Microsoft ID System information in a manner consistent with
\nMicrosoft153s generally applicable policies, for third-party applications for
\nWindows, related to end user notice and consent to sharing such Microsoft ID
\nSystem information;<\/p>\n<\/p>\n

7<\/p>\n

\n

\n

(b) subject to applicable privacy laws, an association between NewCo accounts
\nused to log into the NewCo Store in accordance with this Section 4.2 through the
\nNewCo Windows App and an ID on the Microsoft ID System; and<\/p>\n<\/p>\n<\/p>\n

(c) subject to applicable privacy laws, NewCo prompting users visiting the
\nNewCo Store to provide additional personal information and consent to the use of
\nsuch users153 information in accordance with the NewCo privacy policy (whether for
\ncompleting end user purchases or other purposes), and NewCo may make providing
\nsuch information a condition to the purchase of Content from the NewCo Store;
\nprovided, however, that NewCo will only ask for such information that it
\nbelieves is reasonable to request.<\/p>\n<\/p>\n

For the avoidance of doubt, data collected by NewCo from end users will not
\nbe considered data provided or transferred by Microsoft to NewCo for purposes of
\nthis Agreement (including Section 4.2.4(c)).<\/p>\n<\/p>\n<\/p>\n

4.3<\/strong> Microsoft Support. <\/strong>Microsoft will
\nprovide good faith support for NewCo153s activities described in Sections 4.1 and
\n4.2 through making the Microsoft Commerce Platform available in all material
\nrespects to NewCo on the baseline terms and conditions specified in
\nExhibit E (“Microsoft Commerce Platform Terms<\/strong>“). The parties
\nwill negotiate in good faith and enter into further agreement and details to
\nexpound and further detail the rights and obligations of the parties in a manner
\nconsistent with the Microsoft Commerce Platform Terms in the Microsoft Commerce
\nPlatform Agreement (the “Commerce Platform Agreement”<\/strong>) no later
\nthan June 1, 2012, which terms will be based upon standard terms required of
\nmerchants under applicable law and Network Rules and will be consistent with
\nExhibit E<\/strong>. The Commerce Platform Agreement shall at a minimum
\nreflect Exhibit E<\/strong> and otherwise shall not be inconsistent with
\nthe provisions of this Agreement.<\/p>\n<\/p>\n<\/p>\n

Section 5. Geo Expansion<\/strong><\/p>\n<\/p>\n<\/p>\n

5.1<\/strong> Publishing Services Platform.<\/strong> NewCo
\nwill use good faith efforts to make the Publishing Services Platform available
\nin the Geos in which developers can submit applications to the Windows Store as
\nof the Effective Date (currently[***]) in compliance with applicable laws
\n(including applicable tax laws) in accordance with the following schedule:<\/p>\n<\/p>\n

8<\/p>\n

\n

\n<\/p>\n

(a) in [***] by [***];<\/p>\n<\/p>\n<\/p>\n

(b) [***], as selected by NewCo, of such Geos by [***];<\/p>\n<\/p>\n<\/p>\n

(c) a total of [***], as selected by NewCo, of such Geos by [***]; and<\/p>\n<\/p>\n<\/p>\n

(d) a total of [***], as selected by NewCo, of such Geos by [***].<\/p>\n<\/p>\n<\/p>\n

The local languages in which the Publishing Services Platform is to be made
\navailable in each of such Geos is set forth in the attached Exhibit
\nC<\/strong>.<\/p>\n<\/p>\n<\/p>\n

The “Publish Condition”<\/strong> means making localized versions of
\nthe Publishing Services Platform available in [***] of the current [***] Geos in
\nwhich developers can submit applications to the Windows Store as of the
\nEffective Date.<\/p>\n<\/p>\n<\/p>\n

5.2<\/strong> Localization of NewCo Windows App.
\n<\/strong>NewCo will use good faith efforts to localize the NewCo Windows App
\ninto the Windows Core Languages (currently [***]) on the following schedule:<\/p>\n<\/p>\n<\/p>\n

(a) in [***], as selected by NewCo, of the current Windows Core Languages
\nused in the Initial Commercial Geos by [***];<\/p>\n<\/p>\n

(b) in a total of [***], as selected by NewCo, of the current Windows Core
\nLanguages by [***]; and<\/p>\n<\/p>\n<\/p>\n

(c) in a total of [***], as selected by NewCo, of the current Windows Core
\nLanguages by [***].<\/p>\n<\/p>\n<\/p>\n

The “App Localization Condition<\/strong>” means making localized
\nversions of the NewCo Windows App for [***] of the current [***] Windows Core
\nLanguages commercially available in the Windows Store.<\/p>\n<\/p>\n<\/p>\n

5.3<\/strong> Consumption of Content.<\/strong> Microsoft will
\nuse good faith efforts to enable the Microsoft Commerce Platform to transact
\npurchases of Reading Content (including remitting publisher sales revenue and
\ncollection of applicable taxes as provided in Section 4) in all Geos in which
\nthe Microsoft Commerce Platform is able to transact (currently [***]), subject
\nto compliance with applicable laws. NewCo will use good faith efforts to enable
\nthe purchase and consumption of free and fee-based Reading Content in the Geos
\nin which the Microsoft Commerce Platform is able to transact (currently [***]),
\nsubject to compliance with applicable laws and to NewCo being able to use the
\nMicrosoft Commerce Platform fully (for collecting payments, reconciling funds
\nand remittance of taxes to relevant authorities), to transact in such Geos, on
\nthe following schedule:<\/p>\n<\/p>\n

9<\/p>\n

\n

\n<\/p>\n

(a) in [***] by [***];<\/p>\n<\/p>\n<\/p>\n

(b) [***], as selected by NewCo, of such Geos by [***];<\/p>\n<\/p>\n<\/p>\n

(c) a total of [***], as selected by NewCo, of such Geos by [***]; and<\/p>\n<\/p>\n

(d) a total of [***], as selected by NewCo, of such Geos by [***].<\/p>\n<\/p>\n<\/p>\n

The “Consumption Condition<\/strong>” means enabling purchase and
\nconsumption of fee-based Reading Content in at least [***] of the Priority Geos
\nand at least [***] of the total Geos in which the Microsoft Commerce Platform is
\nable to transact (currently [***]).<\/p>\n<\/p>\n<\/p>\n

5.4<\/strong> Commercial Content. <\/strong>NewCo will use good
\nfaith efforts to enable the purchase and consumption of market-specific
\ncommercial Reading Content from the NewCo Store by entering into Material
\nCommercial Content Agreements for each of the Priority Geos in accordance with
\nthe following schedule:<\/p>\n<\/p>\n<\/p>\n

(a) in [***] by [***];<\/p>\n<\/p>\n<\/p>\n

(b) any [***], as selected by NewCo, of the following [***] Geos by [***]
\n(such [***], the “Initial Commercial Geos”<\/strong>); and<\/p>\n<\/p>\n<\/p>\n

(c) a total of [***], as selected by NewCo, of the Priority Geos by [***];\n<\/p>\n<\/p>\n<\/p>\n

(d) a total of [***], as selected by NewCo, of the Priority Geos by [***].\n<\/p>\n<\/p>\n<\/p>\n

The “Core Geo Commercial Content Condition”<\/strong> means that NewCo
\nhas entered into Material Commercial Content Agreements for each of the Initial
\nCommercial Geos, and the “Core Geo Trade Book Condition<\/strong>” means
\nhaving Material Trade Book Agreements in the Initial Commercial Geos.<\/p>\n<\/p>\n

5.5<\/strong> Free Content. <\/strong>NewCo will use good faith
\nefforts to make free Reading Content available in the NewCo Store in each Geo
\nagreed on by NewCo and Microsoft.<\/p>\n<\/p>\n<\/p>\n

5.6<\/strong> General.<\/strong> Except as specified in this
\nSection 5, the sequencing of the Geo expansion will be determined by NewCo,
\ntaking into account all relevant factors, including the expected degree of
\ndifficulty, complexity, costs, benefits, manpower needs and scope of legal and
\ntax requirements relating thereto. NewCo will consult with Microsoft with
\nrespect to such sequencing. In any Geo in which there are multiple official or
\ncommonly used languages, NewCo will localize the NewCo Windows App and the
\nPublishing Services Platform and provide Content in the languages specified in
\nthe schedule attached as Exhibit C<\/strong>.<\/p>\n<\/p>\n<\/p>\n

Section 6. Development and Distribution of NewCo Phone App<\/strong>\n<\/p>\n<\/p>\n<\/p>\n

6.1 Development<\/strong><\/p>\n<\/p>\n<\/p>\n

10<\/p>\n

\n

\n

6.1.1<\/strong> NewCo Phone App.<\/strong> NewCo will develop
\nthe NewCo Phone App. NewCo will use commercially reasonable efforts to complete
\ndevelopment, obtain certification and make the NewCo Phone App commercially
\navailable in the WP Marketplace in accordance with this Agreement and the
\nApplication Provider Agreement within [***]. If NewCo determines that it is
\neconomically attractive to support the purchase and\/or consumption of Reading
\nContent, NewCo will use good faith efforts to complete development, obtain
\ncertification and make localized versions of the NewCo Phone App in the same
\nlanguages as the NewCo Windows App commercially available in the WP Marketplace.
\nThe NewCo Phone App will be provided at no cost to Windows Phone end users.<\/p>\n<\/p>\n<\/p>\n

6.1.2<\/strong> Updates.<\/strong> Following the Launch Date
\nthrough the end of the Term, NewCo will be responsible for developing and
\nreleasing updates to the NewCo Phone App, including updates for successor
\nversions of the initial version of the Windows Phone Software. Such updates will
\nbe distributed in accordance with the then-current Application Provider
\nAgreement.<\/p>\n<\/p>\n<\/p>\n

6.1.3<\/strong> Certification.<\/strong> NewCo will submit each
\nversion of the NewCo Phone App to Microsoft for certification and distribution
\nthrough the WP Marketplace. Each submission will be treated in accordance with
\nthe Application Provider Agreement. NewCo will make good faith efforts to
\naddress any issues raised during certification in a timely fashion, and
\nMicrosoft will use its good faith efforts to assist NewCo in completing the
\ncertification process as promptly as practicable, to ensure that each version of
\nthe NewCo Phone App is available on the agreed schedule. [***].<\/p>\n<\/p>\n<\/p>\n

6.2<\/strong> Distribution.<\/strong> NewCo hereby grants to
\nMicrosoft and its Affiliates a non-exclusive, non-transferable, worldwide
\nlicense to make available the NewCo Phone App to phone manufacturers for
\ndistribution on Windows Phones. Such phone manufacturers will have the right to
\ndistribute the NewCo Phone App at any time after the NewCo Windows Phone App
\nbecomes commercially available in the WP Marketplace for use on Windows Phones.
\nNewCo will provide to Microsoft such information, instructions and code as is
\nreasonably necessary for Microsoft and its Affiliates to permit phone
\nmanufacturers to distribute the NewCo Phone App on Windows Phones and for end
\nusers to use the NewCo Windows App on such phones. As between Microsoft and
\nNewCo, NewCo will be responsible for providing, and will use commercially
\nreasonable efforts to provide, support to phone manufacturers for the NewCo
\nPhone App.<\/p>\n<\/p>\n

6.3<\/strong> [***] Requirement. <\/strong>Beginning with the
\nrelease of the first major update to the NewCo Phone App and continuing through
\nthe end of the Term, NewCo will use commercially reasonable efforts to deliver a
\n[***] experience on the Windows Phone. This means that [***].<\/p>\n<\/p>\n<\/p>\n

6.4<\/strong> End User Support.<\/strong> As between Microsoft
\nand NewCo, NewCo will be responsible for providing, and will use commercially
\nreasonable efforts to provide, end user support for the NewCo Phone App and its
\nContent distribution services.<\/p>\n<\/p>\n<\/p>\n

Section 7. Financial Terms<\/strong><\/p>\n<\/p>\n<\/p>\n

7.1<\/strong> Revenue Share.<\/strong> Beginning on the Launch
\nDate and through the end of the Term, NewCo and Microsoft will [***] Net
\nRevenue. [***]. The sharing described in this Section 7.1 is implemented in
\nSection 7.2.<\/p>\n<\/p>\n

11<\/p>\n

\n

\n

7.2 Advances; Revenue Share Service Fees.<\/strong><\/p>\n<\/p>\n<\/p>\n

7.2.1<\/strong> Quarterly Payments.<\/strong> Microsoft will
\nmake advance payments to NewCo of up to $[***] as follows, subject to deferral
\nas provided for in Sections 7.2.3 and 7.5 (each, an
\n“Advance”<\/strong>):<\/p>\n<\/p>\n<\/p>\n

(a) $60,000,000 for the first Contract Year (“Year 1”<\/strong>),
\npayable in equal quarterly installments at the beginning of each quarter of Year
\n1;<\/p>\n<\/p>\n<\/p>\n

(b) $60,000,000 for the second Contract Year (“Year 2”<\/strong>),
\npayable in equal quarterly installments at the beginning of each quarter of Year
\n2;<\/p>\n<\/p>\n

(c) $60,000,000 for the third Contract Year (“Year 3”<\/strong>),
\npayable in equal quarterly installments at the beginning of each quarter of Year
\n3; and<\/p>\n<\/p>\n

(d) for each of the [***] and [***] Contract Years, an amount equal to the
\nlesser of (i) $[***] and (ii) an amount equal to [***] the sum of (A) [***] of
\n[***] Net Revenue and (B) [***] of [***] Net Revenue (such sum of (A) and (B),
\n“NewCo153s Base Share”<\/strong>), in each case, for the prior Contract
\nYear, which amount will be payable in equal quarterly installments at the
\nbeginning of each quarter of the applicable Contract Year.<\/p>\n<\/p>\n<\/p>\n

7.2.2<\/strong> Revenue Share Service Fees.<\/strong> For each
\nContract Year, Microsoft will be entitled to receive from NewCo a Revenue Share
\nService Fee (as defined below), which shall be paid as follows:<\/p>\n<\/p>\n<\/p>\n

(a) Microsoft Commerce Platform.<\/strong> Microsoft will remit to
\nNewCo all Net Revenue from transactions using the Microsoft Commerce Platform
\nduring each Contract Year, less the amount of the Revenue Share Service Fee for
\nsuch Contract Year that has not as of the date of such remittance been paid by
\nNewCo to Microsoft by prior deductions from remittances under this Section
\n7.2.2(a) or by payments under Section 7.2.2(b). Microsoft shall remit to NewCo
\nall amounts described in clause (b) of the definition of Net Revenue that are
\npayable by NewCo to third parties.<\/p>\n<\/p>\n

(b) Non-Microsoft Commerce Platform.<\/strong> NewCo will remit all
\nNet Revenue to Microsoft on a quarterly basis during each Contract Year to the
\nextent that the Revenue Share Service Fee payable by NewCo to Microsoft has not
\nas of the date of such remittance been paid by NewCo to Microsoft by prior
\ndeductions from remittances under Section 7.2.2(a) or by payments under this
\nSection 7.2.2(b).<\/p>\n<\/p>\n<\/p>\n

(c) No Carry Over.<\/strong> Notwithstanding anything to the contrary
\nin this Agreement, Microsoft shall not be entitled under this Section 7 to
\nreceive for any Contract Year any amount in excess of its Revenue Share Service
\nFee for such Contract Year. If the Revenue Share Service Fee for a Contract Year
\nis less than the amount of the Advances for such Contract Year, then such
\nshortfall for the applicable Contract Year will be nonrefundable and ineligible
\nfor recoupment in following Contract Years.<\/p>\n<\/p>\n

12<\/p>\n

\n

\n<\/p>\n

(d) “Revenue Share Service Fee”<\/strong> means, for each Contract
\nYear, an amount equal to:<\/p>\n<\/p>\n<\/p>\n

(i) (A) [***] of [***] Net Revenue for such Contract Year, plus (B) [***] of
\n[***] Net Revenue for such Contract Year, plus<\/p>\n<\/p>\n<\/p>\n

(ii) the lesser of:<\/p>\n<\/p>\n<\/p>\n

(A) NewCo153s Base Share for such Contract Year, and<\/p>\n<\/p>\n

(B) the Advances received by NewCo for such Contract Year.<\/p>\n<\/p>\n<\/p>\n

7.2.3<\/strong> Deferral of Advances. <\/strong>Microsoft may
\ndefer payment of [***] of the amount of any and\/or all Advances that have not
\nyet been required to have been made under Section 7.2.1 if:<\/p>\n<\/p>\n

(a) the Core Geo Trade Book Condition is not satisfied before [***]; or<\/p>\n<\/p>\n

(b) NewCo fails to (i) cure a material noncompliance with the [***]
\nrequirements for the NewCo Windows App set forth in Section 2.4 or (ii) address
\nmaterial defects or critical security vulnerabilities, in each of (i) or (ii),
\nwithin four months after written notice from Microsoft, with such deferral in
\nthe case of this clause (b) to start upon the expiration of such notice period.\n<\/p>\n<\/p>\n<\/p>\n

If NewCo has met the Core Geo Trade Book Condition but has otherwise not met
\nthe Core Geo Commercial Content Condition before [***], then [***] of any and\/or
\nall Advances that have not yet been required to have been made will be subject
\nto deferral. Microsoft will pay the balance of any amounts deferred under this
\nSection 7.2.3 when the failure giving rise to the deferral is cured.<\/p>\n<\/p>\n<\/p>\n

7.3<\/strong> Reporting and Reconciliation. <\/strong>Within 30
\ndays after the Effective Date, NewCo and Microsoft will agree on a quarterly
\nreporting mechanism to exchange information about the gross revenue portion of
\nNet Revenue that each party transacts during the prior quarter, the information
\nnecessary to calculate Net Revenue for such period, as well as any remittances
\nit made to the other during such period. Within 30 days after the Effective
\nDate, NewCo and Microsoft will also agree on a quarterly true-up process to
\nvalidate (a) the total Net Revenue for such period, (b) the cumulative Revenue
\nShare Service Fee paid to Microsoft to date for the relevant Contract Year, and
\n(c) any further remittances by NewCo to Microsoft needed to pay unpaid Revenue
\nShare Service Fees payable for the relevant Contract Year in accordance with
\nSection 7.2. NewCo and Microsoft will agree on a mechanism for submitting any
\nsuch remittances required as a result of this true-up process. Any disputes
\nrelated to Section 7.2.2 or this Section 7.3 (to the extent related thereto)
\nwill be resolved through Formal Escalation and, if that does not resolve the
\ndispute, Expedited Arbitration.<\/p>\n<\/p>\n

13<\/p>\n

\n

\n<\/p>\n

7.4<\/strong> Quarterly Operational Cost Payments.<\/strong>
\nMicrosoft will pay to NewCo $25,000,000 each year for the first five years of
\nthe Term, for a total amount of up to $125,000,000, for purposes of assisting
\nNewCo in acquiring local Reading Content and technology development in the
\nperformance of NewCo153s obligations under this Agreement. Microsoft will make
\nsuch payments in quarterly installments of $6,250,000, with the first such
\ninstallment becoming payable on the Effective Date, subject to deferral pursuant
\nto Section 7.5.<\/p>\n<\/p>\n<\/p>\n

7.5 Payment Deferral for Default in Royalty Obligations under Patent
\nAgreement<\/strong><\/p>\n<\/p>\n<\/p>\n

7.5.1<\/strong> Undisputed Patent Royalties.<\/strong> If the
\nobligor under the Patent Agreement (“Patent Obligor<\/strong>“) fails to
\npay any Patent Royalty when due under the Patent Agreement (i.e. within [***]
\ndays after Microsoft153s invoice in accordance with the Patent Agreement), then,
\nunless such payment is the subject of a dispute under Section 7.5.2, Microsoft
\nmay defer payment of any and all amounts otherwise due or becoming due to NewCo
\nunder this Agreement during the period beginning upon the payment due date (i.e.
\n[***] days after invoice) and will give NewCo or the Patent Obligor written
\nnotice of such default, and the Patent Obligor has an additional [***] days to
\ncure such default before it becomes a NewCo Material Default, provided that the
\namount subject to deferral will not exceed the amount that the Patent Obligor
\nhas failed to pay under the Patent Agreement.<\/p>\n<\/p>\n<\/p>\n

7.5.2<\/strong> Disputed Patent Royalties<\/strong>. If the
\nPatent Obligor or Microsoft disputes any royalty obligation under the Patent
\nAgreement, then the parties will promptly submit the dispute to Expedited
\nArbitration under the Patent Agreement. To the extent such royalty obligation is
\nupheld in a final ruling in that Expedited Arbitration, then the Patent Obligor
\nwill have [***] days after such ruling to cure such default before it becomes a
\nNewCo Material Default. Microsoft may defer any Microsoft payment obligations
\ncoming due during the period beginning on the date of a ruling in the Expedited
\nArbitration that the Patent Obligor has not met its royalty obligations in the
\nPatent Agreement, provided that the amount subject to deferral will not exceed
\nthe amount that the Patent Obligor has failed to pay under the Patent Agreement.\n<\/p>\n<\/p>\n<\/p>\n

7.6 Taxes<\/strong><\/p>\n<\/p>\n<\/p>\n

7.6.1<\/strong> Responsibility for Own Taxes. <\/strong>Each
\nparty and its respective Affiliates are responsible for all taxes (including net
\nincome, gross receipts, franchise and property taxes and taxes arising from
\ntransactions between such party and its customers) imposed on such party or its
\nAffiliates under applicable laws and arising as a result of or in connection
\nwith this Agreement or the transactions contemplated by this Agreement.<\/p>\n<\/p>\n

7.6.2<\/strong> Payments Exclusive of Taxes.<\/strong> Except
\nas set forth in Section 7.6.3 and Section 7.6.4, amounts payable under this
\nAgreement by one party to the other party shall not be adjusted for any taxes,
\nduties, levies, fees, excises or tariffs imposed on the payor or the recipient.\n<\/p>\n<\/p>\n<\/p>\n

7.6.3<\/strong> Transaction Taxes. <\/strong>If any sales tax,
\nVAT or other transaction taxes are required by law to be collected by the
\nrecipient with respect to any payment under this Agreement, the payor will remit
\nsuch sales tax, VAT or other transaction taxes to the recipient; provided, that
\nthe recipient will furnish the payor with a valid invoice that meets the
\nrequirements imposed by the appropriate taxation authority.<\/p>\n<\/p>\n

14<\/p>\n

\n

\n<\/p>\n

7.6.4<\/strong> Withholding for Taxes on Payments.<\/strong>
\nIf any taxes are required by law to be withheld by the payor with respect to any
\npayment under this Agreement, the payor will deduct and withhold such taxes from
\nthe amount owed to the recipient of the payment and remit such withheld taxes to
\nthe appropriate taxing authority; provided, that the payor will furnish evidence
\nof such remitted taxes to the recipient as is sufficient to enable the recipient
\nto seek any refunds or credits available to it.<\/p>\n<\/p>\n<\/p>\n

7.6.5<\/strong> Cooperation to Minimize Taxes.<\/strong> The
\nparties will reasonably cooperate (and will require each of their Affiliates to
\ncooperate) with one another (a) in the filing of any tax returns required to be
\nfiled with respect to any taxes collected under Section 7.6.3 or withheld under
\nSection 7.6.4 or the contesting of any such tax, (b) to minimize or reduce any
\ntaxes collected under Section 7.6.3 or withheld under Section 7.6.4 and (c) in
\nthe event of an audit to make available to the other parties all information,
\nrecords or documents relating to any audits or assessments attributable to or
\nresulting from the taxes collected under Section 7.6.3 or withheld under Section
\n7.6.4 to the extent not protected by law or otherwise subject to privilege.<\/p>\n<\/p>\n<\/p>\n

7.7<\/strong> Records.<\/strong> During the Term and for a
\nperiod of at least seven years thereafter, each of the parties will keep and
\nmaintain, and will require each of its Affiliates to keep and maintain, complete
\nand accurate books and records related to its compliance with all terms and
\nconditions of this Agreement (collectively, “Audit
\nInformation”<\/strong>). Audit Information will be the Confidential Information
\nof the party being audited (“Audited Party”<\/strong>).<\/p>\n<\/p>\n<\/p>\n

7.8<\/strong> Audit.<\/strong> Upon not less than 30 days153
\nadvance written notice from a party desiring to conduct an audit
\n(“Auditing Party<\/strong>“) of another party153s Audit Information, the
\nAudited Party will make such Audit Information available for audit by an
\nindependent certified public accounting firm (together with independent
\ntechnical personnel if and as reasonably required for such accountant to perform
\nthe audit) designated by the Auditing Party and approved by the Audited Party,
\nwhich approval will not be unreasonably withheld. Unless otherwise agreed by the
\nAuditing Party and the Audited Party, any such audit will be conducted during
\nregular business hours, at the Audited Party153s principal place of business, not
\nmore frequently than once in any period of 12 consecutive months and in a manner
\nthat does not unreasonably interfere with the Audited Party153s normal course of
\nbusiness. Notwithstanding the foregoing, the Auditing Party may conduct more
\nthan one audit within a 12 month period if, in the Auditing Party153s good faith
\njudgment, the Auditing Party has a bona fide basis for any failure of the
\nAudited Party to comply with its obligations under this Agreement. If any audit
\nreveals an overpayment by the Audited Party, then the Audited Party will receive
\na credit, in the amount of such overpayment, that will be applied only against
\nfuture amounts owing by the Audited Party under this Agreement.<\/u> If any
\naudit reveals an underpayment by the Audited Party, then the Audited Party will
\npay the amount of the underpayment within 45 days after the date of the
\nauditor153s report. Further, if any audit reveals an underpayment of more than 5%
\nof the total amount subject to the audit, then Audited Party will reimburse the
\nAuditing Party within 30 days after the Auditing Party153s request, for all costs
\nand expenses reasonably incurred by the Auditing Party to conduct the audit.<\/p>\n<\/p>\n

15<\/p>\n

\n

\n<\/p>\n

7.9<\/strong> Other Costs and Expenses.<\/strong> Except as
\notherwise expressly provided in this Section 7, each party will bear all costs
\nit incurs in the performance of its obligations under this Agreement.<\/p>\n<\/p>\n<\/p>\n

Section 8. Data.<\/strong><\/p>\n<\/p>\n<\/p>\n

8.1<\/strong> Rights to Use Data. <\/strong>Each party has the
\nright to use data in its systems related to its performance under this
\nAgreement, except (a) to the extent prohibited by law or by the conditions under
\nwhich the relevant Content was acquired, and (b) that Microsoft will not use, or
\ntransfer to a third party to use, data in the Microsoft Commerce Platform due to
\nthe reliance of a NewCo App and the NewCo Store on that system or transmitted
\nvia the NewCo APIs (i.e. data that identifies an individual as a customer of the
\nNewCo Store, identifies a publisher and the publication of its Content in the
\nNewCo Store, and identifies a purchase transaction in the NewCo Store as
\nassociated with a customer or publisher) in a way that [***]. The foregoing
\nexception (b) does not apply in the case of data related to publication to,
\npurchase of or Consumption Experiences for Content in the NewCo Store by users
\nof Microsoft Products and Services to the extent such data is used directly or
\nindirectly consistent with the intent of the user; provided, however, that
\nMicrosoft will not create and present to customers functionality that enables
\n[***]. [***] the previous sentence is not intended to permit Microsoft to use
\ninformation relating to the purchase of Reading Content by a user, including the
\nfact that Reading Content was purchased from NewCo by such user, to sell Reading
\nContent.<\/p>\n<\/p>\n<\/p>\n

8.2<\/strong> Privacy and Data Protection Laws.<\/strong> Each
\nparty will comply with privacy and data protection laws applicable to its
\nperformance of its obligations under this Agreement. If and to the extent a
\nparty believes its performance may not comply with such laws, the parties will
\nengage in good faith efforts to discover and implement a mechanism to meet those
\nobligations in accordance with such laws. NewCo shall not be required to
\ntransfer to or share with Microsoft, or permit Microsoft to use, NewCo customer
\nor publisher data in a manner that violates the applicable NewCo or B&N
\nprivacy policies, and acknowledges that the transfers described in this Section
\n8.2 will not do so, as long as the consents described in Sections 8.2.2 and
\n8.2.3 are obtained. Subject to the first sentence of this Section 8.2, NewCo
\nwill provide Microsoft with customer and publisher data in the following
\nsituations:<\/p>\n<\/p>\n<\/p>\n

8.2.1<\/strong> Microsoft Commerce Platform. <\/strong>To the
\nextent permitted by applicable law, NewCo will transfer customer data and
\npublisher data to Microsoft necessary to effect the following types of
\ntransactions by end users through the Microsoft Commerce Platform: (a) purchases
\nof Content from the NewCo Store and (b) publishing of Reading Content to the
\nNewCo Store (including making payments to the end user that published such
\nReading Content), provided that Microsoft shall only be permitted to use such
\ncustomer and publisher data for the purpose of effecting such transactions and,
\nif the relevant end user expressly consents in advance to use by Microsoft for
\nsuch purpose, effecting other transactions requested by such end user using the
\nMicrosoft Commerce Platform. NewCo will not modify its privacy policy to impair
\nor prohibit such transfer or use, except as required by applicable law. For the
\navoidance of doubt, data collected by Microsoft from end users will not be
\nconsidered data provided or transferred by NewCo to Microsoft for purposes of
\nthis Agreement.<\/p>\n<\/p>\n

16<\/p>\n

\n

\n<\/p>\n

8.2.2<\/strong> NewCo APIs. <\/strong>To the extent permitted
\nby applicable law, NewCo will transfer customer data and publisher data to
\nMicrosoft through use of NewCo APIs by Microsoft Products and Services in
\naccordance with Section 3.1 in order to enable purchases by end users of Content
\nin the NewCo Store, Consumption Experiences for Content from the NewCo Store and
\nusers to publish Reading Content to the NewCo Store, provided that Microsoft
\nobtains express advance user consent to NewCo providing such data for such
\npurposes through user consent to the terms and conditions of use of the relevant
\nMicrosoft Products and Services which will utilize the NewCo APIs for those
\npurposes and, [***]. Microsoft will ultimately elect how to obtain consents
\nsatisfying the requirements of this Section 8.2.2, but it is expected that
\nMicrosoft will obtain this consent by including it in the license terms or
\nprivacy policy applicable to the relevant version of the Microsoft Product and
\nService and, in any case, [***].<\/p>\n<\/p>\n<\/p>\n

8.2.3<\/strong> Microsoft Service Maintenance Toolkit.
\n<\/strong>NewCo will include in its privacy policy a provision substantially
\nsimilar to the provision entitled “Sales, Mergers, and Acquisitions” in the
\nB&N privacy policy dated January 10, 2012. Within 10 days of the date the
\nMicrosoft Service Maintenance Toolkit or Deposit Materials, as applicable, are
\nrequired (taking into account any applicable periods for delivery and, if
\napplicable, the completion of any Expedited Arbitration) to be delivered to
\nMicrosoft in accordance with Sections 10.3, 10.4, 11.5 or 11.6, as applicable,
\nNewCo will (a) notify end users of, and (b) to the extent it believes in good
\nfaith that notwithstanding the provision in its privacy policy above, it is
\nrequired by applicable law to obtain user consent (taking into account such
\nanalysis or other information relevant to such subject that Microsoft provides
\nto NewCo), will request end users to consent to, the transfer to, and use by,
\nMicrosoft of the Customer Data and Publisher Data included therein in accordance
\nwith Section 10.2 and will require such required end user consent as a condition
\nto using the NewCo Store or a NewCo App at any time following the date on which
\nMicrosoft becomes entitled to receive the Microsoft Maintenance Toolkit or
\nDeposit Materials, as applicable. If requested by Microsoft, NewCo will also,
\nwithin the 10-day period identified in the previous sentence, assist Microsoft
\nin providing such notice and obtaining any required end user consent to such
\ntransfer and use by sending an email to end users with respect to which Customer
\nData or Publisher Data is included in the Microsoft Service Maintenance Toolkit
\nor Deposit Materials, as applicable, informing them of the circumstances
\nsurrounding the transfer of such user153s data and offering them the opportunity
\nto provide any such required consent. NewCo will structure such consent request
\nas an “opt-out” (i.e., end users are considered to have consented unless they
\nobject to the request within a period of not more than 30 days (as determined by
\nNewCo), unless NewCo believes in good faith that a longer period is required to
\ncomply with applicable law (taking into account such analysis or other
\ninformation relevant to such subject that Microsoft provides to NewCo) or
\ncommercial custom in the applicable jurisdiction) for all data and in all
\njurisdictions for which NewCo believes in good faith such structure complies
\nwith applicable law, taking into account such analysis or other information
\nrelevant to such subject that Microsoft provides to NewCo.<\/p>\n<\/p>\n

Section 9. Confidentiality<\/strong><\/p>\n<\/p>\n<\/p>\n

17<\/p>\n

\n

\n

9.1<\/strong> NDA. <\/strong>The parties agree that the NDA
\nwill apply to any Confidential Information exchanged by the parties in
\nconnection with this Agreement.<\/p>\n<\/p>\n<\/p>\n

9.2<\/strong> Terms of Agreement. <\/strong>The mere existence
\nof this Agreement and the identification of the parties are not confidential.
\nHowever, the specific terms and conditions of this Agreement (including the
\nfinancial terms set forth in Section 7, the amount of any payments by any party
\nto another party under this Agreement, and schedules for releases of products or
\nservices) are confidential and will not be disclosed by any party except: (a) as
\nmay be required by applicable law or stock exchange rules; (b) as may be
\nrequired by judicial or governmental order or rule (provided that for both (a)
\nand (b), the disclosing party either gives the other party reasonable notice to
\nenable it to seek a protective order or uses reasonable measures to seek an
\nappropriate protective order itself); (c) in confidence to a party153s
\naccountants, tax advisors, auditors and\/or attorneys for purposes of seeking
\nprofessional services; and (d) by written consent of the disclosing party and
\nonly under terms of confidentiality. Further, the parties agree that this
\nAgreement contains competitively sensitive information the public disclosure of
\nwhich would be competitively harmful. B&N or NewCo, as the case may be, will
\nnotify Microsoft before filing this Agreement as an exhibit to any registration
\nstatement or periodic report filed with the SEC or other regulatory agency, and
\nNewCo or B&N, as the case may be, will make a request for confidential
\ntreatment of such competitively sensitive information in connection with any
\nsuch filing if such a request is consistent with applicable regulatory agency
\nregulations and guidance. The request will seek a confidentiality term that is
\nat least as long as the term of this Agreement. B&N or NewCo, as the case
\nmay be, will consult with Microsoft with respect to any such confidential
\ntreatment request.<\/p>\n<\/p>\n<\/p>\n

9.3<\/strong> Publicity. <\/strong>The parties agree to the
\nprompt publication of the joint press release agreed upon by the parties. Except
\nas expressly permitted in the NDA, Section 9.2 or this Section 9.3, no party (or
\nany of their Affiliates) may issue any press release or make any similar public
\nannouncement or public statement, regarding this Agreement without the prior
\nwritten approval and consent of the other parties. Except as expressly permitted
\nin the NDA, Section 9.2 or this Section 9.3, any and all press releases or
\nsimilar public announcements or public statements relating to this Agreement
\nwill be approved in advance of the release, in writing, by B&N, NewCo and
\nMicrosoft and once released, a party may repeat information so released without
\nfurther consent of the other parties. Additionally, in connection with joint
\npress releases and communications, the parties153 respective public relations and
\ncommunications staff will consult to develop (and update, when appropriate)
\nstandard messaging points that may be used to describe the parties153
\nrelationships under this Agreement.<\/p>\n<\/p>\n<\/p>\n

Section 10. Intellectual Property<\/strong><\/p>\n<\/p>\n<\/p>\n

10.1<\/strong> Defense Against Third Party Infringement
\nClaims. <\/strong>NewCo will use commercially reasonable efforts to defend the
\nNewCo Apps against claims by any third party that any of the NewCo Apps
\ninfringes or misappropriates any Intellectual Property Right. Without limitation
\nof the foregoing, NewCo will use such efforts to have any injunction or
\nrestraining order obtained by a third party which prohibits or restricts the
\ndistribution or use of any of the NewCo Apps dissolved or vacated, subject in
\neach case to the right of NewCo to make modifications to the NewCo Apps to
\naddress such claims. Microsoft will provide such assistance in connection with
\nNewCo153s defense of such claims as NewCo may reasonably request; provided,
\nhowever, that NewCo pays or reimburses the reasonable and necessary
\nout-of-pocket expenses of Microsoft as approved in advance by NewCo.<\/p>\n<\/p>\n

18<\/p>\n

\n

\n<\/p>\n

10.2<\/strong> Transition License.<\/strong> NewCo hereby
\ngrants to Microsoft and its Subsidiaries a non-exclusive, irrevocable,
\nnon-transferrable, royalty-free, worldwide license to:<\/p>\n<\/p>\n<\/p>\n

(a) use, produce, reproduce, modify, offer, display, license, distribute and
\notherwise make available the NewCo Apps (excluding trademarks) solely for the
\npurpose of continuing to offer and provide them to end users in order to offer
\nand provide them services equivalent to the services provided or required to be
\nprovided to them under the NewCo SLA;<\/p>\n<\/p>\n<\/p>\n

(b) use, produce, reproduce and modify the NewCo App Materials solely for the
\npurpose of exercising the rights set forth in (a) above;<\/p>\n<\/p>\n<\/p>\n

(c) use, produce, reproduce, modify, offer, display, license, distribute and
\notherwise make available the website for the NewCo Store (excluding trademarks)
\nsolely for the purpose of offering and providing end users services equivalent
\nto the services provided or required to be provided to them under the NewCo SLA;\n<\/p>\n<\/p>\n<\/p>\n

(d) use, reproduce and modify the NewCo Store Materials solely for the
\npurpose of exercising the rights set forth in (c) above; and<\/p>\n<\/p>\n<\/p>\n

(e) use, produce and reproduce any Customer Data and Publisher Data as needed
\nby Microsoft to provide a consistent level of services and experiences to
\ncustomers in relation to the Content they have acquired or provided, all of
\nwhich data will be subject to the provisions set forth in Section 8.<\/p>\n<\/p>\n<\/p>\n

The license granted in this Section 10.2 is a present grant of license,
\neffective in accordance with its terms immediately upon the Effective Date.
\nHowever, Microsoft covenants that neither it nor any of its Subsidiaries will
\nexercise any of the rights granted pursuant to the license granted in this
\nSection 10.2 unless and until:<\/p>\n<\/p>\n<\/p>\n\n\n\n
<\/td>\n\n

(i)<\/p>\n<\/td>\n

\n

a Liquidation Event, and then only after receipt by Microsoft of the
\nMicrosoft Service Maintenance Toolkit or Deposit Materials;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

19<\/p>\n

\n

\n\n\n\n\n
<\/td>\n\n

(ii)<\/p>\n<\/td>\n

\n

a Bankruptcy Event, and then only (A) as to the NewCo App Materials and the
\nNewCo Store Materials, during that portion of the Transition Period (if any)
\nafter receipt by Microsoft of the Microsoft Service Maintenance Toolkit or
\nDeposit Materials, and (B) as to the Customer Data and Publisher Data, after
\nreceipt by Microsoft of such materials, all of which data will be subject to the
\nprovisions set forth in Section 8; or<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(iii)<\/p>\n<\/td>\n

\n

a Non-Renewal, a termination by Microsoft for a NewCo Material Default, or a
\ntermination by NewCo for a Microsoft Material Default, and then only (A) as to
\nthe NewCo App Materials and the NewCo Store Materials, during that portion of
\nthe Transition Period (if any) after receipt by Microsoft of the Microsoft
\nService Maintenance Toolkit or Deposit Materials, and (B) as to the Customer
\nData and Publisher Data, after receipt by Microsoft of such materials, all of
\nwhich data will be subject to the provisions set forth in Section 8.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

10.3<\/strong> Liquidation Event Without Termination.<\/strong>
\nIn the case of a Liquidation Event without termination of this Agreement, then,
\nupon Microsoft153s request, NewCo will promptly provide the Microsoft Service
\nMaintenance Toolkit to Microsoft for use in accordance with the license granted
\nin Section 10.2. If NewCo fails to provide the Microsoft Service Maintenance
\nToolkit within 7 days after Microsoft153s request, then, unless NewCo in good
\nfaith gives by written notice of a bona fide dispute about whether a Liquidation
\nEvent has occurred (in which case, the provisions of Section 11.6(e) will
\napply), upon Microsoft153s request, the Escrow Agent will forthwith release the
\nDeposit Materials to Microsoft for use in accordance with the license granted in
\nSection 10.2.<\/p>\n<\/p>\n<\/p>\n

10.4<\/strong> Bankruptcy Event Without Termination.
\n<\/strong>If in the case of a Bankruptcy Event without termination of this
\nAgreement, NewCo fails to cure any material noncompliance with the NewCo SLA
\nwithin 7 days after written notice from Microsoft, then Section 11.6(e) will
\napply to the release of the Deposit Materials to Microsoft for use in accordance
\nwith the license granted in Section 10.2. Upon delivery of the Deposit Materials
\nto Microsoft pursuant to this Section 10.4, then NewCo153s obligation to provide
\nthe NewCo SLA will continue only until the earlier of (a) the last day of the
\nTransition Period or (b) 12 months after the date of Microsoft153s taking
\npossession of the Microsoft Service Maintenance Toolkit or Deposit Materials, as
\nthe case may be.<\/p>\n<\/p>\n<\/p>\n

10.5<\/strong> Licenses.<\/strong> Except for the licenses
\ngranted in Sections 2.5.2, 6.2, and 10.2, no licenses are granted under this
\nAgreement, whether by implication, estoppel, statute or otherwise. The parties
\nhereby disclaim the grant of any and all express or implied licenses under this
\nAgreement.<\/p>\n<\/p>\n<\/p>\n

10.6<\/strong> Reservation of Rights.<\/strong> All rights not
\nexpressly granted under this Agreement or other written agreements between the
\nparties are reserved. Except for the licenses granted under Sections 2.5.2, 6.2
\nand 10.2, NewCo and its Affiliates retain all right, title and interest in and
\nto all Intellectual Property Rights of NewCo and its Affiliates. Microsoft and
\nits Affiliates retain all right, title and interest in and to all Intellectual
\nProperty Rights of Microsoft and its Affiliates. Except as otherwise provided in
\nSection 1.2(a), B&N and its Affiliates retain all right, title and interest
\nin and to all Intellectual Property Rights of B&N and its Affiliates.
\nWithout limitation of the foregoing, each party reserves any and all
\nIntellectual Property Rights to which it may be entitled under applicable law by
\nvirtue of its development of any software, invention or other technology under
\nthis Agreement.<\/p>\n<\/p>\n

20<\/p>\n

\n

\n<\/p>\n

10.7<\/strong> Excluded Licenses.<\/strong> Each party will
\nensure that deliverables provided to the other party (including the NewCo Apps,
\nNewCo APIs and any code exchanged pursuant to the scenarios in Section 3) will
\nnot be governed by licenses that purport to provide immunity under the other
\nparty153s intellectual property if used or distributed by the other party (e.g.,
\ndeliverables provided by a party in whole or in part will not be governed by any
\nversion of the GPL, LGPL or similar license).<\/p>\n<\/p>\n

Section 11. Term and Termination<\/strong><\/p>\n<\/p>\n<\/p>\n

11.1<\/strong> Term.<\/strong> The term of this Agreement will
\ncommence on the Effective Date and continue until the date that is [***] after
\n[***] or [***] unless extended as provided for in Section 11.2 or terminated in
\naccordance with Section 11.3 or 11.4 (“Term”<\/strong>). No party may
\nterminate this Agreement for convenience. If prior to the Effective Date the
\nInvestment Agreement is terminated in accordance with its terms, this Agreement
\nshall automatically be canceled in its entirety, shall never become effective,
\nand shall thereupon become null and void.<\/p>\n<\/p>\n<\/p>\n

11.2<\/strong> Extension.<\/strong> At least one year before
\nthe expiration of the Term, NewCo and Microsoft will meet to discuss whether
\nthey desire to extend the Term. If both parties desire to extend the Term, they
\nwill discuss in good faith the terms upon which each of the parties would be
\nwilling to extend the Term. If either NewCo or Microsoft determines at any point
\nduring the one year period before the expiration of the Term not to extend the
\nTerm, it will promptly notify the other parties. Unless extended upon mutual
\nagreement of the parties, the Agreement will terminate upon the expiration of
\nthe Term. Termination of this Agreement will end the Term.<\/p>\n<\/p>\n<\/p>\n

11.3<\/strong> Termination by Microsoft.<\/strong> In the case
\nof a Liquidation Event or a Bankruptcy Event, Microsoft may terminate this
\nAgreement by giving NewCo written notice of termination. In the case of a NewCo
\nMaterial Default, Microsoft may terminate this Agreement by giving NewCo written
\nnotice of termination describing such NewCo Material Default in reasonable
\ndetail, provided that such termination will not be effective if such NewCo
\nMaterial Default is caused by Microsoft failing to comply with its obligations
\nunder this Agreement.<\/p>\n<\/p>\n<\/p>\n

11.4<\/strong> Termination by NewCo. <\/strong>In the case of a
\nMicrosoft Material Default, NewCo may terminate this Agreement by giving
\nMicrosoft written notice of termination describing such Microsoft Material
\nDefault in reasonable detail, provided that such termination will not be
\neffective if such Microsoft Material Default is caused by NewCo failing to
\ncomply with its obligations under this Agreement.<\/p>\n<\/p>\n<\/p>\n

11.5<\/strong> Effect of Termination.<\/strong> Upon
\ntermination or expiration of this Agreement, the following will apply:<\/p>\n<\/p>\n<\/p>\n

11.5.1<\/strong> Liquidation Event. <\/strong>If Microsoft
\nterminates this Agreement under Section 11.3 for a Liquidation Event, then, upon
\nMicrosoft153s request, NewCo will promptly provide Microsoft Service Maintenance
\nToolkit to Microsoft for use in accordance with the license granted in Section
\n10.2. If NewCo fails to provide the Microsoft Service Maintenance Toolkit within
\n7 days after Microsoft153s request, then, unless NewCo in good faith gives written
\nnotice of a bona fide dispute with respect to whether a Liquidation Event has
\noccurred (in which case, the provisions of Section 11.6(e) will apply), upon
\nMicrosoft153s request, the Escrow Agent will release the Deposit Materials to
\nMicrosoft for its use in accordance with the license granted in Section 10.2.\n<\/p>\n<\/p>\n

21<\/p>\n

\n

\n<\/p>\n

11.5.2<\/strong> Bankruptcy Event. <\/strong>If in the case of
\na Bankruptcy Event, NewCo materially fails to provide at least the level of
\nservice specified in the NewCo SLA within 7 days after written notice from
\nMicrosoft, then Section 11.6(e) will apply to the release of the Deposit
\nMaterials to Microsoft for use in accordance with the license granted in Section
\n10.2. Upon delivery of the Deposit Materials to Microsoft pursuant to this
\nSection 11.5.2, then NewCo153s obligation to provide the NewCo SLA will continue
\nonly until the earlier of (a) the last day of the Transition Period or (b) 12
\nmonths after the date of Microsoft153s taking possession of the Microsoft Service
\nMaintenance Toolkit or Deposit Materials, as the case may be.<\/p>\n<\/p>\n

11.5.3<\/strong> NewCo Material Default, Microsoft Material
\nDefault or Non-Renewal. <\/strong>If Microsoft terminates this Agreement under
\nSection 11.3 for a NewCo Material Default, if NewCo terminates this Agreement
\nunder Section 11.4 for a Microsoft Material Default or if a Non-Renewal occurs
\nthen:<\/p>\n<\/p>\n<\/p>\n

(a) upon NewCo153s request, Microsoft will continue to enable use of the
\nMicrosoft Commerce Platform, use of the Microsoft ID System, and other services
\nas specified in the Microsoft SLA throughout the Transition Period;<\/p>\n<\/p>\n<\/p>\n

(b) upon Microsoft153s request, NewCo will continue to provide the NewCo Store,
\nthe NewCo Apps, Content, and other services as specified in the NewCo SLA
\nthroughout the Transition Period; and<\/p>\n<\/p>\n<\/p>\n

(c) if NewCo fails to cure any material noncompliance with the NewCo SLA
\nwithin 7 days after written notice from Microsoft, then Microsoft may institute
\nan Expedited Arbitration seeking to require NewCo to provide the Microsoft
\nService Maintenance Toolkit for use in accordance with the license in Section
\n10.2, and Section 11.6(e) will apply to the release of the Deposit Materials to
\nMicrosoft for use in accordance with the license in Section 10.2.<\/p>\n<\/p>\n

22<\/p>\n

\n

\n<\/p>\n

Upon delivery of the Microsoft Service Maintenance Toolkit or Deposit
\nMaterials to Microsoft pursuant to clause (c) of this Section 11.5.3, then
\nNewCo153s obligation to provide the NewCo SLA will continue only until the earlier
\nof (i) the last day of the Transition Period or (ii) 12 months after the date of
\nMicrosoft153s taking possession of the Microsoft Service Maintenance Toolkit or
\nDeposit Materials, as the case may be.<\/p>\n<\/p>\n<\/p>\n

11.6<\/strong> Escrow Agreement.<\/strong> Within 60 days after
\nthe Effective Date, NewCo, B&N and Microsoft will enter into an escrow
\nagreement (“Escrow Agreement”<\/strong>) with an independent escrow agent
\n(“Escrow Agent”<\/strong>) designated by Microsoft and approved by NewCo,
\nwhich approval will not be unreasonably withheld. The parties agree that [***]
\nshall be the Escrow Agent unless and until a successor or alternative thereto is
\nappointed with the written consent of each of NewCo and Microsoft. The Escrow
\nAgreement will provide for the following:<\/p>\n<\/p>\n<\/p>\n

(a) within 30 days after execution of the Escrow Agreement, NewCo will
\ndeposit with the Escrow Agent versions of the Deposit Materials as of the most
\ncurrent date reasonably practicable prior to the date of such deposit;<\/p>\n<\/p>\n<\/p>\n

(b) quarterly throughout the Term, NewCo will deposit with the Escrow Agent
\ncopies of NewCo153s own backup copies of the Source Code, data files containing
\nthe Customer Data and Publisher Data, and the other items referred to in the
\ndefinition of Deposit Materials as of the most current date reasonably
\npracticable prior to the date of such deposit, which copies may contain Source
\nCode and data beyond those referred to in the definition of Deposit Materials;\n<\/p>\n<\/p>\n<\/p>\n

(c) each deposit of Deposit Materials will be subject to verification (which
\nincludes examination of the Deposit Materials but does not include examination
\nof records of NewCo), at Microsoft153s option, by the Escrow Agent or an
\nindependent third party designated by Microsoft and approved by NewCo (such
\napproval not to be unreasonably withheld) who will only be authorized to
\ndisclose to Microsoft whether the Deposit Materials are deposited in accordance
\nwith this Agreement;<\/p>\n<\/p>\n

(d) following commencement of an Expedited Arbitration in which release of
\nthe Deposit Materials is sought, following a Liquidation Event or as of the
\nlatest date reasonably practicable prior to a release in accordance with Section
\n11.6(e)(i), NewCo will promptly undertake to update and then filter Source Code
\nand data included in backup copies of such items deposited with the Escrow Agent
\nto eliminate or redact items that are not referred to in the definition of
\nDeposit Materials;<\/p>\n<\/p>\n<\/p>\n

(e) the Escrow Agent will release the Deposit Materials to Microsoft only if
\nand when (i) Microsoft and NewCo each direct the Escrow Agent in writing to
\nrelease them based on satisfaction of the conditions for release, (ii) the
\nrelease is ordered, or the conditions for release are determined to exist, in an
\nExpedited Arbitration, or (iii) the conditions for release specified in Section
\n10.3 have been satisfied;<\/p>\n<\/p>\n<\/p>\n

(f) NewCo will continue to have the opportunity to cure, at any time up to a
\nfinding of material breach of the NewCo SLA in an Expedited Arbitration the
\nasserted material breach of the NewCo SLA and, in the event of such cure (as
\nagreed by the parties or so determined in the Expedited Arbitration), the Escrow
\nAgent will not release the Deposit Materials to Microsoft and Microsoft and its
\nSubsidiaries will not exercise their rights under the license granted under
\nSection 10.2;<\/p>\n<\/p>\n

23<\/p>\n

\n

\n<\/p>\n

(g) the Deposit Materials will be subject to the license set forth in Section
\n10.2;<\/p>\n<\/p>\n<\/p>\n

(h) Microsoft and NewCo will share equally the costs of the escrow; and<\/p>\n<\/p>\n<\/p>\n

(i) terms otherwise consistent with Sections 10.2, 10.3, 10.4, 10.5 and this
\nSection 11.6.<\/p>\n<\/p>\n<\/p>\n

11.7<\/strong> Survival.<\/strong> Only Sections 1.1 (and all
\nother definitions), 2.5.2 (as to distribution rights for NewCo Windows Apps
\nreleased before the effective date of expiration or termination), 2.6, 3.3, 6.2
\n(as to distribution rights for NewCo Phone Apps released before the effective
\ndate of expiration or termination), 7.1, 7.2, 7.3, 7.6, 7.7, 7.8, 7.9, 8, 9,
\n10.1, 10.2, 10.5, 10.6, 10.7, 11.5, 11.6, 11.7, 12, 13 and 14; Exhibit
\nA<\/strong>; and Exhibit B<\/strong> Section 4 of this Agreement will
\nsurvive any expiration or termination of this Agreement; provided that the
\nrestrictions in clause (b) in Section 8.1 (and associated limitations thereto in
\nSection 8.1) will survive until the date that is two years after the earlier of
\n(i) the last day of the Transition Period or (ii) the day that NewCo materially
\nand permanently stops providing the level of service specified in the NewCo SLA;
\nprovided, further, that Section 1.7 shall survive (i) insofar as it relates to
\nSections 1-3 of Exhibit B<\/strong> until the last day of the Transition
\nPeriod and (ii) insofar as it relates to Section 4 of Exhibit B<\/strong>
\nindefinitely. In addition, the reporting and true-up mechanism agreed to
\npursuant to Section 7.3 will survive any termination or expiration to allow for
\nfinal reconciliation and reporting of amounts accrued or owing under this
\nAgreement. However, any expiration or termination of this Agreement will be
\nwithout prejudice to any right or remedy of any party arising out of any breach
\nof this Agreement, including recovery of any amounts owing under this Agreement.\n<\/p>\n<\/p>\n

Section 12. Representations and Warranties<\/strong><\/p>\n<\/p>\n<\/p>\n

12.1<\/strong> By Microsoft. <\/strong>Microsoft represents and
\nwarrants to NewCo and B&N that (a) it has the right, power and authority to
\nenter into and perform its obligations under this Agreement, and (b) its
\nrepresentative whose signature is affixed to this Agreement has full capacity
\nand authority to bind it to the terms of this Agreement.<\/p>\n<\/p>\n<\/p>\n

12.2<\/strong> By B&N and NewCo. <\/strong>NewCo and
\nB&N jointly and severally represent and warrant to Microsoft that (a) each
\nof NewCo and B&N has the right, power and authority to enter into and
\nperform its obligations under this Agreement, and (b) each of its
\nrepresentatives whose signature is affixed to this Agreement has full capacity
\nand authority to bind it to the terms of this Agreement.<\/p>\n<\/p>\n<\/p>\n

12.3<\/strong> Disclaimer. <\/strong>EXCEPT AS EXPRESSLY
\nPROVIDED OTHERWISE IN THIS AGREEMENT OR A RELATED AGREEMENT, TO THE MAXIMUM
\nEXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY PROVIDES ALL SOFTWARE, DEVICES,
\nTECHNOLOGY, SERVICES, CONTENT, DATA, INFORMATION AND OTHER MATERIALS UNDER THIS
\nAGREEMENT “AS IS” AND WITH ALL FAULTS AND WITHOUT ANY WARRANTIES,
\nREPRESENTATIONS AND CONDITIONS OF ANY KIND, WHETHER EXPRESS, IMPLIED OR
\nSTATUTORY, INCLUDING ANY WARRANTIES OF OR RELATED TO MERCHANTABILITY, FITNESS
\nFOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, ACCURACY OR COMPLETENESS OF
\nRESPONSES, RESULTS, AND LACK OF NEGLIGENCE.<\/p>\n<\/p>\n

24<\/p>\n

\n

\n<\/p>\n

Section 13. Limitations of Liability<\/strong><\/p>\n<\/p>\n<\/p>\n

13.1<\/strong> Disclaimer of Consequential Damages.<\/strong>
\nEXCEPT FOR ANY CLAIMS ARISING FROM BREACH OF SECTION 8, NEITHER NEWCO, B&N
\nNOR MICROSOFT NOR ANY OF THEIR RESPECTIVE AFFILIATES WILL BE LIABLE FOR ANY LOSS
\nOF PROFIT, BUSINESS OR GOODWILL, OR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL,
\nPUNITIVE OR SPECIAL COSTS, DAMAGES OR EXPENSES WHATSOEVER ARISING OUT OF, OR IN
\nANY WAY CONNECTED WITH, THIS AGREEMENT OR THE BREACH THEREOF, REGARDLESS OF THE
\nLEGAL THEORY UPON WHICH ANY CLAIM FOR SUCH DAMAGES IS BASED, EVEN IN THE EVENT
\nOF FAULT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, BREACH OF CONTRACT OR
\nBREACH OF WARRANTY OF ANY PARTY. THE FOREGOING EXCLUSION WILL APPLY EVEN IF SUCH
\nPARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE AND EVEN IF
\nANY AVAILABLE REMEDY FAILS ITS ESSENTIAL PURPOSE.<\/p>\n<\/p>\n<\/p>\n

13.2<\/strong> Limitations on Amounts of Liability.<\/strong>
\nTO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AND EXCEPT AS TO AMOUNTS
\nPAYABLE BY EACH PARTY TO THE OTHER PURSUANT TO SECTION 7, THE TOTAL AGGREGATE
\nLIABILITY OF EACH PARTY AND ITS AFFILIATES, INDIVIDUALLY AND COLLECTIVELY, TO
\nTHE OTHER PARTIES AND THEIR AFFILIATES, INDIVIDUALLY AND COLLECTIVELY, FOR ALL
\nCLAIMS UNDER THIS AGREEMENT WILL BE LIMITED IN AMOUNT TO $[***].<\/p>\n<\/p>\n<\/p>\n

13.3<\/strong> Excused Performance.<\/strong> No party will be
\nliable, or considered to be in breach or default under this Agreement, on
\naccount of any delay, failure in performance, interruption of service, loss or
\ndamage resulting directly or indirectly from any Force Majeure; provided, that
\nthe party suffering the Force Majeure: (a) gives the other parties prompt
\nwritten notice of the Force Majeure, the anticipated duration and consequences
\nof the Force Majeure, and the action being taken to overcome, avoid and mitigate
\nthe consequences; and (b) takes commercially reasonable steps to overcome, avoid
\nand mitigate the consequences.<\/p>\n<\/p>\n

13.4.<\/strong> Material Breach of SLAs<\/strong>.
\nNotwithstanding any other provision of this Agreement to the contrary, but
\nsubject to the limitations set forth in Sections 13.1 and 13.2, in the event of
\na material breach of either the NewCo SLA or the Microsoft SLA, then, in
\naddition to any other remedies specified herein, the parties agree that:<\/p>\n<\/p>\n<\/p>\n

(a) the non-breaching party will be entitled to seek damages or other
\nremedies available in law or equity for such material breach; and<\/p>\n<\/p>\n<\/p>\n

(b) in the event of a material breach or a finding of a likelihood of success
\non a party153s claim of a material breach where a party is seeking preliminary
\ninjunctive relief, it would be appropriate for a court or arbitrator to issue an
\norder (both preliminary and permanent), applicable on a worldwide basis,
\nrequiring the cure of such material breach and full performance of the NewCo SLA
\nand\/or the Microsoft SLA, as the case may be, because, inter alia<\/em>, the
\nparties agree that (i) it is highly likely that the non-breaching party will
\nsuffer irreparable harm from such material breach unless such material breach is
\nimmediately cured, (ii) the risk of irreparable harm to the non-breaching party
\nfrom such material breach outweighs the potential harm to the breaching party of
\nimmediately requiring that it cure such material breach, and (iii) such
\nimmediate injunctive relief is in the public interest and particularly in the
\ninterest of affected customers.<\/p>\n<\/p>\n

25<\/p>\n

\n

\n<\/p>\n

Section 14. General<\/strong><\/p>\n<\/p>\n<\/p>\n

14.1<\/strong> 365(n). <\/strong>All licenses and rights
\ngranted to Microsoft and its Affiliates under or pursuant to this Agreement are,
\nand will otherwise be deemed to be, for purposes of Section 365(n) of the U.S.
\nBankruptcy Code, licenses of rights to “intellectual property” as defined under
\nSection 101 of the U.S. Bankruptcy Code. Microsoft and its Affiliates, as
\nlicensee of such rights under this Agreement, will retain and may fully exercise
\nall its rights and elections under the U.S. Bankruptcy Code. In the event of the
\ncommencement of a bankruptcy proceeding by or against NewCo under the U.S.
\nBankruptcy Code, Microsoft and its Affiliates will be entitled to complete
\naccess to (or a compete duplicate of, as appropriate) any such intellectual
\nproperty and all embodiments of such intellectual property, and same, if not
\nalready in Microsoft153s possession, will be promptly delivered to Microsoft.<\/p>\n<\/p>\n<\/p>\n

14.2<\/strong> Non-Exclusive; Independent Development.
\n<\/strong>Except as provided in Section 1.5, the rights and obligations of the
\nparties under this Agreement are non-exclusive. Except as set forth in Section
\n1.5, nothing in this Agreement restricts a party153s right (a) to acquire,
\nlicense, develop for itself, or have others develop for it, software, content or
\ntechnology performing the same or similar functions as the software, content or
\ntechnology owned or furnished by another party (“competing
\ntechnology<\/strong>“), so long as it did so without violating this Agreement, or
\n(b) to market, distribute or otherwise exploit such competing technology.
\nWithout limiting the foregoing, Microsoft and its Affiliates may develop
\nalternate digital content consumption and authoring experiences on its own or
\nwith other companies and also has the unrestricted ability to work with other
\ncontent and application providers, including to enable digital content
\nexperiences to end users. For clarity, nothing in this Section 14.2 changes the
\nobligations or restrictions in Section 8.<\/p>\n<\/p>\n

14.3<\/strong> Independent Parties. <\/strong>The parties are
\nindependent contractors. This Agreement does not create, and should not be
\ninterpreted or construed as creating, any agency, partnership, joint venture,
\nfranchise, or employment relationship between the parties. No party has the
\nauthority to make any statements, representations or commitments of any kind or
\nto take any action binding on another party.<\/p>\n<\/p>\n<\/p>\n

14.4<\/strong> Notices. <\/strong>Except as otherwise agreed in
\nwriting by the parties, any notices given under this Agreement will be delivered
\neither by messenger or overnight delivery service, or sent by facsimile with a
\nconfirmation sent via certified or registered mail, postage prepaid and return
\nreceipt requested, addressed to the intended recipient as set forth below or as
\notherwise specified by notice given in accordance with this Section 14.4.
\nNotices will be deemed to have been given on the day when received by the party
\nto whom the notice is given:<\/p>\n<\/p>\n

26<\/p>\n

\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

To Microsoft:<\/strong><\/p>\n<\/td>\n

\n

To NewCo:<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

Microsoft Corporation<\/p>\n<\/td>\n

\n

[NewCo] LLC<\/p>\n<\/td>\n<\/tr>\n

\n

One Microsoft Way<\/p>\n<\/td>\n

\n

c\/o Barnes & Noble, Inc.<\/p>\n<\/td>\n<\/tr>\n

\n

Redmond, Washington 98052-6399<\/p>\n<\/td>\n

\n

122 Fifth Avenue<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

New York, NY 10011<\/p>\n<\/td>\n<\/tr>\n

\n

Attn: Peter Klein<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n\n

Chief Financial Officer<\/p>\n<\/td>\n

\n

Attn:<\/p>\n<\/td>\n

\n

Eugene V. DeFelice<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

Vice President, General Counsel & Secretary<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Facsimile No.: (425) 706-7329<\/p>\n<\/td>\n

\n

Facsimile No.: (212) 463-5683<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

With a Copy to:<\/strong><\/p>\n<\/td>\n

\n

With a Copy to:<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Simpson Thacher & Bartlett LLP<\/p>\n<\/td>\n

\n

Cravath, Swaine & Moore LLP<\/p>\n<\/td>\n<\/tr>\n

\n

425 Lexington Avenue<\/p>\n<\/td>\n

\n

Worldwide Plaza<\/p>\n<\/td>\n<\/tr>\n

\n

New York, NY 10017<\/p>\n<\/td>\n

\n

825 Eighth Avenue<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

New York, NY 10019<\/p>\n<\/td>\n<\/tr>\n

\n

Attn: Alan M. Klein, Esq.<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n\n

Attn:<\/p>\n<\/td>\n

\n

Scott A. Barshay, Esq.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

Andrew R. Thompson, Esq.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Facsimile No.: (212) 455-2502<\/p>\n<\/td>\n

\n

Facsimile No.: (212) 474-3700<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

27<\/p>\n

\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

To B&N:<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Barnes & Noble, Inc.<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

122 Fifth Avenue<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

New York, NY 10011<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Attn:<\/p>\n<\/td>\n

\n

Eugene V. DeFelice<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n\n

Vice President, General Counsel & Secretary<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
\n

Facsimile No.: (212) 463-5683<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
\n

With a Copy to:<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
\n

Cravath, Swaine & Moore LLP<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Worldwide Plaza<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

825 Eighth Avenue<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

New York, NY 10019<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Attn:<\/p>\n<\/td>\n

\n

Scott A. Barshay, Esq.<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n\n

Andrew R. Thompson, Esq.<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
\n

Facsimile No.: (212) 474-3700<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

14.5<\/strong> Dispute Resolution; Jurisdiction; and Governing
\nLaw.<\/strong> This Agreement and all disputes arising out of or related to this
\nAgreement will be governed by the laws of the State of New York, without
\nreference to conflict of laws principles. Any and all claims, lawsuits or
\ndisputes of any kind between the parties arising out of or relating to this
\nAgreement will be resolved in federal or state courts in the State of New York
\nwithin the Southern District of New York. Each party hereby waives any challenge
\nto the jurisdiction or venue of such courts over such claims, lawsuits or
\ndisputes. The rest of this Section notwithstanding, if and when applicable, each
\nparty will use (a) the Formal Escalation set forth in Exhibit B<\/strong>
\nbefore commencing any lawsuit against another party relating to this Agreement,
\nexcept as otherwise set forth in Section 3.3 of Exhibit B<\/strong>, and
\n(b) will use the Expedited Arbitration process only where expressly so provided
\nherein or in Exhibit B<\/strong>. Nothing will limit the right of a
\nparty, however, to seek a temporary restraining order or other provisional
\nremedy to preserve the status quo or to prevent irreparable harm. In the event
\nthat discovery or any other materials in connection with any Expedited
\nArbitration are subject to seal or confidentiality or protective order, each
\nparty will be entitled to designate up to two in-house attorneys who will be
\nentitled to have access to such materials, subject to reasonable confidentiality
\nprovisions to prevent disclosure to party employees not entitled to such access,
\nwhich confidentiality provisions will be enforceable against such in-house
\nattorneys in such proceedings, including by sanctions for violation thereof;
\nprovided, however, such access would not extend to source code. The inclusion of
\nthe foregoing provision relating to access to confidential information by
\nin-house counsel in the context of Expedited Arbitration but not in the context
\nof any other claim, lawsuit or dispute of any kind arising out of or related to
\nthis Agreement shall not result in or be relied on as supporting any implication
\nthat similar access to confidential information by designated in-house counsel
\nwould or would not be appropriate in connection with any such other claim,
\nlawsuit or dispute.<\/p>\n<\/p>\n

28<\/p>\n

\n

\n<\/p>\n

14.6<\/strong> Attorneys153 Fees.<\/strong> If a party employs
\nattorneys to enforce any rights arising out of or relating to this Agreement,
\nthe prevailing party will be entitled to recover its reasonable attorneys153 fees,
\ncosts and other expenses, including the costs and fees incurred on appeal or in
\na bankruptcy or similar action.<\/p>\n<\/p>\n<\/p>\n

14.7<\/strong> Assignment.<\/strong> Neither NewCo nor B&N
\nmay assign this Agreement, or any rights or obligations hereunder, except with
\nMicrosoft153s express written consent or to an Affiliate in connection with an
\nInitial Public Offering (as defined in the NewCo LLC Agreement) of NewCo or an
\nIssuer or a “Qualified Distribution” in the NewCo LLC Agreement. Any attempted
\nassignment in violation of this section will be void. Subject to the foregoing
\nrestriction on assignments by NewCo and B&N, this Agreement will be binding
\non, inure to the benefit of, and be enforceable by the parties and their
\nrespective successors and assigns.<\/p>\n<\/p>\n

14.8<\/strong> Waivers. <\/strong>A party153s delay or failure to
\nexercise any right or remedy will not result in a waiver of that or any other
\nright or remedy. Failure by a party to enforce any provision of this Agreement
\nwill not be deemed a waiver of future enforcement of that provision.<\/p>\n<\/p>\n<\/p>\n

14.9<\/strong> Invalid Provisions.<\/strong> If any term of
\nthis Agreement or the application thereof is found by a court of competent
\njurisdiction to be in whole or in part invalid or unenforceable, then (a) the
\ninvalidity or unenforceability will not affect other terms or applications of
\nthis Agreement, (b) the remainder of this Agreement will continue in effect so
\nlong as the Agreement still expresses the intent of the parties, and (c) the
\nparties will engage in good faith efforts to discover and implement a means of
\neffectuating the intent of the parties in accordance with applicable laws.<\/p>\n<\/p>\n<\/p>\n

14.10<\/strong> Construction. <\/strong>As used in this
\nAgreement, (i) the words “include” and “including” and variations thereof, will
\nnot be deemed to be terms of limitation, but rather will be deemed to be
\nfollowed by the words “without limitation,” (ii) unless the context otherwise
\nrequires, the word “or” shall be deemed to be an inclusive “or” and shall have
\nthe meaning equivalent to “and\/or.”<\/p>\n<\/p>\n<\/p>\n

14.11<\/strong> Order of Precedence.<\/strong> In the event of
\nany direct conflict between any terms and conditions of this Agreement and any
\nterms and conditions of any Exhibit or other document referenced in this
\nAgreement, the terms and conditions of this Agreement will prevail over those of
\nany such Exhibit or other document, but solely to the extent of such conflict.
\n[***] Further, the requirements of this Agreement are in addition to the
\nrequirements of any other document or agreement referenced in this Agreement,
\nand such other documents and agreements will not be construed to abrogate,
\ndiminish or amend in any way any of the requirements of this Agreement (for
\nexample, if an action is permitted by such other document or agreement and
\neither required or prohibited by this Agreement, then such action will be
\nrequired or prohibited as set forth in this Agreement).<\/p>\n<\/p>\n<\/p>\n

14.12<\/strong> No Third Party Beneficiaries.<\/strong> This
\nAgreement is for the benefit of the parties and their Affiliates only, and will
\nbe enforceable by the parties and their Affiliates only. No action may be
\ncommenced or prosecuted against a party by any third party claiming as a
\nthird-party beneficiary of this Agreement.<\/p>\n<\/p>\n<\/p>\n

14.13<\/strong> Counterparts and Facsimile.<\/strong> This
\nAgreement may be executed on facsimile copies or in counterparts, each
\ncounterpart of which will be deemed an original and all of which together will
\nconstitute one and the same Agreement. In the event that any signature is
\ndelivered by facsimile transmission or by e-mail delivery of a “.pdf” format
\ndata file, such signature shall create a valid and binding obligation of the
\nparty executing (or on whose behalf such signature is executed) with the same
\nforce and effect as if such facsimile or “.pdf” signature page were an original
\nthereof. Notwithstanding the foregoing, if requested by a party, the other
\nparties will deliver original executed copies of this Agreement to such
\nrequesting party as soon as practicable following execution thereof.<\/p>\n<\/p>\n

29<\/p>\n

\n

\n<\/p>\n

14.14<\/strong> Entire Agreement. <\/strong>This Agreement,
\ntogether with the Related Agreements, constitutes the entire agreement between
\nthe parties with respect to the subject matter hereof and supersedes all prior
\nor contemporaneous communications regarding such subject matter, whether written
\nor oral, including any prior letters of intent or term sheets, including the
\nSettlement Discussion Agreement dated July 12, 2011. This Agreement may not be
\nmodified except by a written agreement dated subsequent to the date of this
\nAgreement and signed by an authorized representative of the party against whom
\nsuch modification is sought to be enforced.<\/p>\n<\/p>\n

14.15<\/strong> Compliance with Laws.<\/strong> Each party will
\ncomply with applicable laws in its performance under this Agreement, including
\nNewCo complying with the Digital Millennium Copyright Act (DMCA) safe harbor
\nnotice and takedown requirements. To the extent a party believes that performing
\nan obligation under this Agreement may not comply with applicable laws, it will
\nnotify the other party, and the parties will engage in good faith efforts to
\ndiscover and implement a mechanism to meet such obligation in accordance with
\napplicable laws.<\/p>\n<\/p>\n<\/p>\n

[Signature Page Follows]<\/p>\n

\n

30<\/p>\n

\n

\n<\/p>\n

This Commercial Agreement is entered into by the parties as of the date first
\nwritten above.<\/p>\n<\/p>\n\n\n\n\n\n\n
\n

Barnes & Noble, Inc.<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

Signature: \/s\/ Eugene V. DeFelice<\/p>\n<\/td>\n<\/tr>\n

\n

Name: Eugene V. DeFelice<\/p>\n<\/td>\n<\/tr>\n

\n

Title: Vice President, General Counsel & Secretary<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

[Signature Page to the Commercial Agreement<\/em>]<\/p>\n

\n

\n<\/p>\n\n\n\n\n\n\n
\n

Microsoft Corporation<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

Signature: \/s\/ Steven A. Ballmer<\/p>\n<\/td>\n<\/tr>\n

\n

Name: Steven A. Ballmer<\/p>\n<\/td>\n<\/tr>\n

\n

Title: Chief Executive Officer<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

[Signature Page to the Commercial Agreement<\/em>]<\/p>\n

\n

\n<\/p>\n

Exhibit A<\/strong><\/p>\n

\n<\/p>\n

Definitions<\/strong><\/p>\n

\n<\/p>\n

“Advance”<\/strong> has the meaning set forth in Section 7.2.1.<\/p>\n<\/p>\n<\/p>\n

“Affiliate”<\/strong> means any legal entity that controls, is
\ncontrolled by, or is under common control with a party, whether directly or
\nindirectly (e.g., through successive tiers of control). For purposes of the
\nforegoing and Section 1.5, an entity controls another entity if it beneficially
\nowns more than 50% of the equity or voting interests of such entity or if it has
\nthe right to direct the management of the entity. An entity is an Affiliate for
\nonly so long as such control exists. However, notwithstanding the foregoing, for
\npurposes of this Agreement, neither NewCo nor any entity that is directly or
\nindirectly controlled by NewCo will be considered an “Affiliate” of B&N; and
\nneither B&N nor any entity that directly or indirectly controls, is
\ncontrolled by, or is under common control with B&N and that is not
\ncontrolled by NewCo will be considered to be an “Affiliate” of NewCo for
\npurposes of this Agreement.<\/p>\n<\/p>\n<\/p>\n

“App Developer Agreement”<\/strong> means the applicable version of
\nMicrosoft153s then-current Windows Store Application Developer Agreement, the
\ncurrent pre-release version of which is currently located at
\nhttp:\/\/msdn.microsoft.com\/en-us\/library\/windows\/apps\/hh694058.aspx<\/u>.<\/p>\n<\/p>\n<\/p>\n

“App Localization Condition”<\/strong> has the meaning set forth in
\nSection 5.2.<\/p>\n<\/p>\n<\/p>\n

“Application Provider Agreement”<\/strong> means the applicable
\nversion of Microsoft153s then-current Windows Phone Marketplace Application
\nProvider Agreement, the current version of which is currently located at
\nhttp:\/\/create.msdn.com\/downloads\/?id=638<\/u>?.<\/p>\n<\/p>\n<\/p>\n

“Bankruptcy Event”<\/strong> means that NewCo:<\/p>\n<\/p>\n<\/p>\n

(a) suffers or permits the appointment of a trustee or receiver for all or a
\nsubstantial portion of its assets, unless such appointment is vacated or
\ndismissed within 60 days from the date of such appointment;<\/p>\n<\/p>\n<\/p>\n

(b) files a petition as a debtor under any provision of the U.S. Bankruptcy
\nCode or any state or other law relating to insolvency;<\/p>\n<\/p>\n<\/p>\n

(c) has any such petition filed against it, unless such petition and all
\nrelated proceedings are dismissed within 90 days of such filing;<\/p>\n<\/p>\n<\/p>\n

(d) is judged insolvent or bankrupt; or<\/p>\n<\/p>\n<\/p>\n

(e) makes a general assignment for the benefit of creditors, formally admits
\nin writing its inability to pay its debts when due, or ceases generally to pay
\nits debts when due.<\/p>\n<\/p>\n<\/p>\n

“B&N Store” <\/strong>means the online bookstore for Content
\noffered by B&N prior to transfer to NewCo at www.bn.com.<\/p>\n<\/p>\n<\/p>\n

“Closing”<\/strong> has the meaning in the Investment Agreement.<\/p>\n<\/p>\n

32<\/p>\n

\n

\n<\/p>\n

“Confidential Information” <\/strong>has the meaning in the NDA, as
\nsupplemented by Section 9.2.<\/p>\n<\/p>\n<\/p>\n

“Consumption Condition”<\/strong> has the meaning set forth in Section
\n5.3.<\/p>\n<\/p>\n<\/p>\n

“Consumption Experiences”<\/strong> means an end user experience that
\nincludes at least the capability to render, read, highlight, bookmark, designate
\n“last page read” and annotate Content.<\/p>\n<\/p>\n<\/p>\n

“Content”<\/strong> means Reading Content and other digital content.\n<\/p>\n<\/p>\n<\/p>\n

“Contract Year”<\/strong> means a period of one year commencing on the
\nLaunch Date or an anniversary of the Launch Date, as applicable.<\/p>\n<\/p>\n<\/p>\n

“Core Geo Commercial Content Condition”<\/strong> has the meaning set
\nforth in Section 5.4.<\/p>\n<\/p>\n<\/p>\n

“Core Geo Trade Book Condition”<\/strong> has the meaning set forth in
\nSection 5.4.<\/p>\n<\/p>\n<\/p>\n

“Critical Geos”<\/strong> means [***].<\/p>\n<\/p>\n<\/p>\n

“Customer Data”<\/strong> means, as of a date, the following data, in
\neach case to the extent such data exists and is in NewCo153s possession as of such
\ndate, for end users who have accessed the NewCo Store through a NewCo App or
\nMicrosoft Product or Service that uses NewCo APIs as contemplated by Section 3:
\n(a) purchase data (including data about the Content in the NewCo Store accessed
\nby such end users such as ISBN, title and author); and (b) reading data (e.g.,
\nhow much of a given Content item has been read, annotations to that Content,
\nword look up and reviews), which data shall be provided in zip file or CSV
\nformat.<\/p>\n<\/p>\n<\/p>\n

“Deposit Materials”<\/strong> means the NewCo App Materials, NewCo
\nStore Materials, Customer Data and Publisher Data deposited with the Escrow
\nAgent under Section 11.6 or the Escrow Agreement; provided, that any other
\nSource Code or data included in backup copies of Source Code and data files
\ndeposited with the Escrow Agent and eliminated or redacted by NewCo as
\ncontemplated in Section 11.6(d) shall not be Deposit Materials.<\/p>\n<\/p>\n<\/p>\n

“Dismissal”<\/strong> has the meaning set forth in Section 3.5 of the
\nPatent Agreement.<\/p>\n<\/p>\n<\/p>\n

“Effective Date”<\/strong> has the meaning set forth in Section 1.8.\n<\/p>\n<\/p>\n<\/p>\n

“E-Reading Assets”<\/strong> means the assets of the following
\nbusiness as conducted by B&N prior to Closing: the Digital Business as
\ndefined in the Investment Agreement, which includes the Nook device business and
\nthe online bookstore business comprising the provision of Reading Content
\nincluded in the B&N Store.<\/p>\n<\/p>\n<\/p>\n

“Escrow Agreement” <\/strong>has the meaning set forth in Section
\n11.6.<\/p>\n<\/p>\n<\/p>\n

“Existing Microsoft Products and Services<\/strong>” means any
\nMicrosoft Product or Service that has been commercially released or of which a
\nbeta has been released and which provides the relevant functionality as of (a)
\nthe date the NewCo SLA came into effect or (b) in the event of a Bankruptcy
\nEvent, the date the conditions for a Bankruptcy Event are met.<\/p>\n<\/p>\n

33<\/p>\n

\n

\n<\/p>\n

“Expedited Arbitration”<\/strong> means: (a) for disputes about
\nroyalty payments under the Patent Agreement, the Royalty Arbitration Processes
\nset forth in Exhibit C of the Patent Agreement; and (b) for other disputes under
\nthis Agreement for which Expedited Arbitration is required, the arbitration
\nprocess set forth in Section 4 of Exhibit B<\/strong> of this Agreement.\n<\/p>\n<\/p>\n<\/p>\n

“Escrow Agent” <\/strong>has the meaning set forth in Section 11.6.\n<\/p>\n<\/p>\n<\/p>\n

“[***] Net Revenue”<\/strong> has the meaning set forth in Section
\n7.1.<\/p>\n<\/p>\n<\/p>\n

“Force Majeure”<\/strong> means any: act of God; act or omission of
\nany governmental, regulatory, civil or military authority; embargo or blockade;
\ncivil disturbance; war, invasion or other hostilities (whether war is declared
\nor not); terrorism or terrorist threats; fire, flood, earthquake, severe storms,
\nexplosion or casualty; employee strike or other labor disturbance; or
\ninterruption or shortage of electric, gas or other utility service.<\/p>\n<\/p>\n<\/p>\n

“Formal Escalation”<\/strong> has the meaning set forth in Section 3
\nof Exhibit B<\/strong>.<\/p>\n<\/p>\n<\/p>\n

“Geo”<\/strong> means a country or other geographical area that NewCo
\nand Microsoft listed as “Geos” in Exhibit C<\/strong> hereto and as
\notherwise mutually agreed in writing.<\/p>\n<\/p>\n<\/p>\n

“Governance Process”<\/strong> means the process set forth in attached
\nExhibit B.<\/strong><\/p>\n<\/p>\n<\/p>\n

“ID”<\/strong> means an identification (currently known as a Windows
\nLive ID) associated with a consumer in the Microsoft ID System.<\/p>\n<\/p>\n<\/p>\n

“Initial Commercial Geos”<\/strong> has the meaning set forth in
\nSection 5.4(a).<\/p>\n<\/p>\n<\/p>\n

“Intellectual Property Rights”<\/strong> means any and all rights,
\nwhether registered or unregistered, existing from time to time under patent law,
\ncopyright law, moral rights law, trade secret law, trademark law, and any and
\nall other similar proprietary rights, as well as any and all applications,
\nrenewals, extensions, divisionals, continuations, restorations and
\nre-instatements thereof, now or hereafter in force and effect worldwide.<\/p>\n<\/p>\n<\/p>\n

“Investment Agreement”<\/strong> means the Investment Agreement dated
\nas of April 27, 2012 between B&N, Microsoft Investment Holdings, Inc. and
\nMicrosoft.<\/p>\n<\/p>\n<\/p>\n

“law<\/strong>” means any applicable supranational, Federal, national,
\nstate, provincial or local statute, law (including common law), ordinance, rule
\nor regulation of any governmental entity.<\/p>\n<\/p>\n<\/p>\n

“Launch Date”<\/strong> means the date when the first version of the
\nNewCo Windows App is made commercially available in the Windows Store in
\naccordance with Section 2.1.1.<\/p>\n<\/p>\n<\/p>\n

“Liquidation Event”<\/strong> means NewCo: (a) commences a liquidation
\nof all or substantially all of its assets (other than through a Bankruptcy
\nEvent); (b) ceases to carry on all or substantially all of its digital device
\nand content business; or (c) formally announces that it intends to liquidate all
\nor substantially all of its assets or to wind down its business.<\/p>\n<\/p>\n

34<\/p>\n

\n

\n<\/p>\n

“Material Commercial Content Agreements”<\/strong> means, for a given
\nGeo, agreements with NewCo such that the NewCo Store includes at least [***].\n<\/p>\n<\/p>\n<\/p>\n

“Material Trade Book Agreements<\/strong>” means, for a given Geo,
\nagreements with NewCo such that the NewCo Store includes at least [***].<\/p>\n<\/p>\n<\/p>\n

“Microsoft Commerce Platform”<\/strong> means a set of infrastructure,
\nprocesses, and contractual relationships to enable the processing, management
\nand handling of transactions by end-users as well as the billing, remittance and
\ncheck-out services developed and offered by Microsoft as described in Section 4
\nand the Microsoft Commerce Platform Terms.<\/p>\n<\/p>\n<\/p>\n

“Microsoft Commerce Platform Terms”<\/strong> has the meaning set
\nforth in Section 4.3.<\/p>\n<\/p>\n<\/p>\n

“Microsoft ID System”<\/strong> means Microsoft153s service (currently
\nknown as Windows Live ID) for consumers to sign into accounts, services and
\nwebsites.<\/p>\n<\/p>\n<\/p>\n

“Microsoft Material Default”<\/strong> means a failure by Microsoft to
\nmake any payment required under Section 7 when due, if (a) not cured or disputed
\nby Microsoft within 45 days after written notice of such failure from NewCo or
\n(b) the payment is disputed by Microsoft within 45 days after written notice of
\nsuch failure from NewCo, but then only to the extent such payment obligation is
\nupheld in a final ruling in an Expedited Arbitration and Microsoft subsequently
\nfails to pay the upheld amount within 45 days after such ruling. For the
\navoidance of doubt, the expiration of this Agreement by its terms in accordance
\nwith Section 10.1 will not constitute a Microsoft Material Default.<\/p>\n<\/p>\n<\/p>\n

“Microsoft Products and Services”<\/strong> means Microsoft products
\nand services designed to interact with Content from the NewCo Store and
\nannotations to Content. For the avoidance of doubt, Microsoft Products and
\nServices do not include the Microsoft Commerce Platform or the NewCo Apps,
\nregardless of whether they are distributed in connection with or as part of
\nMicrosoft Products and Services.<\/p>\n<\/p>\n<\/p>\n

“Microsoft Service Maintenance Toolkit” <\/strong>means a copy that is
\ncomplete and accurate (in all material respects as to (c) and (d)) of the
\nfollowing, in each case, as of the most current date reasonably practicable
\nprior to the relevant date: (a) the NewCo App Materials; (b) the NewCo Store
\nMaterials; (c) the Customer Data; and (d) the Publisher Data.<\/p>\n<\/p>\n<\/p>\n

“Microsoft SLA”<\/strong> means a commitment from Microsoft that it
\nwill, upon NewCo153s request and throughout the Transition Period:<\/p>\n<\/p>\n<\/p>\n

(a) continue enabling any then-existing level of use of the Microsoft
\nCommerce Platform by NewCo and, subject to Microsoft153s strategy with respect to
\nMicrosoft Products and Services, any existing level of integration of the NewCo
\nStore into Microsoft Products and Services, for purposes of end users (i)
\npurchasing additional Reading Content in the NewCo Store and (ii) using the
\nPublishing Services Platform to create accounts, upload Reading Content for
\npurposes of distribution and sale of that Reading Content in the NewCo Store and
\nreceive payment from purchasers of that Reading Content; and<\/p>\n<\/p>\n

35<\/p>\n

\n

\n<\/p>\n

(b) continue enabling NewCo153s then-existing level of use of the Microsoft ID
\nSystem with the NewCo Store and NewCo Apps.<\/p>\n<\/p>\n<\/p>\n

During the Microsoft SLA period during the Term, such transactions will be
\nsubject to the revenue sharing provisions in Section 7. During the Microsoft SLA
\nperiod after the Term, at NewCo153s election, either (i) the Microsoft SLA will be
\nprovided subject to the revenue sharing provisions in Section 7, or (ii) such
\ntransactions effected through the Microsoft Commerce Platform will be subject to
\nthe standard charge for the Microsoft Commerce Platform.<\/p>\n<\/p>\n<\/p>\n

“NDA”<\/strong> means the Microsoft Corporation Non-Disclosure
\nAgreement between Microsoft, NewCo, and B&N with an effective date of no
\nlater than the Effective Date.<\/p>\n<\/p>\n<\/p>\n

“Net Revenue”<\/strong> means:<\/p>\n<\/p>\n<\/p>\n

(a) gross revenue from any sales, subscriptions or other acquisitions of
\nContent purchased from NewCo and its Affiliates by customers using the NewCo
\nWindows App, the NewCo Phone App or Microsoft Products and Services (which for
\nthe avoidance of doubt for purposes of this definition and Section 7 does not
\ninclude browsers), irrespective of which party completes the transaction giving
\nrise to such Net Revenue; less<\/p>\n<\/p>\n<\/p>\n

(b) the sum of (i) any licensing or other fees payable by NewCo or Microsoft
\nfor the specific acquisition of such Content (regardless of whether such fees
\nare paid by the Microsoft Commerce Platform or by NewCo outside of the Microsoft
\nCommerce Platform plus (ii) transaction fees including credit card fees (and
\nother billing mechanism fees), chargebacks by credit card networks or financial
\ninstitutions and foreign exchange transaction fees incurred by either NewCo,
\nMicrosoft or any Affiliate of NewCo or Microsoft for processing payments for
\nsuch Content plus (iii) commissions and similar amounts (but not including any
\nadvertising or marketing expenses) payable to third parties in connection with
\nsales or use by end users of such Content.<\/p>\n<\/p>\n<\/p>\n

For the avoidance of doubt, gross revenue will be determined exclusive of any
\ntaxes and will not, for example, be (A) reduced by any withholding taxes
\nwithheld with respect to any amount payable to the billing party or any income
\ntaxes or other taxes imposed by law on the billing party arising in connection
\nwith any transaction entered into between the billing party and its customers or
\n(B) increased by any sales tax, VAT or other transaction taxes that the billing
\nparty collects from its customers.<\/p>\n<\/p>\n<\/p>\n

“NewCo APIs”<\/strong> has the meaning set forth in Section 3.2.<\/p>\n<\/p>\n<\/p>\n

“NewCo Apps”<\/strong> means all versions of the NewCo Windows App and
\nNewCo Phone App distributed by NewCo or its Affiliates, including updates
\nthereto.<\/p>\n<\/p>\n

36<\/p>\n

\n

\n<\/p>\n

“NewCo App Materials”<\/strong> means, as of a date, the Source Code
\nand user interfaces (UIs) as of such date to all versions of the NewCo Windows
\nApp and NewCo Phone App (excluding trademarks) that have been made commercially
\navailable prior to such date, along with associated development and build tools,
\nall in a format sufficient to enable a reasonably skilled programmer to utilize
\nand read the NewCo App Materials.<\/p>\n<\/p>\n<\/p>\n

“NewCo LLC Agreement”<\/strong> means the Amended and Restated Limited
\nLiability Company Agreement of NewCo entered into pursuant to the Investment
\nAgreement.<\/p>\n<\/p>\n<\/p>\n

“NewCo Material Default”<\/strong> means the occurrence of any of the
\nfollowing:<\/p>\n<\/p>\n<\/p>\n

(a) the Launch Date does not occur before [***], unless such failure is due
\nto failure to obtain certification for distribution through the Windows Store
\ndue to Microsoft153s unreasonably withholding or delaying certification for the
\nNewCo Windows App, in which event the [***] deadline will be extended by the
\nperiod of Microsoft153s unreasonable withholding or delaying of such
\ncertification;<\/p>\n<\/p>\n<\/p>\n

(b) NewCo fails to satisfy the Core Geo Trade Book Condition before [***];\n<\/p>\n<\/p>\n<\/p>\n

(c) due to an action or failure to act by NewCo,<\/p>\n<\/p>\n<\/p>\n

(i) the NewCo Store is unavailable for purchasing or consuming (reading,
\nannotating, etc.) Reading Content,<\/p>\n<\/p>\n<\/p>\n

(ii) the Publishing Services Platform is unavailable for publishing Reading
\nContent, or<\/p>\n<\/p>\n<\/p>\n

(iii) the NewCo APIs are unavailable for publishing, purchasing, or consuming
\n(reading, annotating, etc.) Reading Content where such unavailability materially
\nnegatively impacts the author or publisher153s publishing experience, the user153s
\npurchasing experience, or the user153s consuming experience, respectively,<\/p>\n<\/p>\n<\/p>\n

where such service or NewCo APIs, as applicable, had previously been
\ncommercially available, for an aggregate total number of hours representing
\n[***], at any time following the Launch Date (but excluding unavailability due
\nto Force Majeure) [***] on the condition that either:<\/p>\n<\/p>\n<\/p>\n

37<\/p>\n

\n

\n<\/p>\n<\/p>\n

(A) Microsoft is shipping [***] a beta or later release of Microsoft Products
\nand Services that have the capability to publish to, purchase, or consume
\n(including read or annotate) Reading Content from the NewCo Store using the
\nNewCo APIs (where such tools are using the NewCo APIs that were unavailable); or\n<\/p>\n<\/p>\n<\/p>\n

(B) [***];<\/p>\n<\/p>\n<\/p>\n

(d) due to an action or failure to act by NewCo, the NewCo Windows App is
\nunavailable in the Windows Store, for an aggregate total number of hours
\nrepresenting [***], at any time following the Launch Date (but excluding
\nunavailability due to Force Majeure) [***]; or<\/p>\n<\/p>\n<\/p>\n

(e) Patent Obligor fails to pay any Patent Royalty when due (i.e. within
\n[***] days after Microsoft153s invoice in accordance with the Patent Agreement)
\nand<\/p>\n<\/p>\n<\/p>\n

(i) Patent Obligor has not cured or disputed (i.e., by giving Microsoft
\nwritten notice thereof) such default within [***] days after Microsoft provides
\nNewCo or the Patent Obligor with written notice of such default; or<\/p>\n<\/p>\n<\/p>\n

(ii) Patent Obligor disputes such default by giving Microsoft written notice
\nthereof within [***] days after Microsoft provides NewCo or the Patent Obligor
\nwritten notice of such default, then only to the extent such default is upheld
\nin a final ruling in Expedited Arbitration under the Patent Agreement and the
\nPatent Obligor subsequently fails to pay the upheld amount within [***] days
\nafter such ruling; or<\/p>\n<\/p>\n<\/p>\n

(iii) in the event of a bankruptcy or similar proceeding involving Patent
\nObligor, the payment obligation is repudiated or otherwise voided by a court or
\nsome or all of the material rights and obligations of the parties are nullified
\nfor reasons other than as a result of non-performance by one of the parties.<\/p>\n<\/p>\n<\/p>\n

In the case of any unavailability described in (c) or (d) above is due to an
\ninjunction or restraining order obtained by a third party on the basis of a
\nclaim of infringement of Intellectual Property Rights by the relevant NewCo
\nsoftware or service, then, (x) upon NewCo153s request, Microsoft will reasonably
\ncooperate with NewCo in NewCo153s efforts to design around such claimed
\ninfringement, and (y) so long as NewCo is in good faith striving to have such
\norder dissolved or vacated or to design around the claimed infringement, the
\neffect of such unavailability will be to<\/p>\n<\/p>\n<\/p>\n<\/p>\n

38<\/p>\n

\n

\n<\/p>\n

(A) entitle Microsoft to defer any of its payment obligations or other
\nobligations coming due during such unavailability, and<\/p>\n<\/p>\n<\/p>\n

(B) if such unavailability continues for a period of one year, such
\nunavailability will constitute a NewCo Material Default.<\/p>\n<\/p>\n<\/p>\n

If any event in (a) through (d) is caused by Microsoft failing to comply with
\nits obligations under this Agreement, such event will not be deemed a NewCo
\nMaterial Default. For the avoidance of doubt, the expiration of this Agreement
\nby its terms in accordance with Section 10.1 will not constitute a NewCo
\nMaterial Default.<\/p>\n<\/p>\n<\/p>\n

“NewCo Phone App”<\/strong> means an application for Windows Phone
\nthat includes functionality and user experiences for both Consumption
\nExperiences and acquisition of Reading Content (e.g., from the NewCo Store).<\/p>\n<\/p>\n<\/p>\n

“NewCo SLA” <\/strong>means a commitment from NewCo that it will, upon
\nrequest of Microsoft, allow Microsoft and its Subsidiaries to do the following
\nthroughout the Transition Period:<\/p>\n<\/p>\n<\/p>\n

(a) make all Reading Content purchased through the NewCo Store by an end user
\n(together with associated data thereto including any annotations by such end
\nuser), where the end user has accessed any of such Reading Content using a
\nWindows device, available for consumption (reading, annotating, etc.) by such
\nend user through the NewCo Store through any of the Existing Microsoft Products
\nand Services or any of the NewCo Apps;<\/p>\n<\/p>\n<\/p>\n

(b) if any of the Microsoft Products and Services integration scenarios
\ndescribed in Section 3 are enabled in any of the Existing Microsoft Products and
\nServices, make Content in the NewCo Store published using any such Microsoft
\nProducts and Services available to the end user who published such Content
\n(together with associated data thereto including any annotations by such end
\nuser); and<\/p>\n<\/p>\n<\/p>\n

(c) enable end users to (i) purchase and consume (reading, annotations, etc.)
\nadditional Reading Content in the NewCo Store and (ii) upload Reading Content
\nfor purposes of distribution and sale of that Reading Content in the NewCo Store
\nand receipt of payment from purchasers of that Reading Content, in each of (i)
\nand (ii) using the NewCo Apps and each of the Existing Microsoft Products and
\nServices that access the NewCo Store and\/or use any NewCo APIs. Such purchases
\nduring the Term will be subject to the revenue share described in Section 7.
\nSuch purchases after the Term will be subject to, at NewCo153s election, either
\n(A) the revenue share described in Section 7 or (B) if effected through the
\nMicrosoft Commerce Platform, the standard charges for the Microsoft Commerce
\nPlatform.<\/p>\n<\/p>\n

39<\/p>\n

\n

\n<\/p>\n

The NewCo SLA will be provided at no additional charge.<\/p>\n<\/p>\n<\/p>\n

“NewCo Store”<\/strong> means the online bookstore through which NewCo
\noffers customers the ability to purchase, consume (read, annotate, etc.) and\/or
\npublish Reading Content as a service for client devices and applications (and
\nwhich, prior to transfer to NewCo, and other than those which have not been
\ntransferred due to any applicable third-party consents not having been received,
\nwas the B&N Store).<\/p>\n<\/p>\n<\/p>\n

“NewCo Store Materials”<\/strong> means, as of a date, the Source Code
\nand user interfaces (UIs) elements as of such date to all versions of the
\nwebsite for the NewCo Store (excluding trademarks) that have been made
\ncommercially available prior to such date, along with detailed information about
\nthe backend systems used by NewCo to operate the website, all in a format
\nsufficient to enable a reasonably skilled programmer to utilize and read the
\nNewCo Store Materials.<\/p>\n<\/p>\n<\/p>\n

“NewCo Study Application”<\/strong> means the Nook Study application
\ncurrently available at nookstudy.com and updates and successors thereto that
\nprovide similar functionality.<\/p>\n<\/p>\n<\/p>\n

“NewCo Windows App”<\/strong> means a metro-style application for
\nWindows OS that includes functionality and user experiences for both Consumption
\nExperiences and acquisition of Reading Content (e.g., from the NewCo Store). For
\nthe avoidance of doubt, the NewCo Windows App is not a browser application for
\npurposes of the revenue share set forth in Section 7.<\/p>\n<\/p>\n<\/p>\n

“Non-Renewal”<\/strong> means the parties do not extend or renew the
\nTerm pursuant to Section 11.2.<\/p>\n<\/p>\n<\/p>\n

“Patent Agreement”<\/strong> means the Confidential Settlement and
\nPatent License Agreement, dated on or about the Effective Date, to which
\nMicrosoft and B&N are party.<\/p>\n<\/p>\n<\/p>\n

“Patent Obligor”<\/strong> has the meaning set forth in Section 7.5.1.\n<\/p>\n<\/p>\n<\/p>\n

“Patent Royalty”<\/strong> means any royalty payable to Microsoft
\nunder the Patent Agreement.<\/p>\n<\/p>\n<\/p>\n

“Priority Geos”<\/strong> means [***].<\/p>\n<\/p>\n<\/p>\n

[***]<\/p>\n<\/p>\n<\/p>\n

[***]<\/p>\n<\/p>\n<\/p>\n

“Publish Condition”<\/strong> has the meaning set forth in Section
\n5.1.<\/p>\n<\/p>\n<\/p>\n

“Publisher Data”<\/strong> means, as of a date, data, to the extent
\nsuch data exists and is in NewCo153s possession as of such date, about publishers
\nfor Content they provide for the NewCo Store (e.g. contact information for
\ncommercial publishers, publishers using the Publishing Services Platform,
\nauthors that publish to the NewCo Store through Microsoft Products and Services,
\nassociation of Content with publishers, annotation of Content associated with
\nsuch publishers, but excluding any data that is subject to limitation on
\ntransfers or sharing of such data in any agreements with publishers or digital
\ncontent agreements), which data shall be provided in zip file or CSV format.
\nNewCo will work in good faith with publishers and Microsoft to (a) obtain
\nprovisions in agreements entered into with publishers after the Effective Date
\nto permit enabling such transfer or sharing, or (b) avoid provisions in such
\nagreements entered into with publishers after the Effective Date which prohibit
\nsuch transfers or sharing.<\/p>\n<\/p>\n

40<\/p>\n

\n

\n<\/p>\n

“Publishing Services Platform”<\/strong> means NewCo153s web-based
\nportal that allows an end user to create an account, upload Reading Content for
\npurposes of distribution and sale of that Reading Content in the NewCo Store and
\nreceive payment from purchasers of that Reading Content.<\/p>\n<\/p>\n<\/p>\n

“Reading Content”<\/strong> means electronic books, magazines,
\nnewspapers, periodicals, comic books, children153s books and other reading and
\nreading-related content.<\/p>\n<\/p>\n<\/p>\n

“Region<\/strong>” means one of the following sets of Geos: [***].<\/p>\n<\/p>\n<\/p>\n

“Related Agreements”<\/strong> means the Investment Agreement, Patent
\nAgreement, App Developer Agreement, Application Provider Agreement and NDA and
\nany other agreements between or among NewCo, Microsoft, B&N and any of their
\nrespective Affiliates entered into in connection with the transactions
\ncontemplated herein or therein.<\/p>\n<\/p>\n<\/p>\n

“[***] Net Revenue”<\/strong> has the meaning set forth in Section
\n7.1.<\/p>\n<\/p>\n<\/p>\n

“Source Code”<\/strong> means computer software program instructions
\nthat are translated by a compiler, interpreter or assembler into object or
\nbinary code for execution on a computer, together with all developer comments
\nand annotations relating to such program instructions, in either case, that are
\nincluded therein.<\/p>\n<\/p>\n<\/p>\n

“Subsidiary”<\/strong> means, with respect to any person, another
\nperson, an amount of the voting securities, other voting rights or voting
\npartnership interests of which is sufficient to elect at least a majority of its
\nboard of directors or other governing body (or, if there are no such voting
\ninterests, more than 50% of the equity interests of which) is owned directly or
\nindirectly by such first person. However, notwithstanding the foregoing, for
\npurposes of this Agreement, neither NewCo nor any entity that is directly or
\nindirectly controlled by NewCo will be considered a “Subsidiary” of B&N or
\nany entity that directly or indirectly controls, is controlled by, or is under
\ncommon control with B&N (other than NewCo and its Subsidiaries).<\/p>\n<\/p>\n<\/p>\n

“Term”<\/strong> has the meaning set forth in Section 11.1.<\/p>\n<\/p>\n<\/p>\n

“Transition Period”<\/strong> means a period of time beginning on (i)
\nthe date that Microsoft requests that NewCo provide the NewCo SLA pursuant to
\nSection 11.5.3(b), or (ii) in the event of a Bankruptcy Event, the date the
\nconditions for a Bankruptcy Event are met, and ending on the later of (a) 2
\nyears later or (b) the end of the Term had this Agreement not been terminated
\nearly.<\/p>\n<\/p>\n<\/p>\n

“Windows-Based PC”<\/strong> means a personal computer, desktop
\ncomputer, laptop, tablet, or slate that runs the Windows OS.<\/p>\n<\/p>\n

41<\/p>\n

\n

\n<\/p>\n

“Windows Core Languages”<\/strong> means [***].<\/p>\n<\/p>\n<\/p>\n

“Windows Device” <\/strong>means a Windows-Based PC or a Windows
\nPhone.<\/p>\n<\/p>\n<\/p>\n

“Windows OEM Image” <\/strong>means [***].<\/p>\n<\/p>\n<\/p>\n

“Windows OS”<\/strong> means the Windows 8 (both x86 and ARM) client
\noperating system and any future releases, versions and successors, including any
\nbug fixes, service packs, upgrades and updates.<\/p>\n<\/p>\n<\/p>\n

“Windows Phone” <\/strong>means a mobile device running the Windows
\nPhone Software.<\/p>\n<\/p>\n<\/p>\n

“Windows Phone Software”<\/strong> means (a) the successor to
\nMicrosoft153s Windows Phone 7.5 operating system software for mobile phones that
\nis currently code-named “Apollo,” and (b) any future versions and successors,
\nincluding any bug fixes, service packs, upgrades and updates.<\/p>\n<\/p>\n<\/p>\n

“Windows Store Terms of Use”<\/strong> means the applicable version of
\nMicrosoft153s then-current Windows Store terms of use, the current, pre-release
\nversion of which is currently located at
\nhttp:\/\/windows.microsoft.com\/en-us\/windows\/store-terms-of-use.<\/p>\n<\/p>\n<\/p>\n

“Windows Store”<\/strong> means the Internet-based feature of Windows
\nOS that provides a marketplace for the promotion and distribution of
\napplications for use with Windows OS.<\/p>\n<\/p>\n<\/p>\n

“WP Marketplace”<\/strong> means the platform (however named,
\nconsisting of a client application on Windows Phone, a web-based application
\n(currently available at www.windowsphone.com<\/u>), and an internet-based
\nservice) operated by Microsoft or its Affiliates through which applications,
\ngames, and related content may be acquired by end users for Windows Phones.<\/p>\n<\/p>\n

42<\/p>\n

\n

\n<\/p>\n

Exhibit B<\/strong><\/p>\n

\n<\/p>\n

Governance Processes<\/strong><\/p>\n

\n<\/p>\n

1. Governance Model<\/strong><\/p>\n<\/p>\n<\/p>\n

1.1 Executive Sponsor and Relationship Managers<\/strong><\/p>\n<\/p>\n<\/p>\n\n\n\n
<\/td>\n\n

1.1.1<\/strong><\/p>\n<\/td>\n

\n

Executive Sponsor Role.<\/strong> Within 30 days after the Effective
\nDate, Microsoft, NewCo and B&N will each designate one senior executive
\n(“Executive Sponsor”<\/strong>) who will have broad responsibility for
\npromoting the success of the collaboration under this Agreement and authority to
\nserve as an escalation point for any disagreements that may arise between
\nMicrosoft and one or both of the other parties under this Agreement.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

1.1.2<\/strong><\/p>\n<\/td>\n

\n

Relationship Manager Role. <\/strong>Within 30 days after the
\nEffective Date, Microsoft, NewCo and B&N will each designate one person who
\nwill be responsible for (a) providing guidance and support for the
\nimplementation of this Agreement, (b) coordinating and monitoring the overall
\nperformance of the party that they represent under this Agreement, and (c)
\nmanaging the relationship between the companies as it pertains to the activities
\ncontemplated under this Agreement (each a “Relationship
\nManager”<\/strong>).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

1.1.3<\/strong><\/p>\n<\/td>\n

\n

Meeting Frequency<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

The Executive Sponsors will meet in person or by telephone conference, as
\nneeded, but not less than once per quarter during the Term (unless mutually
\nagreed otherwise), to discuss the status of the parties153 activities under this
\nAgreement. In person meetings will default to alternate locations in New York
\nand Redmond, unless mutually agreed otherwise.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

The Relationship Managers will meet more frequently, as they deem
\nappropriate, to coordinate the parties153 execution against the objectives of this
\nAgreement.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

1.2<\/strong><\/p>\n<\/td>\n

\n

Contract Management Office<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

1.2.1<\/strong><\/p>\n<\/td>\n

\n

Individual Subject Matter Leads. <\/strong>Within 30 days after the
\nEffective Date, Microsoft153s, NewCo153s and B&N153s Relationship Managers will
\neach establish a Contract Management Office (or similar organization)
\n(“CMO”<\/strong>) with staff responsible for overseeing the progress
\nrelated to the successful execution of the activities contemplated under this
\nAgreement. Each of the Relationship Managers will assign staff on its CMO to
\nsupport the functional areas under this Agreement (each person a
\n“Functional Lead”<\/strong>).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

1.2.2<\/strong><\/p>\n<\/td>\n

\n

Pairing and Meeting Frequency. <\/strong>The Relationship Managers
\nwill work to pair the Functional Leads by function, and the Functional Leads
\nwill meet regularly with each other to promote a successful implementation of
\nthe activities under this Agreement. The CMO teams from each company will also
\nmeet collectively on a regular basis as a Joint Operating Team for the
\ncollaborations under this Agreement to review progress across all areas.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

43<\/p>\n

\n

\n<\/p>\n\n\n\n
\n

2.<\/strong><\/p>\n<\/td>\n

\n

Technical Roadmap and Review Process<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

2.1<\/strong><\/p>\n<\/td>\n

\n

Review Meetings. <\/strong>Throughout the Term, weekly until the
\nLaunch Date and not less frequently than quarterly thereafter, the parties will
\nmeet to discuss:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

(a) requests by a party for product updates, enhancements, improvements and
\nchanges to the services or applications provided by another party under this
\nAgreement;<\/p>\n<\/p>\n<\/p>\n

(b) progress against development and launch plans for applications and
\nservices (including the achievement of the Launch Date and any other release
\ndates or any delays encountered or anticipated in the progress toward the Launch
\nDate or any other release date);<\/p>\n<\/p>\n<\/p>\n

(c) implementation of the requirements in Section 2.4 and any exceptions
\nthereto in Sections 2.4.1 and 2.4.2, including the [***] requirements for the
\nNewCo Windows App, [***] and how NewCo can enhance the NewCo Windows App to
\nexploit the features and functionality available through the Windows OS;<\/p>\n<\/p>\n<\/p>\n

(d) [***];<\/p>\n<\/p>\n<\/p>\n

(e) the Microsoft Products and Services integration scenarios described in
\nSection 3;<\/p>\n<\/p>\n<\/p>\n

(f) the progress of the implementation of Geo expansion, including the
\nprogress and results of negotiations with specific publishers and Material
\nCommercial Content Agreements and Material Trade Book Agreements generally, but
\nwithout any obligation to disclose the specifics of any such Material Commercial
\nContent Agreements or Material Trade Book Agreements, including the counterparty
\nthereunder;<\/p>\n<\/p>\n<\/p>\n

(g) implementation of the requirements in Section 6.3; and<\/p>\n<\/p>\n<\/p>\n

(h) such other matters relating to the implementation and performance of
\nservices and applications under this Agreement as a party may desire to discuss.\n<\/p>\n<\/p>\n<\/p>\n

The Relationship Managers and applicable Functional Leads will coordinate and
\nfacilitate such meetings, including appropriate other staff as needed.<\/p>\n<\/p>\n<\/p>\n\n\n\n
<\/td>\n\n

2.2<\/strong><\/p>\n<\/td>\n

\n

Escalation<\/strong>. If the parties are unable to reach agreement as
\nto any matter submitted for discussion in the quarterly review meetings under
\nSection 2.1 above, then a party may escalate the matter using Formal Escalation.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

3.<\/strong><\/p>\n<\/td>\n

\n

Formal Escalation of Issues Pertaining to Services<\/strong>. The
\nparties will use the following process (“Formal Escalation”<\/strong>)
\nfor resolving disputes under this Agreement:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

44<\/p>\n

\n

\n<\/p>\n\n\n\n
<\/td>\n\n

3.1<\/strong><\/p>\n<\/td>\n

\n

Resolution by Relationship Managers.<\/strong> The parties153
\nRelationship Managers will negotiate to resolve all disputes in good faith. If
\nthe parties153 Relationship Managers do not resolve the dispute within 15 business
\ndays (or such longer period as agreed by the parties) after commencement of
\nnegotiations to resolve such dispute, then either party may escalate the dispute
\n(such escalation, the “Formal Executive Escalation”<\/strong>) and a
\nmutually agreed list of the unresolved disputes between the parties (such
\nissues, the “Disputed Issues”<\/strong>) to the Executive Sponsors.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

3.2<\/strong><\/p>\n<\/td>\n

\n

Resolution by Executive Sponsors.<\/strong> The parties153 Executive
\nSponsors will negotiate to resolve any escalated dispute in good faith.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

3.3<\/strong><\/p>\n<\/td>\n

\n

Exclusions from Formal Escalation. <\/strong>Formal Escalation does
\nnot apply to or limit the right of a party (a) to seek a temporary restraining
\norder or other provisional remedy to preserve the status quo or to prevent
\nirreparable harm, (b) to exercise its termination rights under the Agreement, or
\n(c) to submit a dispute about whether the conditions exist for the Escrow Agent
\nto release the Deposit Materials to Microsoft (including whether NewCo has
\nfailed to cure any material noncompliance with the NewCo SLA).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n\n
\n

4.<\/strong><\/p>\n<\/td>\n

\n

Expedited Arbitration of Certain Disputes<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

4.1<\/strong><\/p>\n<\/td>\n

\n

Arbitral Disputes<\/strong>. Any of the following disputes between
\nMicrosoft and NewCo (each, an “Arbitral Dispute”<\/strong>) may be
\nsubmitted to arbitration under this Section 4: (a) any dispute relating to
\nSection 7.2.2 or Section 7.3 (to the extent relating to Section 7.2.2); (b) any
\ndispute regarding any failure or alleged failure by Microsoft to make any
\npayment for purposes of determining any Microsoft Material Default based on any
\nsuch failure; (c) any dispute about whether the conditions exist for the Escrow
\nAgent to release the Deposit Materials to Microsoft or for NewCo to provide
\nMicrosoft Service Maintenance Toolkit to Microsoft (including whether NewCo has
\nfailed to cure any material noncompliance with the NewCo SLA); or (d) a dispute,
\nsubmitted by NewCo pursuant to Sections 10.3 or 11.5.1, about whether a
\nLiquidation Event has occurred. No other disputes between the parties may be
\nsubmitted to arbitration under this Section 4, except as otherwise agreed.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

4.2<\/strong><\/p>\n<\/td>\n

\n

Good Faith Negotiations<\/strong>. In the event of any Arbitral
\nDispute described under 4.1(a) or (b) above, a party may initiate this process
\nby providing written notice to the other party. Within 20 calendar days of the
\ndate such notice is received by the other party, the parties will meet and
\ndiscuss in good faith to resolve such dispute. If the dispute is not resolved in
\nsuch meeting, each party will within 20 days deliver to the other party a
\ndetailed memorandum setting forth its positions and the contractual and factual
\nanalysis therefor. Within 20 calendar days following exchange of such memoranda,
\nthe parties will meet again in an attempt to resolve their disagreements.
\nThereafter, either party may serve a notice of arbitration. The provisions of
\nthis Section 4.2 do not apply to an Arbitral Dispute as described in Section
\n4.1(c).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

45<\/p>\n

\n

\n<\/p>\n\n\n\n
<\/td>\n\n

4.3<\/strong><\/p>\n<\/td>\n

\n

Submission to Arbitration.<\/strong> If the parties are unable to
\nresolve any Arbitral Dispute pursuant to Section 4.2, or in the case of an
\nArbitral Dispute as described in Section 4.1(c), the parties agree to
\nexclusively settle such dispute by binding arbitration administered by JAMS Inc.
\n(“JAMS”)<\/strong> in accordance with the JAMS Comprehensive Arbitration
\nRules and Procedures (“JAMS Rules”<\/strong>) and the Expedited
\nProcedures set out in Section 16.2 thereof, subject to the provisions of this
\nSection 4.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

4.4<\/strong><\/p>\n<\/td>\n

\n

Selection of Arbitrator.<\/strong> The arbitration will be held before
\n1 neutral arbitrator for such proceedings appointed in accordance with the JAMS
\nRules, or as otherwise agreed by the parties. The arbitrator will not be a
\ncurrent or former employee, agent, consultant or representative of any party or
\nany of its Affiliates.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

4.5<\/strong><\/p>\n<\/td>\n

\n

Proceedings.<\/strong> Any arbitration hearing will be held in San
\nFrancisco, California. Discovery will be limited to that which is relevant to
\nthe dispute and material to the outcome as agreed upon by the parties or,
\nfailing such agreement, as determined by the arbitrator, and will be conducted
\npursuant to the Expedited Procedures set out in Rule 16.2 of the JAMS Rules,
\nfurther provided that: (i) the parties will complete an informal exchange of all
\nrelevant non-privileged documents, information, and names of their own witnesses
\nthey intend to call within 14 calendar days after the service of a notice of
\narbitration; (ii) each party may conduct up to 3 discovery depositions; (iii)
\nthe arbitrator may require a party to provide information to assist in the
\nidentification of appropriate custodians for purposes of a search for responsive
\nelectronic documents; (iv) the results of any audit conducted under or related
\nto this Agreement (including any audit under Section 7.8 and any internal audit
\nconducted by or behalf of NewCo or Microsoft) will be admissible in such
\narbitration; (v) the parties to the arbitration will agree on shorter periods
\nfor discovery cut-offs and the commencement of the hearing; and (vi) in all
\nrespects, the parties to the arbitration will use good faith efforts to expedite
\na ruling on the dispute as quickly as possible. Each party will be entitled to
\ndesignate up to two in-house attorneys who will be entitled to have access to
\nconfidential information produced by the opposing party in any such Expedited
\nArbitration, subject to reasonable confidentiality provisions to prevent
\ndisclosure to party employees not entitled to such access, which confidentiality
\nprovisions shall be enforceable against such in-house attorney; provided,
\nhowever, such access would not extend to source code. All proceedings and
\nsubmissions will be in English. The inclusion of the foregoing provision
\nrelating to access to confidential information by in-house counsel in the
\ncontext of Expedited Arbitration but not in the context of any other claim,
\nlawsuit or dispute of any kind arising out of or related to this Agreement shall
\nnot result in or be relied on as supporting any implication that similar access
\nto confidential information by designated in-house counsel would or would not be
\nappropriate in connection with any such other claim, lawsuit or dispute.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

4.6<\/strong><\/p>\n<\/td>\n

\n

Decision. <\/strong>Any arbitration decision will be final and binding
\non the parties, and will not be subject to any appeal or proceeding to vacate,
\nexcept on the grounds set forth in the Federal Arbitration Act, 9 U.S.C. 1
\net seq<\/em>. The award rendered by the arbitrators may be entered into any
\ncourt having jurisdiction, or application may be made to such court for judicial
\nacceptance of the award and an order of enforcement, as the case may be. Such
\ncourt proceeding will disclose only the minimum amount of information concerning
\nthe arbitration as is required to obtain such acceptance or order.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

46<\/p>\n

\n

\n<\/p>\n\n\n\n
<\/td>\n\n

4.7<\/strong><\/p>\n<\/td>\n

\n

Costs. <\/strong>The arbitrators153 fees and the administrative expenses
\nof the arbitration will be paid equally by the parties, and each party will pay
\nits own costs and expenses (including attorneys153 fees) in connection with the
\narbitration.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

4.8<\/strong><\/p>\n<\/td>\n

\n

Confidentiality of Proceeding. <\/strong>Except as required by law, no
\nparty or the arbitrator may disclose the existence, content or results of the
\narbitration. The dispute resolution set forth in this Section will supersede any
\nother dispute resolution provisions in this Agreement with respect to Arbitral
\nDisputes described in Section 4.1, except that before initiating dispute
\nresolution under this Section 4, the parties will first comply with Formal
\nEscalation (except as otherwise allowed under Section 3.3 of this
\nExhibit B<\/strong>).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

47<\/p>\n

\n

\n<\/p>\n

Exhibit C<\/strong><\/p>\n

\n<\/p>\n

Geo Expansion and Localization Schedule<\/strong><\/p>\n

\n<\/p>\n

1. In accordance with Sections 5.1 and 5.6, Geos for Publishing Services
\nPlatform and corresponding languages with respect to localization of the
\nPublishing Services Platform (including languages supported for Content
\nsubmitted through the Publishing Services Platform):<\/p>\n<\/p>\n<\/p>\n\n\n\n\n
\n

Geos<\/strong><\/p>\n<\/td>\n

\n

Languages<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

[***]<\/p>\n<\/td>\n

\n

[***]<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n<\/p>\n

2. Subject to Section 5.2 and in accordance with Section 5.6, the languages
\nwith respect to localization of the NewCo Windows App:<\/p>\n<\/p>\n<\/p>\n\n\n\n
\n

[***]<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n<\/p>\n

3. The countries and regions treated as “Geos” for purposes of this Agreement
\nshall initially include<\/p>\n<\/p>\n<\/p>\n\n\n\n
\n

[***]<\/strong><\/p>\n<\/td>\n

\n

[***]<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n<\/p>\n

48<\/p>\n

\n

\n<\/p>\n

Exhibit D<\/strong><\/p>\n

\n<\/p>\n

[***]<\/strong><\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n

49<\/p>\n

\n

\n<\/p>\n

Exhibit E<\/strong><\/p>\n

\n<\/p>\n

Microsoft Commerce Platform Terms<\/strong><\/p>\n

\n<\/p>\n

The following Microsoft Commerce Platform Terms (“Commerce
\nTerms<\/strong>“) shall serve as the terms and conditions governing NewCo153s use
\nof the Microsoft Commerce Platform. The parties will negotiate in good faith and
\nenter into further agreement and details to expound and further detail the
\nrights and obligations of the parties in a manner consistent with these Commerce
\nTerms in the Microsoft Commerce Platform Agreement (the “Commerce
\nPlatform Agreement<\/strong>“) no later than June 1, 2012, which terms will be
\nbased upon standard terms required of merchants under applicable law and Network
\nRules and will be consistent with this Exhibit E<\/strong>. Such terms
\nand conditions shall at a minimum reflect this Exhibit E<\/strong> and
\notherwise shall not be inconsistent with the provisions of the Agreement. These
\nCommerce Terms will apply whenever NewCo uses the Microsoft Commerce Platform to
\nprocess commerce transactions, including in-application payment processing, or
\nmake payment to Publishers (defined below) in accordance with the Agreement. The
\nCommerce Terms will be incorporated by reference into the Agreement. Sections in
\nthe Commerce Terms will be designated with “CT” to distinguish Commerce Terms
\nsections from sections of the Agreement.<\/p>\n<\/p>\n<\/p>\n<\/p>\n

Terms<\/strong><\/p>\n

\n<\/p>\n\n\n\n\n
\n

1)<\/strong><\/p>\n<\/td>\n

\n

Additional Definitions. <\/strong>In addition to the terms defined in
\nExhibit A<\/strong> of the Agreement and in the body of the Agreement,
\nand for purposes of the Commerce Terms and the Agreement, the terms below will
\nhave the following meanings:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

a)<\/p>\n<\/td>\n

\n

“Affiliated Merchant<\/strong>” means an Affiliate of NewCo authorized
\nto submit Transactions and Reconciliations through the Microsoft Commerce
\nPlatform.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n\n
<\/td>\n\n

b)<\/p>\n<\/td>\n

\n

“Card<\/strong>” means any valid credit or signature debit card issued
\nby a financial institution member of a Network and bearing such Network153s marks.\n<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

c)<\/p>\n<\/td>\n

\n

“Card Transaction<\/strong>” means any payment or credit Transaction
\nthat is made by use of a Card or Card number.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
<\/td>\n\n

d)<\/p>\n<\/td>\n

\n

“Chargeback<\/strong>” means any circumstances where Card issuers,
\nCard Networks or any financial institution either refuses to settle a
\nTransaction or demands payment from Microsoft in respect of a disputed
\nTransaction that has been settled or in respect of which remittance has been
\nmade to the Payout Entity.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

e)<\/p>\n<\/td>\n

\n

“Chargeback Fees<\/strong>” shall have the meaning set forth in
\nSection CT8(b)(ii)(2)(a).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

f)<\/p>\n<\/td>\n

\n

“Network<\/strong>” means Visa or MasterCard or other Card Networks,
\nlike American Express or Discover.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

50<\/p>\n

\n

\n\n\n\n\n
<\/td>\n\n

g)<\/p>\n<\/td>\n

\n

“Network Rules<\/strong>” means the bylaws, rules, regulations and
\nother requirements issued by the respective Networks from time to time, as
\napplicable to a party.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

h)<\/p>\n<\/td>\n

\n

“Other Payment Method<\/strong>” means a payment method (other than
\nCards) specified by Microsoft, from time to time.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
<\/td>\n\n

i)<\/p>\n<\/td>\n

\n

“Payout Entity<\/strong>” means NewCo or an Affiliate of NewCo as
\ndesignated by NewCo or Publisher as provided in Section CT 7, as applicable.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

j)<\/p>\n<\/td>\n

\n

“Publisher<\/strong>” means a person or entity that controls
\npublishing rights with respect to specific Content provided for the NewCo Store.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
<\/td>\n\n

k)<\/p>\n<\/td>\n

\n

“Reconciliation<\/strong>” means a Chargeback, Refund, Representation,
\nor Retro-Charge.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

l)<\/p>\n<\/td>\n

\n

“Refund<\/strong>” means a payment made to wholly or partially reverse
\na Transaction.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
<\/td>\n\n

m)<\/p>\n<\/td>\n

\n

“Representation<\/strong>” means a transaction to reverse a Chargeback
\nby the re-execution of the original transaction, where the Chargeback is
\nsuccessfully challenged.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

n)<\/p>\n<\/td>\n

\n

“Retro-Charge<\/strong>” means a transaction initiated to reverse a
\nRefund to which the end user was not entitled.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
<\/td>\n\n

o)<\/p>\n<\/td>\n

\n

“Segregated Accounts<\/strong>” has the meaning set forth in Section
\nCT12(a).<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

p)<\/p>\n<\/td>\n

\n

“Settlement Account<\/strong>” has the meaning set forth in Section
\nCT12(b).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
<\/td>\n\n

q)<\/p>\n<\/td>\n

\n

“Transaction<\/strong>” means any payment by an end user, on a
\none-time or recurring basis for Content purchased by an end user from NewCo or
\nPublishers, using either:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

i)<\/p>\n<\/td>\n

\n

a Card, a Card number or a Card account; or<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n\n
<\/td>\n\n

ii)<\/p>\n<\/td>\n

\n

any Other Payment Method.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

r)<\/p>\n<\/td>\n

\n

“Transaction Personal Data<\/strong>” means personal data which it is
\nnecessary to provide or to process in connection with Transactions and
\nReconciliations, including name, Card numbers, account numbers, PINs and billing
\naddresses, in each case, solely to the extent such information is subject to
\nNetwork Rules and applicable security and privacy standards related thereto.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

2)<\/strong><\/p>\n<\/td>\n

\n

Microsoft Commerce Platform : Scope of Use. <\/strong>NewCo will use
\nthe Microsoft Commerce Platform as and to the extent provided in the Agreement.\n<\/p>\n<\/td>\n<\/tr>\n

\n

3)<\/strong><\/p>\n<\/td>\n

\n

Role and Appointment of Microsoft. <\/strong>In order to use the
\nMicrosoft Commerce Platform, NewCo appoints Microsoft Corporation and its
\nAffiliates (for purposes of these Commerce Terms, collectively
\n“Microsoft<\/strong>“), provided that Microsoft Corporation will be
\njointly and severally liable for the performance of its Affiliates under these
\nCommerce Terms, to act on behalf of NewCo as NewCo153s agent (or for purposes of
\nthe European Union or any other jurisdiction in which NewCo and Microsoft shall
\nmutually agree, as NewCo153s commissionaire), as applicable, for the following
\npurposes (as specified in the Agreement and these Commerce Terms):<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

51<\/p>\n

\n

\n<\/p>\n\n\n\n
<\/td>\n\n

a)<\/p>\n<\/td>\n

\n

to process Transactions and Reconciliations,<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n<\/p>\n\n\n\n
<\/td>\n\n

b)<\/p>\n<\/td>\n

\n

to receive and remit proceeds from the Transactions, and<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n<\/p>\n\n\n\n\n\n
<\/td>\n\n

c)<\/p>\n<\/td>\n

\n

to discharge the end user tax obligation.<\/p>\n<\/td>\n<\/tr>\n

\n

4)<\/strong><\/p>\n<\/td>\n

\n

Rights and Obligations of the Parties. <\/strong>Microsoft and NewCo
\nshall each have duties and obligations consistent and in compliance with the
\nrights and obligations imposed on a merchant under (i) the Network Rules, (ii)
\napplicable law, and (iii) applicable local tax regimes, with respect to the
\nprocessing and handling of Transactions, Reconciliations and any other
\nrequirement imposed by the Network Rules on merchants. The parties expressly
\nacknowledge that Microsoft has no right or discretion to determine or set the
\nprice for the Content.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n\n
\n

5)<\/strong><\/p>\n<\/td>\n

\n

Third Party Relationships.<\/strong> On an ongoing basis, the parties
\nwill review in detail and discuss in good faith any third party relationships
\nwith payment processors and financial institutions that may require NewCo or any
\nof its Affiliated Merchants to enter into a contractual relationship with such
\nparties as required by applicable law and Network Rules. Microsoft and NewCo
\nwill work together in good faith to minimize such requirements and reasonably
\nmitigate NewCo153s costs and expenses in establishing and managing such
\nrelationships.<\/p>\n<\/td>\n<\/tr>\n

\n

6)<\/strong><\/p>\n<\/td>\n

\n

Payment Methods Available to NewCo.<\/strong> Microsoft shall offer
\nand make available to purchasers of NewCo Content the same payment methods and
\ninstruments available and offered on the Windows Store. As Microsoft continues
\nto expand the types of payment methods made available to customers on the
\nWindows Store, it will provide NewCo with a reasonable advance notice of such
\nexpansion and the parties shall discuss in good faith any concerns or issues
\nrelating to the acceptance of such additional Card or Other Payment Method.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

7)<\/strong><\/p>\n<\/td>\n

\n

Remittance to Payout Entities.<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

a)<\/p>\n<\/td>\n

\n

Calculation. <\/strong>Microsoft will calculate and remit to the
\nPayout Entities any amounts owed to the Payout Entities under the Agreement and
\nin accordance with CT12. Microsoft is not responsible for delay, loss or
\nmisapplication of funds resulting from or related to incorrect or incomplete
\ninformation that the Payout Entities provide to Microsoft or for failure of a
\nbank to credit the Payout Entity153s accounts, provided that Microsoft has
\nproperly instructed such bank. The Payout Entity must provide Microsoft with all
\nfinancial, tax and banking information needed to make Transaction and
\nReconciliation payments.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

52<\/p>\n

\n

\n<\/p>\n\n\n\n\n
<\/td>\n\n

b)<\/p>\n<\/td>\n

\n

Remittance to Publishers; Microsoft Commerce Platform
\nTransactions<\/strong>. If NewCo elects, pursuant to Section 4.1.5 of the
\nAgreement, to have Microsoft facilitate payment to Publishers that are
\nassociated with Content, it must (1) facilitate and ensure that Publishers
\nacknowledge, in writing, the appointment of Microsoft as agent or commissionaire
\nof such Publishers for the purposes of payment processing and tax calculation
\nand withholding and (2) provide to Microsoft sufficient information relating to
\nsuch Publishers to enable Microsoft to process payments and remit funds to such
\nPublisher (which may be implemented through the terms of use) and appropriately
\ncalculate, apply and withhold applicable taxes.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

c)<\/p>\n<\/td>\n

\n

Remittance to Publishers; Non-Microsoft Commerce Platform
\nTransactions. <\/strong>The parties will agree to negotiate in good faith on the
\nconditions under which NewCo can elect to have Microsoft facilitate payments to
\nPublishers for purchases not processed through the Microsoft Commerce Platform
\nby the Existing User Base.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
<\/td>\n\n

d)<\/p>\n<\/td>\n

\n

Currency Remittance and Exchange.<\/strong> NewCo and Microsoft will
\nagree in good faith on how currency remittance and exchange will be handled in
\nvarious situations consistent with the following principles: (i) the parties
\nwill seek to minimize to the extent commercially reasonable foreign currency
\nconversion costs by minimizing foreign currency exchanges to the extent
\nreasonably practicable; (ii) such costs will be deducted in determining Net
\nRevenue in accordance with the definition thereof in the Agreement; and (iii)
\nconsiderations relating to NewCo153s relationships with Publishers will be taken
\ninto account in determining how to handle currency remittance and exchanges.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

e)<\/p>\n<\/td>\n

\n

Affiliated Merchants.<\/strong> NewCo must provide Microsoft adequate
\nwritten notice of NewCo153s intent to add any Affiliated Merchant. Such Affiliated
\nMerchant will be subject to the terms and conditions of the Agreement, and NewCo
\nwill be liable for all acts or omissions of the Affiliated Merchant in
\nconnection with the use of the Microsoft Commerce Platform. The parties will
\ndevelop in good faith mutually acceptable structures to allow payments of a
\nportion of the Revenue Share Service Fee by Affiliated Merchants.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

8)<\/strong><\/p>\n<\/td>\n

\n

Returns and Chargebacks; Offset.<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

a)<\/p>\n<\/td>\n

\n

Chargeback Rights.<\/strong> NewCo acknowledges that end users may
\nhave a Chargeback right under Network Rules (with respect to Card Transactions)
\nor any applicable law, and (if applicable) Microsoft has the right to pass
\nChargebacks to NewCo on an actual-cost basis, provided that to the extent the
\ncharges that are the subject of a Chargeback have been included in the
\ncalculation of Net Revenue in accordance with the definition thereof in the
\nAgreement such Chargeback will be deducted in determining Net Revenue in
\naccordance with the definition thereof in the Agreement. Chargebacks will be
\naddressed in the reporting and reconciliation process contemplated by the
\nAgreement.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

b)<\/p>\n<\/td>\n

\n

Excessive Chargebacks.<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

53<\/p>\n

\n

\n<\/p>\n\n\n\n
<\/td>\n\n

i)<\/p>\n<\/td>\n

\n

Microsoft will promptly notify NewCo in writing if any Chargeback rates for
\nthe relevant Chargeback period exceed a Network153s threshold for the ratio of
\nChargebacks to processed Card Transactions or if Microsoft anticipates that
\nChargebacks for future Chargeback periods will exceed such threshold. Microsoft
\nand NewCo will cooperate in good faith with the goal of reducing the incidence
\nof Chargebacks and avoiding Network Chargeback-related fees and fines.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

ii)<\/p>\n<\/td>\n

\n

If a financial institution or a Network notifies Microsoft or NewCo that
\nthere is an excessive amount of Chargebacks, as determined by the Network Rules,
\nNewCo agrees:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

(1)<\/p>\n<\/td>\n

\n

to comply with all requirements that may apply as a result of such excessive
\nChargebacks, provided that all costs of such compliance shall be deducted in
\ndetermining Net Revenue in accordance with the definition thereof in the
\nAgreement; and<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

(2)<\/p>\n<\/td>\n

\n

with respect to the excessive Chargebacks:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

NewCo will pay Microsoft an amount equal to all fees and fines assessed
\nagainst Microsoft, NewCo, or a financial institution (where applicable),
\nrelating to Card Transactions (“Chargeback Fees<\/strong>“); or<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

Microsoft shall deduct an amount equal to Chargeback Fees from and offset
\nsuch amounts against any funds due to NewCo for Transactions,<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

provided that all such Chargeback Fees shall be deducted in determining Net
\nRevenue in accordance with the definition thereof in the Agreement.<\/p>\n<\/p>\n<\/p>\n\n\n\n\n
\n

9)<\/strong><\/p>\n<\/td>\n

\n

General Obligations.<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

a)<\/p>\n<\/td>\n

\n

NewCo may submit Transactions to Microsoft, but will not utilize the
\nMicrosoft Commerce Platform except as contemplated by the Agreement.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
<\/td>\n\n

b)<\/p>\n<\/td>\n

\n

Except as set forth in the Agreement and in these Commerce Terms, Microsoft
\nreserves authority, on an ongoing basis, to determine how to operate and
\nimplement the Microsoft Commerce Platform generally. Microsoft will not
\nimplement rules for the Microsoft Commerce Platform targeted to NewCo that are
\nnot of general application to the Microsoft Commerce Platform.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

c)<\/p>\n<\/td>\n

\n

Microsoft shall notify and consult with NewCo on an ongoing basis regarding
\npotential and completed changes to the Microsoft Commerce Platform that could
\nmaterially impact NewCo153s use of the Microsoft Commerce Platform.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

d)<\/p>\n<\/td>\n

\n

Each party acknowledges and agrees that (1) Microsoft is not a bank or other
\nchartered depository institution, (2) funds held by Microsoft or its service
\nproviders (including any financial institutions) in connection with the
\nprocessing of Transactions or Reconciliations are not deposits, and (3) such
\nfunds are not insured for the benefit of NewCo.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

54<\/p>\n

\n

\n<\/p>\n\n\n\n\n
<\/td>\n\n

e)<\/p>\n<\/td>\n

\n

Microsoft has no responsibility to NewCo to investigate the background or
\nconfirm the identity of end users, except to the extent required by applicable
\nlaw, Network Rules (with respect to Card Transactions) or that Microsoft does so
\nfor its own transactions or otherwise under Microsoft153s own anti-fraud policies
\nand procedures.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

f)<\/p>\n<\/td>\n

\n

Notwithstanding the provisions of the Agreement regarding Chargebacks, as
\nbetween Microsoft and NewCo, NewCo is solely responsible for disputes with
\nrespect to the Content, unless such dispute is a result of an action or inaction
\nby Microsoft.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
<\/td>\n\n

g)<\/p>\n<\/td>\n

\n

NewCo will disclose its return\/cancellation policy in NewCo Store. If NewCo
\nallows returns, cancellations or price adjustments, NewCo will initiate a credit
\nwithin the period of time specified in the relevant Network Rules. Refunds will
\nnot exceed the total amount of the applicable Transaction. NewCo will not accept
\nany consideration in exchange for issuing a Refund. NewCo will not give cash
\nrefunds unless required by applicable law.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

h)<\/p>\n<\/td>\n

\n

Each party agrees to notify the other party promptly in the event that the
\nnotifying party discovers or detects any fraud or suspicious activity involving
\nany Transaction.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
<\/td>\n\n

i)<\/p>\n<\/td>\n

\n

The parties shall develop in good faith mutually acceptable reporting
\nstandards and mechanisms (including daily reconciliation files) with respect to
\nTransactions and Reconciliations processed through the Microsoft Commerce
\nPlatform.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

j)<\/p>\n<\/td>\n

\n

The parties shall develop in good faith mutually acceptable procedures for
\nNewCo to be involved in the resolution of Chargebacks and other related matters,
\nsuch as network fees and fines.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

10)<\/strong><\/p>\n<\/td>\n

\n

Merchant IDs. <\/strong>Microsoft will establish and maintain
\ndedicated merchant identification numbers (“MIDs<\/strong>“) for Card
\nTransactions on behalf of NewCo. The manner in which NewCo153s or the seller153s
\nname appear on the customer153s receipt or Card statement is subject to NewCo153s
\nreview and approval.<\/p>\n<\/td>\n<\/tr>\n

\n

11)<\/strong><\/p>\n<\/td>\n

\n

Interchange Fees. <\/strong>Microsoft is authorized to deduct any
\napplicable interchange fees and costs assessed against Microsoft by third
\nparties from any sales proceeds generated from the Transactions which deductions
\nshall be taken into account in determining Net Revenue in accordance with the
\ndefinition thereof in the Agreement. For purposes of Card Transactions, such
\ncompensation assumes that all applicable Card Transactions qualify under Network
\nRules for the lowest applicable interchange rates. Non-qualifying Card
\nTransactions may be subject to greater fees.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

12)<\/strong><\/p>\n<\/td>\n

\n

Bank Accounts.<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

55<\/p>\n

\n

\n<\/p>\n\n\n\n\n
<\/td>\n\n

a)<\/p>\n<\/td>\n

\n

Segregated Accounts<\/strong>. Microsoft will establish and maintain
\none or more segregated bank accounts (“Segregated Accounts<\/strong>“) to
\nhold funds settled and collected as a result of the Transactions,
\nRepresentments, or Retro-Charges.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

b)<\/p>\n<\/td>\n

\n

Settlement Account<\/strong>. The parties will establish in the
\nCommerce Platform Agreement the mechanism, the conditions and the process by
\nwhich a separate Settlement Account may be created, if necessary, during the
\ncourse of the engagement in order for Payout Entities to receive settlement
\nfunds from Microsoft for the deposit and settlement of funds. The Commerce
\nPlatform Agreement will be based on the following principles with respect to the
\nSettlement Account:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
<\/td>\n\n

(i)<\/p>\n<\/td>\n

\n

NewCo authorizes Microsoft to initiate electronic credit entries to the
\nSettlement Account in accordance with the Agreement.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(ii)<\/p>\n<\/td>\n

\n

Microsoft will not be liable for any delays in the receipt of funds or errors
\nin Settlement Account entries caused by NewCo or third parties.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
<\/td>\n\n

(iii)<\/p>\n<\/td>\n

\n

The proceeds paid to the Settlement Account will equal the amounts received
\nby Microsoft in respect of Transactions, less all chargebacks and other
\nReconciliations, fees, fines, penalties, and other applicable charges paid to
\nthird parties by Microsoft in accordance with the Commerce Terms and the
\nAgreement, Revenue Share Service Fees paid to Microsoft in accordance with the
\nAgreement and all taxes to be remitted by Microsoft under these Commerce Terms.\n<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(iv)<\/p>\n<\/td>\n

\n

Such amounts will be paid by Microsoft into the Settlement Account in
\nimmediately available funds on the date of Microsoft153s receipt of such funds and
\nshall give prompt electronic notice to NewCo of the initiation of any such
\ntransfer of funds, which shall include the amount and currency of the funds to
\nbe transferred.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n\n
<\/td>\n\n

(v)<\/p>\n<\/td>\n

\n

If the proceeds payable to the Settlement Account do not represent sufficient
\nfunds, or the Settlement Account lacks sufficient funds to pay amounts due
\nrelating to Transactions, Microsoft may pursue one or more options including:
\n(i) demanding and receiving from NewCo immediate payment; (ii) withholding
\nsettlement payments; and (iii) pursuing other remedies against NewCo at law or
\nin equity.<\/p>\n<\/td>\n<\/tr>\n

\n

13)<\/strong><\/p>\n<\/td>\n

\n

Fees\/Fines. <\/strong>All Network fees, fines, penalties and similar
\ncharges that are assessed against Microsoft or passed through to Microsoft by
\npayment processors or financial institutions, and that are attributable to
\nNewCo153s violation of the Agreement or Network Rules, or to excessive
\nChargebacks, will be payable by NewCo to Microsoft, in each case, on an
\nactual-cost basis, and such fees or fines shall be deducted in determining Net
\nRevenue in accordance with the definition thereof in the Agreement.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n<\/p>\n<\/p>\n

56<\/p>\n

\n

\n<\/p>\n<\/p>\n\n\n\n\n
\n

14)<\/strong><\/p>\n<\/td>\n

\n

Prohibited Transactions. <\/strong>NewCo will use the Microsoft
\nCommerce Platform only for the lawful, legitimate, bona fide sale of products
\nand services. Microsoft shall operate the Microsoft Commerce Platform in
\ncompliance with applicable law.<\/p>\n<\/td>\n<\/tr>\n

\n

15)<\/strong><\/p>\n<\/td>\n

\n

Responsibility for Taxes for Purchases and Reconciliations
\nTaxes.<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
<\/td>\n\n

a)<\/p>\n<\/td>\n

\n

Remittance Countries.<\/strong> Microsoft or its local affiliate will
\ncollect and, upon request by the Payout Entity, remit any applicable sales, use,
\ngoods and services, value added or similar taxes in the manner and in such
\ncountries in which Microsoft is permitted by applicable law to do so, the
\ncurrent list of such countries is provided as Attachment 1 (such countries, the
\n“Remittance Countries”<\/strong>). Microsoft will continue to use good
\nfaith and reasonable efforts to expand the list of Remittance countries as
\npermissible by Law, as it deems appropriate and prudent, and it will not remove
\ncountries from such list unless required to do so by a government authority or
\nby law. The Payout Entity will provide any information Microsoft requires for or
\nreasonably requests related to the collection and remittance of taxes in the
\nRemittance Countries. Provided that the Payout Entity timely complies with the
\npreceding sentence, Microsoft will defend, indemnify and hold NewCo and its
\naffiliates, vendors and agents harmless against any claims by any taxing
\nauthority in a Remittance Country based on any nonpayment or underpayment or any
\nfailure to properly report any sales, use, goods and services, value added or
\nother similar tax. This includes any associated penalties, additions to tax and
\ninterest.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

b)<\/p>\n<\/td>\n

\n

Non-Remittance Countries.<\/strong> NewCo and, if applicable,
\nPublishers are responsible for determining if they have an obligation to
\nregister, collect, and remit any taxes in any country other than the Remittance
\nCountries (each, a “Non-Remittance Country<\/strong>“) in which Content
\nis distributed pursuant to this Agreement. The Payout Entity must tell Microsoft
\nwhether taxes must be collected and remitted in those countries and provide
\nMicrosoft information sufficient to calculate those taxes. Those taxes must be
\nadded to the purchase price set for Content. Microsoft will collect (or cause to
\nbe collected) but will not remit to the applicable taxing authority such taxes
\n(as determined by the Payout Entity) from end users. Microsoft will remit (or
\ncause to be remitted) such taxes to the Payout Entity as part of the pay-out
\nprocess. The Payout Entities are responsible for payment and reporting of such
\ntaxes to the appropriate taxing authorities. NewCo will defend, indemnify and
\nhold Microsoft and its affiliates, vendors and agents harmless against any
\nclaims by any taxing authority in a Non-Remittance Country based on any
\nnonpayment or underpayment or any failure to properly report any sales, use,
\ngoods and services, value added or other similar tax. This includes any
\nassociated penalties, additions to tax and interest. If an end user in a
\nNon-Remittance Country reverses the purchase or the Transaction is subject to
\nchargeback, the total amount refunded to the end user, including any previously
\ncollected taxes remitted to the Payout Entity, and any withholding taxes
\napplicable to the refund or chargeback, will be deducted from amounts owed to
\nthe respective Payout Entity.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

c)<\/p>\n<\/td>\n

\n

Set Off.<\/strong> In the event that any price payable by any end user
\nfor any of the Content is subject to any (i) withholding or similar tax; or (ii)
\nother tax or other government levy of any nature, with the exception of sales,
\nuse, goods and services, value added or other transaction taxes that Microsoft
\nwas requested to collect under Section 15(a) or told to collect under Section
\n15(b), the full amount of that tax or levy shall be solely against the Payout
\nEntity153s account.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

57<\/p>\n

\n

\n\n\n\n\n
<\/td>\n\n

d)<\/p>\n<\/td>\n

\n

Additional Information.<\/strong> Certain tax authorities require
\nMicrosoft to disclose additional information to the Payout Entity with respect
\nto sales tax. Microsoft will provide additional information to the Payout
\nEntities electronically relating to such disclosure.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

e)<\/p>\n<\/td>\n

\n

Reporting.<\/strong> Microsoft will report to the Payout Entity all
\nsales and tax collection information necessary for the filing of applicable
\nsales, use, goods and services, value added or similar tax returns within a
\nreasonable period of time as agreed by the parties.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

16)<\/strong><\/p>\n<\/td>\n

\n

Technical Integration.<\/strong> NewCo and Microsoft will cooperate in
\ngood faith to develop a technical integration plan to enable NewCo153s use of the
\nMicrosoft Commerce Platform, including any service level agreements associated
\nwith systems uptime, accessibility and connectivity. Such technical integration
\nplan will address the APIs that NewCo has access to in connection with its use
\nof the Microsoft Commerce Platform.<\/p>\n<\/td>\n<\/tr>\n

\n

17)<\/strong><\/p>\n<\/td>\n

\n

Technical Support\/Customer Service.<\/strong> Microsoft and NewCo will
\ndevelop in good faith mutually acceptable end user service and issue resolution
\nmechanisms and consult regularly on the implementation of, and any proposed
\nchanges to, such mechanisms with the goal of providing a coordinated customer
\nexperience with respect to resolving any such issues relating to purchases
\nthrough the Microsoft Commerce Platform. These mechanisms will reflect the fact
\nthat Microsoft has responsibility for payment-related matters and that NewCo has
\nresponsibility for Content-related matters.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

18)<\/strong><\/p>\n<\/td>\n

\n

Data Collection, Retention and Disclosure. <\/strong>In addition to
\nSection 8 of the Agreement, the following terms shall apply to transactional
\ndata collected by the Microsoft Commerce Platform:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

a)<\/p>\n<\/td>\n

\n

Transactional Personal Data<\/strong>. Microsoft will only provide the
\nPayout Entities with access to any Transactional Personal Data relating to
\npurchases on the Microsoft Commerce Platform to the extent permitted by
\napplicable law and Network Rules and privacy and security standards imposed on
\nmerchants under similar circumstances. All data that Microsoft has or collects
\nthrough the Microsoft Commerce Platform in connection with NewCo153s use of the
\nMicrosoft Commerce Platform as contemplated hereunder shall be subject to
\nSection 8 of the Agreement.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

b)<\/p>\n<\/td>\n

\n

Security<\/strong>. NewCo and Microsoft will provide and maintain
\nreasonable security measures with respect to their services, facilities, systems
\nand networks, which will be at least as rigorous as the security measures
\nrequired by applicable law and Network Rules (with respect to Card Transactions)
\nto prevent unauthorized access to and use of Transactional Personal Data.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

58<\/p>\n

\n

\n\n\n\n\n
<\/td>\n\n

c)<\/p>\n<\/td>\n

\n

PCI Standards.<\/strong> With respect to Card Transactions, each Party
\nwill comply with applicable Payment Card Institute security standards, including
\n“PCI DSS<\/strong>” and “PCI Payment Application DSS<\/strong>,”
\nwhich are required to be implemented under the Network Rules.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

d)<\/p>\n<\/td>\n

\n

Incident Response.<\/strong> If Transaction information stored by
\nMicrosoft or NewCo is lost, stolen or otherwise compromised, the party whose
\nsystem has been affected will (1) give written notice of such loss, theft or
\ncompromise to the other party promptly upon the notifying party having actual
\nknowledge of the same, (2) take all steps required under applicable law, Network
\nRules, and Other Payment Methods rules, and (3) in consultation with the other
\nparty, promptly take commercially reasonable steps, at its sole expense, to
\nremedy the situation and prevent its recurrence.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
<\/td>\n\n

e)<\/p>\n<\/td>\n

\n

Notice of Breach.<\/strong> A party that is required by applicable law
\nto provide notice of a system or data breach, must do so, and the other party
\nwill use commercially reasonable efforts to cooperate in connection with
\nproviding such notice, as well as additional notices as agreed upon by the
\nparties.<\/p>\n<\/td>\n<\/tr>\n

\n

19)<\/strong><\/p>\n<\/td>\n

\n

Proprietary Rights. <\/strong>NewCo agrees not modify, adapt,
\ntranslate, prepare derivative works from, decompile, reverse engineer,
\ndisassemble or otherwise attempt to derive source code from the Microsoft
\nCommerce Platform.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

59<\/p>\n

\n

\n<\/p>\n<\/p>\n

ATTACHMENT 1<\/strong><\/p>\n

\n

REMITTANCE COUNTRIES<\/strong><\/p>\n

\n

All current members countries of the European Union<\/p>\n<\/p>\n

Canada<\/p>\n<\/p>\n

Liechtenstein<\/p>\n<\/p>\n

Norway<\/p>\n<\/p>\n

Switzerland<\/p>\n<\/p>\n

Taiwan<\/p>\n<\/p>\n

United States<\/p>\n<\/p>\n

60<\/p>\n

\n

\n<\/p>\n

ATTACHMENT 2<\/strong><\/p>\n

\n<\/p>\n

1 Distribution to End users in Canada.<\/strong><\/p>\n<\/p>\n<\/p>\n

1.1 GST\/HST<\/strong><\/p>\n<\/p>\n<\/p>\n

(a) If NewCo or any Publisher is a resident of Canada or are a non-resident
\nof Canada that must register for goods and services tax\/harmonized sales tax
\n(“GST\/HST<\/strong>“) purposes under the Excise Tax Act (Canada) (the
\n“ETA<\/strong>“), NewCo or the Publisher must be registered for GST\/HST
\nor have submitted an application to register for GST\/HST to the Canada Revenue
\nAgency (the “CRA<\/strong>“) with an effective registration date no later
\nthan the date the Microsoft Commerce Platform commences the support of NewCo.
\nNewCo or the Publishers must provide Microsoft with satisfactory evidence of the
\nGST\/HST registration (e.g., a copy of the CRA confirmation letter or print-out
\nfrom the GST\/HST Registry on the CRA website) at Microsoft153s request. NewCo or
\nPublishers will notify Microsoft if they cease to be registered for GST\/HST.<\/p>\n<\/p>\n<\/p>\n

(b) If NewCo or Publishers are registered for GST\/HST purposes, NewCo and\/or
\nPublishers agree to elect, pursuant to subsection 177(1.1) of the ETA to have
\nMicrosoft collect, account for and remit GST\/HST on sales of Content made to end
\nusers in Canada. NewCo and Publishers must complete (including entering valid
\nGST\/HST registration number), sign and return to Microsoft Form GST506.<\/p>\n<\/p>\n<\/p>\n

(c) If NewCo or Publishers are not registered for GST\/HST purposes, NewCo or
\nPublishers:<\/p>\n<\/p>\n<\/p>\n

(i) certify that NewCo or Publishers they are not registered for GST\/HST
\npurposes;<\/p>\n<\/p>\n<\/p>\n

(ii) certify that NewCo or Publishers are not residents in Canada and do not
\ncarry on business in Canada for purposes of the ETA; and<\/p>\n<\/p>\n<\/p>\n

(iii) acknowledge that Microsoft will charge, collect and remit GST\/HST on
\nsales of Content to end users in Canada.<\/p>\n<\/p>\n

1.2 Quebec Sales Tax.<\/strong><\/p>\n<\/p>\n

Terms defined in an Act respecting the Quebec Sales Tax (the
\n“QSTA”).<\/strong><\/p>\n<\/p>\n

(a) If NewCo or a Publisher is a resident of Quebec, NewCo or the Publisher
\nmust be registered for Quebec Sales Tax (“QST<\/strong>“) or have
\nsubmitted an application to register for QST to the Ministere du Revenu du
\nQuebec (the “MRQ<\/strong>“). NewCo or Publisher must give Microsoft
\nsatisfactory evidence of the QST registration (e.g., a copy of the MRQ
\nconfirmation letter or print-out from the QST Registry on the MRQ website) at
\nMicrosoft153s request. NewCo or Publishers will notify Microsoft if the party
\nceases to be registered for QST.<\/p>\n<\/p>\n

(b) If NewCo or a Publisher is a resident of Quebec, NewCo or Publisher:<\/p>\n<\/p>\n

(i) certifies that it is registered for QST;<\/p>\n<\/p>\n

61<\/p>\n

\n

\n<\/p>\n

(ii) agrees to elect, pursuant to section 41.0.1 of the QSTA to have
\nMicrosoft collect, account for and remit QST on purchases by end users in
\nQuebec. NewCo or Publishers must complete (including entering valid QST
\nregistration number), sign and return to Microsoft Form FP2506-V; and<\/p>\n<\/p>\n<\/p>\n

(iii) acknowledges that Microsoft will not charge, collect or remit QST on
\nsales of Content Applications to end users located outside Quebec.<\/p>\n<\/p>\n

(c) If NewCo or Publishers are not residents in Quebec, NewCo (or in the case
\nof a Publisher, NewCo shall use good faith effort to ensure that Publisher):<\/p>\n<\/p>\n

(i) certifies that it is not resident in Quebec;<\/p>\n<\/p>\n

(ii) certifies that it does not have a permanent establishment in Quebec; and\n<\/p>\n<\/p>\n

(iii) acknowledges that Microsoft will charge, collect and remit QST on sales
\nto end users in Quebec.<\/p>\n<\/p>\n

2 Distribution to End Users in the U.S.<\/strong><\/p>\n<\/p>\n

2.1 <\/strong>If a Publisher is not a resident of the United States
\nfor U.S. federal income tax purposes, Publisher must complete IRS Form W-8BEN
\nand\/or any other required tax forms. Publisher must provide Microsoft a copy of
\nthe completed form(s), and any other information needed to comply with
\napplicable tax laws and regulations.<\/p>\n<\/p>\n

62<\/p>\n

\n

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