STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT (this "Agreement"), dated as of September 13,
2000, by and between BARNESANDNOBLE.COM INC., a Delaware corporation
("Acquirer"), and the holders (the "Stockholders") of the shares of common
stock, par value $.001 per share (the "Company Common Stock"), of
FATBRAIN.COM, INC., a Delaware corporation (the "Company"), set forth on the
signature pages hereof. Capitalized terms used and not otherwise defined
herein and which are defined in the Merger Agreement (as defined below) shall
have the respective meanings ascribed to such terms in the Merger Agreement.
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this Agreement,
Acquirer and the Company are entering into an Agreement and Plan of Merger
(as the same may be amended from time to time, the "Merger Agreement"),
pursuant to which and subject to the satisfaction or waiver of certain
conditions set forth in the Merger Agreement, the Company will be merged with
and into Acquirer (the "Merger"), with Acquirer Company being the surviving
corporation in the Merger; and
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Acquirer has required that the Stockholders agree, and the
Stockholders have agreed, to enter into this Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound, agree as follows:
1. Voting Agreement.
(a) Each Stockholder owns the shares of Company Common Stock set
forth on Schedule A attached hereto (hereinafter referred to as "Shares").
For purposes of this Agreement, in the event of a stock dividend or
distribution, or any change in the Company Common Stock by reason of any
stock dividend, stock-split, recapitalization, combination, exchange of
shares or the like, the term "Shares" shall refer to and include the Shares
as well as all such stock dividends and distributions and any shares into
which or for which any or all of the Shares may be changed or exchanged.
Shares shall also include any additional shares of Company Common Stock
acquired by any Stockholder after the date hereof.
(b) Each Stockholder hereby irrevocably and unconditionally agrees
to vote (or cause to be voted) all Shares that such Stockholder is entitled
to vote, at the Company's Stockholders' Meeting as follows: (i) in favor of
the Merger, the execution and delivery by the Company of the Merger Agreement
and the approval of the terms thereof, the performance by the Company of each
of the actions contemplated by the Merger Agreement and this Agreement and
all actions required in furtherance thereof and hereof; (ii) against any
Alternative Transaction; and (iii) against any action or agreement that would
impede, frustrate, prevent or nullify this Agreement, or result in a breach
in any respect of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Merger Agreement or which
would result in any of the conditions set forth in Section 7.2 of the Merger
Agreement not being fulfilled.
(c) Each Stockholder hereby revokes any and all previous proxies
granted with respect to the Shares. Each Stockholder represents that any
outstanding proxies heretofore given in respect of the Shares are not
irrevocable, and that any such proxies are hereby revoked.
(d) Each Stockholder understands and acknowledges that Acquirer is
entering into the Merger Agreement in reliance upon such Stockholder's
execution and delivery of this Agreement.
2. Waiver of Appraisal Rights. Each Stockholder hereby waives any
rights of appraisal or rights to dissent from the Merger that such
Stockholder may have.
3. Representations and Warranties of the Stockholders. Each
Stockholder hereby represents and warrants to Acquirer as follows:
(a) Ownership of Shares. The Stockholder is the record and
beneficial owner of its Shares. The Stockholder has sole voting power and
sole power to issue instructions with respect to any and all of the matters
set forth in this Agreement, sole power of disposition, sole power of
conversion, sole power to demand appraisal rights and sole power to agree to
all of the matters set forth in this Agreement, in each case with respect to
any and all of its Shares with no limitations, qualifications or restrictions
on such rights, subject to applicable securities laws and the terms of this
Agreement.
(b) Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of the
Stockholder's obligations under this Agreement. The execution, delivery and
performance of this Agreement by the Stockholder will not violate any other
agreement, arrangement or understanding (in each case, oral or written) to
which the Stockholder is a party including, without limitation, any voting
agreement, proxy arrangement, pledge agreement, stockholders' agreement or
voting trust. This Agreement has been duly and validly executed and delivered
by the Stockholder and constitutes a valid and binding agreement of the
Stockholder, enforceable against the Stockholder in accordance with its
terms. There is no beneficiary or holder of a voting trust certificate or
other interest of any trust of which the Stockholder is a trustee whose
consent is required for the execution and delivery of this Agreement or the
consummation by the Stockholder of the transactions contemplated hereby.
(c) No Conflicts. Except for filings under the HSR Act and the
Exchange Act, (i) to the Stockholders' knowledge, no filing with, and no
permit, authorization, consent or approval of, any Governmental Entity for
the execution of this Agreement by the Stockholder and the consummation by
the Stockholder of the transactions contemplated hereby and (ii) none of the
execution and delivery of this Agreement by the Stockholder, the consummation
by the Stockholder of the transactions contemplated hereby or compliance by
the Stockholder with any of the provisions hereof shall (A) result in a
violation or breach of, or constitute (with or without notice or lapse of
time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any
of the terms, conditions or provisions of any note, loan agreement, bond,
mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement or other instrument or obligation of any kind to
which the Stockholder is a party or by which the Stockholder or any of its
Shares may be bound, or (B) violate any order, writ, injunction, decree,
judgment, order, statute, rule or regulation applicable to the Stockholder or
any of its Shares.
(d) No Encumbrances. Except as permitted by this Agreement, the
Shares and the certificates representing such Shares are now, and the Shares
at all times during the term hereof will be, held by the Stockholder, or by a
nominee or custodian for the benefit of the Stockholder, free and clear of
all encumbrances, liens, restrictions, proxies, voting trusts or agreements,
understandings or arrangements or any other rights whatsoever.
(e) No Additional Ownership. Except for the Shares and as
otherwise set forth on Schedule 3(e) attached hereto, the Stockholder does
not beneficially own any (i) shares of capital stock or voting securities of
the Company, (ii) securities of the Company convertible into or exchangeable
for shares of capital stock or voting securities of the Company or (iii)
options or other rights to acquire from the Company any capital stock, voting
securities or securities convertible into or exchangeable for capital stock
or voting securities of the Company.
(f) No Finder's Fees. No broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf
of the Stockholder.
(g) Reliance by Acquirer. The Stockholder understands and
acknowledges that Acquirer is entering into the Merger Agreement in reliance
upon the Stockholder's execution and delivery of this Agreement.
4. Representations and Warranties of Acquirer. Acquirer represents
and warrants to each Stockholder that the execution, delivery and performance
of this Agreement by Acquirer and the consummation by it of the transactions
contemplated hereby are within the requisite corporate power and authority of
Acquirer and have been duly authorized by all necessary corporate and
stockholder action on the part of Acquirer. This Agreement has been duly
executed by Acquirer and constitutes the legal, valid and binding obligation
of Acquirer, enforceable against Acquirer in accordance with its terms.
5. Covenants of the Stockholders. Each Stockholder hereby covenants
and agrees that:
(a) No Proxies or Encumbrances on the Stockholders' Shares.
Except pursuant to the terms of this Agreement, the Stockholder shall not,
without the prior written consent of Acquirer, directly or indirectly, (i)
grant any proxies or enter into any voting trust or other agreement or
arrangement with respect to the voting of any Shares or (ii) sell, assign,
transfer, encumber or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect to the direct or
indirect sale, assignment, transfer, encumbrance or other disposition of, any
Shares, or solicit to do any of the foregoing, during the term of this
Agreement.
(b) No Shopping. From the date hereof until the termination
hereof, the Stockholder, in its capacity as a Stockholder, will not, and
will not authorize or knowingly permit any investment bankers, attorneys,
accountants, consultants and other agents or advisors ("Representatives") of
the Stockholder to, directly or indirectly, (i) take any action to solicit,
initiate or facilitate or encourage the submission of any Alternative
Transaction, or (ii) engage in any negotiations regarding, or furnish to any
person any nonpublic information with respect to, or take any other action
knowingly to facilitate any inquiries or the making of any proposal that
constitutes, or may be reasonably expected to lead to, any Alternative
Transaction; provided, that notwithstanding any other provision of this
Agreement, the Stockholder may take any action in its capacity as an officer
or director of the Company that would be permitted to be taken in accordance
with the terms and conditions of the Merger Agreement.
(c) Notification. The Stockholder will notify Acquirer promptly
(but in no event later than 48 hours) (orally and in writing) if any proposal
or offer is received by, any information is requested from, or any
discussions or negotiations are sought to be instituted or continued with,
the Stockholder, relating to the acquisition of beneficial ownership of such
Stockholder's Shares. The notice shall state the identity of the person and
the material terms and conditions of such proposal or offer. The Stockholder
shall keep Acquirer reasonably apprised of any material development with
respect to such proposals or offers. The Stockholder shall, and shall cause
its Representatives to, cease immediately and cause to be terminated all
existing discussions or negotiations, if any, with any persons conducted
heretofore with respect to, or that could reasonably expected to lead to, any
Alternative Transaction.
6. Lock-Up.
(a) Each Stockholder agrees that, without the prior written
consent of Acquirer, they shall not offer to sell, contract to sell, or
otherwise sell, dispose of, loan, pledge or grant any rights with respect to
any of the Acquirer Common Stock issued to such Stockholder in connection
with the Merger, any options or warrants to purchase any Acquirer Common
Stock, or any securities convertible into or exchangeable for any Acquirer
Common Stock that they acquire upon completion of the Merger, for a period
commencing from the date of receipt of such securities through and including
the earlier of (a) the six-month anniversary of the Effective Time and (b)
the date immediately after (1) any merger, reorganization or consolidation of
Acquirer with or into any entity if persons who were beneficial owners of
securities of Acquirer entitled to vote generally in the election of
directors ("Voting Securities") immediately before such merger,
reorganization or consolidation are not, immediately thereafter, the
beneficial owners, directly or indirectly, of at least 50% of the then-
outstanding Voting Securities of the entity surviving or resulting from such
merger, reorganization or consolidation in substantially the same respective
proportions as their beneficial ownership of the previously outstanding
Voting Securities of Acquirer or (ii) the sale or other disposition of all or
substantially all of the consolidated assets of Acquirer (the "Lock-Up
Period").
(b) The restrictions set forth in the Section 6 shall not apply to
(i) transactions relating to Acquirer Common Stock acquired in open market
transactions, (ii) the transfer, if the undersigned is an individual, to his
or her immediate family or to a trust, the beneficiaries of which are
exclusively the undersigned and/or a member or members of his or her
immediate family, either during his or her lifetime or on death by will or
intestacy, or (iii) the transfer, if the undersigned is a limited liability
company, partnership, corporation, trust or similar entity, to members,
partners (or retired partners who retire after the date hereof),
shareholders, or beneficiaries, as the case may be, of the undersigned as a
distribution; provided, however, that the undersigned shall not transfer any
shares of Acquirer Common Stock to a total of more than ten (10) persons
under the foregoing clauses (ii) or (iii), and all transferees described in
(ii) or (iii) above will be required to agree in writing to be bound by the
terms hereof as a condition of any such transfer.
(c) In order to enforce this lock-up provision, the Stockholders
agree that, at the sole discretion of the Acquirer, "stop transfer"
instructions may be placed against all of the Acquirer Common Stock issuable
to the Stockholders in connection with the Merger on the transfer books of
Acquirer's stock transfer agent until the conclusion of the Lock-Up Period.
7. Stop Transfer. Except as otherwise permitted in Section 6 hereof,
the Stockholder shall not request that the Company register the transfer
(book-entry or otherwise) of any certificate or uncertificated interest
representing any of the Shares.
8. Disclosure. The Stockholder permits Acquirer to publish and
disclose in the Registration Statement (including all documents and schedules
filed with the SEC) and other filings and communications their identity and
ownership of the Shares and the nature of their commitments, arrangements and
understandings under this Agreement.
9. Further Assurances. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further lawful action as
may be necessary or desirable to consummate and make effective, in a
reasonably prompt manner, the transactions contemplated by this Agreement.
10. Termination. The covenants and agreements contained in this
Agreement shall terminate upon (i) the consummation of the Merger, except for
the covenants in Section 6, which shall survive for the period provided
therein, or (ii) the termination of the Merger Agreement in accordance with
its terms.
11. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof.
(b) Binding Agreement. This Agreement and the obligations
hereunder shall attach to the Shares and shall be binding upon any person or
entity to which legal or beneficial ownership of the Shares shall pass,
whether by operation of law or otherwise, including, without limitation, the
Stockholder's heirs, guardians, administrators or representatives.
Notwithstanding any transfer of the Shares, each Stockholder shall remain
liable for the performance of all obligations of such Stockholder under this
Agreement.
(c) Assignment. This Agreement shall not be assigned by operation
of law or otherwise without the prior written consent of the other party,
provided that Acquirer may assign, in its sole discretion, its rights and
obligations hereunder to any direct or indirect wholly-owned subsidiary of
Acquirer, but no such assignment shall relieve Acquirer of its obligations
hereunder if such assignee does not perform such obligations.
(d) Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified, except upon the
execution and delivery of a written agreement executed by the parties hereto.
(e) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if given) by hand delivery or telecopy
(with a confirmation copy sent for next day delivery via courier service,
such as Federal Express), or by any courier service, such as Federal Express,
providing proof of delivery. All communications hereunder shall be delivered
to the respective parties at the addresses set forth on the signature pages
hereto.
(f) Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of
any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and
this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision or portion of any
provision had never been contained herein.
(g) Liability of Stockholders. The liability of the Stockholders
for the representations, warranties, covenants and obligations contained in
this Agreement shall be several and not joint.
(h) Specific Performance. Each of the parties hereto recognizes
and acknowledges that a breach by such party of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages for
which it would not have an adequate remedy at law for money damages, and
therefore in the event of any such breach the aggrieved party shall be
entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
(i) Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
(j) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available
in respect hereof at law or in equity, or to insist upon compliance by any
other party hereto with its obligations hereunder, and any custom or practice
of the parties at variance with the terms hereof, shall not constitute a
waiver by such party of its right to exercise any such or other right, power
or remedy or to demand such compliance.
(k) No Third Party Beneficiaries. This Agreement is not intended
to be for the benefit of, and shall not be enforceable by, any person or
entity who or which is not a party hereto.
(l) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard
to any applicable conflicts of law.
(m) Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of
or to affect the meaning or interpretation of this Agreement.
(n) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the
parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
(SIGNATURE PAGES FOLLOW)
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
BARNESANDNOBLE.COM INC.
By:/s/ Marie Toulantis
-----------------------------------
Name: Marie Toulantis
Title: Chief Financial Office
STOCKHOLDERS:
Vulcan Ventures Incorporated
By:/s/ William D. Savery
-----------------------------------
Name: William D. Savery
Title: President
Sierra Ventures V
By: /s/ Peter C. Wendell
-----------------------------------
Name: Peter C. Wendell
Title: General Partner
/s/Chris MacAskill
--------------------------------------
Chris MacAskill
Highland Capital Partners IV Limited Partnership
Highland Entrepreneurs Fund IV Limited Partnership
By: /s/ Keith Benjamin
Name: Keith Benjamin
Title: General Partner
APV Technology Partners II LP
APV Technology Partners US LP
APV Technology Partners LP
By: /s/ Peter G. Bodine
-----------------------------------
Name: Peter G. Bodine
Title: Partner
/s/ Kim Orumchian
--------------------------------------
Kim Orumchian
<PAGE>
Schedule A
Name and Address of Stockholders Number of Shares
-------------------------------- ----------------
Vulcan Ventures Incorporated 1,501,791
Attn: Scott Fallis
110, 110th Avenue Northeast, Suite 550
Bellevue, WA 98004
Sierra Venture V 938,143
3000 Sand Hill Road
Building 4, Number 200
Menlo Park, CA 94025
Chris MacAskill 786,458
c/o MightyWords.com
2550 Walsh Avenue
Santa Clara, CA 95051
Highland Capital Partners IV Limited Partnership 479,157
Highland Entrepreneurs Fund IV Limited Partnership
c/o Testa Herwitz and Tibeault
Attn: Malcolm Nicholls
125 High Street
Boston, MA 02110
APV Technology Partners II LP 343,603
APV Technology Partners US LP
APV Technology Partners LP
535 Middlefield Road
Menlo Park, CA 94025
Kim Orumchian 668,100 (plus options to
1621 El Camino Real purchase 441,432 shares
Palo Alto, CA 94306 of common stock)
