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EXHIBIT 10.16
AMENDMENT AND WAIVER
This AMENDMENT AND WAIVER is entered into as of October 29, 1999 by and
between THE LIGHTSPAN PARTNERSHIP, INC. (the "COMPANY") and the undersigned
(each an "INVESTOR" and collectively the "INVESTORS").
RECITALS
WHEREAS, the Company desires to sell shares of its Series E Preferred
Stock in addition to the shares of Series E Preferred Stock already issued to
certain persons selected by the Company (the "SALES");
WHEREAS, as set forth in Section 2 of the Amended and Restated Investor
Rights Agreement dated as of July 8, 1999 by and between the Company and the
persons or entities listed on Exhibit A thereto (the "XXX"), the Company has
granted to the persons listed on Exhibit A to the XXX the right of first offer
(the "RIGHT OF FIRST OFFER") to purchase from the Company any shares that the
Company proposes to sell and issue from time to time;
WHEREAS, Section 5.7 of the XXX provides that "Holders" of at least 50%
of the "Registrable Securities," as such terms are defined in the XXX, shall
have the ability to amend the XXX;
WHEREAS, as set forth in Section 1.3 of that certain Series E Preferred
Stock Purchase Agreement dated as of July 8, 1999 by and among the Company and
certain purchasers of the Company's Series E Preferred Stock listed on Exhibit A
thereto (the "SERIES E AGREEMENT"), the Company has agreed not to issue
additional shares of Series E Preferred Stock;
WHEREAS, Section 7.4 of the Series E Agreement provides that holders of
a majority of the outstanding "Shares," as defined in the Series E Agreement,
may waive provisions of the Series E Agreement;
WHEREAS, the Investors collectively represent (i) 50% of the Holders of
Registrable Securities under the XXX and (ii) a majority of the holders of the
outstanding Shares under the Series E Agreement; and
WHEREAS, the Investors desire to waive the Right of First Offer as to
and to permit the Sales, and permit new purchasers of Series E Preferred Stock
to become parties to the XXX.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. The limitation on future sales of Series E Preferred Stock contained
in Section 1.3 of the Series E Agreement is hereby waived as to any shares of
Series E Preferred stock that the Company shall issue or sell on or prior to
November 21, 1999, pursuant to the resolution of the Company's Board of
Directors.
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2. Section 2.1(b) of the XXX is hereby amended and restated to read in
its entirety as follows:
(B) DEFINITION OF NEW SECURITIES. Except as set forth below, "New
Securities" shall mean any shares of capital stock of the Company,
including Common Stock and Preferred Stock, whether authorized or not,
and rights, options or warrants to purchase said shares of Common Stock
or Preferred Stock, and securities of any type whatsoever that are, or
may become, convertible into said shares of Common Stock or Preferred
Stock. Notwithstanding the foregoing, "New Securities" does not include
(i) the Shares or the Conversion Shares, (ii) securities offered to the
public generally pursuant to a registration statement under the
Securities Act, (iii) securities issued pursuant to the acquisition of
another corporation by the Company by merger, purchase of substantially
all of the assets or shares, or other consolidation, merger or
reorganization whereby the Company or its shareholders own not less than
a majority of the voting power of the surviving or successor corporation
(or other corporation which is the issuer of the capital stock into
which the capital stock of the Company is converted or exchanged in such
consolidation, merger or reorganization), (iv) shares of the Company's
Common Stock or related options convertible into or exercisable for such
Common Stock issued to employees, officers and directors of, and
consultants, customers, and vendors to, the Company, pursuant to any
arrangement approved by the Board of Directors of the Company, (v)
shares of the Company's Common Stock or related options convertible into
or exercisable for such Common Stock issued to any bank, equipment
lessor or other similar financial institution if and to the extent that
the transaction in which such sale or grant is to be made is approved by
the Company's Board of Directors with at least seventy-five percent
(75%) of the members of the Board of Directors voting in favor of such
sale or grant, (vi) stock issued pursuant to any rights or agreements,
including, without limitation, convertible securities, options and
warrants, provided that the Company shall have complied with the right
of first offer established by this Section 2.1 with respect to the
initial sale or grant by the Company of such rights or agreements, (vii)
stock issued in connection with any stock split, stock dividend or
recapitalization by the Company or (viii) shares of Series E Preferred
Stock issued pursuant to Section 5.12 hereof.
3. New Section 5.12 is hereby added to the XXX to read in its entirety
as follows:
5.12 ADDITIONAL INVESTORS. Notwithstanding anything to the
contrary contained herein, if the Company shall sell and issue, on or
before November 21, 1999, shares of its Series E Preferred Stock in
addition to those shares of Series E Preferred Stock issued and sold
pursuant to the Series E Agreement and those shares of Series E
Preferred Stock issued and sold to the Academic Preferred Holders, any
purchaser of such shares of Series E Preferred Stock may become a party
to this Agreement by executing and delivering an additional counterpart
signature page to this Agreement and shall be deemed an "INVESTOR"
hereunder.
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4. This Amendment and Waiver may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Signature pages may be
delivered by facsimile.
IN WITNESS WHEREOF, the parties have executed this AMENDMENT AND WAIVER
as of the date first above written.
COMPANY:
THE LIGHTSPAN PARTNERSHIP, INC.
By:
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Its:
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INVESTOR:
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By:
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Its:
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[Signature Page to Amendment and Waiver]
