RESTRICTED STOCK AGREEMENT



         THIS RESTRICTED STOCK AGREEMENT, dated as of March 22, 2001 (the "Award

Date"), is made by and between VARSITY GROUP INC., a Delaware corporation (the

"Corporation"), and Eric Kuhn an executive officer of the Corporation (the

"Executive"):



         WHEREAS, the Corporation has established The Second Amended and

Restated 1998 Stock Plan of Varsity Group Inc., as amended (the "Plan");



         WHEREAS, the Corporation wishes to carry out the Plan (the terms of

which are hereby incorporated by reference and made a part of this Agreement);



         WHEREAS, the Plan provides for the issuance of shares of the

Corporation's Common Stock (as defined hereunder), subject to certain

restrictions thereon (hereinafter referred to as "Restricted Stock");



         WHEREAS, the Corporation's Board of Directors has determined that it

would be to the advantage and best interest of the Corporation and its

stockholders to issue the shares of Restricted Stock provided for herein to the

Executive in partial consideration of past services to the Corporation and/or

its subsidiaries, and the Board of Directors of the Corporation has approved the

issuance of such shares of Restricted Stock to the Executive upon the terms and

conditions set forth herein; and



      NOW, THEREFORE, in consideration of the mutual covenants herein contained

and other good and valuable consideration, receipt of which is hereby

acknowledged, the parties hereto do hereby agree as follows:





                                   ARTICLE I.

                                   DEFINITIONS



         Whenever the following terms are used below in this Agreement, they

shall have the meaning specified below unless the context clearly indicates to

the contrary. Capitalized terms not otherwise defined herein shall have the

meanings set forth in the Plan. The masculine pronoun shall include the feminine

and neuter, and the singular the plural, where the context so indicates.



         SECTION 1.1 CAUSE. "Cause" shall mean without limitation: (i)

conviction of, or the pleading of nolo contendere to, a felony, (ii) a material

breach of Executive's Employment Agreement which materially and adversely

affects the Corporation's business and operations, (iii) the failure of

Executive for any reason, within ten (10) days after receipt by Executive of

written notice thereof from the Corporation, to correct, cease or otherwise

alter any failure to comply with instructions or other action or omission to act

which will materially or adversely affect its business or operations, (iv)

misconduct by Executive which is of such a serious and substantial nature that a

reasonable likelihood exists that such misconduct will materially injure the

reputation of the Corporation if Executive was to remain employed by the

Corporation, and (v) proven gross negligence.



         SECTION 1.2 CHANGE OF CONTROL EVENT. "Change of Control Event" is

defined in Section 3.5.



         SECTION 1.3 EXCHANGE ACT. "Exchange Act" shall mean the Securities

Exchange Act of 1934, as amended.



         SECTION 1.4 RESTRICTIONS. "Restrictions" shall mean the forfeiture and

transferability restrictions imposed upon Restricted Stock under this Agreement.





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         SECTION 1.5 RESTRICTED STOCK. "Restricted Stock" shall mean Common

Stock of the Corporation issued under this Agreement and subject to the

Restrictions imposed hereunder.



         SECTION 1.6 RULE 16B-3. "Rule 16b-3" shall mean that certain Rule 16b-3

under the Exchange Act, as such Rule may be amended from time to time.



         SECTION 1.7 SECRETARY. "Secretary" shall mean the Secretary of the

Corporation.



         SECTION 1.8 SECURITIES ACT. "Securities Act" shall mean the Securities

Act of 1933, as amended.



         SECTION 1.9 TERMINATION OF EMPLOYMENT. "Termination of Employment"

shall mean the time when the employee-employer relationship between the

Executive and the Corporation, a Parent, or a Subsidiary is terminated for any

reason, including, but not by way of limitation, a termination by resignation,

discharge, death, disability or retirement, but excluding (i) any termination

where there is a simultaneous reemployment by the Corporation, a Parent or a

Subsidiary, (ii) at the discretion of the Board of Directors, any termination

which results in a temporary severance of the employee-employer relationship,

and (iii) at the discretion of the Board of Directors, any termination where the

Executive continues a relationship (e.g., as a director or as a consultant) with

the Corporation, a Parent, or a Subsidiary. The Board of Directors, in its

absolute discretion, shall determine the effect of all other matters and

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