Second Amendment to Second Amended and Restated Stockholders Agreement by and among NetLibrary, Inc., Key Stockholders, and Investors

Summary

This amendment, dated February 18, 2000, updates the existing Stockholders Agreement among NetLibrary, Inc., certain key stockholders, and various investors. The changes reflect the company's new Series D Preferred Stock financing, expanding definitions and rights to include Series D holders, and allowing new Series C and D investors to join the agreement. All other terms of the original agreement remain unchanged. The amendment ensures that new investors are properly included and that their rights and obligations are clearly defined.

EX-10.20 24 ex10-20.txt 2ND AM. TO 2ND AM. AND RESTATED STOCKHOLDERS AGT. 1 EXHIBIT 10.20 NETLIBRARY, INC. SECOND AMENDMENT TO SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (the "Agreement") is made and entered into as of February 18, 2000, by and among NETLIBRARY, INC., a Delaware corporation (the "Company"), those certain holders of the Company's Common Stock listed on Exhibit A hereto (the "Key Stockholders") and the persons and entities listed on Exhibit B hereto, as amended from time to time (the "Investors"). RECITALS WHEREAS, the Key Stockholders or their transferees are the beneficial owners of an aggregate of Two Million Eight Hundred Seventy Thousand Two Hundred Ninety-Seven (2,870,297) shares of the Common Stock of the Company; WHEREAS, the Company previously sold shares of its Series A Preferred Stock (the "Series A Preferred Stock"), its Series B Preferred Stock (the "Series B Preferred Stock") and its Series C Preferred Stock (the "Series C Preferred Stock") to certain of the Investors; WHEREAS, the Company, the Key Stockholders and such Investors entered into a certain Amended and Restated Stockholders Agreement, dated as of October 8, 1999, as amended by the Amendment thereto dated January 18, 2000 (the "Stockholders Agreement"); WHEREAS, the Company proposes to sell shares of its Series D Preferred Stock (the "Series D Preferred Stock") to certain of the Investors pursuant to a Series D Preferred Stock Purchase Agreement and/or the Agreement and Plan of Merger between the Company and peanutpress.com, Inc. and certain other parties (collectively, the "Series D Purchase Agreement") (the "Series D Financing"); and WHEREAS, in connection with the consummation of the Series D Financing, the Company, the Key Stockholders and the Investors desire to amend the Stockholders Agreement as set forth below. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Section 1(c) shall be modified in its entirety to read as follows: 2 (c) "INVESTOR SHARES" shall mean all shares of capital stock of the Company registered in the names of the Investors or beneficially owned by them as of the date hereof and any and all other securities of the Company legally acquired by the Investors after the date hereof (including but not limited to all shares of Common Stock issued upon conversion of the Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock). 2. Section 3.4(a) shall be amended by (i) deleting the word "and" before the words "each holder of Series C Preferred Stock," and (ii) by inserting after the words "(390,000) shares of Series C Preferred Stock" the following: "and each holder of Series D Preferred Stock that, by itself or with its Affiliates holds at least Two Hundred Eighty Thousand (280,000) shares of Series D Preferred Stock." 3. Section 6.5(y) shall be amended in its entirety to read as follows: this Agreement may be amended in connection with the closing of any purchase of the Company's Series C Preferred Stock or Series D Preferred Stock so as to add any purchaser of the Series C Preferred Stock or Series D Preferred Stock as a party hereto, and as an Investor as defined above, by having each such purchaser execute a counterpart copy of this Agreement and modifying Exhibit B to include such person. 4. Except as specifically set forth above, the Stockholders Agreement shall remain in effect, without modification. IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT TO SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT as of the date first above written. COMPANY: NETLIBRARY, INC. 3080 Center Green Drive Boulder, Colorado 80301 By: /s/ TIMOTHY R. SCHIEWE --------------------------------- Name: Timothy R. Schiewe ------------------------------- Title: President and CEO ------------------------------ 2 3 KEY STOCKHOLDERS: /s/ TIMOTHY R. SCHIEWE WORLD VENTURE PARTNERS, INC. - ---------------------------------------- Timothy R. Schiewe /s/ F. CLARK ELLIS By: /s/ PETE ESTLER - ---------------------------------------- ------------------------------ F. Clark Ellis Name: Pete Estler Title: Principal /s/ HENRY VELLANDI - ---------------------------------------- Henry Vellandi 3 4 INVESTORS: /s/ R. MICHAEL SEGROVES - ----------------------------------- R. Michael Segroves /s/ HAROLD S. Schwenk, Jr. - ----------------------------------- Harold S. Schwenk, Jr. GRAND CENTRAL HOLDINGS, LLC By: /s/ WARREN H. HABER, JR. ------------------------------- Name: Warren H. Haber, Jr. Title: Member GCH PEANUTPRESS, LLC By: Grand Central Holdings, LLC, its Managing Member By: /s/ WARREN H. HABER, JR. ------------------------------- Name: Warren H. Haber, Jr. Title: Member HUDSON VENTURE PARTNERS, L.P. By: Grand Central Holdings, LLC, holder of an irrevocable proxy By: /s/ WARREN H. HABER, JR. ------------------------------- Name: Warren H. Haber, Jr. Title: Member 4 5 ABC-CLIO ANSCHUTZ FAMILY INVESTMENT COMPANY LLC By: Anschutz Company, its Manager By: /s/ RONALD J. BOEHM By: /s/ SCOTT CARPENTER ------------------------------- -------------------------------- Name: Ronald J. Boehm Name: Scott Carpenter Title: CEO Title: Vice President Date: February 17, 2000 Date: February __, 2000 BOWANA FOUNDATION BCI INVESTMENTS II, LLC By: /s/ ERIC SWANSON By: /s/ JEFFREY S. DEMOND ------------------------------- -------------------------------- Name: Eric Swanson Name: Jeffrey S. Demond Title: Vice President Title: Member Date: February 17, 2000 Date: February 7, 2000 5 6 BAIN CAPITAL FUND VI, L.P. PEP INVESTMENTS PTY LTD BY: Bain Capital Partners VI, L.P., By: Bain Capital, Inc., its General Partner its attorney-in-fact By: Bain Capital Investors VI, Inc., By: /s/ PAUL EDGERLY its General Partner ------------------------- Name: Paul Edgerly Title: Managing Director By: /s/ PAUL EDGERLY Date: February__, 2000 -------------------- Name: Paul Edgerly Title: Managing Director Date: February __, 2000 BROOKSIDE CAPITAL PARTNERS SANKATY HIGH YIELD ASSET FUND, L.P. PARTNERS, L.P. By: /s/ DOMENIC FERRANTE By: /s/ JONATHAN LAVINE ------------------------- ------------------------- Name: Domenic Ferrante Name: Jonathan Lavine Title: Managing Director Title: Managing Director Date: February 12, 2000 Date: February __, 2000 BCIP ASSOCIATES II BCIP ASSOCIATES II-B By: Bain Capital, Inc., By: Bain Capital, Inc., its Managing Partner its Managing Partner By: /s/ PAUL EDGERLY By: /s/ PAUL EDGERLY --------------------- --------------------- Name: Paul Edgerly Name: Paul Edgerly Title: Managing Director Title: Managing Director Date: February __, 2000 Date: February __, 2000 6 7 BERGER NEW GENERATION FUND A SERIES OF THE BERGER INVESTMENT PORTFOLIO OF TRUSTS By: /s/ MARK S. SUNDERHUSE ------------------------------- Name: Mark S. Sunderhuse Title: Vice President Date: February 18, 2000 COMCAST INTERACTIVE CAPITAL, L.P. By: CIC Partners, LP, its general partner By: CIC Venture Management, LLC, general partner By: /s/ ABRAM E. PATLOVE -------------------------- Name: Abram E. Patlove Title: Vice President Date: February __, 2000 COVESTCO-MEDEURA, LLC UNIVERSITY OF COLORADO FOUNDATION, INC. By: Medeura, LLC, its Manager By: Medeura Limited, its Managing Member By: /s/ ALBIN A. JOHANN By: /s/ JIM BARLOW ------------------------------- ----------------------- Name: Albin A. Johann Name: Jim Barlow Title: Director Title: Treasurer Date: February 24, 2000 Date: February 17, 2000 DLJ CAPITAL CORP. DLJ ESC II, L.P. By: DLJ LBO Plans Management Corporation Its: Manager By: /s/ ROBERT FINZI ------------------------------- By: /s/ ROBERT FINZI Name: Robert Finzi ------------------------- Its: Attorney in Fact Name: Robert Finzi Date: February __, 2000 Date: February __, 2000 7 8 EBSCO INDUSTRIES, INC. EPIXTECH, INC. (FORMERLY KNOWN AS AMERITECH LIBRARY SERVICES) By: /s/ RICHARD L. BOZZELLI By: /s/ LANA PORTER --------------------------- ---------------------------- Name: Richard L. Bozzelli Name: Lana Porter Title: Vice President & CFO Title: President / CEO Date: February 18, 2000 Date: February __, 2000 FOLLETT CORPORATION HOUGHTON MIFFLIN By: /s/ KENNETH J. HULL By: /s/ NADER F. DAREHSHORI --------------------------- ---------------------------- Name: Kenneth J. Hull Name: Nader F. Darehshori Title: Chairman / CEO Title: Chairman, President and CEO Date: March 8, 2000 Date: February 18, 2000 LDIG NL, INC. MARCEL DEKKER, INC. By: /s/ CRAIG ENENSTEIN By: --------------------------- ---------------------------- Name: Craig Enenstein Name: Title: VP Business Development -------------------------- & Strategy Title: Date: March 14, 2000 ------------------------- Date: February __, 2000 MARKET STREET PARTNERS NL MARQUETTE VENTURE PARTNERS III, L.P. By: /s/ MICHAEL C. FRANSON By: /s/ LLOYD RUTH --------------------------- ---------------------------- Name: Michael C. Franson Name: Lloyd Ruth Title: Managing General Partner Title: Authorized Signatory Date: February 20, 2000 Date: February __, 2000 8 9 THE MCGRAW-HILL COMPANIES, INC. PARKER & SON LIMITED By: /s/ ROBERT J. BAHASH By: /s/ TIM EUSTACE ------------------------------- ----------------------- Name: Robert J. Bahash Name: Tim Eustace Title: EVP CFO Title: Director / Secretary Date: February 18, 2000 Date: February 18th, 2000 PARTHENON INVESTORS, L.P. PCIP INVESTORS By: Parthenon Investment Advisors, L.L.C. its general partner By: /s/ JOHN RUTHERFORD By: /s/ JOHN RUTHERFORD ------------------------------- ----------------------- Name: John Rutherford Name: John Rutherford Title: Managing Member Title: General Partner Date: February __, 2000 Date: February __, 2000 PEARL STREET TRUST REPERTOIRE CAPITAL VENTURES RLLLP By: /s/ SCOTT A. BECK By: /s/ KARL FRIEDMAN ------------------------------- ----------------------- Name: Scott A. Beck Name: Karl Friedman Title: Trustee Title: General Partner Date: February 17, 2000 Date: February 11, 2000 SEQUEL LIMITED PARTNERSHIP SEQUEL EURO LIMITED PARTNERSHIP By: Sequel Venture Partners, L.L.C., By: Sequel Venture Partners, L.L.C. General Partner General Partner By: /s/ THOMAS G. WASHING By: /s/ THOMAS G. WASHING ------------------------------- ----------------------- Name: Thomas G. Washing Name: Thomas G. Washing Title: General Partner Title: General Partner Date: February __, 2000 Date: February __, 2000 9 10 SORENSON FAMILY LIMITED SORENSON LIMITED PARTNERSHIP, PARTNERSHIP FLLLP By: /s/ RALPH Z. SORENSON By: /s/ RALPH Z. SORENSON ------------------------- ------------------------- Name: Ralph Z. Sorenson Name: Ralph Z. Sorenson Title: General Partner Title: General Partner Date: February 17, 2000 Date: February 17, 2000 SPROUT CAPITAL VIII, L.P. SPROUT VENTURE CAPITAL, L.P. By: DLJ Capital Corp. By: DLJ Capital Corp. Its: Managing General Partner Its: Managing General Partner By: /s/ ROBERT FINZI By: /s/ ROBERT FINZI ------------------------- ------------------------- Name: Robert Finzi Name: Robert Finzi Its: Attorney in Fact Its: Attorney in Fact THE TELL ERTL FAMILY WORLD VENTURE PARTNERS, INC. By: /s/ JOSEPH L. FOX By: /s/ PETE ESTLER ------------------------- ------------------------- Name: Joseph L. Fox Name: Pete Estler Title: Co-Trustee Title: President Date: February 17, 2000 Date: February __, 2000 10 11 WPG NETWORKING FUND, LP WPG SOFTWARE FUND, LP By: Weiss, Peck & Greer, LLC, By: Weiss, Peck & Greer, LLC, its General Partner its General Partner By: /s/ RAJ MEHRA By: /s/ BENJAMIN JAMES TAYLOR ------------------------- ---------------------------- Member Member Name: Raj Mehra Name: Benjamin James Taylor Title: Managing Director Title: Managing Director Date: February __, 2000 Date: February __, 2000 WPG INSTITUTIONAL WPG INSTITUTIONAL NETWORKING FUND, LP SOFTWARE FUND, LP By: Weiss, Peck & Greer, LLC, By: Weiss, Peck & Greer, LLC, its General Partner its General Partner By: /s/ RAJ MEHRA By: /s/ BENJAMIN JAMES TAYLOR ------------------------- ---------------------------- Member Member Name: Raj Mehra Name: Benjamin James Taylor Title: Managing Director Title: Managing Director Date: February __, 2000 Date: February __, 2000 WPG RAYTHEON WPG RAYTHEON NETWORKING FUND, LP SOFTWARE FUND, LP By: Weiss, Peck & Greer, LLC, By: Weiss, Peck & Greer, LLC, its attorney-in-fact its attorney-in-fact By: /s/ RAJ MEHRA By: /s/ BENJAMIN JAMES TAYLOR ------------------------- ---------------------------- Member Member Name: Raj Mehra Name: Benjamin James Taylor Title: Managing Director Title: Managing Director Date: February __, 2000 Date: February __, 2000 11 12 /s/ RAJ MEHRA /s/ LLOYD RUTH - --------------------------- ------------------------------ RAJ MEHRA LLOYD RUTH /s/ TIM COLLINS /s/ SHARON MAGNESS - --------------------------- ------------------------------ TIM COLLINS SHARON MAGNESS /s/ PETER BEHRENDT - --------------------------- ------------------------------ NAVEEN JAIN PETER BEHRENDT - --------------------------- ANU JAIN /s/ RALPH Z. SORENSON /s/ NANCY OVERMAN - --------------------------- ------------------------------ RALPH Z. SORENSON NANCY OVERMAN /s/ MARK WATTLES - --------------------------- ------------------------------ MARK WATTLES LILLIAN NADHIR /s/ DAN H. BROUGHTON - --------------------------- DAN H. BROUGHTON 12