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EXHIBIT 10.18
NETLIBRARY, INC.
SECOND AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
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TABLE OF CONTENTS
PAGE
1. Definitions..............................................................................................2
2. Voting...................................................................................................2
2.1 General Voting..................................................................................2
2.2 Election of Directors...........................................................................3
2.3 Successors......................................................................................4
2.4 Other Rights....................................................................................4
3. Right of First Refusal...................................................................................4
3.1 Right of First Refusal of Key Stockholder Transfers.............................................4
3.2 Exercise of Rights..............................................................................4
3.3 Purchase of Common Shares by Company............................................................4
3.4 Purchase of Common Shares by the Stockholders...................................................5
3.5 No Participation................................................................................5
3.6 Excluded Securities.............................................................................6
3.7 Transfer........................................................................................7
4. Legend ................................................................................................7
5. Termination..............................................................................................8
6. Miscellaneous............................................................................................8
6.1 Ownership.......................................................................................8
6.2 Further Action..................................................................................8
6.3 Specific Performance............................................................................8
6.4 Governing Law...................................................................................9
6.5 Amendment of Waiver.............................................................................9
6.6 Severability....................................................................................9
6.7 Successors......................................................................................9
6.8 Additional Shares...............................................................................9
6.9 Counterparts....................................................................................9
6.10 Waiver..........................................................................................9
6.11 Notices........................................................................................10
6.12 Attorney's Fees................................................................................10
6.13 Entire Agreement...............................................................................10
6.14 Waiver and Consent.............................................................................10
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NETLIBRARY, INC.
SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THIS SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (the
"Agreement") is made and entered into as of October 8, 1999, 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 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 sold shares of its Series A Preferred Stock (the
"Series A Preferred Stock") to certain of its Investors pursuant to the Series A
Preferred Stock Purchase Agreement (the "Series A Purchase Agreement") on August
20, 1998 and January 8, 1999 (the "Series A Financing");
WHEREAS, the Company sold shares of its Series B Preferred Stock (the
"Series B Preferred Stock") to certain of the Investors pursuant to the Series B
Preferred Stock Purchase Agreement (the "Series B Purchase Agreement") on May
17, 1999 (the "Series B Financing");
WHEREAS, in connection with the Series B Financing, the Company, the
Key Stockholders and such Investors entered into a certain Amended and Restated
Stockholders Agreement, dated May 17, 1999 (the "Stockholders Agreement");
WHEREAS, the Company proposes to sell shares of its Series C Preferred
Stock (the "Series C Preferred Stock") to certain of the Investors pursuant to
the Series C Preferred Stock Purchase Agreement (the "Series C Purchase
Agreement") of even date herewith (the "Series C Financing"); and
WHEREAS, in connection with the consummation of the Series C Financing,
the Company, the Key Stockholders and the Investors desire to amend and restate
the Stockholders Agreement to provide for the future voting of their shares of
the Company's capital stock and to grant rights of first refusal 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:
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1. DEFINITIONS.
(a) "AFFILIATE" of a Person shall mean any other person
controlling, controlled by or under common control with such Person, where
"control' means the possession, directly or indirectly, of the power to direct
the management and policies of a Person whether through the ownership or voting
securities, contract or otherwise.
(b) "COMMON SHARES" shall mean all shares of capital stock of
the Company registered in the names of the Key Stockholders or beneficially
owned by them as of the date hereof and any and all other securities of the
Company legally acquired by the Key Stockholders after the date hereof
(excluding any shares acquired by World Venture Partners, Inc. other than the
common shares described on Exhibit A). The Common Shares registered in the name
of the Key Stockholders or beneficially owned by them as of the date hereof are
set forth on Exhibit A, which Exhibit shall be amended automatically from time
to time by the Company to reflect changes in the number of Common Shares owned
by the Key Stockholders.
(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 and the Series C Preferred Stock).
Each Investor owns or beneficially owns the Investor Shares shown as owned by
such Investor as of the date hereof as set forth on Exhibit B, which Exhibit
shall be amended automatically from time to time by the Company to reflect the
sale of additional shares of Series C Stock or otherwise to reflect changes in
the number of shares of capital stock owned by the Investors.
(d) "QUALIFIED PUBLIC OFFERING" shall mean a firmly
underwritten public offering of the Company's Common Stock pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
covering the offer and sale of the Company's Common Stock in which (i) the
per-share price is at least twenty dollars ($20.00), as adjusted for stock
splits, dividends, recapitalizations, and the like after the date hereof), (ii)
the net cash proceeds to the Company are at least thirty million dollars
($30,000,000), and (iii) the Company's Common Stock is listed on a national
securities exchange or on NASDAQ National Market System of the NASDAQ Stock
Market.
2. VOTING.
2.1 GENERAL VOTING.
(a) The Key Stockholders each agree to hold all Common Shares
subject to, and to vote the Common Shares in accordance with, the provisions of
this Agreement.
(b) Each Investor agrees to hold all of its Investor Shares
subject to, and to vote its Investor Shares in accordance with, the provisions
of this Agreement.
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2.2 ELECTION OF DIRECTORS.
(a) At each election of directors in which the holders of
Series A Preferred Stock, voting together as a separate class on an as-converted
basis, are entitled to elect two (2) directors of the Company (the "Series A
Preferred Designees") pursuant to Article IV(G)(2)(f)(i) of the Company's Third
Amended and Restated Certificate of Incorporation (the "Restated Certificate"),
such holders of Series A Preferred Stock shall vote their respective Investor
Shares so as to elect one person designated by Sequel Limited Partnership (which
person shall initially be ▇▇▇ Washing) and one person designated by Anschutz
Family Investment Company (which person shall initially be ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇). Any
vote taken to remove any director elected pursuant to this Section 2.2(a), or to
fill any vacancy created by the resignation of a director elected pursuant to
this Section 2.2(a), shall also be subject to the provisions of this Section
2.2(a).
(b) At each election of directors in which the holders of
Series B Preferred Stock, voting together as a separate class on an as-converted
basis, are entitled to elect two (2) directors of the Company (the "Series B
Preferred Designees") pursuant to Article IV(G)(2)(f)(ii) of the Restated
Certificate, such holders of Series B Preferred Stock shall vote their
respective Investor Shares so as to elect two (2) people designated by DLJ
Capital Corp., DLJ ESC II, L.P., Sprout Capital VIII, L.P. and Sprout Venture
Capital, L.P. (collectively, "The Sprout Group") (one of which persons shall
initially be ▇▇▇▇▇▇ ▇▇▇▇▇ or another employee of the Sprout Group and the other
such person shall be an individual from within the Company's industry who has
appropriate experience in that industry or as an investor). The Sprout Group
agrees to obtain the prior approval (which shall not be unreasonably withheld)
of the Company's Board of Directors (the "Board") regarding its designation of
the outside Series B Preferred Designee (i.e., the designee other than ▇▇▇▇▇▇
▇▇▇▇▇ or another employee of The Sprout Group). Any vote taken to remove any
director elected pursuant to this Section 2.2(b), or to fill any vacancy created
by the resignation of a director elected pursuant to this Section 2.2(b), shall
also be subject to the provisions of this Section 2.2.
(c) [RESERVED]
(d) At each election of directors in which the holders of the
Common Stock, voting separately as a class, are entitled to elect one (1)
director of the Company pursuant to Article IV(E)(2)(e)(iv) of the Company's
Restated Certificate, the Key Stockholders shall vote their respective Common
Shares so as to elect one (1) person designated by a majority of the holders of
the Common Stock (which person shall initially be ▇▇▇▇ ▇▇▇▇▇▇). Any vote taken
to remove a director elected pursuant to this Section 2.2(d), or to fill any
vacancy created by the resignation of a director elected pursuant to this
Section 2.2(d), shall also be subject to the provisions of this Section 2.2(d).
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2.3 SUCCESSORS. The provisions of this Agreement shall be binding upon
the successors in interest to any of the Common Shares or Investor Shares. The
Company shall not permit the transfer of any of the Common Shares or Investor
Shares on its books or issue a new certificate representing any of the Common
Shares or Investor Shares unless and until the person to whom such security is
to be transferred shall have executed a written agreement, substantially in the
form of this Agreement, pursuant to which such person becomes a party to this
Agreement and agrees to be bound by all the provisions hereof as if such person
were a Key Stockholder or Investor, as applicable.
2.4 OTHER RIGHTS. Except as provided by this Agreement, each Key
Stockholder and Investor shall exercise the full rights of a stockholder with
respect to the Common Shares and its Investor Shares, respectively.
3. RIGHT OF FIRST REFUSAL.
3.1 RIGHT OF FIRST REFUSAL OF KEY STOCKHOLDER TRANSFERS. No Key
Stockholder shall sell, assign, pledge, or in any manner transfer any of the
Common Shares of the Company or any right or interest therein, whether
voluntarily or by operation of law, or by gift or otherwise, except by a
transfer which meets the requirements hereinafter set forth in this Section 3.
3.2 EXERCISE OF RIGHTS. If a Key Stockholder receives from anyone a
bona fide offer acceptable to such Key Stockholder to purchase any of his Common
Shares, then the Key Stockholder shall first deliver written notice (the
"Notice") thereof to the Company and all of the Investors. The Notice shall name
the proposed transferee and state the price and quantity of the Common Shares to
be transferred, as well as all other terms and conditions of the offer.
3.2 PURCHASE OF COMMON SHARES BY COMPANY. For a period of fifteen (15)
days following receipt of such Notice, the Company shall have the option to
purchase all or a portion of the Common Shares specified in the Notice at the
price and upon the terms set forth in such bona fide offer. In the event the
Company elects to acquire any of the Common Shares of the selling Key
Stockholder as specified in said selling Key Stockholder's Notice, the Secretary
of the Company shall so notify the selling Key Stockholder within such fifteen
(15) day period and settlement thereof shall be made in cash within thirty (30)
days after the Secretary of the Company receives said selling Key Stockholder's
Notice; provided, that, if the terms of payment set forth in said selling Key
Stockholder's Notice were other than cash against delivery, the Company shall
pay for said Common Shares on the same terms and conditions set forth in said
selling Key Stockholder's Notice.
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3.4 PURCHASE OF COMMON SHARES BY THE STOCKHOLDERS.
(a) In the event the Company does not elect to acquire all of
the Common Shares specified in the selling Key Stockholder's Notice, the Company
shall promptly (in no case more than five (5) days after its receipt of the Key
Stockholder's Notice) notify each holder of Series A Preferred Stock, each
holder of Series B Preferred Stock that, by itself or with its Affiliates, holds
at least five hundred thousand (500,000) shares of Series B Preferred Stock, and
each holder of Series C Preferred Stock that, by itself or with its Affiliates,
holds at least three hundred ninety thousand (390,000) shares of Series C
Preferred Stock (each, a "Participating Investor"), of the number of Common
Shares available for purchase by each such Participating Investor and each such
Participating Investor shall have the right, exercisable upon written notice to
the selling Key Stockholder within fifteen (15) days following receipt of the
original Notice described in Section 3.2 above, to purchase its pro rata share
(determined as provided in Section 3.4(b)) of the Common Shares (less any Common
Shares purchased by the Company pursuant to Section 3.3 above) on the terms and
conditions specified in the Notice.
(b) Each Participating Investor may purchase all or any part
of that number of Common Shares equal to the product obtained by multiplying (x)
the aggregate number of Common Shares covered by the Notice (less shares
purchased by the Company pursuant to Section 3.3 above) by (y) a fraction the
numerator of which is the number of Investor Shares owned by such Participating
Investor at the time of the sale or transfer and the denominator of which is the
total number of Investor Shares owned by all of the Participating Investors at
the time of the sale or transfer.
(c) In the event that any Participating Investor elects not to
purchase its full pro rata share of the Common Shares as provided in Section
3.4(b) above, then the selling Key Stockholder shall promptly notify the
Participating Investors who do so elect and shall reoffer the remaining
unpurchased portion of the Common Shares to such Participating Investors on a
pro rata basis. Each such Participating Investor shall have the right,
exercisable upon written notice to the selling Key Stockholder within five (5)
days after receipt of such notice, to purchase all or a portion thereof of the
remaining Common Shares.
(d) Settlement for any Common Shares purchased pursuant to
this Section 3.4 shall be made in cash, provided, that, if the terms of payment
set forth in the Key Stockholder's Notice were other than cash against delivery
the stockholder shall pay for said Common Shares on the same terms and
conditions set forth in the Notice.
3.5 NO PARTICIPATION. In the event the Company and the Participating
Investors collectively do not elect to acquire all of the Common Shares
specified in the selling Key Stockholder's Notice, said selling Key Stockholder
may, within the sixty (60) day period following the expiration of the option
rights granted to the Company, sell to the person who made the bona fide offer
the Common Shares specified in said selling Key Stockholder's Notice in
accordance with the provisions of this Section 3, provided, that said sale shall
not be on terms and conditions more favorable to the purchaser than those
contained in the bona fide offer set
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forth in said selling Key Stockholder's Notice. All Common Shares so sold by
said selling Key Stockholder shall continue to be subject to the provisions of
Section 3 in the same manner as before said transfer.
3.6 EXCLUDED SECURITIES. The right of first refusal established by this
Section 3 shall have no application to any of the following:
(a) A Key Stockholder's transfer of any or all Common Shares
held by such Key Stockholder to such Key Stockholder's immediate family or to a
charity whether by gift, devise or descent on death; provided, that any gift is
a bona fide gift. "Immediate family" as used herein shall mean spouse (or
domestic partner), lineal descendant (by birth or adoption), father, mother,
brother, sister, niece, nephew or lineal descendant of father or mother (by
birth or adoption) of the Key Stockholder making such transfer and shall include
any trust established primarily for the benefit of the key stockholder or his
immediate family;
(b) A Key Stockholder's bona fide pledge or mortgage of any
Common Shares with a commercial lending institution; provided, that, any
subsequent transfer of said Common Shares by said institution shall be conducted
in the manner set forth in this Section 3;
(c) A Key Stockholder's transfer of any or all of such Key
Stockholder's Common Shares to another Key Stockholder or to the Company;
(d) A Key Stockholder's transfer of any or all of such Key
Stockholder's Common Shares to a person who, at the time of such transfer, is an
officer of the Company;
(e) A corporate Key Stockholder's transfer of any or all of
its Common Shares pursuant to and in accordance with the terms of any merger,
consolidation, reclassification of shares or capital reorganization of the
corporate stockholder, or pursuant to a sale of all or substantially all of the
stock or assets of a corporate stockholder provided, that if the corporate Key
Stockholder acquired its Common Shares by means of a transaction described in
this Section 3.6, this paragraph (e) shall apply only if the transaction
described in this paragraph (e) does not result in a change in control of the
corporate Key Stockholder;
(f) A corporate Key Stockholder's transfer of any or all of
its Common Shares to any or all of its security holders;
(g) A transfer by a Key Stockholder which is a limited or
general partnership to any or all of its partners or in connection with any
reorganization or acquisition of such partnership; and
(h) A transfer permitted by Section 7(d) of that certain Stock
Purchase Agreement among certain of the Key Stockholders and the Company dated
September 16, 1999.
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In any such case, the transferee, assignee, or other recipient
shall receive and hold such Common Shares subject to this Section 3, and there
shall be no further transfer of such stock except in accordance with this
Section 3 and the other terms of this Agreement.
3.7 TRANSFER. Prior to any transfer of Common Shares of the Company
pursuant to this Section 3 (other than to the Company or the Participating
Investors) the transferring Key Stockholder shall cause the prospective
transferee to be bound by this Agreement and to execute and deliver to the
Company, the other Key Stockholders and the Investors counterparts of this
Agreement.
4. LEGEND.
(a) PRIOR TO OR Concurrently with the execution of this
Agreement, there shall have been or shall be imprinted or otherwise placed on
certificates representing the Common Shares and the Investor Shares the
following restrictive legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A STOCKHOLDERS AGREEMENT THAT PLACES
CERTAIN RESTRICTIONS ON THE VOTING OF THE SHARES REPRESENTED
HEREBY. ANY PERSON ACCEPTING ANY INTEREST IN SUCH SHARES SHALL
BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE
PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH STOCKHOLDERS
AGREEMENT WILL BE FURNISHED TO THE RECORD HOLDER OF THIS
CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY
AT ITS PRINCIPAL PLACE OF BUSINESS."
Concurrently with the execution of this Agreement, there shall be imprinted or
otherwise placed, on certificates representing the Common Shares the following
restrictive legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
RIGHT OF FIRST REFUSAL IN FAVOR OF THE CORPORATION AND ITS
ASSIGNEE(S) AND CERTAIN STOCKHOLDERS OF THE CORPORATION AS
PROVIDED IN A STOCKHOLDERS AGREEMENT."
(b) The Company agrees that, during the term of this
Agreement, it will not remove, and will not permit to be removed (upon
registration of transfer, reissuance or otherwise), the above restrictive
legends from any such certificate and will place or cause to be placed the above
restrictive legends on any new certificate issued to represent Common Shares or
Investor Shares theretofore represented by a certificate carrying the
restrictive legends.
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5. TERMINATION.
This Agreement shall continue in full force and effect from the date
hereof through the earliest of the following dates, on which it shall terminate
in its entirety:
(a) the date of the closing of a Qualified Public Offering; or
(b) ten (10) years from the date of this Agreement; or
(c) the date as of which the parties hereto terminate this
Agreement by written consent of a two-thirds (2/3) in interest of the Investors
and a majority in interest of the Key Stockholders; or
(d) as to any Key Stockholder, at such time as his Common
Shares represent less than one percent (1%) of the outstanding Common Stock on a
fully diluted basis; or
(e) as to any Investor, at such time as his Investor Shares
represent less than one percent (1%) of the outstanding Common Stock on an
as-converted, fully diluted basis.
6. MISCELLANEOUS.
6.1 OWNERSHIP. Each Key Stockholder represents and warrants to the
Investors that (a) he now owns the Common Shares shown on Exhibit A, free and
clear of all liens or encumbrances (other than joint tenancy), and has not,
prior to or on the date of this Agreement, executed or delivered any proxy or
entered into any other voting agreement or similar arrangement other than one
which has expired or terminated prior to the date hereof, and (b) such Key
Stockholder has full power and capacity to execute, deliver and perform this
Agreement, which has been duly executed and delivered by, and evidences the
valid and binding obligation of, such Key Stockholder enforceable in accordance
with its terms.
6.2 FURTHER ACTION. If and whenever any Common Shares are sold, the Key
Stockholders or the personal representatives of the Key Stockholders shall do
all things and execute and deliver all documents and make all transfers, and
cause any transferee of the Common Shares to do all things and execute and
deliver all documents, as may be necessary to consummate such sale consistent
with this Agreement.
6.3 SPECIFIC PERFORMANCE. The parties hereto hereby declare that it is
impossible to measure in money the damages which will accrue to a party hereto
or to such party's heirs, personal representatives, or assigns by reason of a
failure to perform any of the obligations under this Agreement, and agree that
the terms of this Agreement shall be specifically enforceable. If any party
hereto or such party's heirs, personal representatives, or assigns institutes
any action or proceeding to specifically enforce the provisions hereof, any
person against whom such action or proceeding is brought hereby waives the claim
or defense therein that such party or such personal representative has an
adequate remedy at law, and such person shall not offer in any such action or
proceeding the claim or defense that such remedy at law exists.
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6.4 GOVERNING LAW. This Agreement, and the rights of the parties
hereto, shall be governed by and construed in accordance with the laws of the
State of Colorado as such laws apply to agreements among Colorado residents made
and to be performed entirely within the State of Colorado, without giving effect
to any choice of law or conflict of law rules or provisions (whether of the
State of Colorado or any other jurisdiction), that would cause the application
of the laws of any other jurisdiction other than the State of Colorado.
6.5 AMENDMENT OR WAIVER. This Agreement may be amended (or provisions
of this Agreement waived) only by an instrument in writing signed by (a) the
Company, (b) two-thirds (2/3) in interest of the Investors and (c) a majority in
interest of the Key Stockholders; provided, that no party shall lose its right
to designate, or vote for the designation of, a member of the Board pursuant to
Section 2.2 hereof without the specific consent of such party. Any amendment or
waiver so effected shall be binding upon the Company, each of the parties hereto
and any assignee of any such party. Notwithstanding the foregoing, (x) the
consent of a Key Stockholder to any amendment or waiver that diminishes such Key
Stockholder's rights shall not be required if such person is no longer serving
as an employee or director of, or consultant to, the Company, and (y) this
Agreement may be amended in connection with the closing of any purchase of the
Company's Series C Stock so as to add any purchaser of the Series C 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.
6.6 SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable, the validity and enforceability of the remaining
provisions of this Agreement shall not be affected thereby.
6.7 SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, successors, assigns,
administrators, executors and other legal representatives.
6.8 ADDITIONAL SHARES. In the event that subsequent to the date of this
Agreement any shares or other securities (other than any shares or securities of
another corporation issued to the Company's stockholders pursuant to a plan of
merger) are issued in respect of, or in exchange for, any of the Common Shares
or Investor Shares by reason of any stock dividend, stock split, consolidation
of shares, reclassification or consolidation involving the Company, such shares
or securities shall be deemed to be Common Shares or Investor Shares, as the
case may be, for purposes of this Agreement.
6.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
shall constitute one and the same agreement.
6.10 WAIVER. No waivers of any breach of this Agreement extended by any
party hereto to any other party shall be construed as a waiver of any rights or
remedies of any other party hereto or with respect to any other breach.
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6.11 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (iii) five (5) business days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (iv) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be
sent to the party to be notified at the address as set forth on the signature
page or exhibit pages hereof or at such other address as such party may
designate by ten (10) days advance written notice to the other parties hereto.
6.12 ATTORNEY'S FEES. In the event that any suit or action is
instituted to enforce any provision in this Agreement, the prevailing party
shall be entitled to all costs and expenses of such suit or action, including
reasonable attorneys' fees.
6.13 ENTIRE AGREEMENT. This Agreement supercedes the Stockholders
Agreement in its entirety. This Agreement and the Exhibits hereto, along with
the Purchase Agreement and each of the Exhibits thereto, constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof and no party shall be liable or bound to any other
in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
6.14 WAIVER AND CONSENT. Subject to the terms of the Series C Purchase
Agreement, each Investor and each Key Stockholder who is a party to the
Stockholders Agreement hereby waives any rights it may have thereunder in
connection with the sale and issuance of the Series C Preferred Stock, grants
any consent required by the Stockholders Agreement with respect to the sale and
issuance of the Series C Preferred Stock and waives any breach or default as may
have occurred under the Stockholders Agreement.
[THIS SPACE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this
SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT as of the date first above
written.
COMPANY:
NETLIBRARY, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
After October 31, 1999:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
KEY STOCKHOLDERS:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ WORLD VENTURE PARTNERS, INC.
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ F. ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------- ---------------------------
F. ▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Agent
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
INVESTORS:
SEQUEL EURO LIMITED PARTNERSHIP ANSCHUTZ FAMILY INVESTMENT
COMPANY LLC
By: Sequel Venture Partners, L.L.C. By: Anschutz Company
Its: General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------
By: /s/ ▇▇▇▇▇▇ WASHING Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------- Title: Vice President
Manager
SEQUEL LIMITED PARTNERSHIP
By: Sequel Venture Partners, L.L.C.
Its: General Partner
By: /s/ ▇▇▇▇▇▇ WASHING
-------------------------------
Its: General Partner
11
14
REPERTOIRE CAPITAL UNIVERSITY OF COLORADO
VENTURES RLLLP FOUNDATION, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇▇
------------------------------ -------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇ ▇▇▇▇▇▇
Title: General Partner Title: CFO, Treasurer
WORLD VENTURE PARTNERS, INC. MARKET STREET PARTNERS NL
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------ -------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Agent Title: Managing General Partner
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------- ----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
DLJ CAPITAL CORP. DLJ ESC II, L.P.
By: DLJ LBO Plans Management
Corporation
Its: Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------- By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇ -------------------------------
Its: Attorney in Fact Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Its: Attorney in Fact
12
15
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/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------- --------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Its: Attorney in Fact Its: Attorney in Fact
PEARL STREET TRUST BOWANA FOUNDATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------ -------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President/CEO Title: President
MARQUETTE VENTURE PARTNERS III, L.P. COVESTCO-MEDEURA, LLC
By: Marquette III, L.L.C. By: Medeura Limited
Its: General Partner Its: Manager
By: /s/ ▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------- --------------------------
Name: ▇▇▇▇ ▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory Title: Director
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------- ----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------- ----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
13
16
ABC-CLIO THE ▇▇▇▇▇▇ -▇▇▇▇
COMPANIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ -------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CEO Title: Executive Vice President
and CEO
▇▇▇▇ CAPITAL FUND VI, L.P.
By: ▇▇▇▇ Capital Partners VI, L.P.,
its General Partner
By: ▇▇▇▇ Capital Investors VI, Inc.,
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
BROOKSIDE CAPITAL PARTNERS SANKATY HIGH YIELD ASSET
FUND, L.P. PARTNERS, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------ -------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director Title: Managing Director
PEP INVESTMENTS PTY LTD BCIP ASSOCIATES II
By: ▇▇▇▇ Capital, Inc., By: ▇▇▇▇ Capital, Inc.,
its attorney-in-fact its Managing Partner
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------- --------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director Title: Managing Director
14
17
BCIP ASSOCIATES II-B
By: ▇▇▇▇ Capital, Inc.,
its Managing Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇ NEW GENERATION LDIG NL, INC.
FUND, A SERIES OF THE
▇▇▇▇▇▇ INVESTMENT
PORTFOLIO OF TRUSTS
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------ -------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President Title: Vice President
Port Manager
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇ ▇▇▇▇▇▇▇
--------------------------------- ----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
15
18
WPG NETWORKING FUND, LP WPG SOFTWARE FUND, LP
By: ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, LLC, By: ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, LLC,
its General Partner its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------ ---------------------------------
Member Member
WPG INSTITUTIONAL WPG INSTITUTIONAL
NETWORKING FUND, LP SOFTWARE FUND, LP
By: ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, LLC, By: ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, LLC,
its General Partner its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------ ---------------------------------
Member Member
WPG RAYTHEON WPG RAYTHEON
NETWORKING FUND, LP SOFTWARE FUND, LP
By: ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, LLC, By: ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, LLC,
its attorney-in-fact its attorney-in-fact
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------ ---------------------------------
Member Member
16
19
EBSCO INDUSTRIES, INC. ▇▇▇▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------ -------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: VP & CFO Title: Chairman/CEO
HOUGHTON MIFFLIN ▇▇▇▇▇▇ & SON LIMITED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
------------------------------ -------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman, President & CEO Title: Director/Secretary
/s/ ▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------- ----------------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, INC. EPIXTECH, INC. (FORMERLY KNOW AS
AMERITECH LIBRARY SERVICES)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------ -------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: COO Title: President & CEO
COMCAST INTERACTIVE CAPITAL, L.P. BCI INVESTMENTS II, LLC
By: CIC Partners, LP, its general partner
By: CIC Venture Management, LLC, By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
its general partner -------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
17
20
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
GRAND CENTRAL HOLDINGS, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Member
GCH PEANUTPRESS, LLC
By: Grand Central Holdings, LLC,
its Managing Member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Member
▇▇▇▇▇▇ VENTURE PARTNERS, L.P.
By: Grand Central Holdings, LLC,
holder of an irrevocable proxy
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Member
18
21
February 24, 2000
Parthenon Investors, L.P. PCIP Investors, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Attention: Mr. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Re: netLibrary Series D Investment
Dear ▇▇. ▇▇▇▇▇▇▇▇▇▇:
As you may recall, in connection with your investment in the Series D Preferred
Stock of netLibrary, Inc. (the "Company"), you executed the Amendment to Second
Amended and Restated Stockholders Agreement and the Amendment to Second Amended
and Restated Investors' Rights Agreement. Through an oversight, the amendment
did not include standard language to the effect that you agreed to be bound by
the terms of the Second Amended and Restated Stockholders Agreement and the
Second Amended and Restated Investors' Rights Agreement (collectively, the
"Agreements").
netLibrary requests that you indicate your agreement to becoming a party to the
Agreements in the space provided below.
Sincerely,
▇▇▇▇ ▇. ▇▇▇▇▇
General Counsel
Accepted and agreed to this
28th day of February, 2000:
PARTHENON INVESTORS, L.P. PCIP INVESTORS, L.P.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------- ---------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: General Partner Title: General Partner