EXHIBIT (D)(5)
CONFORMED COPY
REGISTRATION RIGHTS AGREEMENT dated as of July 19, 2000, among CDnow,
Inc., a Pennsylvania corporation, (the "Issuer"), and Bertelsmann, Inc., a
Delaware Corporation, (the "Holder").
WHEREAS the parties hereto are parties to a Convertible Loan Agreement (as
amended from time to time the "Loan Agreement") dated as of July 19, 2000; and
WHEREAS as a condition to the consummation of the transactions
contemplated by the Loan Agreement, the Issuer has agreed to grant to the
Holder and its transferees certain registration rights with respect to its
respective Registrable Securities (as defined below).
NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. As used herein, the following terms shall have
the meanings herein specified unless the context otherwise requires. Defined
terms in this Agreement shall include in the singular number the plural and in
the plural number the singular. Capitalized terms used but not otherwise
defined herein shall have the respective meanings ascribed thereto in the Loan
Agreement.
"Agreement" shall mean this Registration Rights Agreement.
"Registrable Securities" shall mean all shares of CDnow Common Stock
resulting from the conversion of (x) the Note or any portion of the principal
amount thereof or (y) any accrued and unpaid interest on any Loan, in each case
pursuant to Article 8 of the Loan Agreement.
"Securities Act" shall mean the Securities Act of 1933.
ARTICLE 2
REGISTRATION RIGHTS
SECTION 2.01. Registration Rights. With respect to the Holder's
Registrable Securities, the Issuer will, if requested by the Holder at any time
and from time to time within three years after the date of the conversion in
full of the Note, as expeditiously as possible prepare and file a total of up
to three registration statements under the Securities Act if such registration
is necessary in order to permit the sale or other disposition of any or all
Registrable Securities in accordance with the intended method of sale or other
disposition stated by the Holder, including "shelf" registration statements
under Rule 415 promulgated under the Securities Act or any successor provision,
and the Issuer will use its best efforts to qualify such Registrable Securities
under any applicable state securities laws. The Holder agrees to use reasonable
efforts to cause, and to cause any underwriters of any sale or other
disposition pursuant to such registration statement to be effected on a widely
distributed basis so that upon consummation thereof no purchaser or transferee
will own beneficially more than 4.9% of the then-outstanding voting power of
the Issuer. The Issuer will use reasonable efforts to cause such registration
statement to become effective, to obtain all consents or waivers of other
parties which are required therefor and to keep such registration statement
effective for such period not in excess of 180 calendar days from the day such
registration statement first becomes effective as may be reasonably necessary
to effect such sale or other disposition. The obligations of the Issuer
hereunder to file a registration statement and to maintain its effectiveness
may be suspended for up to 60 calendar days in the aggregate if the Board of
Directors of the Issuer shall have determined that the filing of such
registration statement or the maintenance of its effectiveness would require
premature disclosure of material nonpublic information that would materially
and adversely affect the Issuer or otherwise interfere with or adversely affect
any pending or proposed offering of securities of the Issuer or any other
material transaction involving the Issuer. Any registration statement prepared
and filed under this Section 2.01, and any sale covered thereby, will be at the
Issuer's expense (which shall include all registration filing fees, printing
expenses and fees and disbursements of counsel to the Issuer), except for
underwriting discounts or commissions, brokers' fees and the fees and
disbursements of counsel to the Holder related thereto. The Holder will provide
all information regarding itself reasonably requested by the Issuer for
inclusion in any registration statement to be filed hereunder. If, during the
time periods referred to in the first sentence of this Section 2.01, the Issuer
effects a registration under the Securities Act of its Common Stock for its own
account or for any other shareholders of the Issuer (other than on Form S-4 or
Form S-8, or any successor form), it will allow the Holder the right to
participate in such registration, and such participation will not effect the
obligation of the Issuer to effect demand registration statements for the
Holder under this Section 2.01;
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provided that, if the managing underwriter of such offering advise the Issuer
in writing that in their opinion the number of shares of its Common Stock
requested to be included in such registration exceeds the number which can be
sold in such offering, the Issuer will include the Registrable Securities
requested to be included therein by the Holder pro rata with the shares
intended to be included therein by the Issuer. In connection with any
registration pursuant to this Section 2.01, the Issuer, on the one hand, and
the Holder, on the other, will provide the other and any underwriter of the
offering with customary representations, warranties, covenants, indemnification
and contribution in connection with such registration.
ARTICLE 3
MISCELLANEOUS
SECTION 3.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission) and
shall be given:
if to Holder, to:
Bertelsmann, Inc.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Fax: 000-000-0000
Attention: Xxxxxx Xxxxxxxxxx
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Attention: Xxxxxxx Xxxxxxxx
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if to the Issuer, to:
0000 Xxxxxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxx
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests or other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5 p.m. on any business
day in the place of receipt. Otherwise, any such notice, request or other
communication shall be deemed not to have been received until the next
succeeding business day in the place of receipt.
SECTION 3.02. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York, without
regard to the conflict of laws rules of such state.
SECTION 3.03. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought against any of the parties in the United States District Court for the
Southern District of New York or any New York state court sitting in the City
of New York, and each of the parties hereto hereby consents to the exclusive
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to
the laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding which is brought in any such
court has been brought in an inconvenient forum. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court. Without limiting the
generality of the foregoing, each party hereto
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agrees that service of process upon such party as provided in Section 9.07 of
the Loan Agreement shall be deemed effective service of process upon such
party.
SECTION 3.04. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
CDNOW, Inc.
By: /s/ Xxxxx Xxxx
------------------------------
Title: President and Chief
Executive Officer
BERTELSMANN, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
------------------------------
Title: President and Chief
Executive Officer
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