Exhibit 10.33
SERIES A CONVERTIBLE PREFERRED
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STOCK PURCHASE AGREEMENT
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This Series A Convertible Preferred Stock Purchase Agreement (together
with the schedules and exhibits hereto, the "Agreement") dated as of February 8,
2001, is entered into by and among Audible, Inc., a Delaware corporation (the
"Company") and Microsoft Corporation, a Washington corporation ("Investor").
In consideration of the premises, mutual promises and covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Authorization and Sale of Series A Preferred Shares
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1.1 Authorization. The Company has, or before the Closing (as
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defined in Section 2) will have, duly authorized the issuance of up to 4,750,000
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shares of its Series A Convertible Preferred Stock, $0.01 par value per share
(the "Series A Shares"), having the rights, restrictions, privileges and
preferences set forth in the Certificate of Designation of the Designations,
Limitations, Restrictions and Relative Rights of the Series A Convertible
Preferred Stock, attached hereto as Exhibit A (the "Designation").
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1.2 Sale of Shares. Subject to the terms and conditions of this
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Agreement, at the Closing (as defined in Section 2), the Company will sell and
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issue to Investor, and Investor will purchase from the Company 2,666,666 Series
A Shares at a per share purchase price of $3.75, or any aggregate purchase price
of $9,999,997.50.
2. The Closing. The closing (the "Closing") of the sale and purchase of
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Series A Shares under this Agreement shall take place at the offices of Xxxxx
Xxxxxxx Xxxxxxx & Xxxxx LLP, 0000 Xxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, XX 00000
at 10 a.m., local time, on the date which is five (5) days following the
satisfaction (or waiver) of the conditions to Closing set forth in Sections 5
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and 6 below, or at such other place, time, and date as are mutually agreeable to
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the Company and the Investor. At the Closing, the Company will deliver to
Investor a certificate for the number of Series A Shares being purchased by
Investor, registered in the name of such Investor, against payment to the
Company of the aggregate purchase price therefor, by wire transfer, check, or
other method acceptable to the Company. The date of the Closing is hereinafter
referred to as the "Closing Date."
3. Representations of the Company. The Company hereby represents and
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warrants to Investor, at and as of the date of this Agreement, as follows:
3.1 Organization. The Company is a corporation duly incorporated,
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validly existing and in good standing under the laws of the State of Delaware.
The Company has all requisite corporate power and authority to own, operate and
lease its property and to carry on its business as now being conducted. The
Company is duly qualified or licensed as a foreign corporation to do business
and is in good standing in each jurisdiction in which the character of
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properties occupied, owned or held under lease by the Company, or the nature of
the business conducted by the Company, makes such qualification or license
necessary, except where the failure to be so qualified or licensed would not
have a material adverse effect on the business, operations, assets, liabilities
or financial condition of the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect").
3.2 Valid Issuance. The Series A Shares, when issued and paid for in
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accordance with this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable and (assuming the accuracy of Investor's representation
set in Section 4.5 hereof) issued in compliance with all applicable U.S., state
and foreign securities laws and will not be subject to any preemptive or other
similar rights.
3.3 Authority. The Company has all requisite corporate power and
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authority to enter into this Agreement, to sell and issue the Series A Shares
and to consummate the other transactions contemplated by this Agreement. The
execution and delivery of this Agreement, the issuance and sale of the Series A
Shares and the consummation of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate action on the part of the
Company. This Agreement has been duly executed and delivered by the Company,
and constitutes the valid and binding obligation of the Company, enforceable in
accordance with its terms, except to the extent limited by (i) the effect of
bankruptcy, insolvency, reorganization, receivership, conservatorship,
arrangement, moratorium, fraudulent transfer or other laws affecting or relating
to the rights of creditors generally, (ii) the rules governing the availability
of specific performance, injunctive relief or other equitable remedies and
general principles of equity, regardless of whether arising prior to, or after,
the date hereof or considered in a proceeding in equity or at law, or (iii) the
effect of federal and state securities laws and principles of public policy on
rights of indemnity and contribution.
3.4 No Conflict. The execution and delivery by the Company of this
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Agreement does not, and the sale and issuance of the Series A Shares and
consummation of the other transactions contemplated by this Agreement will not,
conflict with, or result in any violation or breach of any provision of, the
charter documents of the Company.
3.5 Required Filings and Consents. No consent, approval, order or
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authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority or
instrumentality ("Governmental Entity") is required by or with respect to the
Company in connection with the execution and delivery of this Agreement, the
sale and issuance of the Series A Shares or the consummation of the other
transactions contemplated hereby or thereby, except for such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable U.S., state and foreign securities laws and
such filings as may be required under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act").
3.6 Commission Filings. The Company has filed all reports required
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to be filed with the Securities Exchange Commission (the "Commission") since
July 16, 1999 (collectively, including all exhibits thereto, the "SEC Reports".
None of such SEC Reports, as of
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their respective dates (as amended through the date hereof), contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. All such SEC
Reports, as of their respective dates (as amended through the date hereof),
complied in all material respects with the requirements of the Securities
Exchange Act of 0000 (xxx "Xxxxxxxx Xxx").
3.7 Financial Statements. The consolidated financial statements of
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the Company and its subsidiaries contained in the SEC Reports were prepared in
accordance with U.S. generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods indicated, and present fairly in
all material respects, as of the dates and for the periods indicated, the
financial position of the Company and its subsidiaries and their results of
operations and cash flows for the periods therein set forth, subject in the case
of the unaudited consolidated financial statements to later normal, recurring
audit adjustments required by GAAP that are not in the aggregate material and to
omission of certain footnotes as permitted by GAAP.
3.8 Stockholders' Consent. No consent or approval of the
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stockholders of the Company is required or necessary pursuant to Rule 4350(i) of
the NASD Regulations or other applicable laws for the Company to enter into this
Agreement, to sell and issue the Series A Shares or to consummate the other
transactions contemplated pursuant to this Agreement.
3.9 Litigation. There is no litigation, governmental proceeding,
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investigation or arbitration pending or, to the knowledge of the Company,
threatened against or directly involving the Company that questions the legality
or validity of this Agreement or any related agreements or any actions taken or
to be taken pursuant to or in connection with this Agreement or any related
agreements or which could reasonably be expected to have a Material Adverse
Effect.
3.10 Disclosure. The representations and warranties made or
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contained in this Agreement when taken together, do not contain any untrue
statement of a material fact and do not omit to state a material fact required
to be stated herein or therein or necessary in order to make such
representations and warranties and other material not misleading.
4. Representations of the Investors. The Investor represents and warrants
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to the Company as follows:
4.1 Organization. The Investor is a corporation duly incorporated
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and validly existing under the laws of the State of Washington.
4.2 Authority. The Investor has all requisite corporate power and
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authority to enter into this Agreement, to purchase and hold the Series A Shares
and to consummate the other transactions to be consummated by the Investor
contemplated by this Agreement. The execution and delivery of this Agreement,
the purchase of the Series A Shares and the consummation of the other
transactions contemplated by this Agreement have been duly authorized by all
necessary
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corporate action on the part of the Investor. This Agreement has been duly
executed and delivered by the Investor, and constitutes the valid and binding
obligation of the Investor, enforceable in accordance with its terms, except to
the extent limited by (i) the effect of bankruptcy, insolvency, reorganization,
receivership, conservatorship, arrangement, moratorium, fraudulent transfer or
other laws affecting or relating to the rights of creditors generally, (ii) the
rules governing the availability of specific performance, injunctive relief or
other equitable remedies and general principles of equity, regardless of whether
arising prior to, or after, the date hereof or considered in a proceeding in
equity or at law, or (iii) the effect of federal and state securities laws and
principles of public policy on rights of indemnity and contribution.
4.3 No Conflict. The execution and delivery by the Investor of this
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Agreement does not, and consummation of the transactions contemplated by this
Agreement will not conflict with, or result in any violation or breach of any
provision of, the charter documents of the Investor.
4.4 Required Filings and Consents. No consent, approval, order or
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authorization of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to the Investor in connection with the
execution and delivery of this Agreement, the purchase of the Series A Shares to
be purchased by the Investor or the consummation of the other transactions to be
consummated by the Investor contemplated hereby, except for such filings as may
be required under the HSR Act and such consents, orders, authorizations,
declarations, filings, approvals and registrations which, if not obtained or
made, could not be expected to have a material adverse effect on the Investor's
ability to consummate the transactions contemplated pursuant to this Agreement.
4.5 Investor is an "Accredited Investor". The Investor is an
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"accredited investor" as defined in Rule 501(a) under the Securities Act of
1933, as amended (the "Securities Act"). The Investor believes that it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Series A Shares. The Investor further represents that
it has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the Series A Shares and the business,
properties, prospects and financial condition of the Company; provided, however,
that the foregoing shall not diminish or detract from the Investor's ability to
rely upon any of the Company's representations or warranties. The Investor
acknowledges that it is able to fend for itself, can bear the economic risk of
its investment, and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Series A Shares. The Investor is not acquiring the Series A Shares with
a view towards distribution in violation of the Securities Act.
5. Conditions to the Obligations of the Investor. The obligation of
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Investor to purchase the Series A Shares at the Closing is subject to the
fulfillment, or the waiver by Investor, of the following conditions on or before
the Closing Date:
5.1 Accuracy of Representations and Warranties. Each representation
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and warranty of the Company contained in Section 3 shall be true and complete on
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and as of the
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Closing Date with the same effect as though such representation and warranty had
been made on and as of that date.
5.2 Performance. The Company shall have performed and complied with
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all agreements and conditions contained in this Agreement required to be
performed or complied with by the Company prior to or at the Closing.
5.3 Filing of Designation. The Designation shall have been filed
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with the Secretary of State of the State of Delaware and shall continue to be in
full force and effect as of the Closing Date.
5.4 Blue Sky Approvals. The Company shall have taken all actions
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necessary for the exemptions from the state securities laws in which the Series
A Shares are being sold on or before the Closing Date, or at such time
thereafter as may be required by the applicable statute.
5.5 Certificates and Documents. The Company shall have delivered to
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counsel to the Investors:
(a) The Company's Certificate of Incorporation, as in effect
immediately prior to the Closing;
(b) Certificates, dated within 10 days of the Closing, as to the
corporate good standing of the Company issued by the Secretary of State of
the State of Delaware and any place where the Company is qualified to do
business as a foreign corporation;
(c) By-Laws of the Company certified by its Secretary or
Assistant Secretary as being in effect as of the Closing Date; and
(d) Resolutions of the Board of Directors of the Company,
authorizing and approving all matters in connection with this Agreement and
the transactions contemplated hereby, certified by the Secretary or
Assistant Secretary of the Company as of the Closing Date.
5.6 Legal Opinion. The Investor shall have received an opinion of
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Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP, substantially as set forth as Exhibit B.
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6. Conditions to the Obligations of the Company. The obligations of the
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Company under Section 1.2 of this Agreement are subject to fulfillment, on or
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before the Closing Date, of each of the following conditions:
6.1 Accuracy of Representations and Warranties. Each representation
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and warranty contained in Section 4 shall be true and complete on and as of the
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Closing Date with the same effect as though such representation and warranty had
been made on and as of that date.
6.2 Purchase Price. Investor shall have delivered to Company the
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aggregate purchase price of $9,999,997.50.
6.3 Blue Sky Approvals. The Company shall have obtained all
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necessary Blue Sky Law permits and qualifications, or secured an exemption
therefrom, required by any state for the offer and sale of the Series A Shares.
6.4 Nasdaq Listing. The Company shall have filed, in compliance
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with applicable rules and regulations, a Notification Form For Listing of
Additional Shares (the "Nasdaq Notification") with The Nasdaq Stock Market, Inc.
covering the Series A Shares.
7. Agreement Regarding Voting of Shares. Except as specifically provided
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below, Investor shall be entitled to vote, or cause to be voted, that number of
Voting Securities (as defined below) it owns representing up to 19.40% of the
voting power of all the outstanding Voting Securities on any matter submitted to
a vote of Company stockholders (or for which action in lieu of a vote is
solicited by the Company) in Investor's sole discretion. Investor agrees to
vote or cause to be voted all of the Voting Securities that it at any time owns
representing in excess of 19.40% of the total voting power of all outstanding
Voting Securities on any matter submitted to a vote of Company stockholders (or
for which action in lieu of a vote is solicited by the Company) in accordance
with the recommendation of the Company's Board of Directors. Notwithstanding
the foregoing, Investor shall not be limited or restricted in any manner in
voting any number of Voting Securities and shall not be subject to any voting
obligation with respect to any Voting Securities in respect of any offer or
proposal for any merger, consolidation, sale of all or substantially all of the
assets of the Company, tender, exchange or other offer for any equity securities
of the Company or other business combination involving the Company. For
purposes of this Section 7, "Voting Securities" shall mean, at any time, shares
of any class of the Company's equity securities which are entitled to vote on
matters submitted to a vote of the Company stockholders.
8. Participation Right. If at any time on or before the earlier of (a)
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the fifth (5th) anniversary of this Agreement or (b) such time as Investor
ceases to own 100% of the Series A Shares acquired hereunder (or shares of
Company common stock issuable upon conversion of the Series A Shares), the
Company shall sell and issue equity securities for financing purposes (a "New
Issuance"), it shall offer to Investor, by written notice at least ten (10) days
prior to the proposed New Issuance, the opportunity to participate in the New
Issuance to the extent of such Investor's pro rata ownership interest in the
Company (on a fully-diluted basis), upon the same terms and conditions as the
other participants in such New Issuance, as set forth in the
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Company's notice. Investor may accept the Company's offer as to the full number
of shares offered to it, or any lesser number, by written notice thereof given
by it to the Company within five (5) days after the delivery to Investor of
Company's notice regarding the New Issuance. In such event, the Company shall
sell and such Investor shall buy, upon the terms and conditions specified in the
notice, the number of shares agreed to be purchased by such Investor.
9. Standstill. From and after the date hereof through the fifth (5th)
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anniversary of this Agreement, Investor, on behalf of itself and its Affiliates
(as defined below), agrees that it will not, without the prior consent of
Company, seek to acquire, offer to acquire or agree to acquire (other than
shares of Series A Preferred Stock issued as dividends to Investor or upon
conversion of the shares of Series A Preferred Stock) any equity securities of
the Company that would result in Investor's aggregate ownership of equity
securities of Company exceeding 19.99% of Company's outstanding equity
securities (except by way of stock dividends or other distributions made on a
pro rata basis to all holders of the equity securities held by Investor). For
purposes of this Agreement, "Affiliate" shall have the meaning set forth in Rule
405 promulgated under the Securities Act of 1933, as amended (the "Securities
Act").
10. Registration of Shares.
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10.1 Demand Registration.
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(a) At any time and from time to time, Investor may make written
requests on the Company for the registration under the Securities Act of
the shares of Company common stock (the "Common Stock") issuable upon
conversion of the Series A Shares (the "Conversion Shares") having an
anticipated aggregate offering price (net of discounts and commissions) of
at least $5,000,000. The Company shall have no obligation to file more
than two (2) registration statements under the Securities Act with respect
to such requests; provided, however, that if the Conversion Shares may be
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registered on Form S-3 (or any successor form with similar "short form"
disclosure requirements), the Investor shall have unlimited rights to
request registration of its Conversion Shares on Form S-3 (or such
successor form), provided, however, that each such registration of
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Conversion Shares shall have an anticipated aggregate offering price (net
of discounts and commissions) of at least $500,000. Each such request
described in the preceding two sentences shall be hereinafter referred to
as a "Demand Registration." Any Demand Registration will specify the
number of Conversion Shares proposed to be sold and will also specify the
intended method of disposition thereof.
(b) A registration will not be deemed to have been effected as a
Demand Registration unless it has been declared effective by the Commission
and the Company has complied in all material respects with its obligations
under this Agreement with respect thereto; provided, however, that if,
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after it has become effective, the offering of shares of Common Stock
pursuant to such registration is or becomes the subject of any stop order,
injunction or other order or requirement of the Commission or any other
governmental or administrative agency, or if any court prevents or
otherwise limits the sale of the shares of Common Stock pursuant to the
registration at any time within one
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hundred eighty (180) days after the effective date of the registration
statement, such registration will be deemed not to have been effected. If
(i) a registration requested pursuant to this Section 10.1 is deemed not to
have been effected or (ii) the registration requested pursuant to this
Section 10.1 does not remain effective for a period of at least one hundred
eighty (180) days beyond the effective date thereof or, with respect to an
underwritten offering of Conversion Shares, until ninety (90) days after
the commencement of the distribution by the Investor of the Conversion
Shares included in such registration statement, then the Company shall
continue to be obligated to effect such registration pursuant to this
Section 10.1. The Investor shall be permitted to withdraw all or any part
of the Conversion Shares from a Demand Registration at any time prior to
the effective date of such Demand Registration.
(c) If the Investor so elects, the offering of Conversion
Shares pursuant to Demand Registration shall be in the form of an
underwritten offering. The Investor shall select one or more nationally
recognized firms of investment bankers reasonably acceptable to the Company
to act as the lead managing underwriter (the "Underwriter") in connection
with such offering and shall select any additional investment bankers and
managers to be used in connection with the offering.
10.2 Piggy-Back Registration
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(a) If at any time the Company proposes to file a registration
statement under the Securities Act with respect to an offering by the
Company for its own account or for the account of any of its respective
security holders (other than a registration statement on Form S-4 or S-8
(or any substitute form that may be adopted by the Commission) or a Demand
Registration pursuant to Section 10.1), then the Company shall give prompt
written notice of such proposed filing to the Investor as soon as
practicable (but in no event less than 20 days before the anticipated
filing date), and such notice shall offer Investor the opportunity to
register such number of Conversion Shares as Investor may request (which
request shall specify the Conversion Shares intended to be disposed of by
Investor and the intended method of distribution thereof) (a "Piggy-Back
Registration"). The Company shall use its best efforts to cause the
managing Underwriter or Underwriters of a proposed underwritten offering to
permit the Conversion Shares requested to be included in a Piggy-Back
Registration to be included on the same terms and conditions as any similar
securities of the Company or any other security holder included therein and
to permit the sale or other disposition of such Conversion Shares in
accordance with the intended method of distribution thereof. Except as set
forth in Section 10.2(c), Investor shall have the right to withdraw its
request for inclusion of its Conversion Shares in any registration
statement pursuant to this Section 10.2 by giving written notice to the
Company of its request to withdraw, provided, however, that in the event of
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such withdrawal, Investor shall be responsible for all fees and expenses
(including fees and expenses of counsel) incurred by Investor prior to such
withdrawal except as set forth in Section 10.2(c). The Company may
withdraw a Piggy-Back Registration at any time prior to the time it becomes
effective.
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No registration effected under this Section 10.2, and no failure
to effect a registration under this Section 10.2, shall relieve the Company
of its obligation to effect a registration upon the request of Investor
pursuant to Section 10.1, and no failure to effect a registration under
this Section 10.2 and to complete the sale of Conversion Shares in
connection therewith shall relieve the Company of any other obligation
under this Section 10.
(b) Notwithstanding anything to the contrary contained herein,
if the managing Underwriter or Underwriters of any underwritten offering
described in Section 10.2 have informed, in writing, the Investor that it
is their opinion that the total number of shares which the Company, the
Investor and any other persons desiring to participate in such registration
intend to include in such offering is such as to materially and adversely
affect the success of such offering, then the number of shares to be
offered shall be reduced or limited in the following order of priority: (x)
first, the number of shares to be offered by all other holders of
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securities of the Company other than the Investor or others who have
registration rights to the extent necessary to reduce the total number of
shares as recommended by such managing Underwriters; and (y) second, if
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further reduction or limitation is required, the number of shares to be
offered for the account of the Investor shall be reduced or limited to the
extent necessary to reduce the total number of shares as recommended by
such managing Underwriters; provided, however, that the reduction for the
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account of the Investor shall not result in the number of shares of the
Investor included in the offering to be less than 25% of the total number
of shares offered.
(c) Withdrawal Election. If, as a result of the proration
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provisions of Section 10.2(b), Investor shall not be entitled to include at
least 50% of the Conversion Shares in a Piggy-Back Registration that
Investor has requested to be included, Investor may elect to withdraw its
request to include Conversion Shares in such registration (a "Withdrawal
Election") without incurring any liability for its fees and expenses;
provided, however, that a Withdrawal Election shall be irrevocable and,
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after making a Withdrawal Election, Investor shall no longer have any right
to include Conversion Shares in the Piggy-Back Registration as to which
such Withdrawal Election was made.
10.3 Registration Procedures. Whenever the Company is required to
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effect or cause the registration of Conversion Shares pursuant to Section 10.1,
the Company will use its best efforts to effect the registration and the sale of
such Conversion Shares in accordance with the intended method of disposition
thereof as quickly as practicable, and in connection with any such request:
(a) The Company will prepare and file with the Commission a
registration statement (which, in the case of an underwritten public
offering, shall be on Form S-3 (unless the Company does not qualify for use
of Form S-3 in a registration involving only a secondary offering as
provided in the General Instructions to Form S-3 in such registration, in
which case such registration statement shall be a Form S-1) or other form
of general applicability satisfactory to the managing underwriter selected
as therein provided) with respect to such securities and use best efforts
to cause such
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registration statement to become and remain effective until the completion
of the distribution; provided, however, that the Company shall be required
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to keep any registration statement effective at least ninety (90) days.
(b) The Company will prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective for the period specified in Section
10.3(a) and as to comply with the provisions of the Securities Act with
respect to the disposition of all Conversion Shares covered by such
registration statement in accordance with the intended method of
disposition set forth in such registration statement for such period.
(c) The Company will, as far in advance as practical, prior to
filing a registration statement or prospectus or any amendment or
supplement thereto, furnish copies of such registration statement as
proposed to be filed, together with exhibits thereto, to (i) Investor, (ii)
not more than one counsel representing Investor, and (iii) each
Underwriter, if any, of the Conversion Shares covered by such registration
statement, which documents will be subject to review and approval by the
foregoing within five (5) days after delivery, and thereafter as far in
advance as practical, furnish to such Investor, counsel and Underwriters,
if any, for their review and comment such number of copies of such
registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such registration statement (including
each preliminary prospectus) and such other documents or information as
Investor, counsel or Underwriters may reasonably request in order to
facilitate the disposition of the Conversion Shares owned by Investor.
(d) After the filing of the registration statement, the Company
will promptly notify Investor of any stop order issued or threatened by the
Commission and take all reasonable actions required to prevent the entry of
such stop order or to remove it if entered.
(e) The Company will use its best efforts to (i) register or
qualify the Conversion Shares under such other securities or blue sky laws
of such jurisdictions in the United States as Investor reasonably (in light
of Investor's intended plan of distribution) requests, and (ii) cause such
Conversion Shares to be registered with or approved by such other
governmental agencies or authorities in the United States as may be
necessary by virtue of the business and operations of the Company and do
any and all other acts and things that may be reasonably necessary or
advisable to enable Investor to consummate the disposition of the
Conversion Shares; provided, however, that the Company will not be required
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to (A) qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this paragraph (e), (B)
subject itself to taxation in any jurisdiction where it would not be
subject to taxation but for actions taken pursuant to this Section 10.3 or
(C) consent to general service of process in any such jurisdiction.
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(f) The Company will immediately notify Investor, at any time
when a prospectus relating to Conversion Shares is required to be delivered
under the Securities Act, of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the Investor, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading and promptly make available to Investor any such supplement
or amendment.
(g) The Company and the Investor will enter into customary
agreements including, if applicable, an underwriting agreement in customary
form and which is reasonably satisfactory to the Company (which shall not
require the Investor to indemnify the underwriter with respect to
misstatements or omissions in the registration statement other than such
misstatements or omissions in written material supplied by Investor). The
Company and Investor will also take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such
Conversion Shares; and the Investor may, at its option, require that any or
all of the representations, warranties and covenants of the Company made to
or for the benefit of such Underwriters also be made to and for the benefit
of Investor.
(h) The Company will make available to Investor (and its counsel)
and each Underwriter, if any, subject to restrictions imposed by the United
States federal government or any agency or instrumentality thereof, copies
of all correspondence between the Commission and the Company, its counsel
or auditors and will also make available for inspection by Investor, any
Underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other professional retained to
represent Investor (collectively, the "Inspectors"), all financial and
other records, pertinent corporate documents and properties of the Company
(collectively, the "Records") as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the
Company's officers and employees to supply all information reasonably
requested by any Inspectors in connection with such registration statement.
Records which the Company determines, in good faith, to be confidential and
which it notifies the Inspectors are confidential shall not be disclosed by
the Inspectors unless (i) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in such registration statement
or (ii) the disclosure or release of such Records is requested or required
pursuant to oral questions, interrogatories, requests for information or
documents or a subpoena or other order from a court of competent
jurisdiction or other process; provided, however, that prior to any
-------- -------
disclosure or release pursuant to clause (ii), the Inspectors shall provide
the Company with prompt notice of any such request or requirement so that
the Company may seek an appropriate protective order or waive such
Inspectors' obligation not to disclose such Records; and, provided further,
----------------
however, that if failing the entry of a protective order or the waiver by
-------
the Company permitting the disclosure or release of such Records, the
Inspectors, upon advice of counsel, are compelled to disclose such Records,
the Inspectors may disclose that portion of the Records which counsel has
advised the Inspectors that the Inspectors
-11-
are compelled to disclose. Investor agrees that information obtained by it
solely as a result of such inspections (not including any information
obtained from a third party who, insofar as is known to the Investor after
reasonable inquiry, is not prohibited from providing such information by a
contractual, legal or fiduciary obligation to the Company) shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company or its Affiliates unless and
until such information is made generally available to the public. Investor
further agrees that it will, upon learning that disclosure of such Records
is sought in a court of competent jurisdiction, give notice to the Company
and allow the Company, at the Company's expense, to undertake appropriate
action to prevent disclosure of the Records deemed confidential.
(i) In connection with an underwritten offering, the Company will
participate, to the extent reasonably requested by the managing Underwriter
for the offering or the Investor, in customary efforts to sell the
securities under the offering, including, without limitation, participating
in "road shows"; provided, however, that the Company shall not be obligated
-------- -------
to participate in more than one such offering in any 12-month period.
The Company may require Investor to promptly furnish in writing
to the Company such information regarding the distribution of the
Conversion Shares as the Company may from time to time reasonably request
and such other information as may be legally required in connection with
such registration including, without limitation, all such information as
may be requested by the Commission or the NASD. The Company may exclude
Investor from such registration if Investor fails to provide such
information.
Investor agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 10.3(f)
hereof, Investor will forthwith discontinue disposition of Conversion
Shares pursuant to the registration statement covering such Conversion
Shares until Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 10.3(f) hereof, and, if so
directed by the Company, Investor will deliver to the Company all copies,
other than permanent file copies then in Investor's possession, of the most
recent prospectus covering such Conversion Shares at the time of receipt of
such notice. In the event the Company shall give such notice, the Company
shall extend the period during which such registration statement shall be
maintained effective (including the period referred to in Section 10.3(a)
hereof) by the number of days during the period from and including the date
of the giving of notice pursuant to Section 10.3(f) hereof to the date when
the Company shall make available to the Investor a prospectus supplemented
or amended to conform with the requirements of Section 10.3(f) hereof.
10.4 Registration Expenses. In connection with the Demand
---------------------
Registrations pursuant to Section 10.1 hereof and any Piggy-Back Registrations
under Section 10.2 hereof, the Company shall pay the following registration
expenses incurred in connection with the registration thereunder (the
"Registration Expenses"): (i) all registration and filing fees, (ii) fees
-12-
and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Conversion Shares), (iii) processing, duplicating and
printing expenses, (iv) the Company's internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), (v) the fees and expenses incurred in connection
with the listing of the Conversion Shares, (vi) reasonable fees and
disbursements of counsel for the Company and customary fees and expenses for
independent certified public accountants retained by the Company (including the
expenses of any comfort letters or costs associated with the delivery by
independent certified public accountants of a comfort letter or comfort letters
requested but not the cost of any audit other than a year end audit), (vii) the
reasonable fees and expenses of any special experts retained by the Company in
connection with such registration, (viii) reasonable fees and expenses of one
firm of counsel for the Investor, and (ix) any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities. The Company
shall have no obligation to pay any underwriting fees, discounts or commissions
attributable to the sale of Conversion Shares, or the cost of any special audit
required, such costs to be borne by the Investor.
10.5 Indemnification.
(a) The Company shall, to the full extent permitted by law,
indemnify and hold harmless Investor, its Affiliates, partners, officers,
directors, employees and agents, and each person, if any, who controls or is
under common control with such Investor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act of 1934, together with the
partners, officers, directors, employees and agents of such controlling person
(collectively, the "Controlling Persons"), from and against any loss, claim,
damage, liability, reasonable attorneys' fees, cost or expense and costs and
expenses of investigating and defending any such claim, joint or several, and
any action in respect thereof (collectively, the "Damages") to which Investor,
its partners, officers, directors, employees and agents, and any such
Controlling Person may become subject under the Securities Act or otherwise,
insofar as such Damages (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus relating to the Conversion Shares or any
amendment or supplement thereto, or arises out of, or are based upon, any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or any
violation by the Company of any federal or state securities laws or any rule or
regulation thereof, except insofar as the same are based upon information
furnished in writing to the Company by Investor expressly for use therein, and
shall reimburse Investor, its Affiliates, partners, officers, directors,
employees and agents, and each such Controlling Person for any legal and other
expenses reasonably incurred by Investor, its Affiliates, its partners,
officers, directors, employees and agents, or any such Controlling Person in
investigating or defending or preparing to defend against any such Damages or
proceedings; provided, however, that the Company shall not be liable to Investor
-------- -------
to the extent that any such Damages (or action or proceeding in respect thereof)
arise out of or are based upon an untrue statement or omission made in any
preliminary prospectus if (i) Investor failed to send or deliver a copy of the
final prospectus with or prior to the delivery of written confirmation of the
sale by
-13-
Investor to the person asserting the claim from which such Damages arise, and
(ii) the final prospectus would have corrected such untrue statement or such
omission; provided, further, however, that the Company shall not be liable to
-------- ------- -------
Investor in any such case to the extent that any such Damages arise out of or
are based upon an untrue statement or omission in any prospectus if (x) such
untrue statement or omission is corrected in an amendment or supplement to such
prospectus, and (y) having previously been furnished by or on behalf of the
Company with copies of such prospectus as so amended or supplemented, Investor
thereafter fails to deliver such prospectus as so amended or supplemented prior
to or concurrently with the sale of a Conversion Shares to the person asserting
the claim from which such Damages arise. The Company also agrees to indemnify
any Underwriters of the Conversion Shares, their officers and directors and each
person who controls such Underwriters on substantially the same basis as that of
the indemnification of the Investor provided in this Section 10.5(a).
(b) Investor shall, to the full extent permitted by law, indemnify and
hold harmless the Company, its officers, directors, employees and agents and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, together with the
partners, officers, directors, employees and agents of such controlling person,
to the same extent as the foregoing indemnity from the Company to Investor, but
only to the extent the Company's or such person's Damages are attributable to
the information related to Investor, or its plan of distribution, furnished in
writing by Investor or on Investor's behalf expressly for use in any
registration statement or prospectus relating to the Conversion Shares, or any
amendment or supplement thereto, or any preliminary prospectus and the aggregate
amount which may be recovered from Investor pursuant to the indemnification
provided for in this Section 10.5(a) in connection with any registration and
sale of Conversion Shares shall be limited to the net proceeds received by
Investor from the sale of such Conversion Shares. In case any action or
proceeding shall be brought against the Company or its officers, directors,
employees or agents or any such controlling person or its officers, directors,
employees or agents, in respect of which indemnity may be sought against
Investor, Investor shall have the rights and duties given to the Company, and
the Company or its officers, directors, employees or agents, or such controlling
person, or its officers, directors, employees or agents, shall have the rights
and duties given to Investor under the preceding paragraph. Investor also
agrees to indemnify and hold harmless any Underwriters of the Conversion Shares,
their officers and directors and each person who controls such Underwriters on
substantially the same basis as that of the indemnification Investor provides to
the Company provided in this Section 10.5(b); provided that the aggregate
-------- ----
recovery that the Company and any Underwriters can recover from Investor
pursuant to this Section 10.5(b) cannot exceed the net proceeds received by
Investor from the sale of Conversion Shares. The Company shall be entitled to
receive indemnities from Underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the distribution, to
the same extent as provided above, with respect to information so furnished in
writing by such persons specifically for inclusion in any prospectus or
registration statement; provided, however, that if the Company does not receive
such indemnities, the Company will not be relieved of its duties and obligations
hereunder.
(c) Promptly after receipt by any person in respect of which indemnity
may be sought pursuant to Section 10.5(a) or 10.5(b) (an "Indemnified Party") of
notice of any
-14-
claim or the commencement of any action, the Indemnified Party shall, if a claim
in respect thereof is to be made against the Person against whom such indemnity
may be sought (an "Indemnifying Party"), notify the Indemnifying Party in
writing of the claim or the commencement of such action; provided, however, that
-------- -------
the failure to notify the Indemnifying Party shall not relieve it from any
liability which it may have to an Indemnified Party otherwise than under Section
10.5(a) or 10.5(b) and except to the extent of any actual prejudice resulting
therefrom. If any such claim or action shall be brought against an Indemnified
Party, and it shall notify the Indemnifying Party thereof, the Indemnifying
Party shall be entitled to participate therein, and, to the extent that it
wishes, jointly with any other similarly notified Indemnifying Party, to assume
the defense thereof with counsel reasonably satisfactory to the Indemnified
Party. After notice from the Indemnifying Party to the Indemnified Party of its
election to assume the defense of such claim or action, the Indemnifying Party
shall not be liable to the Indemnified Party for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
-------- -------
the Indemnified Party shall have the right to employ separate counsel to
represent the Indemnified Party and its controlling Persons who may be subject
to liability arising out of any claim in respect of which indemnity may be
sought by the Indemnified Party against the Indemnifying Party, but the fees and
expenses of such counsel shall be for the account of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) in the reasonable judgment of
the Company and such Indemnified Party, representation of both parties by the
same counsel would be inappropriate due to actual or potential conflicts of
interest between them, it being understood, however, that the Indemnifying Party
shall not, in connection with any one such claim or action or separate but
substantially similar or related claims or actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all Indemnified Parties, or for fees
and expenses that are not reasonable. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any
claim or pending or threatened proceeding in respect of which the Indemnified
Party is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out
of such claim or proceeding. Whether or not the defense of any claim or action
is assumed by the Indemnifying Party, such Indemnifying Party will not be
subject to any liability for any settlement made without its consent, which
consent will not be unreasonably withheld.
(d) If the indemnification provided for in this Section 10.5 is
unavailable to the Indemnified Parties in respect of any Damages referred to
herein, then each Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such Damages (i) as between the Company and Investor on the one
hand and the Underwriters on the other, in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Investor on the
one hand and the Underwriters on the other from the offering of the Conversion
Shares, or if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits but also
the relative fault of the Company and the Investor on the
-15-
one hand and of the Underwriters on the other in connection with the statements
or omissions which resulted in such Damages, as well as any other relevant
equitable considerations, and (ii) as between the Company on the one hand and
Investor on the other, in such proportion as is appropriate to reflect the
relative fault of the Company and Investor in connection with such statements or
omissions, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Investor on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company and the Investor bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the prospectus. The
relative fault of the Company and the Investor on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and the Investor or by the Underwriters. The relative
fault of the Company on the one hand and Investor on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and Investor agree that it would not be just and equitable if
contribution pursuant to this Section 10.5(d) were determined by pro rata
--- ----
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Party as a result of the Damages
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 10.5(b), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Conversion Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and Investor shall not be required to contribute any amount
in excess of the amount by which the total price at which the Conversion Shares
were offered to the public (less underwriting discounts and commissions) exceeds
the amount of any damages which Investor has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
11. Board of Directors.
------------------
11.1 For so long as Investor continues to hold at least fifty
percent (50%) of the Series A Shares (or shares of Company common stock issuable
upon conversion of the Series A Shares), Investor shall be entitled to designate
one person for election to the Company's Board
-16-
of Directors (the "Investor Representative"). The parties acknowledge that as a
result of prior business dealings, an individual designated by Investor is
currently a member of the Company's Board of Directors and his term expires at
the Company's annual meeting of stockholders in 2001. At the time of the
Company's next annual meeting of stockholders, Company agrees to take all such
action as may be required under applicable law: (a) to include the Investor
Representative in the slate of nominees for the class of directors in which the
Investor Representative is designated to be recommend by the Board of Directors
for election by the Company stockholders, and (b) to use its best efforts to
cause the election of the Investor Representative to the Board of Directors,
including nominating such individual to be elected as a director. In the event
that a vacancy is created on the Board of Directors at any time by the death,
disability, retirement, resignation or removal of the Investor Representative,
the Company and the remaining directors will cause the vacancy created thereby
to be filled by a new designee of Investor as soon as possible.
11.2 In the event Investor elects not to designate an Investor
Representative, and for so long as Investor continues to hold at least fifty
percent (50%) of the Series A Shares (or shares of Company common stock issuable
upon conversion of the Series A Shares), Investor shall have the right to
appoint one observer (the "Investor Observer") to attend all regular and special
meetings of the Board of Directors. The Investor Observer shall be entitled to
receive the same notice of all such meetings and all other information and
materials as and at the same time received by the directors, and shall have the
right to participate therein, but shall not have the right to vote on any matter
or to be counted for purposes of determining whether a quorum is present
thereat; provided, however, that the Company reserves the right to withhold any
information and to exclude the Investor Observer from any meeting or portion
thereof if the Company reasonably believes that the Investor Observer's access
to such information or attendance at such meeting would (a) involve a conflict
of interest regarding Investor, (b) be necessary in order to meet or protect any
fiduciary obligations of the Board of Directors or (c) adversely affect the
confidentiality or attorney-client privilege between the Company and its counsel
or would result in disclosure of trade secrets or Company confidential
information to Investor, as determined in good faith by the Board of Directors.
The Investor Observer shall be subject to the same obligations regarding
treatment of confidential information of the Company that it receives as an
observer as would an actual member of the Board of Directors receiving such
information.
11.3 At no time shall Investor have the right to have both an
Investor Representative and an Investor Observer at the same time.
12. Covenant Regarding Acquisition Events. The following provision shall
-------------------------------------
apply for so long as Investor continues to hold 100% of the Series A Shares (or
shares of Company common stock issuable upon conversion of the Series A Shares):
in the event that the Board of Directors of the Company determines to proceed
with (i) a bona fide offer to be acquired by means of (x) a merger,
consolidation or other business combination pursuant to which the stockholders
of the Company immediately prior to the effective date of such transaction have
beneficial ownership of less than fifty percent (50%) of the total combined
voting power for election of directors of the surviving corporation immediately
following such transaction, or (y)
-17-
the sale of all or substantially all of the assets of the Company, then, prior
to accepting such acquisition proposal or initiating such sale, the Company
shall provide to Investor a notice specifying in general the proposed terms of
such acquisition proposal or sale. Investor shall have ten (10) days in which to
present an offer to acquire the Company, during which period the Company shall
refrain from entering into definitive transaction documentation with respect to
such acquisition proposal or sale. Nothing in the foregoing sentence shall
obligate the Company to negotiate with Investor on an exclusive basis during
said ten (10) day period.
13. Covenant Regarding Nasdaq Notification. The Company hereby covenants
--------------------------------------
to file, as soon as practicable after the date of execution of this Agreement,
the Nasdaq Notification with The Nasdaq Stock Market, Inc.
14. Confidentiality. Neither the Company nor the Investor shall issue any
---------------
press release or other public announcement regarding, or otherwise disclose,
this Agreement or the transactions contemplated herein, or make any filing of
this Agreement or other agreements relating to the transactions contemplated
herein, without the consent of the other, which consent will not be unreasonably
withheld; provided, however, that if a party is required by applicable law to
provide public disclosure of this Agreement or the transactions contemplated
herein, such party shall use all reasonable efforts to coordinate the disclosure
with the other party before issuance, including, but not limited to the
submission to the Commission (and any other applicable regulatory or judicial
authority) of an application for confidential treatment of certain terms (which
terms shall be agreed upon by the Investor and the Company) of this Agreement.
Each party shall provide to the other for review a copy of any proposed
disclosure of this Agreement or its terms and any application for confidential
treatment at least five (5) business days before any such disclosure or
application is made and to comply with all reasonable requests from the other
party to minimize the extent and scope of any such disclosure.
15. Successors and Assigns. The provisions of this Agreement shall be
----------------------
binding upon, and inure to the benefit of, the respective successors, assigns,
heirs, executors and administrators of the parties hereto.
16. Survival of Representations and Warranties. The representations,
------------------------------------------
warranties and agreements made herein shall survive the closing of the
transactions contemplated hereby. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.
17. Expenses. Each party shall pay its own costs and expenses incurred
--------
with respect to the negotiation, execution, delivery and performance of this
Agreement.
18. Notices. All notices, requests, consents, and other communications
-------
under this Agreement shall be in writing and shall be deemed delivered (i) two
business days after being sent by registered or certified mail, return receipt
requested, postage prepaid or (ii) one business
-18-
day after being sent via a reputable nationwide overnight courier service
guaranteeing next business day delivery, in each case to the intended recipient
as set forth below:
If to the Investor:
Microsoft Corporation
Xxx Xxxxxxxxx Xxx
Xxxxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxx & Xxxxx LLP
0000 Xxxx xx Xxxxxxx Tower
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to Company:
Audible, Inc.
00 Xxxxxxxxxxx Xxxx.
Xxxxx, XX 00000
Attn: Chief Executive Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxxx, Esq.
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
Commerce Executive Park III, Suite 610
0000 Xxxxxxxxxx Xxxx Xxxxx
Xxxxxx, XX 00000-0000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section 18.
----------
-19-
19. Brokers. The Company is not subject to an existing agreement with any
-------
finder and no fees will be paid by the Company to any such finder in regard to
the transactions contemplated herein. The Investor is not responsible for the
payment of any finder's fees in connection with the transactions contemplated
herein.
20. Entire Agreement. This Agreement embodies the entire agreement and
----------------
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
21. Amendments and Waivers. Except as otherwise expressly set forth in
----------------------
this Agreement, any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), with the written consent of
the Company and the Investor. No waivers of or exceptions to any term,
condition or provision of this Agreement, in any one or more instances, shall be
deemed to be, or construed as, a further or continuing waiver of any such term,
condition or provision.
22. Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be deemed an original, but all of which, when taken
together, shall constitute one and the same instrument.
23. Headings. The headings of the sections, subsections, and paragraphs
--------
of this Agreement have been added for convenience only and shall not be deemed
to be a part of this Agreement.
24. Severability. The invalidity or unenforceability of any provision of
------------
this Agreement shall not affect the validity or enforceability of any other
provision.
25. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware, without regard to the choice
of law or conflicts of law provisions thereof.
{Signature pages follow}
-20-
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as
of the day and year first above written.
THE "COMPANY":
AUDIBLE, INC.
By:_______________________________
Name:
Title:
THE "INVESTOR":
MICROSOFT CORPORATION
By:_______________________________
Name:
Title:
EXHIBIT A
DESIGNATION
EXHIBIT B
LEGAL OPINION
