EXHIBIT 10.14
EXECUTION COPY
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AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
Dated as of February 26, 1998
Audible Inc.,
The Purchasers of the Series D Preferred Stock
Named as Investors Herein,
and
the Other Stockholders Named Herein
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS................................................... 2
1.1 Definitions.......................................................... 2
ARTICLE 2 - REGISTRATION RIGHTS........................................... 5
2.1 Demand Registration.................................................. 5
2.2 Piggy-Back Registration.............................................. 10
2.3 Reduction of Offering................................................ 10
ARTICLE 3 - REGISTRATION PROCEDURES....................................... 11
3.1 Filings; Information................................................. 11
3.2 Registration Expenses................................................ 15
ARTICLE 4 - INDEMNIFICATION AND CONTRIBUTION.............................. 15
4.1 Indemnification by the Company....................................... 15
4.2 Indemnification by Selling Holders................................... 16
4.3 Conduct of Indemnification Proceedings............................... 17
4.4 Contribution......................................................... 18
ARTICLE 5 - OTHER REGISTRATION RIGHTS..................................... 19
5.1 Other Registration Rights............................................ 19
5.2 Future Registration Rights........................................... 19
5.3 Exclusion of Registrable Shares...................................... 19
ARTICLE 6 - MISCELLANEOUS................................................. 20
6.1 Participation in Underwritten Registrations.......................... 20
6.2 Lock-up Agreement.................................................... 20
6.3 Rule 144 and 144A.................................................... 21
6.4 Suspension of Obligation to File..................................... 21
6.5 Amendment and Modification........................................... 21
6.6 Assignability of Rights.............................................. 21
6.7 Binding Effect; Entire Agreement..................................... 22
6.8 Severability......................................................... 22
6.9 Notices.............................................................. 22
6.10 Governing Law....................................................... 23
6.11 Headings............................................................. 23
6.12 Counterparts......................................................... 23
6.13 Further Assurances................................................... 23
6.14 Remedies............................................................. 23
6.15 Supersedes Prior Agreement........................................... 23
6.16 Pronouns............................................................. 24
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this "Agreement"),
dated as of February 26, 1998, by and among each of the persons that signs a
signature page annexed hereto (collectively, the "Investors") and Audible Inc.,
a Delaware corporation (the "Company").
W I T N E S S E T H:
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WHEREAS, certain of the Investors and the Company have entered into that
certain Series D Preferred Stock Purchase Agreement, dated as of the date hereof
(the "Stock Purchase Agreement"), whereby such Investors (the "Series D
Holders") have purchased an aggregate of 1,350,000 shares (the "Series D
Preferred Shares") of Series D Preferred Stock, par value $.01 per share (the
"Series D Preferred Stock") of the Company;
WHEREAS, the Company desires to grant the Series D Holders registration
rights with respect to the shares of Common Stock into which the Series D
Preferred Shares are convertible;
WHEREAS, the Company and certain of the Investors have previously entered
into that certain Amended and Registration Rights Agreement dated as of March
31, 1997 (the "Prior Agreement") pursuant to which a certain Investor (the
"Series A Holder") who holds shares of the Series A Convertible Preferred Stock,
par value $.01 per share, of the Company (the "Series A Preferred Stock");
certain Investors (the "Series B Holders") who hold shares or warrants to
purchase shares of the Series B Preferred Stock, par value $.01 per share, of
the Company (the "Series B Preferred Stock"); and certain Investors (the "Series
C Holders") who hold shares or warrants to purchase shares of the Series C
Convertible Preferred Stock, par value $.01 per share, of the Company (the
"Series C Preferred Stock"); were granted registration rights by the Company;
WHEREAS, in connection with the execution of the Stock Purchase Agreement,
the Series A Holder, the Series B Holders, the Series C Holders, the Series D
Holders and the Company wish to amend and restate the Prior Agreement to
consolidate the registration rights of the Series A Holder, the Series B Holders
and the Series C Holders with those of the Series D Holders and make certain
other changes thereto;
WHEREAS, the Company anticipates that, subsequent to the date hereof, it
will issue a warrant or warrants that permit the holder thereof to purchase up
to an aggregate of 25,000 shares of Series D Preferred Stock (the "Series D
Warrants");
WHEREAS, upon execution of the Series D Warrants, the holder of shares of
Series D Preferred Stock is to be permitted to execute a signature addendum
hereto providing such holder with the registration rights set forth herein; and
WHEREAS, the Company currently expects to issue the Series D Warrant to
Silicon Valley Bank (the "Bank") as part of, and in connection with, certain
bank financing to be provided by the Bank.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
conditions contained herein and of other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto amend
and restate the Prior Agreement in its entirety as follows:
ARTICLE 1
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DEFINITIONS
SECTION 1.1 Definitions. All terms not defined herein or below shall
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have the meaning set forth in the Stock Purchase Agreement.
"Affiliate" shall have the meaning set forth in Rule 405 promulgated under
the Securities Act of 1933, as amended.
"Commission" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act.
"Common Stock" shall have the meaning set forth in the preamble of this
Agreement.
"Common Stock Warrants" shall mean the warrants, held by the Series C
Holders, to purchase up to 450,000 shares of the Common Stock of the Company.
"Company" shall have the meaning set forth in the preamble of this
Agreement.
"Controlling Persons" shall have the meaning set forth in Section 4.1
hereof.
"Damages" shall have the meaning set forth in Section 4.1 hereof.
"Demand Registration" shall mean a Series A Demand Registration, Series B
Demand Registration, Series C Demand Registration or Series D Demand
Registration, without distinction, except as the context otherwise requires.
"Holder" shall mean any person who now holds or shall hereafter acquire and
hold Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section 4.3 hereof.
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"Indemnifying Party" shall have the meaning set forth in Section 4.3
hereof.
"Inspectors" shall have the meaning set forth in Section 3.1(h) hereof.
"Investors" shall have the meaning set forth in the preamble of this
Agreement.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Notices" shall have the meaning set forth in Section 6.8 hereof.
"Piggy-Back Registration" shall have the meaning set forth in Section 2.2
hereof.
"Records" shall have the meaning set forth in Section 3.1(h) hereof.
"Registrable Securities" shall mean the Series A Registrable Securities,
the Series B Registrable Securities, the Series C and Warrant Registrable
Securities and the Series D Registrable Securities, without distinction, except
as the context otherwise requires.
"Registration Expenses" shall have the meaning set forth in Section 3.2
hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Holder" shall mean an Investor who is selling Registrable
Securities pursuant to a registration statement under the Securities Act.
"Series A Demand Registration" shall have the meaning set forth in Section
2.1(a) hereof.
"Series A Preferred Stock" shall have the meaning set forth in the preamble
of this Agreement.
"Series A Registrable Securities" shall mean the shares of Common Stock
into which the Series A Preferred Stock are convertible and any additional
shares of Common Stock acquired by a Holder by way of a dividend, stock split or
other distribution in respect of the Series A Preferred Stock or the Common
Stock issued upon conversion of the Series A Preferred Stock.
"Series B Demand Registration" shall have the meaning set forth in Section
2.1(b) hereof.
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"Series B Preferred Stock" shall have the meaning set forth in the preamble
of this Agreement.
"Series B Registrable Securities" shall mean the shares of Common Stock
into which the Series B Preferred Stock are convertible and any additional
shares of Common Stock acquired by a Holder by way of a dividend, stock split or
other distribution in respect of the Series B Preferred Stock or the Common
Stock issued upon conversion of the Series B Preferred Stock.
"Series C and Warrant Demand Registration" shall have the meaning set forth
in Section 2.1(c) hereof.
"Series C Preferred Stock" shall have the meaning set forth in the preamble
of this Agreement.
"Series C and Warrant Registrable Securities" shall mean the shares of
Common Stock into which the Series C Preferred Stock are convertible and any
additional shares of Common Stock acquired by a Holder by way of (i) a dividend,
stock split or other distribution in respect of the Series C Preferred Stock,
(ii) a dividend, stock split or other distribution in respect of the Common
Stock issued upon conversion of the Series C Preferred Stock, (iii) on exercise
of its Common Stock Warrants, (iv) a dividend, stock split or other distribution
in respect of the Common Stock Warrants and (v) a dividend, stock split or other
distribution in respect of the Common Stock issued upon exercise of the Common
Stock Warrants.
"Series D Demand Registration" shall have the meaning set forth in Section
2.1(d) hereof.
"Series D Preferred Stock" shall have the meaning set forth in the preamble
of this Agreement.
"Series D Registrable Securities" shall mean the shares of Common Stock
into which the Series D Preferred Stock are convertible and any additional
shares of Common Stock acquired by a Holder by way of (i) a dividend, stock
split or other distribution in respect of the Series D Preferred Stock; (ii) a
dividend, stock split or other distribution in respect of or the Common Stock
issued upon conversion of the Series D Preferred Stock and, (iii) a dividend,
stock split or other distribution in respect of the Series D Warrants.
"Stockholders' Agreement" shall mean that certain Amended and Restated
Stockholders' Agreement, dated as of the date hereof, by and among the Company,
the Investors and certain stockholders of the Company.
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"Stock Purchase Agreement" shall have the meaning set forth in the preamble
of this Agreement.
"Underwriter" shall mean a securities dealer who purchases any Registrable
Securities as principal in an underwritten offering and not as part of such
dealer's market-making activities.
"Withdrawal Election" shall have the meaning set forth in Section 2.3(b)
hereof.
ARTICLE 2
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REGISTRATION RIGHTS
SECTION 2.1 Demand Registration.
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(a) Request for Registration by Holders of Series A Registrable
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Securities. At any time and from time to time after March 31, 2000, Holders of
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at least two-thirds (2/3) in interest of the Series A Registrable Securities
(for this purpose, treating the Series A Preferred Stock as if it had been
converted into Common Stock) may make written requests on the Company for the
registration of the Series A Registrable Shares having an anticipated aggregate
offering price (net of discounts and commissions) of at least $5,000,000 under
the Securities Act. Subject to the penultimate sentence of Section 2.1(e), the
Company shall have no obligation to file more than two (2) registration
statements under the Securities Act with respect to such requests; provided,
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however, that if the Series A Registrable Securities may be registered on Form
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S-3 (or any successor form with similar "short form" disclosure requirements),
the Holders of Series A Registrable Securities shall have unlimited rights to
request registration of their shares on Form S-3 (or such successor form),
provided, however, that each such registration of Series A Registrable
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Securities 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 "Series A Demand
Registration." Any Series A Demand Registration will specify the number of
shares of Series A Registrable Securities proposed to be sold and will also
specify the intended method of disposition thereof. The Company shall give
written notice of such registration request within ten (10) days after the
receipt thereof to all other Holders of Series A Registrable Securities and
shall use its best efforts to effect the Series A Demand Registration within
thirty (30) days after the giving of such written notice. Within 20 days after
receipt of such notice by any such Holder, such Holder may request in writing
that Series A Registrable Securities be included in such registration and the
Company shall include in the registration statement for such Series A Demand
Registration the Series A Registrable Securities of all Holders requested to be
so included. Each such request by such other Holders shall specify the number of
shares of Series A Registrable Securities proposed to be sold and the intended
method of disposition thereof.
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Whenever the Company shall effect a Series A Demand Registration pursuant
to this Section 2.1(a) in connection with an underwritten offering of Series A
Registrable Securities, no securities other than the Series A Registrable
Securities requested to be included shall be included among the securities
covered by such registration unless (i) the managing Underwriter or Underwriters
of such offering shall have advised the Holder of Series A Registrable
Securities to be covered by such registration in writing that the inclusion of
other securities would not adversely affect such offering, in which case,
securities to be issued by the Company or securities held by other stockholders
of the Company may be included or (ii) all Holders of Series A Registrable
Securities to be covered by such registration shall have consented in writing to
the inclusion of securities to be issued by the Company or securities held by
other stockholders of the Company. Whenever the Company shall effect a Series A
Demand Registration pursuant to this Section 2.1(a) other than in connection
with an underwritten offering of Series A Registrable Securities, no securities
held by stockholders of the Company other than Holders of Series A Registrable
Securities may be covered by such registration unless all Holders of Series A
Registrable Securities to be covered by such registration shall have consented
thereto in writing.
(b) Request for Registration by Holders of Series B Registrable
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Securities. At any time and from time to time after March 31, 2000, Holders of
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at least two-thirds (2/3) in interest of the Series B Registrable Securities
(for this purpose, treating the Series B Preferred stock as if it had been
converted into Common Stock) may make written requests on the Company for the
registration of the Series B Registrable Shares having an anticipated aggregate
offering price (net of discounts and commissions) of at least $5,000,000 under
the Securities Act. Subject to the penultimate sentence of Section 2.1(e), the
Company shall have no obligation to file more than two (2) registration
statements under the Securities Act with respect to such requests; provided,
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however, that if the Series B Registrable Securities may be registered on Form
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S-3 (or any successor form with similar "short form" disclosure requirements),
the Holders of Series B Registrable Securities shall have unlimited rights to
request registration of their shares on Form S-3 (or such successor form),
provided, however, that each such registration of Series B Registrable
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Securities 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 "Series B Demand
Registration." Any Series B Demand Registration will specify the number of
shares of Series B Registrable Securities proposed to be sold and will also
specify the intended method of disposition thereof. The Company shall give
written notice of such registration request within ten (10) days after the
receipt thereof to all other Holders of Series B Registrable Securities and
shall use its best efforts to effect the Series B Demand Registration within
thirty (30) days after the giving of such written notice. Within 20 days after
receipt of such notice by any such Holder, such Holder may request in writing
that Series B Registrable Securities be included in such registration and the
Company shall include in the registration statement for such Series B Demand
Registration the Series B Registrable Securities of all Holders requested to be
so included. Each such request by such other Holders shall specify
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the number of shares of Series B Registrable Securities proposed to be sold and
the intended method of disposition thereof.
Whenever the Company shall effect a Series B Demand Registration pursuant
to this Section 2.1(b) in connection with an underwritten offering of Series B
Registrable Securities, no securities other than the Series B Registrable
Securities requested to be included shall be included among the securities
covered by such registration unless (i) the managing Underwriter or Underwriters
of such offering shall have advised the Holder of Series B Registrable
Securities to be covered by such registration in writing that the inclusion of
other securities would not adversely affect such offering, in which case,
securities to be issued by the Company or securities held by other stockholders
of the Company may be included or (ii) all Holders of Series B Registrable
Securities to be covered by such registration shall have consented in writing to
the inclusion of securities to be issued by the Company or securities held by
other stockholders of the Company. Whenever the Company shall effect a Series B
Demand Registration pursuant to this Section 2.1(b) other than in connection
with an underwritten offering of Series B Registrable Securities, no securities
held by stockholders of the Company other than Holders of Series B Registrable
Securities may be covered by such registration unless all Holders of Series B
Registrable Securities to be covered by such registration shall have consented
thereto in writing.
(c) Request for Registration by Holders of Series C and Warrant
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Registrable Securities. At any time and from time to time after March 31, 2000,
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Holders of a majority in interest of the Series C and Warrant Registrable
Securities (for this purpose, treating the Series C Preferred Stock as if it had
been converted into Common Stock) may make written requests on the Company for
the registration of the Series C and Warrant Registrable Shares having an
anticipated aggregate offering price (net of discounts and commissions) of at
least $5,000,000 under the Securities Act. Subject to the penultimate sentence
of Section 2.1(e), 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 Series C and Warrant Registrable
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Securities may be registered on Form S-3 (or any successor form with similar
"short form" disclosure requirements), the Holders of Series C and Warrant
Registrable Securities shall have unlimited rights to request registration of
their shares on Form S-3 (or such successor form), provided, however, that each
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such registration of Series C and Warrant Registrable Securities 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 "Series C and Warrant Demand Registration." Any
Series C and Warrant Demand Registration will specify the number of shares of
Series C and Warrant Registrable Securities proposed to be sold and will also
specify the intended method of disposition thereof. The Company shall give
written notice of such registration request within ten (10) days after the
receipt thereof to all other Holders of Registrable Securities and shall use its
best efforts to effect the Series C and Warrant Demand Registration within
thirty (30) days after the giving of such written notice. Within 20 days after
receipt of such notice by any such Holder, such Holder may request in writing
that some or all of its
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Series C and Warrant Registrable Securities be included in such registration and
the Company shall include in the registration statement for such Series C and
Warrant Demand Registration the Series C and Warrant Registrable Securities of
all Holders requested to be so included. Each such request by such other Holders
shall specify the number of shares of Series C and Warrant Registrable
Securities proposed to be sold and the intended method of disposition thereof.
Whenever the Company shall effect a Series C and Warrant Demand
Registration pursuant to this Section 2.1(c) in connection with an underwritten
offering of Series C and Warrant Registrable Securities, no securities other
than the Series C and Warrant Registrable Securities requested to be included
shall be included among the securities covered by such registration unless (i)
the managing Underwriter or Underwriters of such offering shall have advised the
Holder of Series C and Warrant Registrable Securities to be covered by such
registration in writing that the inclusion of other securities would not
adversely affect such offering, in which case, securities to be issued by the
Company or securities held by other stockholders of the Company may be included
or (ii) all Holders of Series C and Warrant Registrable Securities to be covered
by such registration shall have consented in writing to the inclusion of
securities to be issued by the Company or securities held by other stockholders
of the Company. Whenever the Company shall effect a Series C and Warrant Demand
Registration pursuant to this Section 2.1(c) other than in connection with an
underwritten offering of Series C and Warrant Registrable Securities, no
securities held by stockholders of the Company other than Holders of Series C
and Warrant Registrable Securities may be covered by such registration unless
all Holders of Series C and Warrant Registrable Securities to be covered by such
registration shall have consented thereto in writing.
(d) Request for Registration by Holders of Series D Registrable Securities.
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Securities. At any time and from time to time after the first to occur of (i)
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the first underwritten public offering of the Company's Common Stock or (ii)
March 31, 2000, Holders of no less than 40% of the Series D Registrable
Securities (for this purpose, treating the Series D Preferred Stock as if it had
been converted into Common Stock) may make written requests on the Company for
the registration of the Series D Registrable Shares having an anticipated
aggregate offering price (net of discounts and commissions) of at least
$5,000,000 under the Securities Act. Subject to the penultimate sentence of
Section 2.1(e), 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 Series D Registrable Securities may be registered
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on Form S-3 (or any successor form with similar "short form" disclosure
requirements), the Holders of Series D Registrable Securities shall have
unlimited rights to request registration of their shares on Form S-3 (or such
successor form); provided, however, that each such registration of Series D
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Registrable Securities have an anticipated aggregate offering price (net of
discounts and commissions) of at least $500,000. Notwithstanding anything to the
contrary contained in the preceding sentence, if 12 months following the first
underwritten public offering of the Company's Common Stock the Company is
ineligible to
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register its Common Stock on Form S-3, the number of registration statements
that the holders of Series D Registrable Securities will be entitled to require
of the Company under the second sentence of this Section 2.1(d) shall be
increased from two to three. Each such request described in the preceding three
sentences shall be hereinafter referred to as a "Series D Demand Registration."
Any Series D Demand Registration will specify the number of shares of Series D
Registrable Securities proposed to be sold and will also specify the intended
method of disposition thereof. The Company shall give written notice of such
registration request within ten (10) days after the receipt thereof to all other
Holders of Registrable Securities and shall use its best efforts to effect the
Series D Demand Registration within thirty (30) days after the giving of such
written notice. Within 20 days after receipt of such notice by any such Holder,
such Holder may request in writing that some or all of its Series D Registrable
Securities be included in such registration and the Company shall include in the
registration statement for such Series D Demand Registration the Series D
Registrable Securities of all Holders requested to be so included. Each such
request by such other Holders shall specify the number of shares of Series D
Registrable Securities proposed to be sold and the intended method of
disposition thereof.
Whenever the Company shall effect a Series D Demand Registration
pursuant to this Section 2.1(d) in connection with an underwritten offering of
Series D Registrable Securities, no securities other than the Series D
Registrable Securities requested to be included shall be included among the
securities covered by such registration unless (i) the managing Underwriter or
Underwriters of such offering shall have advised the Holder of Series D
Registrable Securities to be covered by such registration in writing that the
inclusion of other securities would not adversely affect such offering, in which
case, securities to be issued by the Company or securities held by other
stockholders of the Company may be included or (ii) all Holders of Series D
Registrable Securities to be covered by such registration shall have consented
in writing to the inclusion of securities to be issued by the Company or
securities held by other stockholders of the Company. Whenever the Company
shall effect a Series D Demand Registration pursuant to this Section 2.1(d)
other than in connection with an underwritten offering of Series D Registrable
Securities, no securities held by stockholders of the Company other than Holders
of Series D Registrable Securities may be covered by such registration unless
all Holders of Series D Registrable Securities to be covered by such
registration shall have consented thereto in writing.
(e) Effective Registration. A registration will not be deemed to have
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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
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if, 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 hundred eighty (180) days after the effective date of the
registration statement, such registration will be deemed not to
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have been effected. If (i) a registration requested pursuant to this Section 2.1
is deemed not to have been effected or (ii) the registration requested pursuant
to this Section 2.1 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 Registrable Securities, until ninety (90) days after
the commencement of the distribution by the Holders of the Registrable
Securities included in such registration statement, then the Company shall
continue to be obligated to effect such registration pursuant to this Section
2.1. The Holders of Registrable Securities shall be permitted to withdraw all or
any part of the Registrable Securities from a Demand Registration at any time
prior to the effective date of such Demand Registration.
(f) Selection of Underwriter. If the Selling Holders so elect, the
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offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of an underwritten offering. The Selling Holders owning at
least two-thirds (2/3) of Registrable Securities to be sold shall select one or
more nationally recognized firms of investment bankers reasonably acceptable to
the Company to act as the lead managing Underwriter or Underwriters in
connection with such offering and shall select any additional investment bankers
and managers to be used in connection with the offering.
SECTION 2.2 Piggy-Back Registration. If at any time the Company
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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 2.1), then the Company shall give prompt
written notice of such proposed filing to the Holders of Registrable Securities
as soon as practicable (but in no event less than 20 days before the anticipated
filing date), and such notice shall offer such Holders the opportunity to
register such number of Registrable Securities as each such Holder may request
(which request shall specify the Registrable Securities intended to be disposed
of by such Holder 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 Registrable Securities 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 Registrable Securities in
accordance with the intended method of distribution thereof. Except as set
forth in Section 2.3(b), any Holder shall have the right to withdraw its request
for inclusion of its Registrable Securities in any registration statement
pursuant to this Section 2.2 by giving written notice to the Company of its
request to withdraw, provided, however, that in the event of such withdrawal,
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such Holder shall be responsible for all fees and expenses (including fees and
expenses of counsel) incurred by such Holder prior to such withdrawal except as
set forth in Section 2.3(b). 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 2.2, and no failure to
effect a registration under this Section 2.2, shall relieve the Company of its
obligation to effect a registration upon the request of Holders pursuant to
Section 2.1, and no failure to effect a registration under this Section 2.2 and
to complete the sale of Registrable Securities in connection therewith shall
relieve the Company of any other obligation under this Agreement (including,
without limitation, the Company's obligations under Sections 3.2 and 4.1).
SECTION 2.3 Reduction of Offering.
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(a) Piggy-Back Registration. Notwithstanding anything to the contrary
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contained herein, if the managing Underwriter or Underwriters of any
underwritten offering described in Section 2.2 have informed, in writing, the
Holders of the Registrable Securities requesting inclusion in such offering that
it is their opinion that the total number of shares which the Company, Holders
of Registrable Securities 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 securities proposed by the Company to be sold for its own account;
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(y) second, the number of shares to be offered by all other holders of
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securities of the Company other than the Holders of Registrable Securities or
other holders who have registration rights to the extent necessary to reduce the
total number of shares as recommended by such managing Underwriters; and (z)
third, if further reduction or limitation is required, the number of shares to
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be offered for the account of the Holders shall be reduced or limited on a pro
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rata basis in proportion to the relative number of Registrable Securities of the
----
Holders participating in such registration; provided, however, that the
-------- -------
reduction for the account of the Holders shall not result in the number of
shares of the Holders included in the offering to be less than 25% of the total
number of shares offered.
(b) Withdrawal Election. If, as a result of the proration provisions
-------------------
of this Section 2.3, any Holder shall not be entitled to include at least 50% of
the Registrable Securities in a Piggy-Back Registration that such Holder has
requested to be included, such Holder may elect to withdraw his, her or its
request to include Registrable Securities in such registration (a "Withdrawal
Election") without incurring any liability for his, her or its fees and
expenses; provided, however, that a Withdrawal Election shall be irrevocable
-------- -------
and, after making a Withdrawal Election, a Holder shall no longer have any right
to include Registrable Securities in the Piggy-Back Registration as to which
such Withdrawal Election was made.
ARTICLE 3.
----------
REGISTRATION PROCEDURES
SECTION 3.1 Filings; Information. Whenever the Company is required
--------------------
to effect or cause the registration of Registrable Securities pursuant to
Section 2.1, the Company will use its best efforts to effect the registration
and the sale of such Registrable Securities in
-11-
accordance with the intended method of disposition thereof as quickly as
practicable, and in connection with any such request:
(a) Registration Statements. 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
registration statement to become and remain effective until the completion of
the distribution; provided, however, that the Company shall be required to keep
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any registration statement effective at least ninety (90) days.
(b) Amendments and Supplements. 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
3.1(a) and as to comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by such registration
statement in accordance with the intended method of disposition set forth in
such registration statement for such period.
(c) Copies For Review. 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) each Selling
Holder, (ii) not more than one counsel representing all Selling Holders, to be
selected by a majority-in-interest of such Selling Holders, and (iii) each
Underwriter, if any, of the Registrable Securities 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 Selling Holders, 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 such Selling Holders,
counsel or Underwriters may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Selling Holders.
(d) Stop Orders. After the filing of the registration statement, the
-----------
Company will promptly notify each Selling Holder of Registrable Securities
covered by such registration statement 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.
-12-
(e) Blue Sky. The Company will use its best efforts to (i) register
--------
or qualify the Registrable Securities under such other securities or blue sky
laws of such jurisdictions in the United States as any Selling Holder reasonably
(in light of such Selling Holder's intended plan of distribution) requests, and
(ii) cause such Registrable Securities 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 such Selling Holder to consummate the disposition of the Registrable
Securities owned by such Selling Holder; provided, however, that the Company
-------- -------
will not be required 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 3.1 or (C) consent to
general service of process in any such jurisdiction.
(f) Certain Events. The Company will immediately notify each Selling
--------------
Holder of such Registrable Securities, at any time when a prospectus relating
thereto 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 Holders of such Registrable
Securities, 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 each Selling Holder any such supplement or amendment.
(g) Agreements. The Company and the Selling Holders 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 Selling Holder 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 such Selling Holder
expressly for inclusion in the registration statement) and, if requested by the
underwriter(s), an agreement appointing one or more (but not more than three)
Persons approved by a majority in interest of the Holders whose Registrable
Securities are to be included in the registration, to act as attorney-in-fact
for the Holder and as escrow agent for the Registrable Securities to be included
in the offering in customary form. The Company and the Selling Holders will
also take such other actions as are reasonably required in order to expedite or
facilitate the disposition of such Registrable Securities; and the Selling
Holders may, at their 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 such Selling Holders.
(h) Due Diligence. The Company will make available to each Selling
-------------
Holder (and their 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
-13-
also make available for inspection by any Selling Holder, any Underwriter
participating in any disposition pursuant to such registration statement and any
attorney, accountant or other professional retained to represent any such
Selling Holder or Underwriter (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 are
compelled to disclose. Each Selling Holder of such Registrable Securities 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 Selling Holder 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. Each
Selling Holder of such Registrable Securities 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) Sales Efforts. In connection with an underwritten offering, the
-------------
Company will participate, to the extent reasonably requested by the managing
Underwriter for the offering or the Selling Holders, 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 each Selling Holder to promptly furnish in
writing to the Company such information regarding the distribution of the
Registrable Securities 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
-14-
information as may be requested by the Commission or the NASD. The Company may
exclude from such registration any Holder who fails to provide such information.
Each Selling Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3.1(f)
hereof, such Selling Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Selling Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3.1(f) hereof, and,
if so directed by the Company, such Selling Holder will deliver to the Company
all copies, other than permanent file copies then in such Selling Holder's
possession, of the most recent prospectus covering such Registrable Securities
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 3.1(a) hereof) by the number of days during the period from and
including the date of the giving of notice pursuant to Section 3.1(f) hereof to
the date when the Company shall make available to the Selling Holders of
Registrable Securities covered by such registration statement a prospectus
supplemented or amended to conform with the requirements of Section 3.1(f)
hereof.
SECTION 3.2 Registration Expenses. In connection with the Demand
---------------------
Registrations pursuant to Section 2.1 hereof and any Piggy-Back Registrations
under Section 2.2 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 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 Registrable Securities), (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 Registrable Securities, (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 Holders to be selected by the Holders of at least 66 2/3% of the
Registrable Securities to be included in such registration voting as a single
class 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 other underwriting fees, discounts or commissions attributable to the sale
of Registrable Securities, or the cost of any special audit required, such costs
to be borne by the Holder or Holders making the request.
-15-
ARTICLE 4.
----------
INDEMNIFICATION AND CONTRIBUTION
SECTION 4.1 Indemnification by the Company. The Company shall, to the
------------------------------
full extent permitted by law, indemnify and hold harmless each Selling Holder,
its Affiliates, partners, officers, directors, employees and agents, and each
Person, if any, who controls or is under common control with such Selling Holder
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 (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 such Selling Holder, 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 Registrable Securities 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 a Selling
Holder expressly for use therein, and shall reimburse each Selling Holder, its
Affiliates, partners, officers, directors, employees and agents, and each such
Controlling Person for any legal and other expenses reasonably incurred by that
Selling Holder, 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 any Selling Holder 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) such Selling Holder failed to send or deliver a copy of the
final prospectus with or prior to the delivery of written confirmation of the
sale by such Selling Holder 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 any Selling Holder 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, such Selling Holder thereafter fails to deliver such prospectus as
so amended or supplemented prior to or concurrently with the sale of a
Registrable Security to the Person asserting the claim from which such Damages
arise. The Company also agrees to indemnify any Underwriters of the Registrable
Securities, their officers and directors and each Person
-16-
who controls such Underwriters on substantially the same basis as that of the
indemnification of the Selling Holders provided in this Section 4.1.
SECTION 4.2 Indemnification by Selling Holders. Each Selling Holder
----------------------------------
shall, to the full extent permitted by law, severally but not jointly, 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 such Selling
Holder, but only to the extent the Company's or such Person's Damages are
attributable to the information related to such Selling Holder, or its plan of
distribution, furnished in writing by such Selling Holder or on such Selling
Holder's behalf expressly for use in any registration statement or prospectus
relating to the Registrable Securities, or any amendment or supplement thereto,
or any preliminary prospectus and the aggregate amount which may be recovered
from any Selling Holder of Registrable Securities pursuant to the
indemnification provided for in this Section 4.2 in connection with any
registration and sale of Registrable Securities shall be limited to the net
proceeds received by such Selling Holder from the sale of such Registrable
Securities. 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 such Selling Holder, such Selling Holder 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 such Selling Holder under the preceding paragraph. Each Selling Holder also
agrees to indemnify and hold harmless any Underwriters of the Registrable
Securities, their officers and directors and each Person who controls such
Underwriters on substantially the same basis as that of the indemnification such
Selling Holder provides to the Company provided in this Section 4.2; provided
--------
that the aggregate recovery that the Company and any Underwriters can recover
----
from a Selling Holder pursuant to this Section 4.2 cannot exceed the net
proceeds received by such Selling Holder from the sale of such Registrable
Securities. 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.
SECTION 4.3 Conduct of Indemnification Proceedings. Promptly after
--------------------------------------
receipt by any person in respect of which indemnity may be sought pursuant to
Section 4.1 or 4.2 (an "Indemnified Party") of notice of any 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
-------- -------
-17-
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 4.1 or
4.2 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.
SECTION 4.4 Contribution. If the indemnification provided for in
------------
this Article 4 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 the Selling Holders 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 Selling Holders on the one hand and the
Underwriters on the other from the offering of the Registrable Securities, 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 Selling Holders on the one hand and of the
Underwriters on the
-18-
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 each Selling Holder on the other, in
such proportion as is appropriate to reflect the relative fault of the Company
and of each Selling Holder in connection with such statements or omissions, as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Holders 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 Selling Holders
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 Selling Holders 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 Selling Holders or by the
Underwriters. The relative fault of the Company on the one hand and of each
Selling Holder 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 the Selling Holders agree that it would not be just
and equitable if contribution pursuant to this Section 4.4 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 4.4, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Registrable Securities 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 no Selling Holder shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities of such Selling Holder were offered to
the public (less underwriting discounts and commissions) exceeds the amount of
any damages which such Selling Holder 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. Each
Selling Holder's obligations to contribute pursuant to this Section 4.4
-19-
is several in the proportion that the proceeds of the offering received by such
Selling Holder bears to the total proceeds of the offering received by all the
Selling Holders and not joint.
ARTICLE 5.
----------
OTHER REGISTRATION RIGHTS
SECTION 5.1 Other Registration Rights. The Company represents and
-------------------------
warrants to the Holders that there is not in effect on the date hereof any
agreement by the Company pursuant to which any holders of securities of the
Company have a right to cause the Company to register or qualify such securities
under the Securities Act or any securities or blue sky laws of any jurisdiction
that would conflict in any material respect with any provision of this
Agreement.
SECTION 5.2 Future Registration Rights. The Company shall not in the
--------------------------
future grant to any owner or purchaser of shares of capital stock of the Company
registration rights (whether demand or incidental) unless (a) such registration
rights are made subordinate to the rights granted hereunder so that each Holder
shall have priority to participate in any piggy-back registration with respect
to such other shares of capital stock of the Company and (b) if the offering by
the Holders is underwritten, such owner or purchaser agrees not to sell any
shares of capital stock of the Company during the period commencing ten (10)
days prior to any such underwritten offering and ending one hundred eighty (180)
days following any such underwritten offering (or for such shorter period of
time as is sufficient and appropriate, in the opinion of the managing
Underwriter).
SECTION 5.3 Exclusion of Registrable Shares. As to any particular
-------------------------------
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale of such securities has been declared effective by the Commission and such
securities have been disposed of pursuant to such effective registration
statement, (ii) they shall have been distributed to the public pursuant to the
provisions of Rule 144 or (iii) they shall have ceased to be outstanding.
ARTICLE 6
---------
MISCELLANEOUS
SECTION 6.1 Participation in Underwritten Registrations. No Holder
-------------------------------------------
of Registrable Securities shall be required to make any representations or
warranties to or agreements with the Company or the Underwriters other than
representations, warranties or agreements regarding such Holder and its
ownership of the securities being registered on its behalf and such Holder's
intended method of distribution and any other representation required by law.
No Person may participate in any underwritten registration hereunder unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements, and
-20-
(b) completes and executes all customary questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements and these registration rights.
SECTION 6.2 Lock-up Agreement. The Holder agrees in connection with
-----------------
any registration of the Company's securities, upon the request of the
underwriters managing any underwritten offering of the Company's securities, not
to sell, make any short sale of, pledge, grant any option for the purchase of or
otherwise dispose of any Registrable Securities without the prior written
consent of the Company or such underwriters, as the case may be, during the
seven (7) days prior to and during the 180-day period beginning on the effective
date of such registration, as the Company or the underwriters may specify;
provided, however, that if the Company delays the effective date of any
-------- -------
registration statement by more than 14 days, the Investors shall not be
precluded from selling Registrable Shares during the seven-day period
immediately preceding the effective date of such registration statement; and
provided further (i) each member of the Company's Board of Directors and
management and each of the Company's stockholders holding two percent (2%) or
more of the Company's outstanding capital stock enter into a similar agreement
and (ii) that if any such member of the Company's Board of Directors, the
Company's management or a 2% stockholder is released in whole or in part from
such lock-up prior to its expiration, the Company will notify each Investor of
such release and each Investor will be released pro-rata with the released
parties. This provision shall apply whether or not any Registrable Securities
of the Holder are included in the offering. This provision shall apply to the
Company's initial public offering and registrations of the Company's securities
with an effective date on or before the first anniversary of the effective date
of the Company's initial public offering, and shall be of no further force or
effect if the Holder no longer has the right to have Registrable Securities
included in any registration pursuant to this Agreement.
SECTION 6.3 Rule 144 and 144A. The Company covenants that it will
-----------------
file any reports required to be filed by it under the Securities Act and the
Securities Exchange Act of 1934, as amended and that it will take such further
action as any Holder may reasonably request, all to the extent required from
time to time to enable Holders to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 or Rule 144A under the Securities Act, as such Rules
may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the Commission. Upon the request of any Holder, the
Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
SECTION 6.4 Suspension of Obligation to File. Notwithstanding the
--------------------------------
provisions of Section 3.1(a), the Company's obligations to file a registration
statement, or cause such registration statement to become and remain effective,
shall be suspended for the minimally necessary period, not to exceed one hundred
twenty (120) days, if there exists at the time material non-public information
relating to the Company that, in the reasonable opinion
-21-
of the Company's counsel, should not be disclosed. The Company's rights under
this Section 6.4 may not be invoked more than once during any single 365-day
period.
SECTION 6.5 Amendment and Modification. This Agreement may be
--------------------------
amended, modified and supplemented, and any of the provisions contained herein
may be waived, only by a written instrument signed by (i) Holders of at least a
majority in interest of the Series A Registrable Securities, (ii) Holders of at
least a majority in interest of the Series B Registrable Securities, (iii)
Holders of at least a majority in interest of the Series C and Warrant
Registrable Securities and (iv) Holders of at least a majority in interest of
the Series D Registrable Securities (for this purpose, treating the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock as if they had been converted into Common Stock).
Notwithstanding anything to the contrary contained in the preceding sentence, a
signature addendum to this Agreement permitting the holder or holders of shares
of Series D Preferred Stock issued upon exercise of the Series D Warrants shall
not be deemed an amendment to this Agreement. No course of dealing between or
among any Persons having any interest in this Agreement will be deemed effective
to modify, amend or discharge any part of this Agreement or any rights or
obligations of any Person under or by reason of this Agreement.
SECTION 6.6 Assignability of Rights. An Investor may assign in whole
-----------------------
or in part their rights and obligations pursuant to this Agreement to one or
more persons, provided that such person acquires at least 20% of the Registrable
Shares originally issued to such Investor. Upon such assignment, the Investors
shall have no further obligations with respect to the portions of their
respective rights and obligations that have been assigned. Any such assignee
shall execute an agreement assuming and agreeing to be bound by this Agreement,
insofar as it relates to the rights and obligations assigned. Notwithstanding
anything to the contrary contained elsewhere in this Section 6.6, an Investor
shall be permitted to assign in whole or in part its rights or obligations
pursuant to this Agreement to any entity under common control with such Investor
or that is a direct or indirect wholly-owned subsidiary of such Investor or such
Investor's parent without obtaining the prior consent of the Company or other
Investors, and such assignments shall not be subject to the 20% requirement
specified in the first sentence hereof.
SECTION 6.7 Binding Effect; Entire Agreement. This Agreement and all
--------------------------------
of the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns and executors,
administrators and heirs. This Agreement amends, restates and sets forth the
entire agreement and understanding between the parties as to the subject matter
hereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them, including, without
limitation, (i) Section 7 of the Series A Preferred Stock Purchase Agreement,
dated as of December 11, 1995, by and between the Company and the Series A
Holder and (ii) the Prior Agreement.
-22-
SECTION 6.8 Severability. In the event that any provision of this
------------
Agreement or the application of any provision hereof is declared to be illegal,
invalid or otherwise unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall not be affected except to the extent necessary
to delete such illegal, invalid or unenforceable provision unless that provision
held invalid shall substantially impair the benefits of the remaining portions
of this Agreement.
SECTION 6.9 Notices. All notices, demands, requests, consents or
-------
approvals (collectively, the "Notices") required or permitted to be given
hereunder or which are given with respect to this Agreement shall be in writing
and shall be personally served or mailed, registered or certified, return
receipt requested, postage prepaid (or by a substantially similar method), or
delivered by a reputable overnight courier service with charges prepaid, or
transmitted by hand delivery, telegram, telex or facsimile, addressed as set
forth below, or such other address as such party shall have specified most
recently by written notice:
(a) If to the Company:
Audible Inc.
ββ βββββββββββ βββββββββ
βββββ, βββ ββββββ βββββ
Attention: ββββββ ββββ
Telephone: (βββ) βββ-ββββ
Telecopy: (βββ) βββ-ββββ
with copies (which shall not constitute notice) to:
Piper & Marbury L.L.P.
ββββ ββββββββββ ββ., β.β.
ββββββββββ, ββ βββββ
Attention: βββββ β. ββββββββ, Esq.
Telephone: (βββ) βββ-ββββ
Telecopy: (βββ) βββ-ββββ
(b) If to a Holder, at the most current address, and with a copy to
be sent to each additional address, given by such Holder to the
Company in writing to the addresses listed for such Holder on the
signature pages to this Agreement.
Notice shall be deemed given or delivered on the date of service or transmission
if personally served or transmitted by telegram, telex or facsimile. Notice
otherwise sent as provided herein shall be deemed given or delivered on the
third business day following the date mailed or on the next business day
following delivery of such notice to a reputable overnight courier service.
-23-
SECTION 6.10 Governing Law. This agreement shall be governed by and
-------------
construed in accordance with the internal law of the State of New York, without
giving effect to principles of conflicts of law.
SECTION 6.11 Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not constitute a part of this Agreement,
nor shall they affect their meaning, construction or effect.
SECTION 6.12 Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which shall be deemed to be an original
instrument and all of which together shall constitute one and the same
instrument.
SECTION 6.13 Further Assurances. Each party shall cooperate and take
------------------
such action as may be reasonably requested by another party in order to carry
out the provisions and purposes of this Agreement and the transactions
contemplated hereby.
SECTION 6.14 Remedies. In the event of a breach or a threatened
--------
breach by any party to this Agreement of its obligations under this Agreement,
any party injured or to be injured by such breach will be entitled to specific
performance of its rights under this Agreement or to injunctive relief, in
addition to being entitled to exercise all rights provided in this Agreement and
granted by law. The parties agree that the provisions of this Agreement shall
be specifically enforceable, it being agreed by the parties that the remedy at
law, inducing monetary damages, for breach of any such provision will be
inadequate compensation for any loss and that any defense or objection in any
action for specific performance or injunctive relief that a remedy at law would
be adequate is waived.
SECTION 6.15 Supersedes Prior Agreement This Agreement amends,
--------------------------
restates and supersedes in their entirety all of the terms and conditions set
forth in the Prior Agreement, and upon execution of this Agreement, the Prior
Agreement shall be of no further force or effect.
SECTION 6.16 Pronouns. Whenever the context may require, any
--------
pronouns used herein shall be deemed also to include the corresponding neuter,
masculine or feminine forms.
(Signatures on following pages.)
-24-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COMPANY:
--------
AUDIBLE INC.
By:/s/ ββββββ ββββ
------------------------------------
Name: ββββββ ββββ
Title: President
ββ βββββββββββ βββββββββ
βββββ, ββ βββββ
INVESTORS:
----------
CPQ HOLDINGS, INC.
By: /s/ ββββββ β. βββββββ
------------------------------------
Name: ββββββ β. βββββββ
Title: Senior Vice President
Address: βββββ ββ βββ
βββββββ, βββββ βββββ
βββββββββ & βββββ, CALIFORNIA
By: /s/ ββββ βββββ
------------------------------------
Name: ββββ βββββ
Title: Controller
Attorney-in-fact
Address: βββ ββββ ββββββ
βββ βββββββββ, ββ βββββ
VENTURE FUND I, L.P.
By: /s/ ββββ βββββββ
-------------------------
Name: ββββ βββββββ
Title: General Partner
βββ βββββ βββββ ββββββ
βββββββ βββββ, ββ βββββ
-25-
AT&T VENTURE FUND II, L.P.
By: /s/ ββββ βββββββ
------------------------------------
Name: ββββ βββββββ
Title: General Partner
βββ βββββ βββββ ββββββ
βββββββ βββββ, ββ βββββ
THOMSON U.S. INC.
By: /s/ βββββ β. ββββββ
------------------------------------
Name: βββββ β. ββββββ
Title: Vice President
βββ ββββ ββββ, β.β. βββ ββββ
ββββββββββ, ββ βββββ
INTEL CORPORATION
By: /s/ ββββββ βββββββ
------------------------------------
Name: ββββββ βββββββ
Title: Vice President and Treasurer
ββββ βββββββ βββββββ βββββββββ
βββββ βββββ, ββ βββββ-ββββ
APA EXCELSIOR IV, L.P.
By: APA EXCELSIOR IV PARTNERS, L.P.
Its General Partner
By: PATRICOF & CO. MANAGERS
INC., its General Partner
By: /s/ ββββ ββββββββ
------------------------------------
Name: ββββ ββββββββ
Title: Co. Chairman
βββ ββββ ββββββ, ββββ ββ.
βββ ββββ, βββ ββββ βββββ
-26-
APA EXCELSIOR IV/OFFSHORE, L.P.
By: PATRICOF & CO. VENTURES, INC., its
Investment Advisor
By: /s/ ββββ ββββββββ
------------------------------------
Name: ββββ ββββββββ
Title: Co. Chairman
βββ ββββ ββββββ, ββββ ββ.
βββ ββββ, βββ ββββ βββββ
PATRICOF PRIVATE INVESTMENT
CLUB, L.P.
By: APA EXCELSIOR IV PARTNERS, L.P.,
its General Partner
By: PATRICOF & CO. MANAGERS, INC.,
its General Partner
By: /s/ ββββ ββββββββ
------------------------------------
Name: ββββ ββββββββ
Title: Co. Chairman
βββ ββββ ββββββ, ββββ ββ.
βββ ββββ, βββ ββββ βββββ
βββββββ βββββββ ββββββββ & βββββ VIII
By: PCB VIII ASSOCIATES,
its General Partner
By: /s/ βββββ β. βββββββ
------------------------------------
Name: βββββ β. βββββββ
Title: General Partner
ββββ ββββ ββββ ββββ
βββββ ββββ, ββ βββββ
-27-
KPCB INFORMATION SCIENCES ZAIBATSU
FUND II
By: KPCB VII ASSOCIATES, its General
Partner
By: /s/ βββββ β. βββββββ
-----------------------------------
Name: βββββ β. βββββββ
Title: General Partner
ββββ ββββ ββββ ββββ
βββββ ββββ, ββ βββββ
KPCB VIII FOUNDERS FUND
By: KPCB VIII Associates
Its: General Partner
By: /s/ βββββ β. βββββββ
-----------------------------------
Name: βββββ β. βββββββ
Title: General Partner
ββββ ββββ ββββ ββββ
βββββ ββββ, ββ βββββ
IRONWOOD CAPITAL L.L.C.
By: /s/ βββ ββββ
-----------------------------------
Name:
Title:
ββββ βββββ ββββββ
βββ ββββ, ββ βββββ
__________________________
βββββββ ββββββ
Address: ________________
__________________________
-28-
__________________________
ββββββββ ββββββββ
Address:
COMDISCO, INC.
By:_______________________
Name:
Title:
IMPERIAL BANK, INC.
By:_______________________
Name:
Title:
/s/ βββ βββββ
--------------------------
βββ βββββ
Address:_____________________________
_______________________________
/s/ βββ ββββββββ
-------------------------------------
βββ ββββββββ
Address:_____________________________
_______________________________
/s/ ββββ ββββββ
-------------------------------------
ββββ ββββββ
Address: βββ βββββ ββββ
-----------------------------
ββββββββββββ, ββ βββββ
-------------------------------------
/s/ ββββββ βββββββ
-------------------------------------
ββββββ βββββββ
Address: ββββ βββ ββββββ
-----------------------------
ββ ββ βββββ
-------------------------------
/s/ βββ β. ββββββ
-------------------------------------
βββ ββββββ
Address: ββββ ββββββββββ ββββββ
-----------------------------
ββ, ββ βββββ
-------------------------------
-29-
