EXHIBIT 10.31
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT is made and entered into as of January
30, 2000, by and between Audible, Inc., a Delaware corporation (the "Company"),
and Xxxxxx.xxx Commerce Services, Inc., a Delaware corporation (the
"Purchaser").
THE PARTIES AGREE AS FOLLOWS:
1. Authorization and Sale of Shares
1.1. Authorization of the Shares
On or before the Closing Date (as defined in Section 2.2 below), the
Company will have authorized the issuance and sale, pursuant to the terms and
conditions of this Agreement, of 1,340,033 shares (the "Shares") of common stock
of the Company, par value $0.01 per share ("Common Stock"), which equals the
quotient of (i) twenty million dollars ($20,000,000) divided by (ii) $14.925
(the average closing price of the Common Stock for the five trading days from
January 24, 2000 to January 28, 2000.
1.2. Sale of the Shares
Subject to the terms and conditions of this Agreement, the Purchaser
agrees to purchase at the Closing, and the Company agrees to sell and issue to
the Purchaser at the Closing that number of shares of Common Stock for
consideration consisting solely of twenty million dollars ($20,000,000) (the
"Shares Consideration"). The Company will not take any position on any tax
return inconsistent with this position.
2. Closing; Closing Date; Deliveries at Closing
2.1. Closing
The completion of the purchase and sale of the Shares (the "Closing")
shall be held at the offices of Xxxxxxx Coie LLP, 0000 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000 at 10:00 a.m., Seattle time on the Closing Date. The parties
agree that the Closing may be effected by facsimile.
2.2. Closing Date
Subject to the terms and conditions of this Agreement, the Closing shall
occur on a date (the "Closing Date") to be agreed upon by the Company and the
Purchaser but, subject to the terms of this Agreement, in no event later than
March 31, 2000.
2.3. Delivery of the Shares at the Closing
At the Closing, the Company shall deliver to the Purchaser one or more
stock certificates registered in the name of the Purchaser, or in such nominee
name(s) as designated by the Purchaser in writing, representing the Shares
bearing an appropriate legend referring to the fact that the Shares were sold in
reliance upon the exemption from registration under the Securities Act of 1933,
as amended (the "Securities Act"), provided by Section 4(2) thereof and Rule 506
thereunder. The Company will substitute one or more replacement certificates
without the legend at the request of the Purchaser promptly after such time as
the Registration Statement (as hereinafter defined) becomes effective.
2.4. Consummation of Closing
At the Closing, the Shares Consideration due the Company pursuant to
Section 1.2 hereof and Company Closing Consideration (as defined in that certain
Co-Branding Agreement dated January 30, 2000 between the Company and the
Purchaser. (the "Commercial Agreement")) due the Purchaser pursuant to Section
5.2.1 of the Commercial Agreement, which amounts are identical, shall offset
each other solely for the purpose of determining the actual fund transfers
required at Closing. The Company acknowledges and agrees that the entire amount
of the Shares Consideration shall be deemed paid and received for the Common
Stock upon the issuance thereof.
All acts, deliveries and confirmations comprising the Closing regardless of
chronological sequence shall be deemed to occur contemporaneously and
simultaneously upon the occurrence of the last act, delivery or confirmation of
the Closing, and none of such acts, deliveries or confirmations shall be
effective unless and until the last of same shall have occurred.
3. Representations and Warranties of the Company
In order to induce the Purchaser to enter into this Agreement and to
perform its obligations hereunder, the Company hereby represents and warrants to
the Purchaser, at and as of the date of this Agreement, as follows:
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3.1. Organization
The Company is a corporation duly incorporated, 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 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 Shares when issued and paid for in accordance with this Agreement, as
the case may be, will be duly authorized, validly issued, fully paid and
nonassessable and (based in part on the representations set forth 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 authority to enter into
this Agreement, to sell and issue the Shares and to consummate the other
transactions contemplated by this Agreement. The execution and delivery of this
Agreement, the issuance and sale of the 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.
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3.4. No Conflict
The execution and delivery by the Company of this Agreement does not, and
the sale and issuance of the Shares and consummation of the other transactions
contemplated by this Agreement will not, (a) conflict with, or result in any
violation or breach of any provision of, the charter documents of the Company,
(b) result in any violation or breach of, or constitute (with or without notice
or lapse of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any material benefit)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, contract or other agreement, instrument or obligation to which
the Company is a party or by which any of its properties or assets may be bound,
or (c) conflict or violate any permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to the
Company or any of its properties or assets, in the case of (b) and (c) above
except such as would not have a Material Adverse Effect.
3.5. Required Filings and Consents
No consent, approval, order or 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 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
Attached hereto as Exhibit A is a true and accurate list of all forms,
reports and documents required to be filed to date since July 16, 1999 with the
Securities and Exchange Commission (the "Commission") by the Company pursuant to
the Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (collectively, the "Company Commission Reports"). The Company
Commission Reports (a) at the time filed, complied in all material respects with
the applicable requirements of the Securities Act and the Exchange Act, as
applicable, and (b) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
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3.7. Financial Statements
The consolidated financial statements of the Company and its subsidiaries
contained in the Company Commission 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 stockholders of the Company is required or
necessary for the Company to enter into this Agreement, to sell and issue the
Shares or to consummate the other transactions contemplated pursuant to this
Agreement.
3.9 Litigation
There is no any litigation, governmental proceeding, 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 Registration Rights
There are no persons with registration or similar rights to have any
securities registered pursuant to the Registration Statement (as defined below)
or otherwise registered by the Company under the Securities Act that would
conflict with any provision of this Agreement.
3.11 S-3 Eligible
The Company and the transactions contemplated by Section 8 of this
Agreement shall meet the requirements for using Form S-3, or, to the extent Form
S-3 is not available to the Company, Form S-1, under the Securities Act for
resale within the time period specified in Section 8.1(a).
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3.12 Disclosure
The representations and warranties made or contained in this Agreement and
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 and Warranties of the Purchaser
In order to induce the Company to enter into this Agreement and to perform
its obligations hereunder, the Purchaser hereby represents and warrants to the
Company, at and as of the date of this Agreement and at and as of the Closing
Date, as follows:
4.1. Organization
The Purchaser is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware.
4.2. Authority
The Purchaser has all requisite corporate power and authority to enter
into this Agreement, to purchase and hold the Shares and to consummate the other
transactions to be consummated by the Purchaser contemplated by this Agreement.
The execution and delivery of this Agreement, the purchase of the Shares and the
consummation of the other transactions contemplated by this Agreement have been
duly authorized by all necessary corporate action on the part of the Purchaser.
This Agreement has been duly executed and delivered by the Purchaser, and
constitutes the valid and binding obligation of the Purchaser, 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 Purchaser of this Agreement does not,
and consummation of the transactions contemplated by this Agreement will not (a)
conflict with, or result in any violation or breach of any provision of, the
charter documents of the Purchaser, (b) result in any violation or breach of, or
constitute
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(with or without notice or lapse of time, or both) a default (or give rise to a
right of termination, cancellation or acceleration of any obligation or loss of
any material benefit) under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, lease, contract or other agreement, instrument
or obligation to which the Purchaser is a party or by which any of its
properties or assets may be bound, or (c) conflict or violate any permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Purchaser or any of its
properties or assets, in the case of (b) and (c) above except such as 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.
4.4. Required Filings and Consents
No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to the Purchaser in connection with the execution and delivery of this
Agreement, the purchase of the Shares to be purchased by the Purchaser or the
consummation of the other transactions to be consummated by the Purchaser
contemplated hereby, except for such filings as may be required under the Xxxx-
Xxxxx-Xxxxxx Antitrust 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 Purchaser's ability to
consummate the transactions contemplated pursuant to this Agreement.
4.5. Purchaser is an "Accredited Investor"
The Purchaser is an "accredited investor" as defined in Rule 501(a) under
the Securities Act. The Purchaser believes that it has received all the
information it considers necessary or appropriate for deciding whether to
purchase the Shares. The Purchaser further represents that it has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the Shares and the business, properties, prospects and
financial condition of the Company; provided, however, that the foregoing shall
not diminish or detract from the Purchaser's ability to rely upon any of the
Company's representations or warranties. The Purchaser 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 Shares. The
Purchaser is not acquiring the Shares with a view towards distribution in
violation of the Securities Act.
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4.6. Registration Statement Information
Other than in accordance with the transactions contemplated by this
Agreement, the Purchaser has not acquired any other shares of Common Stock or
other securities of the Company and the Purchaser has not had any position,
office or other material relationship within the past three years with the
Company or, to the knowledge of the Purchaser, any affiliate of the Company.
4.7. Brokers or Finders
The Purchaser has not employed any broker, finder, consultant or other
intermediary that would have a valid claim against the Company for a fee or
commission in connection with the transactions contemplated hereby.
5. Conditions to the Obligations of the Purchaser
The obligations of the Purchaser pursuant to Sections 1 and 2 of this
Agreement are subject to the fulfillment on or prior to the Closing Date of the
following conditions, each of which may be waived in whole or part by the
Purchaser:
5.1. Representations and Warranties
The representations and warranties made by the Company pursuant to this
Agreement shall have been true and correct when made, and shall be true and
correct on the Closing Date.
5.2. Covenants
The Company shall have performed all obligations and conditions herein
required to be performed or observed by it on or prior to the Closing Date.
5.3. Closing Certificate
The President or Chief Financial Officer of the Company shall deliver to
the Purchaser at the Closing a certificate certifying that the conditions
specified in Sections 5.1 and 5.2 have been fulfilled and stating that there
shall have been no material adverse change in the business, operations,
properties, assets or financial condition of the Company since the date of this
Agreement.
5.4 No Injunction or Litigation
As of the Closing Date, there shall not be any claim or judgment of any
nature or type threatened, pending or made by or before any Governmental Entity
that
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questions or challenges the lawfulness of the transactions contemplated by
this Agreement under any law or regulation or seeks to delay, restrain or
prevent such transactions.
5.5. Government Approvals
All consents, approvals or authorizations of, and declarations, filings or
registrations with, all Governmental Entities required for the consummation of
the transactions contemplated in Sections 1 and 2 of this Agreement shall have
been obtained or made on terms reasonably satisfactory to the Purchaser and
shall be in full force and effect.
5.6. Legal Opinion
The Company shall have delivered to the Purchaser an opinion of counsel,
dated the Closing Date, substantially in the form of Exhibit B hereto.
5.7. Nasdaq Listing
If necessary, the Company shall have filed a Notification For Listing of
Additional Shares with Nasdaq covering the Shares.
5.8. Commercial Agreement
The Company shall have entered into the Commercial Agreement.
5.9. Xxxx Xxxxx Xxxxxx Act
All applicable waiting periods under the HSR Act shall have expired or
early termination shall have been granted by both the Federal Trade Commission
and the Department of Justice.
6. Conditions to the Company's Obligations
The obligation of the Company pursuant to Sections 1 and 2 of this
Agreement are subject to the fulfillment on or prior to the Closing Date of each
of the following conditions, each of which may be waived in whole or part by the
Company:
6.1. Representations and Warranties
The representations and warranties of the Purchaser pursuant to this
Agreement shall have been true and correct when made, and shall be true and
correct on the Closing Date.
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6.2. Covenants
The Purchaser shall have performed all obligations and conditions herein
required to be performed or observed by the Purchaser on or prior to the Closing
Date.
6.3. No Injunction or Litigation
As of the Closing Date, there shall not be any claim or judgment of any
nature or type threatened, pending or made by or before any Governmental Entity
that questions or challenges the lawfulness of the transactions contemplated by
this Agreement under any law or regulation or seeks to delay, restrain or
prevent such transactions.
6.4. Government Approvals
All consents, approvals or authorizations of, and declarations, filings or
registrations with, all Governmental Entities required for the consummation of
the transactions contemplated in Sections 1 and 2 of this Agreement shall have
been obtained or made on terms reasonably satisfactory to the Company and shall
be in full force and effect, except for such filings that are required to be
filed after the Closing according to applicable statutes.
6.4. Commercial Agreement
The Purchaser shall have entered into the Commercial Agreement.
7. Certain Covenants
7.1. Nondisclosure
Whether or not the Closing under this Agreement occurs, the Company and
the Purchaser will protect the Confidential Information (as defined below) of
the other party from misappropriation and unauthorized use or disclosure, and at
a minimum, will take precautions at least as great as those taken to protect its
own confidential information of a similar nature. Without limiting the
foregoing, the Receiving Party (as defined below) will: (a) use such
Confidential Information solely for the purposes for which it has been
disclosed; and (b) disclose such Confidential Information only to those of its
employees, agents, consultants, and others who have a need to know the same for
the purpose of performing this Agreement and who are informed of and agree to a
duty of nondisclosure. The Receiving Party may also disclose Confidential
Information of the Disclosing Party (as defined below) to the extent necessary
to comply with applicable law or legal process, provided that the Receiving
Party uses reasonable efforts to give the Disclosing Party prompt advance
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notice thereof. Upon request of the other party, each party shall return to the
other all materials, in any medium, which contain, embody, reflect or reference
all or any part of any Confidential Information of the other party.
For the purposes of this Section 7.1, the following terms have the
following meanings:
"Confidential Information" means non-public information and know-how of
the Disclosing Party which, by the nature of the circumstances surrounding
disclosure, ought in good faith to be treated as proprietary and/or
confidential, or which has been or is designated as proprietary and/or
confidential. Confidential Information does not include information that the
Receiving Party can show: (a) was known by the Receiving Party prior to
disclosure thereof by the Disclosing Party; (b) was in or entered the public
domain through no fault of the Receiving Party; (c) is independently developed
by the Receiving Party without reference to any Confidential Information of the
Disclosing Party; or (d) came into the possession of the Receiving Party in the
ordinary course of business from sources not owing a duty of confidentiality to
the Disclosing Party with respect to that information.
"Disclosing Party" means a party that discloses Confidential Information
to the other party in connection with this Agreement.
"Receiving Party" means a party that receives Confidential Information
from the other party in connection with this Agreement.
7.2. Confidentiality; Publicity
Neither the Company nor the Purchaser 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 Purchaser 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.
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7.3. Covenants to Satisfy Conditions
Each of the Company and the Purchaser shall use commercially reasonable
efforts to satisfy or cause to be satisfied all of the conditions precedent to
the other party's obligations that are set forth in Section 5 or 6, as the case
may be.
7.4. Further Assurances
Each party agrees from time to time to do and perform such other and
future acts and execute and deliver any and all such other instruments as may be
required by law or reasonably requested by the other party to establish,
maintain or protect the rights and remedies of the requesting party or to carry
out and effect the intent and purpose of this Agreement.
7.5 HSR Act Filings
If required, as soon as practicable after execution of this Agreement, the
Company and the Purchaser shall separately make or cause to be made any filings
with and submissions to the FTC and the DOJ required under the HSR Act in
connection with the consummation of the transactions contemplated by this
Agreement. Each party shall furnish to the other party such necessary
information and reasonable assistance as the other party may request, and shall
cooperate with the other party, in connection with the preparation of such
filings and submissions.
7.6 Restriction on Transfers
Except for (i) sales pursuant to a Registration Statement relating to the
sale of the Shares, as provided in Section 8 of this Agreement, or (ii)
transfers to Purchaser's affiliates, as set forth in Section 9.3; Purchaser
shall not sell, assign, transfer, pledge, hypothecate or otherwise dispose of,
by operation of law or otherwise (collectively, "transfer"), any of the Shares,
or any interest therein until July 31, 2000 without the prior written consent
the Company's Board of Directors. As a condition to such transfer within such
sixth month period, the transferee shall deliver to the Company a written
instrument confirming that it shall be bound by all terms and conditions of this
Agreement.
8. Registration of the Shares
8.1. Registration Procedures and Expenses
The Company shall:
(a) At Purchaser's request, by the later of (i) six months after the
Closing Date or (ii) August 1, 2000, prepare and file with the Commission a
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registration statement on Form S-3 (the "Registration Statement") relating to
the sale of the Shares by the Purchaser from time to time through the automated
quotation system of the Nasdaq National Market or the facilities of any national
securities exchange on which the Company's Common Stock is then traded or in
privately-negotiated transactions (it being acknowledged that the Purchaser
shall supply, or at least have the right to approve, any "Plan of Distribution"
contained therein);
(b) use its reasonable efforts subject to receipt of necessary
information from the Purchaser, to cause the Commission to notify the Company of
the Commission's willingness to declare the Registration Statement effective
within 45 days after the Registration Statement is filed by the Company;
(c) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith and take such other action, if any, as may be necessary to keep the
Registration Statement effective until the earlier of (i) eighteen months after
the effective date of the Registration Statement, (ii) the date on which the
Shares may be resold by the Purchaser without registration or without regard to
any volume limitations by reason of Rule 144 under the Securities Act or any
other rule of similar effect or (iii) all of the Shares have been sold pursuant
to the Registration Statement or Rule 144 under the Securities Act or any other
rule of similar effect (the "Selling Period");
(d) furnish to the Purchaser with respect to the Shares registered
under the Registration Statement (and to each underwriter, if any, of such
Shares) such reasonable number of copies of prospectuses, including any
supplements to or amendments of such prospectuses, in order to facilitate the
public sale or other disposition of all or any of the Shares by the Purchaser;
(e) during the period when such prospectuses are required to be
delivered under the Securities Act or the Exchange Act, file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the
Exchange Act within the time periods required by the Exchange Act and the rules
and regulations promulgated thereunder;
(f) file documents required of the Company for normal blue sky
clearance in states specified in writing by the Purchaser; provided, however,
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that the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or
has not so consented or subject itself to general taxation in any such
jurisdiction;
(g) notify the Purchaser, during the time when a prospectus is
required to be delivered under the Securities Act, of the happening of any event
as a
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result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances then existing, not misleading; and
(h) bear all expenses in connection with this Section 8.1 and the
registration of the Shares pursuant to the Registration Statement, other than
underwriting discounts, brokerage fees and commissions incurred by the
Purchaser, if any.
Notwithstanding the foregoing, if at any time during the Selling
Period the Company shall notify the Purchaser in a writing signed by the Chief
Financial Officer of the Company that there exists material nonpublic
information that must be disclosed in order for the Registration Statement not
to be false or misleading, the Company may require that no sales may be made
under the Registration Statement until such time as disclosure is made. The
Company shall use its best efforts to cause such disclosure to be made as soon
as practicable, but in any event no later than twenty days after such written
notice to the Purchaser.
8.2. Information
The Purchaser shall furnish to the Company such information regarding
itself, the Shares (and any other securities of the Company, if any) it holds
and the distribution proposed by it as the Company may reasonably request in
writing and as shall be required in connection with the registration referenced
to in Section 8.1.
8.3. Information Available
So long as the Registration Statement is effective covering the resale of
Shares owned by the Purchaser, the Company will furnish to the Purchaser:
(a) as soon as practicable after available (but in the case of the
Company's Annual Report to Shareholders, within 120 days after the end of each
fiscal year of the Company), one copy of (i) its Annual Report to Shareholders
(which Annual Report shall contain financial statements audited in accordance
with generally accepted accounting principles by a national firm of certified
public accountants), (ii) if not included in substance in the Annual Report to
Shareholders, its Annual Report on Form 10-K, (iii) if not included in substance
in its Quarterly Reports to Shareholders, its quarterly reports on Form 10-Q,
and (iv) a full copy of the particular Registration Statement covering the
Shares; and
(b) upon the request of the Purchaser, a reasonable number of copies
of the prospectuses to supply to any other party requiring such prospectuses.
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Upon the reasonable request of the Purchaser, representatives of the
Company will meet with the Purchaser (or a representative thereof) to discuss
information relevant for disclosure in the Registration Statement covering the
Shares, subject to appropriate confidentiality limitations.
8.4. Reports Under the Securities Act
With a view to making available to the Purchaser the benefits of the
Commission's Rule 144 promulgated under the Securities Act and any other rule or
regulation of the Commission that may at any time permit the Seller to sell
securities of the Company to the public without registration or pursuant to a
registration on Form S-3, the Company agrees to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) Take such action as may be necessary to ensure the availability to
the Company of Form S-3, or any successor form that allows the Company to
incorporate substantial amounts of information from other Commission filings
into a registration statement for the sale of the Shares; and
(c) Furnish to the Purchaser, so long as the Purchaser owns any
Shares, promptly upon request (i) a written statement by the Company that it has
complied with the reporting requirements of the Exchange Act, and (ii) such
other information as may be reasonably requested in availing the Purchaser of
any rule or regulation of the Commission that permits the selling of any Shares
without registration or pursuant to Form S-3.
8.5. Indemnification
(a) To the extent permitted by law, the Company will indemnify and
hold harmless the Purchaser, any underwriter (as defined in the Securities Act)
for the Purchaser and each person, if any, who controls the Purchaser or such
underwriter within the meaning of the Securities Act or the Exchange Act against
any expenses (including legal fees and costs), losses, claims, damages
(including settlement amounts) or liabilities (joint or several) (collectively,
"Losses") to which they may become subject under the Securities Act, the
Exchange Act or other U.S., state or foreign law, insofar as such Losses arise
out of or are based upon any of the following statements, omissions or
violations (collectively, a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
including any preliminary prospectus or final prospectus contained therein, or
in any amendments or supplements thereto, (ii) the omission or alleged omission
to state therein a material fact required to be stated therein, or
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necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law and relating to such registration.
The Company will reimburse (as incurred) the Purchaser, or each such underwriter
or controlling person for any Losses reasonably incurred by them in connection
with investigating or defending any Violations; provided, however, that the
indemnity agreement contained in this Section 8.5(a) shall not apply to amounts
paid in settlement of any claims for Violations if such settlement is made
without the consent of the Company, which consent shall not be unreasonably
withheld, nor shall the Company be liable in any such case for any Losses that
arise out of or are based upon a Violation that occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by the Purchaser or any such underwriter or controlling
person.
(b) To the extent permitted by law, the Purchaser will indemnify and
hold harmless the Company, its officers who signed the Registration Statement
and its directors, each underwriter and each other person selling securities of
the Company in the offering registered by the Registration Statement, and any
person who controls any of the foregoing within the meaning of the Securities
Act or the Exchange Act, against any Losses to which the Company or such
officer, director, agent, employee, underwriter, other person selling
securities of the Company in the offering registered by the Registration
Statement or controlling person may become subject under the Securities Act, the
Exchange Act or other U.S. state or foreign securities law, insofar as such
Losses arise out of or are based upon any Violation that occurs in reliance upon
and in conformity with written information furnished by the Purchaser, any
underwriter for the Purchaser or any controlling person of the Purchase or any
such underwriter, expressly for use in connection with such registration; and
the Purchaser will reimburse (as incurred) any Losses reasonably incurred by the
Company, the Company's officers who signed the Registration Statement, the
Company's directors, underwriters and other persons selling securities of the
Company pursuant to the Registration Statement or controlling persons in
connection with investigating or defending any Violations; provided, however,
that (i) the indemnity agreement contained in this Section 8.5(b) shall not
apply to amounts paid in settlement of any claims for Violations if such
settlement is made without the consent of the Purchaser, which consent shall not
be unreasonably withheld and (ii) the obligations of the Purchaser shall be
limited to an amount equal to the net proceeds to the Purchaser of the Shares
sold as contemplated herein.
(c) Promptly after receipt of notice of the commencement of any action
(including any governmental action), an indemnified party will, if a claim is to
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be made against any indemnifying party under this Section 8.5, deliver to the
indemnifying party a written notice of the commencement, and the indemnifying
party shall have the right to participate in, and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party
similarly notified, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in the proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable period of time
after notice of the commencement of any such action shall relieve such
indemnifying party of any liability to the indemnified party under this Section
8.5 to the extent such failure is prejudicial to its ability to defend such
action, but the omission to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 8.5.
(d) If the indemnification provided for in this Section 8.5 is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any Losses, then the 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 Losses in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the Violations
that resulted in such Losses as well as any other relevant equitable
considerations; provided, that, in no event shall any contribution by the
Purchaser under this Section 8.5(d) exceed the net proceeds to the Purchaser of
the Shares sold as contemplated herein. The relative fault of the indemnifying
party and of the indemnified party shall be determined by reference to, among
other things, whether the Violation resulting in such Losses relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information, and opportunity
to correct or prevent such Violation. 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.
(e) The obligations of the Company and the Purchaser under this
Section 8.5 shall survive the completion of any offering of the Shares.
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9. Miscellaneous
9.1. Governing Law
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Delaware applicable to contracts executed in and to be
performed in that state.
9.2. Survival
The representations and warranties made herein shall survive until the
first anniversary of the Closing. The covenants and agreements made herein
shall survive the Closing in accordance with their terms.
9.3. Successors and Assigns
Except as otherwise expressly provided herein, the provisions hereof shall
inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto. It is expressly
acknowledged that the Purchaser may assign its rights hereunder to its affiliate
(as such term is defined in Rule 144 of the Securities Act) provided that the
affiliate first deliver to the Company a written instrument confirming that it
shall be bound by all terms and conditions of this Agreement.
9.4. Entire Agreement
This Agreement and the other documents referred to herein constitute the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof.
9.5. Amendment; Waiver
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), only with the written consent of the
Company and the Purchaser.
9.6. Delays or Omissions
No delay or omission to exercise any right, power or remedy accruing to
any holder of any of the Shares, upon any breach or default of the Company under
this Agreement, shall impair any such right, power or remedy of such holder nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of
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any single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any holder of any breach or default under
this Agreement, or any waiver on the part of any holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies either under
this Agreement, or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
9.7. Notices and Other Communications
Every notice or other communication required or contemplated by this
Agreement by either party shall be delivered either by (i) personal delivery,
(ii) postage prepaid return receipt requested registered or certified mail or
the equivalent of registered or certified mail under the laws of the country
where mailed, (iii) nationally recognized overnight courier, such as Federal
Express or UPS, or (iv) facsimile with a confirmation copy sent simultaneously
by postage prepaid, return receipt requested, registered or certified mail, in
each case addressed to the Company or the Purchaser as the case may be at the
following address:
To the Company: Audible, Inc.
00 Xxxxxxxxxxx Xxxx
Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, CFO
Facsimile: (000) 000-0000
With copies to: Piper, Marbury, Xxxxxxx & Xxxxx, LLP
0000 Xxxxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
To the Purchaser: Xxxxxx.xxx Commerce Services, Inc.
c/o Xxxxxx.xxx, Inc.
0000 - 00xx Xxxxxx X., Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Vice President and General Counsel
Facsimile: (000) 000-0000
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With a copy to: Xxxxxxx Coie LLP
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
or at such other address as the intended recipient previously shall have
designated by written notice to the other party (with copies to counsel as may
be indicated on the signature page). Notice by registered or certified mail
shall be effective on the date it is officially recorded as delivered to the
intended recipient by return receipt or equivalent, and in the absence of such
record of delivery, the effective date shall be the fifth business day after it
was deposited in the mail. All notices delivered in person or sent by courier
shall be effective on the date of personal delivery; notices delivered by
facsimile with simultaneous confirmation copy by registered or certified mail
shall be effective on the date sent. Notice not given in writing shall be
effective only if acknowledged in writing by a duly authorized representative of
the party to whom it was given.
9.8. Specific Performance
Each of the parties hereto acknowledges and agrees that the other party
hereto would be damaged irreparably in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms or otherwise
are breached. Accordingly, each of the parties hereto agrees the other party
hereto will be entitled to an injunction to prevent breaches of the provisions
of this Agreement and to enforce specifically this Agreement and the terms and
provisions of this Agreement in any competent court having jurisdiction over the
parties, in addition to any other remedy to which they might be entitled at law
or in equity. In any such action specifically to enforce any such term or
provision of this Agreement, the parties hereby waive any claim or defense
therein that an adequate remedy at law or in damages exists.
9.9. Severability of this Agreement
In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. Furthermore
the court shall have the power to replace the invalid or unenforceable part or
provision with a provision that accomplishes, to the extent possible, the
original business purpose of such part or provision in a valid and enforceable
manner. Such replacement shall apply only with respect to the particular
jurisdiction in which the adjudication is made.
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9.10. Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument. Execution and delivery of this Agreement by exchange of facsimile
copies bearing the facsimile signature of a party hereto shall constitute a
valid and binding execution and delivery of this Agreement by such party. Such
facsimile copies shall constitute enforceable original documents.
9.11. No Third-Party Rights
Nothing in this Agreement is intended, nor shall be construed, to confer
upon any person or entity other than the parties and their respective successors
and assigns any right or remedy under or by reason of this Agreement, except as
expressly provided in this Agreement.
9.12. No Agency, Etc.
None of the provisions of this Agreement shall be construed to mean that
any party is appointed or is in any way authorized to act as an agent of any
other party. This Agreement does not constitute, create, give effect to, or
otherwise recognize a joint venture, partnership, or formal business
organization of any kind.
9.13 Construction of Agreement
This Agreement has been negotiated by the parties and their attorneys,
and the language hereof shall not be construed for or against any party. The
titles and headings herein are for reference purposes only and shall not in any
manner limit the construction of this Agreement, which shall be considered as a
whole.
9.14. Termination
This Agreement may be terminated as follows:
(a) The Purchaser may terminate this Agreement in the event that the
conditions set forth in Section 5 have not been satisfied or waived on or before
March 31, 2000;
(b) The Company may terminate this Agreement in the event that the
conditions set forth in Section 6 have not been satisfied or waived on or before
March 31, 2000;
No termination pursuant to this Section 9.14 shall relieve any party of
liability for breach of this Agreement prior to such termination.
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Either the Company or the Purchaser may terminate this Agreement if the
other (a) has a receiver or administrative receiver appointed for it or over its
undertakings or assets, (b) passes a resolution for winding up or a court of
competent jurisdiction makes an order to that effect and such order is not
discharged within ninety (90) days, (c) enters into any voluntary arrangement
with its creditors for the benefit of its creditors, (d) becomes subject to an
administration order, or (e) ceases to carry on business.
9.15. Attorneys' Fees
(a) Each party shall be responsible for its own costs and expenses
incurred in connection with the preparation, negotiation and delivery of this
Agreement, including, but not limited to, attorneys' and accountants' fees and
expenses.
(b) If any action or proceeding shall be commenced to enforce this
Agreement or any right arising in connection with this Agreement, the prevailing
party in such action or proceeding shall be entitled to recover from the other
party, the reasonable attorneys' fees, costs and expenses incurred by such
prevailing party in connection with such action or proceeding or negotiation to
avoid such action or proceeding.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
AUDIBLE, INC.
/s/ Xxx Xxxx
----------------------------------
By (Sign)
Founder, Chairman, Acting CEO
----------------------------------
Its
XXXXXX.XXX COMMERCE SERVICES, INC.
/s/
----------------------------------
By (Sign)
Vice President
----------------------------------
Its
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