-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LMFN7/1p1Tkc1lyX/0wTuAVzkgrAxnOv9F88EujvfXiGLtFm4XKe+SM/mRuB5q64 0/PJJjDO1BzbuDXra59bCw== 0000950117-03-005439.txt : 20031224 0000950117-03-005439.hdr.sgml : 20031224 20031224125150 ACCESSION NUMBER: 0000950117-03-005439 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20031224 GROUP MEMBERS: BERTELSMANN MULTIMEDIA, INC. GROUP MEMBERS: BERTELSMANN, INC. GROUP MEMBERS: RANDOM HOUSE VENTURES L.L.C. FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RANDOM HOUSE INC CENTRAL INDEX KEY: 0000082008 IRS NUMBER: 132558190 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1745 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10019 MAIL ADDRESS: STREET 1: 1745 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10019 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AUDIBLE INC CENTRAL INDEX KEY: 0001077926 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 223407945 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-57711 FILM NUMBER: 031073437 BUSINESS ADDRESS: STREET 1: 65 WILLOWBROOK BLVD CITY: WAYNE STATE: NJ ZIP: 07470 BUSINESS PHONE: 9738372700 MAIL ADDRESS: STREET 1: 65 WILLOWBROOK BLVD CITY: WAYNE STATE: NJ ZIP: 07470 SC 13D/A 1 a36730.txt RANDOM HOUSE, INC. ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------- SCHEDULE 13D (Amendment No. 1)* Audible, Inc. ------------------------------------------------------ (Name of Issuer) Common Stock ------------------------------------------------------ (Title of Class of Securities) 05069A104 ------------------------------------------------------ (CUSIP Number) Holland & Knight LLP 195 Broadway New York, NY 10007 Attn: James M. Lurie, Esq. Tel: (212) 513-3354 ------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) March 25, 2002 ------------------------------------------------------ (Date of Event Which Requires Filing of this Statement) ---------- If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this statement because of Rule 13d-1(e), 13d-1(f), or 13d-1(g), check the following box: [_] Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). ================================================================================ CUSIP No. 05069A104 13D ____________________ 1. NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) Random House, Inc. IRS No. 13-2558190 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT [_] TO ITEMS 2(d) or 2(e) 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7. SOLE VOTING POWER: 1,250,000 shares of NUMBER OF Common Stock, issuable on conversion of SHARES 1,250,000 shares of Series B Preferred Stock BENEFICIALLY OWNED BY 8. SHARED VOTING POWER EACH REPORTING 9. SOLE DISPOSITIVE POWER: 1,250,000 shares of PERSON WITH Common Stock, issuable on conversion of 1,250,000 shares of Series B Preferred Stock 10. SHARED DISPOSITIVE POWER 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,948,197 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [_] SHARES* 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.9% 14. TYPE OF REPORTING PERSON* CO 2 CUSIP No. 05069A104 13D ____________________ 1. NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) Random House Ventures L.L.C. IRS No. 13-4090714 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT [_] TO ITEMS 2(d) or 2(e) 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7. SOLE VOTING POWER: 2,846,347 shares of Common Stock, comprised of 169,780 shares of Common Stock, 1,851,850 shares of Common Stock issuable on conversion of 185,185 shares of Series C Preferred Stock, and 824,717 shares of Common Stock currently issuable upon NUMBER OF exercise of a warrant to purchase 878,333 SHARES shares of Common Stock BENEFICIALLY OWNED BY 8. SHARED VOTING POWER EACH REPORTING 9. SOLE DISPOSITIVE POWER: 2,846,347 shares of PERSON WITH Common Stock, comprised of 169,780 shares of Common Stock, 1,851,850 shares of Common Stock issuable on conversion of 185,185 shares of Series C Preferred Stock, and 824,717 shares of Common Stock currently issuable upon exercise of a warrant to purchase 878,333 shares of Common Stock 10. SHARED DISPOSITIVE POWER 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,948,197 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [_] SHARES* 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.9% 14. TYPE OF REPORTING PERSON* PN 3 CUSIP No. 05069A104 13D ____________________ 1. NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) Bertelsmann, Inc. IRS No. 95-2949493 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT [_] TO ITEMS 2(d) or 2(e) 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF 7. SOLE VOTING POWER: 0 SHARES BENEFICIALLY 8. SHARED VOTING POWER OWNED BY EACH 9. SOLE DISPOSITIVE POWER: 0 REPORTING PERSON WITH 10. SHARED DISPOSITIVE POWER 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,948,197 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [_] SHARES* 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.9% 14. TYPE OF REPORTING PERSON* CO 4 CUSIP No. 05069A104 13D ____________________ 1. NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) Bertelsmann Multimedia, Inc. IRS No. 13-4010933 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [_] 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT [_] TO ITEMS 2(d) or 2(e) 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7. SOLE VOTING POWER: 1,851,850 shares of Common NUMBER OF Stock, issuable on conversion of 185,185 SHARES shares of Series C Preferred Stock BENEFICIALLY OWNED BY 8. SHARED VOTING POWER EACH REPORTING 9. SOLE DISPOSITIVE POWER: 1,851,850 shares of PERSON WITH Common Stock, issuable on conversion of 185,185 shares of Series C Preferred Stock 10. SHARED DISPOSITIVE POWER 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,948,197 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [_] SHARES* 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.9% 14. TYPE OF REPORTING PERSON* CO 5 Bertelsmann, Inc., a Delaware corporation ("Bertelsmann, Inc."), Bertelsmann Multimedia, Inc., a Delaware corporation and a wholly-owned direct subsidiary of Bertelsmann, Inc. ("Bertelsmann Multimedia"), Random House, Inc., a Delaware corporation and a wholly-owned direct subsidiary of Bertelsmann, Inc. ("Random House, Inc.") and Random House Ventures L.L.C., a Delaware limited liability company the sole member of which is Random House, Inc. ("RH Ventures"), hereby amend and supplement the Statement on Schedule 13D, originally filed on August 14, 2003 by Bertelsmann Multimedia, Random House, Inc. and RH Ventures (as heretofore amended and supplemented, the "Schedule 13D"), with respect to the beneficial ownership of shares of Common Stock, par value $0.01 per share, Series B Convertible Preferred Stock, par value $0.01 per share (the "Series B Preferred Stock"), Series C Convertible Preferred Stock, par value $0.01 per share (the "Series C Preferred Stock"), and warrants to purchase Common Stock, of Audible, Inc., a Delaware corporation ("Audible" or the "Issuer"). As used herein, Bertelsmann, Inc., Bertelsmann Multimedia, Random House, Inc. and RH Ventures are referred to individually as a "Reporting Person" and collectively as the "Reporting Persons". Unless otherwise indicated, each capitalized term used but not defined herein shall have the meaning assigned to such term in the Schedule 13D. This Amendment No. 1 to the Schedule 13D is filed by the Reporting Persons in accordance with Exchange Act Rule 13d-2, and it shall refer only to the information that has materially changed since the filing of the Schedule 13D on August 14, 2003. Item 2. Identity and Background. Item 2 of the Schedule 13D is amended by replacing it with the following: "This statement is filed on behalf of Bertelsmann, Inc., a Delaware corporation with its principal place of business at 1540 Broadway, New York, NY 10036, Bertelsmann Multimedia, a Delaware corporation with its principal place of business at 1540 Broadway, New York, NY 10036, Random House, Inc., a Delaware corporation with its principal place of business at 1745 Broadway, New York, NY 10019, and RH Ventures, a Delaware limited liability company with its principal place of business at 1745 Broadway, New York, NY 10019. Bertelsmann, Inc. has been added to this Schedule 13D as a Reporting Person because it is the parent corporation of Bertelsmann Multimedia and Random House, Inc. During the past five years, none of the Reporting Persons, and to the best of their knowledge, none of the persons listed on Schedules A, B, C or D attached hereto, has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors), nor has any of them been subject to a judgment, decree, or final order in a civil proceeding enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws." Item 3. Source and Amount of Funds or Other Consideration. Item 3 of the Schedule 13D is amended by replacing it with the following: "In 2000, RH Ventures acquired 169,780 shares of Common Stock of the Issuer for an aggregate purchase price of $1,000,000, which amount was funded by the working capital of RH Ventures. In 2000, as consideration for Random House, Inc.'s entering into a strategic alliance with Audible to establish a joint venture to produce spoken word content specifically suited for digital distribution, Audible issued to RH Ventures (i) a Common Stock Purchase Warrant to purchase up to 878,333 shares of Common Stock at prices ranging from $5.89 to $50 per share (600,000 at $5.89, 50,000 at $8.00, 50,000 at $10.00, 50,000 at $12.00, 50,000 at $20.00, 33,333 at $30.00, 25,000 at $40.00 and 20,000 at $50.00) and (ii) a Performance Based Common Stock Purchase Warrant to purchase, at the end of Audible's fiscal years 2002, 2003 and 2004, a number of shares of Common Stock equal in value to $500,000, $1,000,000 and $1,500,000, respectively, based on exercise prices equal to the average closing price of Audible's Common Stock for the five trading days prior to the last day of the then current fiscal year. The Performance Based Warrant is exercisable only upon the joint venture attaining certain revenue targets. As of the date of the filing of this Amendment No. 1 to the Schedule 13D, none of the Performance Based Warrant shares have vested. 6 The foregoing description of the Common Stock Purchase Warrant and the Performance Based Common Stock Purchase Warrant is not intended to be complete and is qualified in its entirety by the complete text of (i) the Common Stock Purchase Warrant, which is filed as Exhibit 1 hereto and (ii) the Performance Based Common Stock Purchase Warrant, which is filed as Exhibit 2 hereto, each of which is incorporated herein by reference. In March 2002, pursuant to a purchase agreement (the "Series B Purchase Agreement"), Random House, Inc. acquired 1,250,000 shares of Audible Series B Preferred Stock in exchange for the waiver of a cash payment that was due from Audible to Random House, Inc. in 2002 in the amount of $1,250,000 in connection with a Co-Publishing, Marketing and Distribution Agreement between the parties. The Series B Certificate of Designation, as amended, provides that each share of Series B Preferred Stock is convertible from the date of issuance, at the option of the holder. The number of shares of Common Stock issuable upon conversion of each share of Series B Preferred Stock is determined by dividing (i) the Original Purchase Price by (ii) the Conversion Price in effect at the time of conversion. The Original Purchase Price was $0.56 per share, and the initial Conversion Price, which is subject to adjustment from time to time as provided in the Series B Certificate of Designations, was $0.56 per share, resulting in an initial conversion ratio of one to one. The Series B Certificate of Designation states that no cash dividends shall be declared or paid upon the Common Stock, any other preferred stock or other securities of the Corporation (other than the Series A Preferred Stock) unless equivalent dividends, on an as-converted basis, are declared and paid concurrently on the Series B Preferred Stock. On all matters put to vote to the holders of Common Stock, each share of Series B Preferred Stock entitles the holder thereof to such number of votes per share equal to the number of shares of Common Stock into which such share of Series B Preferred Stock is then convertible. The holders of Series B Preferred Stock and Common Stock (as well as Series A Preferred Stock and Series C Preferred Stock of Audible) will vote together as a single class on all matters submitted to a vote or consent of stockholders. The acquisition of the Series B Preferred Stock resulted in RH Ventures and Random House, Inc. owning in excess of 5% of the Common Stock of Audible. The filing of the Schedule 13D as originally filed on August 14, 2003 was, accordingly, a late filing, and the cover page of this Amendment No. 1 has been revised to reflect the date of the event which required the filing of the Schedule 13D. The foregoing description of the Series B Purchase Agreement and Series B Certificate of Designation is not intended to be complete and is qualified in its entirety by the complete text of (i) the Series B Purchase Agreement, which is filed as Exhibit 3 hereto, (ii) the Series B Certificate of Designation, which is filed as Exhibit 4 hereto, and (iii) the Amendment to the Series B Certificate of Designation, which is filed as Exhibit 5 hereto, each of which is incorporated herein by reference. On August 4 2003, RH Ventures and Bertelsmann Multimedia, Inc. entered into an agreement (the "Series C Purchase Agreement") with Audible to each acquire 185,185 shares of Audible Series C Preferred Stock, par value $0.01 per share, at a price of $5.40 per share for an aggregate purchase price of $1,999,998, which amount was funded by RH Ventures and Bertelsmann Multimedia, Inc. from working capital. The sale of shares to RH Ventures and Bertelsmann Multimedia, Inc. under this agreement closed August 4, 2003. The Series C Certificate of Designation provides that each share of Series C Preferred Stock is convertible from the date of issuance, at the option of the holder. The number of shares of Common Stock issuable upon conversion of each share of Series C Preferred Stock is determined by dividing (i) the Original Purchase Price by (ii) the Conversion Price in effect at the time of conversion. The Original Purchase Price was $5.40 per share, and the initial Conversion Price was $0.54 per share, resulting in an initial conversion ratio of 1 to 10 on the date of issuance of the Series C Preferred Stock. The Series C Certificate of Designation states that the holders of the Series C Preferred Stock shall be entitled to receive dividends, which shall accrue and compound semi-annually until August 4, 2007. In the event of the conversion of shares of Series C Preferred Stock, all such accrued and unpaid dividends shall be converted into shares of Common Stock at the then applicable conversion price. The Series C Certificate of Designation also states that no cash dividends shall be declared or paid upon the Common Stock, any other preferred stock or other securities of the Corporation (other than the Series A Preferred Stock) unless equivalent dividends, on an as-converted basis, are declared and paid concurrently on the Series C Preferred Stock and all accrued and unpaid dividends, including dividends paid on the Series C Preferred Stock, have been paid on the Series C Preferred Stock. On all matters put to vote to the holders of Common Stock, each share of Series C Preferred Stock entitles the holder thereof to such number of votes per share equal to the number of shares of Common Stock into which such share of Series C Preferred Stock is then convertible. The holders of Series C Preferred Stock and Common Stock (as well as Series 7 A Preferred Stock and Series B Preferred Stock) will vote together as a single class on all matters submitted to a vote or consent of stockholders. The foregoing descriptions of the Series C Purchase Agreement and Series C Certificate of Designation is not intended to be complete and is qualified in its entirety by the complete text of (i) the Series C Purchase Agreement, which is filed as Exhibit 6 hereto, and (ii) the Series C Certificate of Designation, which is filed as Exhibit 7 hereto, each of which is incorporated herein by reference." Item 4. Purpose of Transaction. Item 4 of the Schedule 13D is amended by replacing it with the following: "Random House, Inc.'s, Random House Ventures L.L.C.'s and Bertelsmann Multimedia, Inc.'s acquisitions of Audible capital stock and warrants have been made for investment purposes. Depending on future evaluations of the business prospects of Audible and other factors, including, but not limited to, general economic and business conditions, Random House, Inc., Random House Ventures L.L.C. and Bertelsmann Multimedia, Inc. may retain or, from time to time, increase their holdings or dispose of all or a portion of their holdings, subject to any applicable legal and contracted restrictions on its ability to do so. The Reporting Persons have no present plan or intention that would result in or relate to any of the transactions in subparagraphs (a) through (j) of Item 4 of Schedule 13D." Item 5. Interest in Securities of the Issuer. Item 5 of the Schedule 13D is amended by replacing it with the following: "(a) Random House, Inc. beneficially owns 1,250,000 shares of Series B Preferred Stock, convertible into 1,250,000 shares of Common Stock, constituting 3.8% of the Audible Common Stock. RH Ventures beneficially owns 2,846,347 shares of Common Stock consisting of (i) 169,780 shares of Common Stock, (ii) a Common Stock Purchase Warrant to purchase up to 878,333 shares of Common Stock, 824,717 of which are vested and exercisable as of May 5, 2003 (with the remaining portion of the Common Stock Purchase Warrant becoming vested and exercisable on May 5, 2004), and (iii) 185,185 shares of Series C Preferred Stock, convertible into 1,851,850 shares of Common Stock, collectively constituting 8.3% of the Audible Common Stock. RH Ventures also beneficially owns the Performance Based Common Stock Purchase Warrant described in Item 3 above, no portion of which is currently exercisable within the meaning of Rule 13d-3(d)(1). Bertelsmann Multimedia beneficially owns 185,185 shares of Series C Preferred Stock, convertible into 1,851,850 shares of Common Stock, constituting 5.5% of the Audible Common Stock. Bertelsmann, Inc. does not directly own any securities of Audible, Inc. Collectively, the Reporting Persons beneficially own 5,948,197 shares of Common Stock, representing 15.9% of Audible's Common Stock. All of the foregoing percentage calculations are based on 31,677,869 shares of Common Stock outstanding as of March 31, 2003, as reported in Audible's Form 10-Q filed with the Securities and Exchange Commission on May 15, 2003 for the quarterly period ended March 31, 2003. None of the foregoing calculations include any shares of Common Stock underlying the Performance Based Warrant owned by RH Ventures, because the conditions to vesting of such shares have not been met. (b) Random House, Inc. has the sole power to vote or to direct the vote and the sole power to dispose or to direct the disposition of the 1,250,000 shares of Common Stock deemed beneficially owned by it. 8 RH Ventures has the sole power to vote or to direct the vote and the sole power to dispose or to direct the disposition of the 2,846,347 shares of Common Stock deemed beneficially owned by it. Bertelsmann Multimedia, Inc. has the sole power to vote or to direct the vote and the sole power to dispose or to direct the disposition of the 1,851,850 shares of Common Stock deemed beneficially owned by it." Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Item 6 of the Schedule 13D is amended by replacing it with the following: "The responses set forth in Items 3 and 4 of this Schedule 13D are incorporated herein by reference in their entirety. In addition, (i) pursuant to the Series B Purchase Agreement the Reporting Persons have been granted certain demand and participation registration rights relating to the shares of Common Stock issuable upon conversion of the Series B Preferred shares, and (ii) pursuant to the Series C Purchase Agreement the Reporting Persons have been granted certain demand and participation registration rights relating to the shares of Common Stock issuable upon conversion of the Series C Preferred shares." Item 7. Material to be Filed as Exhibits. Item 7 of the Schedule 13D is amended by replacing it with the following: "Exhibit 1* Common Stock Purchase Warrant dated May 5, 2000. Exhibit 2* Performance Based Common Stock Purchase Warrant dated May 5, 2000. Exhibit 3* Series B Convertible Preferred Stock Purchase Agreement dated as of March 25, 2002, by and between Audible, Inc. and Random House, Inc. Exhibit 4** Series B Convertible Preferred Stock Certificate of Designation of Audible, Inc. Exhibit 5*** Amendment to Series B Convertible Preferred Stock Certificate of Designation of Audible, Inc. Exhibit 6*** Series C Convertible Preferred Stock Purchase Agreement dated as of August 1, 2003, by and among Audible, Inc., Bertelsmann Multimedia, Inc., Random House Ventures, L.L.C. and the other purchasers named therein. Exhibit 7*** Series C Convertible Preferred Stock Certificate of Designation of Audible, Inc. Exhibit 8* Joint Filing Agreement dated as of December 15, 2003 between Random House, Inc., Random House Ventures L.L.C., Berteslmann, Inc. and Bertelsmann Multimedia, Inc." - ---------- *Filed herewith. **Incorporated by reference from Audible's Form 10-Q for the quarterly period ended June 30, 2002. ***Incorporated by reference from Audible's Form 8-K filed on August 5, 2003. 9 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: December 20, 2003 RANDOM HOUSE, INC. By: /s/ Richard Sarnoff -------------------------- Name: Richard Sarnoff Title: Executive Vice President RANDOM HOUSE VENTURES, L.L.C. By: /s/ Richard Sarnoff -------------------------- Name: Richard Sarnoff Title: President BERTELSMANN, INC. By: /s/ Robert J. Sorrentino -------------------------- Name: Robert J. Sorrentino Title: President BERTELSMANN MULTIMEDIA, INC. By: /s/ Robert J. Sorrentino -------------------------- Name: Robert J. Sorrentino Title: President 10 SCHEDULE A DIRECTORS AND EXECUTIVE OFFICERS OF RANDOM HOUSE, INC. The name, business address, title, present principal occupation or employment of each of the directors and executive officers of Random House, Inc., are set forth below. If no business address is given the director's or officer's business address is 1745 Broadway, New York, NY 10019. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to Random House, Inc. Unless otherwise indicated below, all of the persons listed below are citizens of the United States of America.
Present Principal Occupation Including Name and Business Address Name and Address(1) of Employer - ----------------------------- ----------------------------------------------- Directors and Officers Peter Olson Director, Chairman and Chief Executive Officer, Random House, Inc. Ed Volini Director, Deputy Chairman, Executive Vice President, Chief Administrative Officer / Chief Financial Officer, Random House Inc. Irwyn Applebaum President & Publisher, Bantam Dell Publishing Group, Random House Inc. Gina Centrello President & Publisher, Random House Ballantine Publishing Group, Random House Inc. Jenny Frost President & Publisher, Crown Publishing Group, Random House Inc. Chip Gibson President & Publisher, RH Children's Books, Random House Inc. Sonny Mehta President, Knopf Publishing Group, Random House Inc. David Naggar President, Random House Audio Publishing Group President, RH Diversified Publishing Group, Random House Inc. Stephen Rubin President & Publisher, Doubleday Broadway Publishing Group, Random House Inc. Richard Sarnoff Executive Vice President, Random House, Inc. and President New Media & Corporate Development, Random House, Inc. Bonnie Ammer Executive Vice President, Publisher-at-Large, Random House Inc. Stuart Applebaum Executive Vice President, Communications, Random House Inc. Don Weisberg Executive Vice President, Chief Operating Officer, Random House Inc. Tom Allen Senior Vice President, Executive Director, Finance, Random House Inc.
11 Diane Kenney Senior Vice President, Human Resources, Random House Inc. Katherine J. Trager Director, Senior Vice President, Secretary & General Counsel, Random House Inc. Andrew Weber Senior Vice President, Operations, Random House Inc. Robert J. Sorrentino Vice President, Taxes, Random House Inc.
12 SCHEDULE B MEMBER AND OFFICERS OF RANDOM HOUSE VENTURES L.L.C. Random House, Inc., with its business address at 1745 Broadway, New York, NY 10019, is the sole member of Random House Ventures, L.L.C.
Present Principal Occupation Including Name and Business Address Name and Address(1) of Employer - ----------------------------- ----------------------------------------------- Officers Richard Sarnoff President, Random House Ventures L.L.C.; Executive Vice President, Random House, Inc. Anke Steineke Secretary, Random House Ventures, L.L.C.; Vice President, Associate General Counsel, Random House, Inc. Anne Davis Treasurer, Random House Ventures, L.L.C.; Comptroller, Random House, Inc.
13 SCHEDULE C DIRECTORS AND EXECUTIVE OFFICERS OF BERTELSMANN, INC. The name, business address, title, present principal occupation or employment of each of the directors and executive officers of Bertelsmann, Inc., are set forth below. If no business address is given the director's or officer's business address is 1540 Broadway, New York, NY 10036. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to Bertelsmann, Inc. Unless otherwise indicated below, all of the persons listed below are citizens of the United States of America.
Present Principal Occupation Including Name and Business Address Name and Address(1) of Employer - ----------------------------- ----------------------------------------------- Directors Aydin S. Caginalp Secretary, Bertelsmann, Inc.; Partner, Alston & Bird LLP 90 Park Avenue New York, NY 10016 Siegfried Luther(2) Chief Financial Officer, Bertelsmann, Inc. and Bertelsmann AG.; Deputy Chairman, Bertelsmann AG Carl-Bertelsmann-Strasse 270 33311 Guetersloh, Germany Peter Olson Chairman and Chief Executive Officer, Random House, Inc. 1745 Broadway New York, NY 10019 Rolf Schmidt-Holtz(2) President and Chief Executive Officer, Bertelsmann Music Group, Inc. Robert J. Sorrentino President and Chief Operating Officer, Bertelsmann, Inc. Gunter Thielen(2) Chairman of the Board, Bertelsmann, Inc.; Chairman and Chief Executive Officer, Bertelsmann AG Carl-Bertelsmann-Strasse 270 33311 Guetersloh, Germany
Present Principal Occupation Including Name Name and Business Address and Address(1) of Employer - ----------------------------- ----------------------------------------------- Executive Officers Executive Vice President, Internal Audit, (Who Are Not Directors) Bertelsmann, Inc.; Executive Vice President and K. Peter Blobel(2) General Auditor, Bertelsmann AG Carl-Bertelsmann-Strasse 270 33311 Guetersloh, Germany Liz Young Executive Vice President, Corporate Communications, Bertelsmann, Inc. Jacqueline Chasey Senior Vice President, Legal Affairs and Assistant Secretary, Bertelsmann, Inc. Andrea Bonime-Blanc Senior Vice President and Chief Ethics and Compliance Officer, Bertelsmann, Inc.
- ---------- (1) Same address as director's or officer's business address except where indicated. (2) Citizen of Germany. 14 SCHEDULE D DIRECTORS AND EXECUTIVE OFFICERS OF BERTELSMANN MULTIMEDIA, INC. The name, business address, title, present principal occupation or employment of each of the directors and executive officers of Bertelsmann Multimedia, Inc., are set forth below. If no business address is given the director's or officer's business address is 1540 Broadway, New York, NY 10036. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to Bertelsmann Multimedia, Inc. Unless otherwise indicated below, all of the persons listed below are citizens of the United States of America.
Present Principal Occupation Including Name and Business Address Name and Address(1) of Employer - ----------------------------- ----------------------------------------------- Directors Jacqueline Chasey Secretary, Bertelsmann Multimedia, Inc.; Senior Vice President, Legal Affairs and Assistant Secretary, Bertelsmann, Inc. Robert J. Sorrentino President, Bertelsmann Multimedia, Inc.; President and Chief Operating Officer, Bertelsmann, Inc.
Present Principal Occupation Including Name and Business Address Name and Address(1) of Employer - ----------------------------- ----------------------------------------------- Executive Officers (Who Are Not Directors) Evelyn Pena Treasurer, Bertelsmann Multimedia, Inc.
- ---------- (1) Same address as director's or officer's business address except where indicated. 15 EX-1 3 ex1.txt EXHIBIT 1 EXHIBIT 1 THIS WARRANT AND THE OTHER SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS IS AVAILABLE WITH RESPECT THERETO. COMMON STOCK PURCHASE WARRANT Warrant No.________ AUDIBLE, INC. 1. Issuance. This Warrant is issued to Random House Ventures L.L.C. (together with its assignees, "Random House") by Audible, Inc., a Delaware corporation (hereinafter, with its successors, the "Company"). 2. Exercise Price; Number of Shares. Subject to the terms and conditions hereinafter set forth, the registered holder, its successor or permitted assigns of this Warrant (the "Holder"), commencing on the date hereof, is entitled upon surrender of this Warrant with the subscription form annexed hereto duly executed, at the office of the Company or such other office as the Company shall notify the Holder in writing, to purchase from the Company that number (subject to adjustment as provided herein) of fully paid and nonassessable shares (the "Warrant Shares") of the Company's Common Stock, $0.01 par value (the "Common Stock") as set forth on Schedule A hereto. 3. Payment of Exercise Price; Cashless Exercise. (a) The applicable exercise price, as set forth on Schedule A (the applicable "Exercise Price") may be paid in cash, by check or wire transfer in immediately available funds, or as provided in 3(b) below. The Corporation shall issue to the Holder upon payment of the Exercise Price a certificate for the Warrant Shares issuable upon exercise of the Warrant and, if applicable, a new warrant of like tenor evidencing the balance of the Warrants Shares remaining subject to this Warrant. (b) At any time during the term of this Warrant, the Holder may also elect to exercise this Warrant (the "Conversion Right") with respect to a particular number of Warrant Shares (the "Converted Warrant Shares"), and the Company shall deliver to the Holder (without payment by the Holder of the Exercise Price in cash or any other consideration (other than the surrender of rights to receive Warrant Shares hereunder)) that number of shares of Common Stock equal to the quotient obtained by dividing: (x) the difference between (i) the product of (A) the Current Market Price of a share of Common Stock multiplied by (B) the number of Converted Warrant Shares and (ii) the product of (A) the Exercise Price multiplied by (B) the number of the Converted Warrant Shares, in each case as of the Conversion Date (as defined in Section 3(c) below)), by (y) the Current Market Price of a share of Common Stock on the Conversion Date. No fractional Warrant Shares shall be issuable upon exercise of the Conversion Right, and if the number of Warrant Shares to be issued determined in accordance with the following formula is other than a whole number, the Company shall pay to the holder of this Warrant an amount in cash equal to the Current Market Price of the resulting fractional Warrant Share on the Conversion Date. (c) The Conversion Right may be exercised by the Holder by the surrender of this Warrant as provided in Section 3(b), together with a written statement specifying that the Holder thereby intends to exercise the Conversion Right and indicating the number of Converted Warrant Shares which are covered by the exercise of the Warrant. Such conversion shall be effective upon receipt by the Corporation of this Warrant, together with the aforesaid written statement, or on such later date as is specified therein (the "Conversion Date"). The Corporation shall issue to the Holder as of the Conversion Date a certificate for the Warrant Shares issuable upon exercise of the Conversion Right and, if applicable, a new warrant of like tenor evidencing the balance of the Warrant Shares remaining subject to this Warrant. (d) The term "Current Market Price" for the Common Stock as of a specified date shall mean the average closing price per share over the preceding 5 trading days as reported on the NASDAQ National Market or, if the shares of such class of Common Stock then are listed and traded on the New York Stock Exchange, Inc. ("NYSE"), the closing price on such day as reported on the NYSE Composite Transactions Tape; if the shares of such class of Common Stock then are not listed and traded on the NYSE, the closing price on such day as reported by the principal national securities exchange on which the shares are listed and traded; or if the shares of such class of Common Stock then are not traded on any such principal national securities exchange, the average of the highest reported bid and lowest reported asked price on such day as reported by NASDAQ. If on any determination date the shares of such class of Common Stock are not quoted by any such organization, the Current Market Price shall be the fair market value of such shares on such determination date as determined by the Board of Directors. If the Holder shall object to any determination by the Board of Directors of the Current Market Price, the Current Market Price shall be the fair market value per share of the applicable class of Common Stock as determined by an independent appraiser retained by the Company at its expense and reasonably acceptable to the Holder. 4. Partial Exercise. This Warrant may be exercised in part, and, in the event of a partial exercise, the Holder shall be entitled to receive a new warrant, which shall be dated as of the date of this Warrant, covering the number of Warrant Shares in respect of which this Warrant shall not have been exercised. - 2 - 5. Issuance Date. The person or persons in whose name or names any certificate representing shares of Common Stock is issued hereunder shall be deemed to have become the holder of record of the shares represented thereby as at the close of business on the date this Warrant is received by the Company with respect to such shares, whether or not the transfer books of the Company shall be closed. 6. Expiration Date. This Warrant shall expire at the close of business on the seventh (7th) anniversary of the Original Issue Date (the "Expiration Date") and shall be void thereafter. 7. Reserved Shares; Valid Issuance; Restricted Stock. (a) The Company covenants that it will at all times from and after the date hereof reserve and keep available such number of its authorized shares of Common Stock, free from all preemptive or similar rights therein, as will be sufficient to permit the exercise of this Warrant in full. The Company further covenants that such shares as may be issued pursuant to the exercise of this Warrant will, upon issuance, be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof. (b) The Warrant Shares have not been registered under the Securities Act of 1933 (the "Securities Act"), as amended, or any applicable state securities laws. The Warrant Shares may not be sold or transferred unless such sale or transfer is in accordance with the registration requirements of the Securities Act and applicable laws or some other exemption from the registration requirements of the Securities Act and applicable laws - including a sale under Rule 144 - is available with respect thereto. 8. Adjustment of Number of Shares; Exercise Price; Nature of Securities Issuable Upon Exercise of Warrants. (a) Exercise Price; Adjustment of Number of Shares. Each Exercise Price and the number of shares purchasable hereunder shall be subject to adjustment from time to time as hereinafter provided. (b) Reorganization, Reclassification, Consolidation. Merger or Sale. If any capital reorganization or reclassification of the capital stock of the Company or any consolidation or merger of the Company with another entity, or the sale of all or substantially all of the Company's assets to another person or entity (collectively referred to as a "Transaction") shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities, cash or assets with respect to or in exchange for Common Stock, then, as a condition of such Transaction, the holder of this Warrant shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions specified in this Warrant, upon exercise of this Warrant and in lieu of the Warrant Shares immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby, such number, amount and like kind of shares of stock, securities, cash or assets as may be issued or payable pursuant to the terms of the Transaction with respect to or in exchange for the number of shares of Common Stock immediately theretofore purchasable and receivable upon the exercise of the rights represented - 3 - hereby as if such shares were outstanding immediately prior to the Transaction (assuming that in the case of a consolidation merger, sale or transfer which includes an election as to the consideration to be received by the holders, such holder of Common Stock failed to exercise its rights of election as to the kind or amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer provided that if the kind or amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer is not the same for each share of Common Stock held immediately prior to such consolidation, merger, sale or transfer by other than a constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised ("non-electing share"), then for the purpose of this paragraph 8(b) the kind and amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer by each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares), and in any such case appropriate provision shall be made with respect to the rights and interest of the holders to the end that the provisions hereof (including, without limitation, provisions for adjustments of the Exercise Price and of the number of Warrant Shares purchasable and receivable upon the exercise of this Warrant) shall thereafter be applicable, as nearly as may be practicable, in relation to any shares of stock or securities thereafter deliverable upon the exercise hereof. (c) Stock Splits, Stock Dividends and Reverse Stock Splits. If at any time after the date hereof, the Company shall subdivide its outstanding shares of Common Stock into a greater number of shares, or shall declare and pay any stock dividend with respect to its outstanding stock that has the effect of increasing the number of outstanding shares of Common Stock, the Exercise Price in effect immediately prior to such subdivision or stock dividend shall be proportionately reduced and the number of Warrant Shares purchasable pursuant to this Warrant immediately prior to such subdivision or stock dividend shall be proportionately increased, and conversely, in case at any time after the date hereof, the Company shall combine its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares purchasable upon the exercise of this Warrant immediately prior to such combination shall be proportionately reduced. (d) Dissolution, Liquidation or Wind-Up. In case the Company shall, at any time prior to the exercise of this Warrant, dissolve, liquidate or wind up its affairs, the holder hereof shall be entitled, upon the exercise of this Warrant, to receive, in lieu of the Warrant Shares which the holder would have been entitled to receive, the same kind and amount of assets as would have been issued, distributed or paid to such holder upon any such dissolution, liquidation or winding up with respect to such Warrant Shares, had such holder hereof been the holder of record of the Warrant Shares receivable upon the exercise of this Warrant on the record date for the determination of those persons entitled to receive any such liquidating distribution. 9. Fractional Shares. In no event shall any fractional share of Common Stock be issued upon any exercise of this Warrant. If, upon exercise of this Warrant as an entirety, the Holder would, except as provided in this Section 9, be entitled to receive a fractional share of Common - 4 - Stock, then the Company shall issue the next higher number of full shares of Common Stock, issuing a full share with respect to such fractional share. 10. Exchange, Transfer or Assignment of Warrant. The Holder of this Warrant shall be entitled without obtaining the consent of the Company to assign and transfer this Warrant, at any time in whole or from time to time in part, to any Person or Persons. Subject to the preceding sentence, upon surrender of this Warrant to the Company, together with the attached Assignment Form duly executed, the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee or assignees named in such instrument of assignment and, if the Holder's entire interest is not being assigned, in the name of the Holder, and this Warrant shall promptly be canceled. Each taker and holder of this Warrant Certificate by taking or holding the same, consents and agrees that the registered holder hereof may be treated by the Company and all other persons dealing with this Warrant Certificate as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented hereby. 11. Notices of Record Date, Etc. In the event of: (a) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, (b) any reclassification of the capital stock of the Company, capital reorganization of the Company, consolidation or merger involving the Company, or sale or conveyance of all or substantially all of its assets, or (c) any voluntary or involuntary dissolution, liquidation or winding-up of the Company, then and in each such event the Company will mail or cause to be mailed to the Holder a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the date on which any such reclassification, reorganization, consolidation, merger, sale or conveyance, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record in respect of such event are to be determined. Such notice shall be mailed at least 20 days prior to the date specified in such notice on which any such action is to be taken. 12. Amendment. The terms of this Warrant may be amended, modified or waived only with the written consent of the Company and the holder of this Warrant. 13. Governing Law. The provisions and terms of this Warrant shall be governed by and construed in accordance with the internal laws of the State of New York. - 5 - 14. Successors and Assigns. This Warrant shall be binding upon the Company's successors and assigns and shall inure to the benefit of the Holder's successors, legal representatives and permitted assigns. 15. Business Days. If the last or appointed day for the taking of any action required or the expiration of any right granted herein shall be a Saturday or Sunday or a legal holiday, then such action may be taken or right may be exercised on the next succeeding day which is not a Saturday or Sunday or such a legal holiday. Original Issue Date: May 5, 2000 AUDIBLE, INC. By: /s/ Donald R. Katz ------------------ Title: Chairman - 6 - SCHEDULE A The Holder shall be entitled to exercise this Warrant for shares of Common Stock as follows: (1) Subject to the vesting schedule set forth below, this warrant shall be exercisable for the following number of shares and at the following exercise prices: (a) 600,000 shares at an Exercise Price of $5.89 (b) 50,000 shares at an Exercise Price of $8 per share. (c) 50,000 shares at an Exercise Price of $10 per share. (d) 50,000 shares at an Exercise Price of $12 per share. (e) 50,000 shares at an Exercise Price of $20 per share. (f) 33,333 shares at an Exercise Price of $30 per share. (g) 25,000 shares at an Exercise Price of $40 per share. (h) 20,000 shares at an Exercise Price of $50 per share. (2) Vesting The Warrant Shares shall become exercisable in accordance with the following vesting schedule: (a) Warrant Shares with an aggregate Exercise Price of $2,258,498 shall be exercisable on the date of execution of this Warrant; the holder may, in its discretion, select which Warrant Shares are being exercised; (b) Warrant Shares with an aggregate Exercise Price of $2,258,498 shall vest on each anniversary of the date hereof in 2002, 2003 and 2004; provided that on such date that certain Co-Publishing, Marketing and Distribution Agreement by and between the Company and Random House, dated as of the date hereof, shall continue to be in full force and effect (unless it has expired in accordance with its terms or has been terminated by Random House upon the occurrence of an Event of Default (as defined in such agreement). For the avoidance of doubt, this Warrant shall be exercisable in part and in respect of any vested portion hereof until the Expiration Date. Notwithstanding the foregoing, the Warrant Shares shall become 100% exercisable immediately prior to the closing of an event described in Sections 8(b) or 8(d). The Holder shall have the right to choose the per share - 7 - Exercise Price to be applied in any given exercise, and the Holder need not exercise this Warrant in the order of the Exercise Prices set forth above. - 8 - Subscription To:_______________ Date:________________ The undersigned hereby subscribes for __________ shares of Common Stock at an Exercise Price of $__________ covered by this Warrant. The certificate(s) for such shares shall be issued in the name of the undersigned or as otherwise indicated below: _____________________________ Signature _____________________________ Name for Registration ______________________________ Mailing Address - 9 - EX-2 4 ex2.txt EXHIBIT 2 EXHIBIT 2 THIS WARRANT AND THE OTHER SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS IS AVAILABLE WITH RESPECT THERETO. PERFORMANCE BASED COMMON STOCK PURCHASE WARRANT Warrant No.________ AUDIBLE, INC. 1. Issuance. This Warrant is issued to Random House Ventures L.L.C. (together with its assignees, "Random House") by Audible, Inc., a Delaware corporation (hereinafter with its successors called the "Company"). 2. Applicable Exercise Price; Number of Shares. Subject to the terms and conditions hereinafter set forth, the registered holder, its successor or permitted assigns of this Warrant (the "Holder"), commencing on the date hereof, is entitled upon surrender of this Warrant with the subscription form annexed hereto duly executed, at the office of the Company or such other office as the Company shall notify the Holder in writing, to purchase from the Company at prices to be determined in accordance with the provisions of Schedule A, such number (subject to adjustment as provided herein) of fully paid and nonassessable shares of the Company's Common Stock, $0.01 par value (the "Common Stock") as is set forth on Schedule A (the "Performance Warrant Shares"). The Performance Warrant Shares are subject to vesting as provided on Schedule A. 3. Payment of Applicable Exercise Price; Cashless Exercise. (a) The Applicable Exercise Price, as defined in Schedule A hereto, may be paid in cash, by check or wire transfer in immediately available funds, or as provided in 3(b) below. The Corporation shall issue to the Holder upon payment of the Exercise Price a certificate for the Warrant Shares issuable upon exercise of the Warrant and, if applicable, a new warrant of like tenor evidencing the balance of the Warrants Shares remaining subject to this Warrant. (b) At any time during the term of this Warrant, the Holder may also elect to exercise this Warrant (the "Conversion Right") with respect to a particular number of Performance Warrant Shares (the "Converted Performance Warrant Shares"), and the Company shall deliver to the Holder (without payment by the Holder of the Applicable Exercise Price in cash or any other consideration (other than the surrender of rights to receive Performance Warrant Shares hereunder)) that number of shares of Common Stock equal to the quotient obtained by dividing: (x) the difference between (i) the product of (A) the Current Market Price of a share of Common Stock multiplied by (B) the number of Converted Performance Warrant Shares and (ii) the product of (A) the Applicable Exercise Price multiplied by (B) the number of the Converted Performance Warrant Shares, in each case as of the Conversion Date (as defined in Section 3(c) below)), by (y) the Current Market Price of a share of Common Stock on the Conversion Date. No fractional Performance Warrant Shares shall be issuable upon exercise of the Conversion Right, and if the number of Performance Warrant Shares to be issued determined in accordance with the following formula is other than a whole number, the Company shall pay to the holder of this Warrant an amount in cash equal to the Current Market Price of the resulting fractional Warrant Share on the Conversion Date. (c) The Conversion Right may be exercised by the Holder by the surrender of this Warrant as provided in Section 3(b), together with a written statement specifying that the Holder thereby intends to exercise the Conversion Right and indicating the number of Converted Performance Warrant Shares which are covered by the exercise of the Warrant. Such conversion shall be effective upon receipt by the Corporation of this Warrant, together with the aforesaid written statement, or on such later date as is specified therein (the "Conversion Date"). The Corporation shall issue to the Holder as of the Conversion Date a certificate for the Performance Warrant Shares issuable upon exercise of the Conversion Right and, if applicable, a new warrant of like tenor evidencing the balance of the Performance Warrant Shares remaining subject to this Warrant. (d) The term "Current Market Price" for the Common Stock as of a specified date shall mean the average closing price per share over the preceding 5 trading days as reported on the NASDAQ National Market or, if the shares of such class of Common Stock then are listed and traded on the New York Stock Exchange, Inc. ("NYSE"), the closing price on such day as reported on the NYSE Composite Transactions Tape; if the shares of such class of Common Stock then are not listed and traded on the NYSE, the closing price on such day as reported by the principal national securities exchange on which the shares are listed and traded; or if the shares of such class of Common Stock then are not traded on any such principal national securities exchange, the average of the highest reported bid and lowest reported asked price on such day as reported by NASDAQ. If on any determination date the shares of such class of Common Stock are not quoted by any such organization, the Current Market Price shall be the fair market value of such shares on such determination date as determined by the Board of Directors. If the Holder shall object to any determination by the Board of Directors of the Current Market Price, the Current Market Price shall be the fair market value per share of the applicable class of Common Stock as determined by an independent appraiser retained by the Company at its expense and reasonably acceptable to the Holder. - 2 - 4. Partial Exercise. This Warrant may be exercised in part, and, in the event of a partial exercise, the Holder shall be entitled to receive a new warrant, which shall be dated as of the date of this Warrant, covering the number of Warrant Shares in respect of which this Warrant shall not have been exercised. 5. Issuance Date. The person or persons in whose name or names any certificate representing shares of Common Stock is issued hereunder shall be deemed to have become the holder of record of the shares represented thereby as at the close of business on the date this Warrant is received by the Company with respect to such shares, whether or not the transfer books of the Company shall be closed. 6. Expiration Date. This Warrant shall expire at the close of business on the seventh (7th) anniversary of the Original Issue Date (the "Expiration Date") and shall be void thereafter. 7. Reserved Shares; Valid Issuance; Restricted Stock. (a) The Company covenants that it will at all times from and after the date hereof reserve and keep available such number of its authorized shares of Common Stock, free from all preemptive or similar rights therein, as will be sufficient to permit the exercise of this Warrant in full. The Company further covenants that such shares as may be issued pursuant to the exercise of this Warrant will, upon issuance, be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof. (b) The Performance Warrant Shares have not been registered under the Securities Act of 1933 (the "Securities Act"), as amended, or any applicable state securities laws. The Performance Warrant Shares may not be sold or transferred unless such sale or transfer is in accordance with the registration requirements of the Securities Act and applicable laws or some other exemption from the registration requirements of the Securities Act and applicable laws-including a sale under Rule 144 - is available with respect thereto. 8. Adjustment of Number of Shares; Applicable Exercise Price; Nature of Securities Issuable Upon Exercise of Warrants. (a) Applicable Exercise Price; Adjustment of Number of Shares. The Applicable Exercise Price set forth in Schedule A hereto and the number of shares purchasable hereunder shall be subject to adjustment from time to time as hereinafter provided. (b) Reorganization, Reclassification, Consolidation, Merger or Sale. If any capital reorganization or reclassification of the capital stock of the Company or any consolidation or merger of the Company with another entity, or the sale of all or substantially all of the Company's assets to another person or entity (collectively referred to as a "Transaction") shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities, cash or assets with respect to or in exchange for Common Stock, then, as a condition of such Transaction, the holder of this Warrant shall thereafter have the right to purchase and receive - 3 - upon the basis and upon the terms and conditions specified in this Warrant, upon exercise of this Warrant and in lieu of the Performance Warrant Shares immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby, such number, amount and like kind of shares of stock, securities, cash or assets as may be issued or payable pursuant to the terms of the Transaction with respect to or in exchange for the number of shares of Common Stock immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby as if such shares were outstanding immediately prior to the Transaction (assuming that in the case of a consolidation merger, sale or transfer which includes an election as to the consideration to be received by the holders, such holder of Common Stock failed to exercise its rights of election as to the kind or amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer provided that if the kind or amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer is not the same for each share of Common Stock held immediately prior to such consolidation, merger, sale or transfer by other than a constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised ("non-electing share"), then for the purpose of this paragraph 8(b) the kind and amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer by each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares), and in any such case appropriate provision shall be made with respect to the rights and interest of the holders to the end that the provisions hereof (including, without limitation, provisions for adjustments of the Applicable Exercise Price and of the number of Performance Warrant Shares purchasable and receivable upon the exercise of this Warrant) shall thereafter be applicable, as nearly as may be practicable, in relation to any shares of stock or securities thereafter deliverable upon the exercise hereof. (c) Stock Splits, Stock Dividends and Reverse Stock Splits. If at any time after the date hereof, the Company shall subdivide its outstanding shares of Common Stock into a greater number of shares, or shall declare and pay any stock dividend with respect to its outstanding stock that has the effect of increasing the number of outstanding shares of Common Stock, the Applicable Exercise Price in effect immediately prior to such subdivision or stock dividend shall be proportionately reduced and the number of Performance Warrant Shares purchasable pursuant to this Warrant immediately prior to such subdivision or stock dividend shall be proportionately increased, and conversely, in case at any time after the date hereof, the Company shall combine its outstanding shares of Common Stock into a smaller number of shares, the Applicable Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Performance Warrant Shares purchasable upon the exercise of this Warrant immediately prior to such combination shall be proportionately reduced. (d) Dissolution, Liquidation or Wind-Up. In case the Company shall, at any time prior to the exercise of this Warrant, dissolve, liquidate or wind up its affairs, the holder hereof shall be entitled, upon the exercise of this Warrant, to receive, in lieu of the Performance Warrant Shares which the holder would have been entitled to receive, the same kind and amount of assets as would have been issued, distributed or paid to such holder upon any such dissolution, liquidation or winding up with respect to such Performance Warrant Shares, had such holder hereof been the holder of record of the Performance Warrant Shares receivable upon the exercise - 4 - of this Warrant on the record date for the determination of those persons entitled to receive any such liquidating distribution. 9. Fractional Shares. In no event shall any fractional share of Common Stock be issued upon any exercise of this Warrant. If, upon exercise of this Warrant as an entirety, the Holder would, except as provided in this Section 9, be entitled to receive a fractional share of Common Stock, then the Company shall issue the next higher number of full shares of Common Stock, issuing a full share with respect to such fractional share. 10. Exchange, Transfer or Assignment of Warrant. The Holder of this Warrant shall be entitled without obtaining the consent of the Company to assign and transfer this Warrant, at any time in whole or from time to time in part, to any Person or Persons. Subject to the preceding sentence, upon surrender of this Warrant to the Company, together with the attached Assignment Form duly executed, the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee or assignees named in such instrument of assignment and, if the Holder's entire interest is not being assigned, in the name of the Holder, and this Warrant shall promptly be canceled. Each taker and holder of this Warrant Certificate by taking or holding the same, consents and agrees that the registered holder hereof may be treated by the Company and all other persons dealing with this Warrant Certificate as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented hereby. 11. Notices of Record Date, Etc. In the event of: (a) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, (b) any reclassification of the capital stock of the Company, capital reorganization of the Company, consolidation or merger involving the Company, or sale or conveyance of all or substantially all of its assets, or (c) any voluntary or involuntary dissolution, liquidation or winding-up of the Company, then and in each such event the Company will mail or cause to be mailed to the Holder a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the date on which any such reclassification, reorganization, consolidation, merger, sale or conveyance, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record in respect of such event are to be determined. Such notice shall be mailed at least twenty (20) days prior to the date specified in such notice on which any such action is to be taken. - 5 - 12. Amendment. The terms of this Warrant may be amended, modified or waived only with the written consent of the Company and the holder of this Warrant. 13. Governing Law. The provisions and terms of this Warrant shall be governed by and construed in accordance with the internal laws of the State of New York. 14. Successors and Assigns. This Warrant shall be binding upon the Company's successors and assigns and shall inure to the benefit of the Holder's successors, legal representatives and permitted assigns. 15. Business Days. If the last or appointed day for the taking of any action required or the expiration of any right granted herein shall be a Saturday or Sunday or a legal holiday, then such action may be taken or right may be exercised on the next succeeding day which is not a Saturday or Sunday or such a legal holiday. Original Issue Date: May 5, 2000 AUDIBLE, INC. By: /s/ Donald R. Katz ------------------ Title: Chairman - 6 - SCHEDULE A The Holder shall be entitled to exercise this Warrant for shares of Common Stock as follows: (1) Number of Performance Warrant Shares Subject to Random House's achievement of the customer revenue targets set forth below, the Performance Warrant Shares shall vest and become exercisable at the end of the applicable fiscal year of the Company for that number of Performance Warrant Shares as follows: (a) if the Customer Revenue from Random House Products (as defined below) during the second year of that certain Co-Publishing, Marketing and Distribution Agreement by and between the Company and Random House, dated as of the date hereof (the "CMD Agreement") meets or exceeds $2,000,000, then the Holder may purchase that number of Performance Warrant Shares equal to $500,000 divided by the Applicable Exercise Price (as defined below); (b) if the Customer Revenue from Random House Products during the third year of the CMD Agreement meets or exceeds $9,200,000, then the Holder may purchase that number of Performance Warrant Shares equal to $1,000,000 divided by the Applicable Exercise Price; and (c) if the Customer Revenue from Random House Products during the fourth year of the CMD Agreement meets or exceeds $24,600,000, then the Holder may purchase that number of Performance Warrant Shares equal to $1,500,000 divided by the Applicable Exercise Price. The prices (in each case, the "Applicable Exercise Price") at which the Performance Warrant Shares may be purchased shall be equal to the average closing price of the Company's stock on the NASDAQ exchange for the five trading days prior to the last day of the then current fiscal year. "Customer Revenue from Random House Products" with respect to a period shall mean (i) revenue generated from Audible's sales to its customers of Titles and Programs released under the Imprint (as defined in the CMD Agreement), and (ii) revenue generated from Audible's sales to its customers of other audio product purchased by Audible from Random House Audio Publishing Group, as determined in accordance with generally accepted accounting principles, consistently applied. - 7 - Subscription To:____________________ Date:________________________ The undersigned hereby subscribes for __________ shares of Common Stock at an Applicable Exercise Price of $__________covered by this Warrant. The certificate(s) for such shares shall be issued in the name of the undersigned or as otherwise indicated below: ______________________________ Signature ______________________________ Name for Registration ______________________________ Mailing Address - 8 - Assignment For value received _________________ hereby sells, assigns and transfers unto___________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ [Please print or typewrite name and address of Assignee above] a portion of the within Warrant equal to __________ shares, and does hereby irrevocably constitute and appoint __________ its attorney to transfer said portion of the within Warrant on the books of the within named Company with full power of substitution on the premises. Dated:_________________ ______________________________ In the Presence of: _______________________ Assignment For value received _________________ hereby sells, assigns and transfers unto ___________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ [Please print or typewrite name and address of Assignee above] a portion of the within Warrant equal to __________ shares, and does hereby irrevocably constitute and appoint ____________________ its attorney to transfer said portion of the within Warrant on the books of the within named Company with full power of substitution on the premises. Dated:_________________ ________________________________ In the Presence of: _______________________ EX-3 5 ex3.txt EXHIBIT 3 Exhibit 3 SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT This Series B Convertible Preferred Stock Purchase Agreement (together with the schedules and exhibits hereto, the "Agreement") dated as of March 25, 2002, is entered into by and among Audible, Inc. a Delaware corporation (the "Company") and Random House, Inc., a New York corporation ("Investor"). In consideration of the premises, mutual promises and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follow: 1. Authorization and Sale of Series B Preferred Shares 1.1 Authorization. The Company has, or before the Closing (as defined in Section 2) will have, duly authorized the issuance of 1,250,000 shares of its Series B Convertible Preferred Stock, $0.01 par value per share (the "Series B Shares"), having the rights, restrictions, privileges and preferences set forthin the Certificate of Designation of the Designations, Limitations, Restrictions and Relative Rights of the Series B Convertible Preferred Stock, attached hereto as Exhibit A (the "Designation"). 1.2 Sale of Shares. Subject to the terms and conditions of this Agreement, at the Closing (as defined in Section 2), the Company will sell and issue to Investor, and Investor will purchase from the Company 1,250,000 Series B Shares. As full and complete consideration for such shares, at Closing Investor will execute and deliver to Company that certain Letter Agreement in substantially the form attached hereto as Exhibit B (the "Letter"), which Letter provides, among other things, for the waiver of $1.25 million in imprint fees owed by Company to Investor and other benefits to Company. 2. The Closing. The closing (the "Closing") of the sale and purchase of Series B Shares under this Agreement shall take place at the offices of Piper Marbury Rudnick & Wolfe LLP, 1200 Nineteenth Street, N.W., Washington, DC 20036 at 10 a.m., local time, on the date which is five (5) days following the satisfaction (or waiver) of the conditions to Closing set forth in Sections 5 and 6 below, or at such other place, time, and date as are mutually agreeable to the Company and the Investor. At the Closing, the Company will deliver to Investor a certificate for the number of Series B Shares being purchased by Investor, registered in the name of such Investor, against payment to the Company through delivery of the executed Letter. The date of the Closing is hereinafter referred to as the "Closing Date." 3. Representations of the Company. The Company hereby represents and warrants to Investor, at and as of the date of this Agreement, as follows: 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 Series B Shares, when issued and paid for in accordance with this Agreement, will be duly authorized, validly issued, fully paid and nonassessable, not subject to any preemptive or other similar rights and, assuming the accuracy of Investor's representation set forth in Section 4.5 hereof, issued in compliance with all applicable U.S., state and foreign securities laws. 3.3 Authority. The Company has all requisite corporate power and authority to enter into this Agreement, to sell and issue the Series B Shares and to consummate the other transactions contemplated by this Agreement. The execution and delivery of this Agreement, the issuance and sale of the Series B Shares and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company , and constitutes the valid and binding obligation of the Company, enforceable in accordance with its terms, except to the extent limited by (i) the effect of bankruptcy, insolvency, reorganization, receivership, conservatorship, arrangement, moratorium, fraudulent transfer or other laws affecting or relating to the rights of creditors generally, (ii) the rules governing the availability of specific performance, injunctive relief or other equitable remedies and general principles of equity, regardless of whether arising prior to, or after, the date hereof or considered in a proceeding in equity or at law, or (iii) the effect of federal and state securities laws and principles of public policy on rights of indemnity and contribution. 3.4 No Conflict. The execution and delivery by the Company of this Agreement does not, and the sale and issuance of the Series B Shares and consummation of the other transactions contemplated by this Agreement will not, conflict with, or result in any violation or breach of any provision of, (a) the charter documents of the Company, or (b) any material contract to or commitment to which the Company is a party. 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 Series B 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. 3.6 Commission Filings. The Company has filed all reports required to be filed with the Securities Exchange Commission (the "Commission") since July 16, 1999 (collectively, including all exhibits thereto, the "SEC Reports"). None of such SEC Reports, as of their respective dates (as amended through the date hereof), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. All such SEC Reports, as of their respective dates (as amended through the date hereof), complied in all material respects with the requirements of the Securities Exchange Act of 1934 (the "Exchange Act"). 3.7 Financial Statements. The consolidated financial statements of the Company and its subsidiaries contained in the SEC Reports were prepared in accordance with U.S. generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods indicated, and present fairly in all material respects, as of the dates and for the periods indicated, the financial position of the Company and its subsidiaries and their results of operations and cash flows for the periods therein set forth, subject in the case of the unaudited consolidated financial statements to later normal, recurring audit adjustments required by GAAP that are not in the aggregate material and to omission of certain footnotes as permitted by GAAP. 3.8 Stockholders' Consent. No consent or approval of the stockholders of the Company is required or necessary pursuant to Rule 4350(i) of the NASD Regulations or other applicable laws for the Company to enter into this Agreement, to sell and issue the Series B Shares or to consummate the other transactions contemplated pursuant to this Agreement. 3.9 Litigation. There is no 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. 4. Representations of the Investor. The Investor represents and warrants to the Company as follows: 4.1 Organization. The Investor is a corporation duly incorporated and validly existing under the laws of the State of New York. 4.2 Authority. The Investor has all requisite corporate power and authority to enter into this Agreement, to purchase and hold the Series B Shares and to consummate the other transactions to be consummated by the Investor contemplated by this Agreement. The execution and delivery of this Agreement, the purchase of the Series B 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 Investor. This Agreement has been duly executed and delivered by the Investor, and constitutes the valid and binding obligation of the Investor, enforceable in accordance with its terms, except to the extent limited by (i) the effect of bankruptcy, insolvency, reorganization, receivership, conservatorship, arrangement, moratorium, fraudulent transfer or other laws affecting or relating to the rights of creditors generally, (ii) the rules governing the availability of specific performance, injunctive relief or other equitable remedies and general principles of equity, regardless of whether arising prior to, or after, the date hereof or considered in a proceeding in equity or at law, or (iii) the effect of federal and state securities laws and principles of public policy on rights of indemnity and contribution. 4.3 No Conflict. The execution and delivery by the Investor of this Agreement does not, and consummation of the transactions contemplated by this Agreement will not conflict with, or result in any violation or breach of any provision of, the charter documents of the Investor. 4.4 Required Filings and Consents. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required by or with respect to the Investor in connection with the execution and delivery of this Agreement, the purchase of the Series B Shares to be purchased by the Investor or the consummation of the other transactions to be consummated by the Investor contemplated hereby, except for such consents, orders, authorizations, declarations, filings, approvals and registrations which, if not obtained or made, could not be expected to have a material adverse effect on the Investor's ability to consummate the transactions contemplated pursuant to this Agreement. 4.5 Investor is an "Accredited Investor". The Investor is an "accredited investor" as defined in Rule 501(a) under the Securities Act of 1933, as amended (the "Securities Act"). The Investor believes that it has received all the information it considers necessary or appropriate for deciding whether to purchase the Series B Shares. The Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the Series B Shares and the business, properties, prospects and financial condition of the Company; provided, however, that the foregoing shall not diminish or detract from the Investor's ability to rely upon any of the Company's representations or warranties. The Investor acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Series B Shares. The Investor is not acquiring the Series B Shares with a view towards distribution in violation of the Securities Act. 5. Conditions to the Obligations of the Investor. The obligation of Investor to purchase the Series B Shares at the Closing is subject to the fulfillment, or the waiver by Investor, of the following conditions on or before the Closing Date: 5.1 Accuracy of Representations and Warranties. Each representation and warranty of the Company contained in Section 3 shall be true and complete on and as of the Closing Date with the same effect as though such representation and warranty had been made on and as of that date. 5.2 Performance. The Company shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by the Company prior to or at the Closing. 5.3 Filing of Designation. The Designation shall have been filed with the Secretary of State of the State of Delaware and shall continue to be in full force and effect as of the Closing Date. 5.4 Blue Sky Approvals. The Company shall obtained all necessary Blue Sky Law permits and qualifications, or secured an exemption therefrom, required by any state for the offer and sale of the Series B Shares. 5.5 Certificates and Documents. The Company shall have delivered to counsel to the Investor: (a) The Company's Certificate of Incorporation, including the Designation, as in effect immediately prior to the Closing; (b) Certificates, dated within 10 days of the Closing, as to the corporate good standing of the Company issued by the Secretary of State of the State of Delaware and any place where the Company is qualified to do business as a foreign corporation; (c) By-Laws of the Company certified by its Secretary or Assistant Secretary as being in effect as of the Closing Date; and (d) Resolutions of the Board of Directors of the Company, authorizing and approving all matters in connection with this Agreement and the transactions contemplated hereby, certified by the Secretary or Assistant Secretary of the Company as of the Closing Date. 6. Conditions to the Obligations of the Company. The obligations of the Company under Section 1.2 of this Agreement are subject to fulfillment, on or before the Closing Date, of each of the following conditions: 6.1 Accuracy of Representations and Warranties. Each representation and warranty contained in Section 4 shall be true and complete on and as of the Closing Date with the same effect as though such representation and warranty had been made on and as of that date. 6.2 Letter. Investor shall have executed and delivered delivered to Company the Letter. 6.3 Blue Sky Approvals. The Company shall have obtained all necessary Blue Sky Law permits and qualifications, or secured an exemption therefrom, required by any state for the offer and sale of the Series B Shares. 7. Registration of Shares. 7.1 Demand Registration. (a) At any time and from time to time, Investor may make written requests on the Company for the registration under the Securities Act of the shares of Company common stock (the "Common Stock") issuable upon conversion of the Series B Shares (the "Conversion Shares") having an anticipated aggregate offering price (net of discounts and commissions) of at least $1,000,000. The Company shall have no obligation to file more than two (2) registration statements under the Securities Act with respect to such requests. Each such request described in the preceding two sentences shall be hereinafter referred to as a "Demand Registration." Any Demand Registration will specify the number of Conversion Shares proposed to be sold and will also specify the intended method of disposition thereof. (b) A registration will not be deemed to have been effected as a Demand Registration unless it has been declared effective by the Commission and the Company has complied in all material respects with its obligations under this Agreement with respect thereto; provided, however, that if, 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 have been effected. If (i) a registration requested pursuant to this Section 7.1 is deemed not to have been effected or (ii) the registration requested pursuant to this Section 7.1 does not remain effective for a period of at least one hundred eighty (180) days beyond the effective date thereof or, with respect to an underwritten offering of Conversion Shares, until ninety (90) days after the commencement of the distribution by the Investor of the Conversion Shares included in such registration statement, then the Company shall continue to be obligated to effect such registration pursuant to this Section 7.1. The Investor shall be permitted to withdraw all or any part of the Conversion Shares from a Demand Registration at any time prior to the effective date of such Demand Registration. (c) If the Investor so elects, the offering of Conversion Shares pursuant to Demand Registration shall be in the form of an underwritten offering. The Investor shall select one or more nationally recognized firms of investment bankers reasonably acceptable to the Company to act as the lead managing underwriter (the "Underwriter") in connection with such offering and shall select any additional investment bankers and managers to be used in connection with the offering. 7.2 Piggy-Back Registration (a) If at any time the Company proposes to file a registration statement under the Securities Act with respect to an offering by the Company for its own account or for the account of any of its respective security holders (other than a registration statement on Form S-4 or S-8 (or any substitute form that may be adopted by the Commission)), then the Company shall give prompt written notice of such proposed filing to the Investor as soon as practicable (but in no event less than 20 days before the anticipated filing date), and such notice shall offer Investor the opportunity to register such number of Conversion Shares as Investor may request (which request shall specify the Conversion Shares intended to be disposed of by Investor and the intended method of distribution thereof) (a "Piggy-Back Registration"). The Company shall cause the managing Underwriter or Underwriters of a proposed underwritten offering to permit the Conversion Shares requested to be included in a Piggy-Back Registration to be included on the same terms and conditions as any similar securities of the Company or any other security holder included therein and to permit the sale or other disposition of such Conversion Shares in accordance with the intended method of distribution thereof. Except as set forth in Section 7.2(c), Investor shall have the right to withdraw its request for inclusion of its Conversion Shares in any registration statement pursuant to this Section 7.2 by giving written notice to the Company of its request to withdraw, provided, however, that in the event of such withdrawal, Investor shall be responsible for all fees and expenses (including fees and expenses of counsel) incurred by Investor prior to such withdrawal except as set forth in Section 7.2(c). The Company may withdraw a Piggy-Back Registration at any time prior to the time it becomes effective. (b) Notwithstanding anything to the contrary contained herein, if the managing Underwriter or Underwriters of any underwritten offering described in Section 7.2 have informed, in writing, the Investor that it is their opinion that the total number of shares which the Company, the Investor and any other persons desiring to participate in such registration intend to include in such offering is such as to materially and adversely affect the success of such offering, then the number of shares to be offered shall be reduced or limited in the following order of priority: (x) first, the number of shares to be offered by all other holders of securities of the Company other than the Investor or others who have registration rights to the extent necessary to reduce the total number of shares as recommended by such managing Underwriters; and (y) second, if further reduction or limitation is required, the number of shares to be offered for the account of the Investor shall be reduced or limited to the extent necessary to reduce the total number of shares as recommended by such managing Underwriters; provided, however, that the reduction for the account of the Investor shall not result in the number of shares of the Investor included in the offering to be less than 25% of the total number of shares offered. (c) Withdrawal Election. If, as a result of the proration provisions of Section 7.2(b), Investor shall not be entitled to include at least 50% of the Conversion Shares in a Piggy-Back Registration that Investor has requested to be included, Investor may elect to withdraw its request to include Conversion Shares in such registration (a "Withdrawal Election") without incurring any liability for its fees and expenses; provided, however, that a Withdrawal Election shall be irrevocable and, after making a Withdrawal Election, Investor shall no longer have any right to include Conversion Shares in the Piggy-Back Registration as to which such Withdrawal Election was made. (d) Effectiveness. With respect to a registration statement pursuant to this Section 7.2, the Company will use its 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 any such registration statement effective for at least ninety (90) days. (e) Exclusion. Notwithstanding anything herein to the contrary, Investor shall have no right to a Piggy-Back Registration in connection with the filing of a registration statement by the Company under the Securities Act with respect to an offering for the account of Special Situations Funds (and its affiliated entities). 7.3 Registration Procedures. Whenever the Company is required to effect or cause the registration of Conversion Shares pursuant to Section 7, the following shall apply: (a) The Company and the Investor will enter into customary agreements including, if applicable, an underwriting agreement in customary form and which is reasonably satisfactory to the Company (which shall not require the Investor to indemnify the underwriter with respect to misstatements or omissions in the registration statement other than such misstatements or omissions in written material supplied by Investor). The Company and Investor will also take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Conversion Shares; and the Investor may, at its option, require that any or all of the representations, warranties and covenants of the Company made to or for the benefit of such Underwriters also be made to and for the benefit of Investor. (b) The Company may require Investor to promptly furnish in writing to the Company such information regarding the distribution of the Conversion Shares as the Company may from time to time reasonably request and such other information as may be legally required in connection with such registration including, without limitation, all such information as may be requested by the Commission or the NASD. The Company may exclude Investor from such registration if Investor fails to provide such information. (c) The Company will immediately notify Investor, at any time when a prospectus relating to Conversion Shares is required to be delivered under the Securities Act, of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the Investor, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and promptly make available to Investor any such supplement or amendment. (d) Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 7.3(c) hereof, Investor will forthwith discontinue disposition of the Conversion Shares pursuant to the registration statement covering such Conversion Shares until Investor's receipt of the copies of the supplemented or amended prospectus contemplated by Section 7.3(c) hereof, and, if so directed by the Company, Investor will deliver to the Company all copies, other than permanent file copies then in Investor's possession, of the most recent prospectus covering such Conversion Shares at the time of receipt of such notice. (e) The Company shall furnish to Investor such number of copies of each prospectus, including preliminary prospectuses, as Investor may reasonably request in order to facilitate the public sale or other disposition of the Conversion Shares. (f) The Company shall use all reasonable efforts to register or qualify the Conversion Shares covered by such registration statement under such blue sky or other applicable laws of such jurisdictions as Investor shall reasonably request to enable Investor to consummate the public sale or other disposition of the Conversion Shares; provided that the Company shall not be required in connection therewith to qualify to do business or to file a general consent to service of process in any such jurisdiction. 7.4 Registration Expenses. In connection with the Demand Registrations and Piggy-Back Registrations under Sections 7.1 and 7.2 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 Conversion Shares), (iii) processing, duplicating and printing expenses, (iv) the Company's internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (v) the fees and expenses incurred in connection with the listing of the Conversion Shares, (vi) reasonable fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses of any comfort letters or costs associated with the delivery by independent certified public accountants of a comfort letter or comfort letters requested but not the cost of any audit other than a year end audit), (vii) the reasonable fees and expenses of any special experts retained by the Company in connection with such registration, (viii) reasonable fees and expenses of one firm of counsel for the Investor, and (ix) any fees and disbursements of underwriters customarily paid by issuers or sellers of securities. The Company shall have no obligation to pay any underwriting fees, discounts or commissions attributable to the sale of Conversion Shares, or the cost of any special audit required, such costs to be borne by the Investor. 7.5 Indemnification. (a) The Company shall, to the full extent permitted by law, indemnify and hold harmless Investor, its Affiliates, partners, officers, directors, employees and agents, and each person, if any, who controls or is under common control with such Investor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act of 1934, together with the partners, officers, directors, employees and agents of such controlling person (collectively, the "Controlling Persons"), from and against any loss, claim, damage, liability, reasonable attorneys' fees, cost or expense and costs and expenses of investigating and defending any such claim, joint or several, and any action in respect thereof (collectively, the "Damages") to which Investor, its partners, officers, directors, employees and agents, and any such Controlling Person may become subject under the Securities Act or otherwise, insofar as such Damages (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus relating to the Conversion Shares or any amendment or supplement thereto, or arises out of, or are based upon, any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or any violation by the Company of any federal or state securities laws or any rule or regulation thereof, except insofar as the same are based upon information furnished in writing to the Company by Investor expressly for use therein, and shall reimburse Investor, its Affiliates, partners, officers, directors, employees and agents, and each such Controlling Person for any legal and other expenses reasonably incurred by Investor, its Affiliates, its partners, officers, directors, employees and agents, or any such Controlling Person in investigating or defending or preparing to defend against any such Damages or proceedings; provided, however, that the Company shall not be liable to Investor to the extent that any such Damages (or action or proceeding in respect thereof) arise out of or are based upon an untrue statement or omission made in any preliminary prospectus if (i) Investor failed to send or deliver a copy of the final prospectus with or prior to the delivery of written confirmation of the sale by Investor to the person asserting the claim from which such Damages arise, and (ii) the final prospectus would have corrected such untrue statement or such omission; provided, further, however, that the Company shall not be liable to Investor in any such case to the extent that any such Damages arise out of or are based upon an untrue statement or omission in any prospectus if (x) such untrue statement or omission is corrected in an amendment or supplement to such prospectus, and (y) having previously been furnished by or on behalf of the Company with copies of such prospectus as so amended or supplemented, Investor thereafter fails to deliver such prospectus as so amended or supplemented prior to or concurrently with the sale of a Conversion Shares to the person asserting the claim from which such Damages arise. The Company also agrees to indemnify any Underwriters of the Conversion Shares, their officers and directors and each person who controls such Underwriters on substantially the same basis as that of the indemnification of the Investor provided in this Section 7.5(a). (b) Investor shall, to the full extent permitted by law, indemnify and hold harmless the Company, its officers, directors, employees and agents and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, together with the partners, officers, directors, employees and agents of such controlling person, to the same extent as the foregoing indemnity from the Company to Investor, but only to the extent the Company's or such person's Damages are attributable to the information related to Investor, or its plan of distribution, furnished in writing by Investor or on Investor's behalf expressly for use in any registration statement or prospectus relating to the Conversion Shares, or any amendment or supplement thereto, or any preliminary prospectus and the aggregate amount which may be recovered from Investor pursuant to the indemnification provided for in this Section 7.5(a) in connection with any registration and sale of Conversion Shares shall be limited to the net proceeds received by Investor from the sale of such Conversion Shares. In case any action or proceeding shall be brought against the Company or its officers, directors, employees or agents or any such controlling person or its officers, directors, employees or agents, in respect of which indemnity may be sought against Investor, Investor shall have the rights and duties given to the Company, and the Company or its officers, directors, employees or agents, or such controlling person, or its officers, directors, employees or agents, shall have the rights and duties given to Investor under Section 7.5(a). Investor also agrees to indemnify and hold harmless any Underwriters of the Conversion Shares, their officers and directors and each person who controls such Underwriters on substantially the same basis as that of the indemnification Investor provides to the Company provided in this Section 7.5(b); provided that the aggregate recovery that the Company and any Underwriters can recover from Investor pursuant to this Section 7.5(b) cannot exceed the net proceeds received by Investor from the sale of Conversion Shares. The Company shall be entitled to receive indemnities from Underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above, with respect to information so furnished in writing by such persons specifically for inclusion in any prospectus or registration statement; provided, however, that if the Company does not receive such indemnities, the Company will not be relieved of its duties and obligations hereunder. (c) Promptly after receipt by any person in respect of which indemnity may be sought pursuant to Section 7.5(a) or 7.5(b) (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 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 7.5(a) or 7.5(b) and except to the extent of any actual prejudice resulting therefrom. If any such claim or action shall be brought against an Indemnified Party, and it shall notify the Indemnifying Party thereof, the Indemnifying Party shall be entitled to participate therein, and, to the extent that it wishes, jointly with any other similarly notified Indemnifying Party, to assume the defense thereof with counsel reasonably satisfactory to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its election to assume the defense of such claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that the Indemnified Party shall have the right to employ separate counsel to represent the Indemnified Party and its controlling Persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Indemnified Party against the Indemnifying Party, but the fees and expenses of such counsel shall be for the account of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) in the reasonable judgment of the Company and such Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential conflicts of interest between them, it being understood, however, that the Indemnifying Party shall not, in connection with any one such claim or action or separate but substantially similar or related claims or actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for all Indemnified Parties, or for fees and expenses that are not reasonable. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any claim or pending or threatened proceeding in respect of which the Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such claim or proceeding. Whether or not the defense of any claim or action is assumed by the Indemnifying Party, such Indemnifying Party will not be subject to any liability for any settlement made without its consent, which consent will not be unreasonably withheld. (d) If the indemnification provided for in this Section 7.5 is unavailable to the Indemnified Parties in respect of any Damages referred to herein, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Damages (i) as between the Company and Investor on the one hand and the Underwriters on the other, in such proportion as is appropriate to reflect the relative benefits received by the Company and the Investor on the one hand and the Underwriters on the other from the offering of the Conversion Shares, or if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits but also the relative fault of the Company and the Investor on the one hand and of the Underwriters on the other in connection with the statements or omissions which resulted in such Damages, as well as any other relevant equitable considerations, and (ii) as between the Company on the one hand and Investor on the other, in such proportion as is appropriate to reflect the relative fault of the Company and Investor in connection with such statements or omissions, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Investor on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by the Company and the Investor bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the prospectus. The relative fault of the Company and the Investor on the one hand and of the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Investor or by the Underwriters. The relative fault of the Company on the one hand and Investor on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and Investor agree that it would not be just and equitable if contribution pursuant to this Section 7.5(d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the Damages referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7.5(b), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Conversion Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and Investor shall not be required to contribute any amount in excess of the amount by which the total price at which the Conversion Shares were offered to the public (less underwriting discounts and commissions) exceeds the amount of any damages which Investor has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 8. Covenant Regarding Nasdaq Notification. The Company hereby covenants to file, as soon as practicable after the date of execution of this Agreement, the Notification Form for Listing of Additional Shares with The Nasdaq Stock Market, Inc. 9. Confidentiality. Neither the Company nor the Investor shall issue any press release or other public announcement regarding, or otherwise disclose, this Agreement or the transactions contemplated herein, or make any filing of this Agreement or other agreements relating to the transactions contemplated herein, without the consent of the other, which consent will not be unreasonably withheld; provided, however, that if a party is required by applicable law to provide public disclosure of this Agreement or the transactions contemplated herein, such party shall use all reasonable efforts to coordinate the disclosure with the other party before issuance, including, but not limited to the submission to the Commission (and any other applicable regulatory or judicial authority) of an application for confidential treatment of certain terms (which terms shall be agreed upon by the Investor and the Company) of this Agreement. Each party shall provide to the other for review a copy of any proposed disclosure of this Agreement or its terms and any application for confidential treatment at least five (5) business days before any such disclosure or application is made and to comply with all reasonable requests from the other party to minimize the extent and scope of any such disclosure. 10. Successors and Assigns. The provisions of this Agreement shall be binding upon, and inure to the benefit of, the respective successors, assigns, heirs, executors and administrators of the parties hereto. 11. Survival of Representations and Warranties. The representations, warranties and agreements made herein shall survive the closing of the transactions contemplated hereby. All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in connection with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company hereunder solely as of the date of such certificate or instrument. 12. Expenses. Each party shall pay its own costs and expenses incurred with respect to the negotiation, execution, delivery and performance of this Agreement. 13. Notices. All notices, requests, consents, and other communications under this Agreement shall be in writing and shall be deemed delivered (i) two business days after being sent by registered or certified mail, return receipt requested, postage prepaid or (ii) one business day after being sent via a reputable nationwide overnight courier service guaranteeing next business day delivery, in each case to the intended recipient as set forth below: If to the Investor: Random House, Inc. 1540 Broadway New York, NY 10036 Attn: President, Random House Audio and Diversified Publishing Group Telephone No.: (212) 782-9807 Facsimile No.: (212) 782-9600 with a copy to: Random House, Inc. 1540 Broadway New York, NY 10036 Attn: General Counsel Telephone No.: (212) 782-9617 Facsimile No.: (212) 782-8499 If to Company: Audible, Inc. 65 Willowbrook Blvd. Wayne, NJ 07470 Attn: Chief Executive Officer Telephone No.: (973) 890-4070 Facsimile No.: (973) 890-2442 with a copy to: Nancy Spangler, Esq. Piper Marbury Rudnick & Wolfe LLP 1775 Wiehle Avenue, Suite 400 Reston, VA 20190 Telephone No.: (703) 773-4021 Facsimile No.: (703) 773-5000 Any party may give any notice, request, consent or other communication under this Agreement using any other means (including, without limitation, personal delivery, messenger service, telecopy, first class mail or electronic mail), but no such notice, request, consent or other communication shall be deemed to have been duly given unless and until it is actually received by the party for whom it is intended. Any party may change the address to which notices, requests, consents or other communications hereunder are to be delivered by giving the other parties notice in the manner set forth in this Section 13. 14. Brokers. The Company is not subject to an existing agreement with any finder and no fees will be paid by the Company to any such finder in regard to the transactions contemplated herein. The Investor is not responsible for the payment of any finder's fees in connection with the transactions contemplated herein. 15. Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter. 16. Amendments and Waivers. Except as otherwise expressly set forth in this Agreement, any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Investor. No waivers of or exceptions to any term, condition or provision of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision. 17. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which, when taken together, shall constitute one and the same instrument. 18. Headings. The headings of the sections, subsections, and paragraphs of this Agreement have been added for convenience only and shall not be deemed to be a part of this Agreement. 19. Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision. 20. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the choice of law or conflicts of law provisions thereof. {Signature pages follow} IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the day and year first above written. THE "COMPANY": AUDIBLE, INC. By: ----------------------------------- Name: Title: THE "INVESTOR": RANDOM HOUSE, INC. By: ----------------------------------- Name: Title: EX-8 6 ex8.txt EXHIBIT 8 EXHIBIT 8 JOINT FILING AGREEMENT In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, each of Bertelsmann, Inc., a Delaware corporation ("Bertelsmann, Inc. "), Bertelsmann Multimedia, Inc., a Delaware corporation and a wholly-owned direct subsidiary of Bertelsmann, Inc. ("Bertelsmann Multimedia"), Random House, Inc., a Delaware corporation and a wholly-owned direct subsidiary of Bertelsmann, Inc. ("Random House, Inc.") and Random House Ventures L.L.C., a Delaware limited liability company and a wholly-owned direct subsidiary of Random House, Inc. ("RH Ventures"), agrees to the joint filing of a Statement on Schedule 13D (including amendments thereto) with respect to the Common Stock, par value $0.01, Class B Preferred Stock, par value $0.01 per share, and Class C Preferred Stock, par value $0.01 per share, of Audible, Inc., a Delaware corporation, and further agrees that this Joint Filing Agreement be included as an exhibit to such filing. Each of Bertelsmann, Inc., Bertelsmann Multimedia, Random House, Inc. and RH Ventures acknowledges that it is responsible for the timely filing of its own Statement on Schedule 13D and any amendments thereto and for the completeness and accuracy of the information concerning itself contained therein and that, as contemplated by Rule 13d-1(k)(1)(ii), no other person shall be responsible for the completeness or accuracy of the information concerning itself, unless such person knows or has reason to believe that such information is inaccurate. The parties to this Joint Filing Agreement expressly authorize each party to file on each other party's behalf any and all amendments to such Statement on Schedule 13D. This Joint Filing Agreement may be executed in any number of counterparts, all of which together shall constitute one and the same instrument. Date: December 20, 2003 RANDOM HOUSE, INC. By: /s/ Richard Sarnoff ------------------- Name: Richard Sarnoff Title: Executive Vice President RANDOM HOUSE VENTURES L.L.C. By: /s/ Richard Sarnoff ------------------- Name: Richard Sarnoff Title: President BERTELSMANN, INC. By: /s/ Robert J. Sorrentino ------------------------ Name: Robert J. Sorrentino Title: President BERTELSMANN MULTIMEDIA, INC. By: /s/ Robert J. Sorrentino ------------------------ Name: Robert J. Sorrentino Title: President 16 -----END PRIVACY-ENHANCED MESSAGE-----