THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Audible, Inc. (ADBL)

4/27/2006 Proxy Information

Apax Managers, Inc. and Bertelsmann A.G. In August 2003, funds managed by Apax Managers, Inc. and entities affiliated with Bertelsmann A.G. purchased shares of our Series C convertible preferred stock for an aggregate purchase price of $6,000,000. In December 2003, all of the shares of Series C convertible preferred stock purchased by these funds and entities were automatically converted to shares of our common stock in accordance with the terms of the stock based on the price and trading volume of our common stock during the 60 day period prior to conversion.

Apax Managers, Inc. and Random House, Inc. In February 2004, all of the shares of Series A convertible preferred stock owned by Apax Managers, Inc. and Series B convertible preferred stock owned by Random House, Inc. were converted to shares of our common stock. As an inducement to early conversion of the Series A convertible preferred stock, which carried a 12% coupon through August 2007, we granted to Apax 766,666 shares of our common stock over dividend shares then due and warrants to purchase 333,333 shares of our common stock at the price of $21.00 per share.

As a result of these conversions, we no longer have any preferred stock outstanding.

Apax Managers, Inc. beneficially owns, in the aggregate, more than 5% of our common stock. Alan J. Patricof founded Apax and Oren Zeev is a partner at Apax.

Random House, Inc. Random House is a major audio book publisher which licenses audio content to Audible for resale to its customers. Payments to Random House under these license agreements exceeded 5% of our revenue in 2005. Entities affiliated with Bertelsmann A.G., including Random House, Inc. and Random House Ventures LLC, together own more than 5% of our outstanding common stock. Johannes Mohn is an executive at Bertelsmann A. G. Richard Sarnoff is an employee at Random House.

On August 30, 2004, Audible Inc., Verlagsgruppe Random House GmbH, and Holtzbrinck networXs AG entered into a joint venture agreement to form Audible GmbH, or Audible Germany. Audible Germany has the exclusive rights to operate a German language Audible Web site. Under the joint venture, Random House and Holtzbrinck each contributed approximately $16,000 in exchange for each receiving a 24.5% interest in Audible Germany. We contributed approximately $34,000 in exchange for a 51% interest in Audible Germany. Following initial formation, Random House and Holtzbrinck were obligated to provide additional financing of approximately $1,490,000 each in certain installments subject to Audible Germany meeting certain milestones. In the event of liquidation of Audible Germany, this additional financing by Random House and HoItzbrinck, which accrues interest at 8% per annum, is senior in right of payment to our investment. We may, but we are not obligated to, contribute additional capital to the entity. Pursuant to a license agreement, beginning in September 2004, Audible Germany is required to pay us $30,000 per month for thirty months subject to certain conditions. The agreement also requires Audible Germany to pay us a royalty ranging from 0.5% to 3% of Audible GermanyŐs revenue up to an annual royalty cap of the U.S. dollar equivalent of Űl.5 million, subject to Audible Germany achieving certain operating margins. Audible Germany is a related party to Audible.

On September 15, 2004, Audible Inc., France Loisirs S.A.S. and Audio Direct S.A.S., a wholly-owned subsidiary of France Loisirs entered into a 24-month service and license agreement, whereby, France Loisirs launched a French language spoken word audio service through Audio Direct. Under the agreement, we provide intellectual property and substantially the entire technological infrastructure for the operation of the service. In return, France Loisirs is required to pay us a total of $1,000,000 over the term of the agreement. Commencing the first fiscal year after the business achieves positive net income, we will receive a royalty of 5% of the businessŐs net paid revenue. Net paid revenue means net revenues for digital spoken word content after the deduction of taxes but excluding certain hardware revenue. The 5% royalty will apply until the businessŐs net paid revenue exceeds Ű20 million. Once net paid revenue exceeds Ű20 million, we will receive a flat fee of Ű1 million. If net paid revenue exceeds Ű33.3 million, we will receive a royalty payment of Ű l million, plus 3% of net paid revenue in excess of Ű33.3 million. An additional royalty is payable equal to one-half of the distributable pre-tax profits of the business. France Loisirs is a related party to Audible.