EXHIBIT 4.4
OPTIONHOLDER EQUITY WARRANT AGREEMENT
DATED AS OF AUGUST 9, 2005
FOR
WARRANTS TO PURCHASE
UP TO 1,558,651 SHARES OF COMMON STOCK
BETWEEN
EXPEDIA, INC.
AND
MELLON INVESTOR SERVICES LLC, AS
EQUITY WARRANT AGENT
THIS OPTIONHOLDER EQUITY WARRANT AGREEMENT (the "AGREEMENT"), dated as of
August 9, 2005, between Expedia, Inc. (the "COMPANY" or "EXPEDIA"), a
Delaware corporation and Mellon Investor Services LLC, a New Jersey limited
liability company, as warrant agent (the "EQUITY WARRANT AGENT").
WHEREAS, the Board of Directors of IAC/InterActiveCorp ("IAC") has
determined that it is appropriate and desirable to spin-off Expedia into a
separate, publicly-traded company by separating IAC's principal travel and
travel-related businesses, and related assets and liabilities, and
contributing them to Expedia and effecting a reclassification of the capital
stock of IAC and a division of IAC securities into securities of both IAC and
Expedia, such that registered owners of IAC securities immediately prior to
the reclassification will own securities of both IAC and Expedia immediately
after the reclassification (such transactions taken together, the "SPIN-OFF");
WHEREAS, IAC and Expedia have entered in that certain Separation
Agreement, dated as of August 9, 2005 (the "SEPARATION AGREEMENT"), which
sets forth, among other things, the necessary steps for the reclassification
and division of IAC securities and the issuance of Expedia securities, in
each case, for purposes of effecting the Spin-Off, and which further provides
that IAC will effect a two-for-one reverse stock split immediately prior to
the Effective Time (as defined in the Separation Agreement) of the
reclassification;
WHEREAS, IAC has issued and outstanding certain equity warrants
governed by that certain Optionholder Equity Warrant Agreement, by and
between IAC and Mellon Investor Services, LLC, dated as of August 8, 2003
(the "2003 IAC WARRANT AGREEMENT"), pursuant to which certain warrants were
issued (the "2003 IAC WARRANTS");
WHEREAS, in accordance with the terms of the Separation Agreement,
following the completion of the Spin-Off, each 2003 IAC Warrant will convert
into a warrant to purchase .969375 shares of IAC Common Stock, par value
$0.001, at an exercise price of $14.44 (the "NEW IAC WARRANTS") and a warrant
to purchase .969375 shares of Expedia Common Stock, par value $0.001 (the
"COMMON STOCK") at an exercise price of $11.56 (the "EQUITY WARRANTS"). The
form and terms of the Equity Warrants shall mirror, in all material respects,
those of the 2003 IAC Warrants, in each case, as set forth in detail in the
2003 IAC Warrant Agreement;
WHEREAS, the Company desires the Equity Warrant Agent to assist the
Company in connection with the issuance, exchange, cancellation, replacement and
exercise of the Equity Warrants, and in this Agreement wishes to set forth,
among other things, the terms and conditions on which the Equity Warrants may be
issued, exchanged, cancelled, replaced and exercised; and
WHEREAS, the Company has duly authorized the execution and
delivery of this Agreement to provide for the issuance of the Equity Warrants
to be exercisable at such times and for such prices, and to have such other
provisions, as shall be fixed as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
"2003 IAC WARRANTS" shall have the meaning set forth in the recitals
hereto.
"2003 IAC WARRANT AGREEMENT" shall have the meaning set forth in the
recitals hereto.
"CLOSING DATE" shall have the meaning set forth in Section 2.1.
"CLOSING PRICE" for each Trading Day shall be the last reported sales price
regular way, during regular trading hours, or, in case no such reported sales
takes place on such day, the average of the closing bid and asked prices regular
way, during regular trading hours, for such day, in each case on The Nasdaq
Stock Market or, if not listed or quoted on such market, on the principal
national securities exchange on which the shares of Common Stock are listed or
admitted to trading or, if not listed or admitted to trading on a national
securities exchange, the last sale price regular way for the Common Stock as
published by the National Association of Securities Dealers Automated Quotation
System ("NASDAQ"), or if such last sale price is not so published by NASDAQ or
if no such sale takes place on such day, the mean between the closing bid and
asked prices for the Common Stock as published by NASDAQ. If the Common Stock is
not publicly held or so listed or publicly traded, "Closing Price" shall mean
the Fair Market Value per share as determined in good faith by the board of
directors of the Company or, if such determination cannot be made, by a
nationally recognized independent investment banking firm selected in good faith
by the board of directors of the Company.
"COMMON STOCK" shall have the meaning set forth in the recitals hereto.
"CURRENT MARKET PRICE" shall have the meaning set forth in Section 4.1(d).
"EQUITY WARRANT" shall have the meaning set forth in the recitals hereto.
"EQUITY WARRANT CERTIFICATES" shall have the meaning set forth in Section
2.6.
"EQUITY WARRANT REGISTER" shall have the meaning set forth in Section 6.1.
"EXERCISE DATE" shall have the meaning set forth in Section 3.3(a).
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"EXERCISE PRICE" shall have the meaning set forth in Section 3.1.
"EXPIRATION DATE" means 5:00 p.m. New York City time on February 4, 2009.
"FAIR MARKET VALUE" means the amount that a willing buyer would pay a
willing seller in an arm's length transaction.
"FORMED, SURVIVING OR ACQUIRING CORPORATION" shall have the meaning set
forth in Section 5.4.
"HOLDER" means the Person or Persons in whose name such Equity Warrant
Certificate shall then be registered as set forth in the Equity Warrant Register
to be maintained by the Equity Warrant Agent pursuant to Section 6.1 for that
purpose.
"NON-ELECTING SHARE" shall have the meaning set forth in Section 5.4.
"OFFICER'S CERTIFICATE" shall have the meaning set forth in Section 7.2(f).
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust or any other entity or organization.
"PROSPECTUS" shall have the meaning set forth in Section 8.9.
"SALE TRANSACTION" shall have the meaning set forth in Section 5.4.
"SEPARATION AGREEMENT" shall have the meaning set forth in the recitals
hereto.
"SPIN-OFF" shall have the meaning set forth in the recitals hereto.
"TIME OF DETERMINATION" shall have the meaning set forth in Section 4.1(d).
"TRADING DAY" shall mean a day on which the securities exchange utilized
for the purpose of calculating the Closing Price shall be open for business or,
if the shares of Common Stock shall not be listed on such exchange for such
period, a day on which The Nasdaq Stock Market is open for business.
ARTICLE 2.
ISSUANCE OF EQUITY WARRANTS AND EXECUTION AND
DELIVERY OF EQUITY WARRANT CERTIFICATES
Section 2.1. ISSUANCE OF EQUITY WARRANTS. Equity Warrants shall only be
issued by the Company on the closing date of the Spin-Off (the "CLOSING DATE").
The Company shall promptly notify the Equity Warrant Agent in writing of the
occurrence of the Closing Date and the issuance of the Equity Warrants.
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Section 2.2. FORM AND EXECUTION OF EQUITY WARRANT CERTIFICATES
(a) Except as provided in Section 2.6, the Equity Warrants shall be
evidenced by the equity warrant certificates, which shall be in registered form
and substantially in the form set forth as Exhibit A attached hereto (the
"EQUITY WARRANT CERTIFICATES"). Each Equity Warrant Certificate shall be dated
the date it is countersigned by the Equity Warrant Agent and may have such
letters, numbers or other marks of identification and such legends or
endorsements printed, lithographed or engraved thereon as are not inconsistent
with the provisions of this Agreement, which do not change the Equity Warrant
Agent's duties, liabilities or obligations, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any securities exchange on which the Equity Warrants may be
listed, or to conform to usage, as the officer of the Company executing the same
may approve (his execution thereof to be conclusive evidence of such approval).
Each Equity Warrant Certificate shall evidence one or more Equity Warrants. Each
Equity Warrant Certificate shall set forth on it the vesting schedule for the
referenced Equity Warrant.
(b) The Equity Warrant Certificates shall be signed in the name and on
behalf of the Company by its Chairman, its Vice Chairman, its Chief Executive
Officer, President or a Vice President (any reference to a Vice President of the
Company herein shall be deemed to include any Vice President of the Company,
whether or not designated by a number or a word or words added before or after
the title "Vice President") under its corporate seal, and attested by its
Secretary or an Assistant Secretary. Such signatures may be manual or facsimile
signatures of the present or any future holder of any such office and may be
imprinted or otherwise reproduced on the Equity Warrant Certificates. The seal
of the Company may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Equity Warrant Certificates.
(c) No Equity Warrant Certificate shall be valid for any purpose, and no
Equity Warrant evidenced thereby shall be deemed issued or exercisable, until
such Equity Warrant Certificate has been countersigned by the manual or
facsimile signature of the Equity Warrant Agent. Such signature by the Equity
Warrant Agent upon any Equity Warrant Certificate executed by the Company shall
be conclusive evidence that the Equity Warrant Certificate so countersigned has
been duly issued hereunder.
(d) In case any officer of the Company who shall have signed any Equity
Warrant Certificate either manually or by facsimile signature shall cease to be
such officer before the Equity Warrant Certificate so signed shall have been
countersigned and delivered by the Equity Warrant Agent, such Equity Warrant
Certificate nevertheless may be countersigned and delivered as though the person
who signed such Equity Warrant Certificate had not ceased to be such officer of
the Company; and any Equity Warrant Certificate may be signed on behalf of the
Company by such person as, at the actual date of the execution of such Equity
Warrant Certificate, shall be the proper officer of the Company, although at the
date of the execution of this Agreement such person was not such an officer.
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Section 2.3. ISSUANCE AND DELIVERY OF EQUITY WARRANT CERTIFICATES At any
time and from time to time after the execution and delivery of this Agreement,
the Company may deliver Equity Warrant Certificates executed by the Company to
the Equity Warrant Agent for countersignature. Except as provided in the
following sentence, the Equity Warrant Agent shall thereupon countersign and
deliver such Equity Warrant Certificates to or upon the written request of the
Company. Subsequent to the original issuance of an Equity Warrant Certificate
evidencing Equity Warrants, the Equity Warrant Agent shall countersign a new
Equity Warrant Certificate evidencing such Equity Warrants only if such Equity
Warrant Certificate is issued in exchange or substitution for one or more
previously countersigned Equity Warrant Certificates evidencing such Equity
Warrants or in connection with their transfer, as hereinafter provided.
Section 2.4. TEMPORARY EQUITY WARRANT CERTIFICATES. Pending the preparation
of a definitive Equity Warrant Certificate, the Company may execute, and upon
the written order of the Company, the Equity Warrant Agent shall countersign and
deliver, temporary Equity Warrant Certificates that are printed, lithographed,
typewritten, mimeographed or otherwise produced, substantially of the tenor of
the definitive Equity Warrant Certificates in lieu of which they are issued and
with such appropriate insertions, omissions, substitutions and other variations
as the officer executing such Equity Warrant Certificates may determine are in
compliance with this Agreement, as evidenced by his execution of such Equity
Warrant Certificates.
If temporary Equity Warrant Certificates are issued, the Company will cause
definitive Equity Warrant Certificates to be prepared without unreasonable
delay. After the preparation of definitive Equity Warrant Certificates, the
temporary Equity Warrant Certificates shall be exchangeable for definitive
Equity Warrant Certificates upon surrender of the temporary Equity Warrant
Certificates at the office of the Equity Warrant Agent designated for such
purpose. Upon surrender for cancellation of any one or more temporary Equity
Warrant Certificates, the Company shall execute and the Equity Warrant Agent
shall countersign and deliver in exchange therefor definitive Equity Warrant
Certificates representing the same aggregate number of Equity Warrants which
were represented on the temporary Equity Warrant Certificate. Until so
exchanged, the temporary Equity Warrant Certificates shall in all respects be
entitled to the same benefits under this Agreement as definitive Equity Warrant
Certificates.
Section 2.5. PAYMENT OF TRANSFER TAXES. The Company will pay all transfer,
stamp and other similar taxes, if any, to which this Agreement or the original
issuance, or exercise, of the Equity Warrants or Equity Warrant Certificates may
be subject under the laws of the United States of America or any state or
locality; PROVIDED, HOWEVER, that the Holder, and not the Company, shall be
required to pay any transfer, stamp or other similar tax or other governmental
charge that may be imposed in connection with any transfer involved in the
issuance of the Common Stock where the Holder designates the shares to be issued
in a name other than the name of the Holder; and in the event that any such
transfer is involved, the Company shall not be required to issue any Common
Stock (and the purchase of the shares of Common Stock issued upon the exercise
of such Holder's Equity Warrant shall not be deemed to have been consummated)
until such tax
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or other charge shall have been paid or it has been established to the Company's
satisfaction that no such tax or other charge is due.
Section 2.6. BOOK-ENTRY PROVISIONS FOR EQUITY WARRANTS. Unless (i) a Holder
specifically requests in writing to the Equity Warrant Agent and the Company
that the Equity Warrants be in certificated form, PROVIDED, that such
certification request may be made only with respect to such Holder's vested
Equity Warrants or (ii) the Company instructs the Equity Warrant Agent in
writing to issue Warrant Certificates in respect of a Holder's Equity Warrants
that fall below a DE MINIMUS amount, as determined by the Company, paper
certificates representing the Equity Warrants will not be issued by the Company.
Instead, the Equity Warrants shall (i) be registered on the books and records of
the Equity Warrant Agent in the name of the Holder, and the Holder shall,
subject to any cancellation or expiration thereof, be treated as the owner of
such Equity Warrants for all purposes, (ii) be delivered to the Equity Warrant
Agent in electronic form to be held for the account for such Holder, and (iii)
bear the same vesting schedule, restrictions and legends applicable to such
Equity Warrants had such Equity Warrants been certificated as provided herein.
ARTICLE 3.
DURATION AND EXERCISE OF EQUITY WARRANTS
Section 3.1. EXERCISE PRICE. Each Equity Warrant shall entitle the Holder
thereof to purchase .969375 shares of Common Stock for $11.56 (the "EXERCISE
PRICE"), subject to the terms herein. The number of shares of Common Stock which
shall be purchasable upon the payment of the Exercise Price shall be subject to
adjustment pursuant to Article 4 hereof.
Section 3.2. DURATION OF AND RESTRICTIONS ON EQUITY WARRANTS.
(a) Each Equity Warrant is subject to the same vesting schedule as the New
Linked Options (as such term is defined in the 2003 IAC Warrant Agreement), and
each Equity Warrant shall be deemed vested to the same extent as and
proportionate to the respective New Linked Options. Upon the forfeiture of a New
Linked Option related to an Equity Warrant, such Equity Warrant shall be
automatically forfeited without any further action required on the part of the
Company or the Holder. The Equity Warrant Agent shall not permit the exercise or
transfer of an Equity Warrant by the initial holder thereof until it has
received confirmation in a manner mutually agreed upon between the Equity
Warrant Agent and the Company that as of the date of exercise the Equity Warrant
has not been forfeited, and the Equity Warrant Agent may rely conclusively on
such confirmation and the Equity Warrant Agent shall have no obligation or duty
to investigate or confirm the accuracy thereof.
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(b) Each Equity Warrant (i) not exercised on or prior to the Expiration
Date, or (ii) forfeited pursuant to Section 3.2(a), shall become void, and all
rights of the Holder of such Equity Warrant thereunder and under this Agreement
shall cease.
Section 3.3. EXERCISE OF EQUITY WARRANTS.
(a) The Holder of an Equity Warrant shall have the right, at its option, to
exercise such Equity Warrant and purchase .969375 shares of Common Stock during
the period referred to in Section 3.2, subject to adjustment pursuant to Article
4 hereof. Except as may be provided in an Equity Warrant Certificate, and
subject to receipt by the Equity Warrant Agent of confirmation from the Company
that such Equity Warrant is exercisable, an Equity Warrant may be exercised (i)
in the event that such Equity Warrant has been certificated, by completing the
form of election to purchase set forth on the reverse side of the Equity Warrant
Certificate or (ii) in the event that such Equity Warrant has not been
certificated, by completing a Notice of Purchase in the form attached hereto as
EXHIBIT B, by duly executing the same, and by delivering the same, together with
payment in full of the Exercise Price, in lawful money of the United States of
America, in cash or by certified or official bank check or by bank wire
transfer, to the Equity Warrant Agent at its office designated for such purpose.
Except as may be provided in an Equity Warrant Certificate, the date on which
such Equity Warrant Certificate and payment are received by the Equity Warrant
Agent as aforesaid shall be deemed to be the date on which the Equity Warrant is
exercised and the relevant shares of Common Stock are issued (the "EXERCISE
DATE").
(b) Upon the exercise of an Equity Warrant, the Company shall, as soon as
practicable, issue, to or upon the order of the Holder of such Equity Warrant,
the shares of Common Stock to which such Holder is entitled, registered in such
name or names as may be directed by such Holder. Such issuance of shares of
Common Stock and/or the transfer of Equity Warrants shall be conditioned upon
the Company's receipt of applicable withholding taxes from the Holder of such
Equity Warrant pursuant to Section 8.14 hereof.
(c) Unless the Equity Warrant Agent and the Company agree in writing
otherwise, the Equity Warrant Agent shall deposit all funds received by it in
payment of the Equity Warrant Price for Equity Warrants in the non-interest
bearing account of the Company maintained with it for such purpose and shall
advise the Company by telephone by 5:00 P.M., New York City time, of each day on
which a payment of the Exercise Price for Equity Warrants is received, of the
amount so deposited in such account. The Equity Warrant Agent shall, if so
requested by the Company in writing, promptly confirm such telephone advice in
writing to the Company.
(d) The Equity Warrant Agent shall, upon the written request of the
Company, advise the Company of (i) the number of Equity Warrants exercised as
provided herein, (ii) the written instructions it receives from each Holder of
such Equity Warrants with respect to the delivery of the Common Stock issued
upon exercise of such Equity Warrants to which such Holder is entitled upon such
exercise, and (iii) such other
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information as the Company shall reasonably require. Such advice may be given by
telephone to be confirmed in writing.
ARTICLE 4.
ADJUSTMENTS OF NUMBER OF SHARES
Section 4.1. ADJUSTMENTS. The number of shares of Common Stock
purchasable upon the exercise of the Equity Warrants shall be subject to
adjustment as follows:
(a) In case the Company shall (i) pay a dividend or make a
distribution on its Common Stock in shares of Common Stock, (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares,
(iii) combine its outstanding shares of Common Stock into a smaller number
of shares, or (iv) issue by reclassification, recapitalization or
reorganization of its Common Stock any shares of capital stock of the
Company, then in each such case the number of shares of Common Stock
issuable upon exercise of an Equity Warrant shall be equitably adjusted so
that the Holder of any Equity Warrant thereafter surrendered for conversion
shall be entitled to receive the number of shares of Common Stock or other
capital stock of the Company which such Holder would have owned or been
entitled to receive immediately following such action had such Equity
Warrant been exercised immediately prior to the occurrence of such event.
An adjustment made pursuant to this subsection 4.l(a) shall become
effective immediately after the record date and written notice thereof to
the Equity Warrant Agent, in the case of a dividend or distribution, or
immediately after the effective date, in the case of a subdivision,
combination or reclassification. If, as a result of an adjustment made
pursuant to this subsection 4.l(a), the Holder of any Equity Warrant
thereafter exercised shall become entitled to receive shares of two or more
classes of capital stock or shares of Common Stock and other capital stock
of the Company, the Company's board of directors (whose determination shall
be in its good faith judgment and shall be described in a statement filed
by the Company with the Equity Warrant Agent and which shall be conclusive
for all purposes) shall determine the allocation of the Exercise Price
between or among shares of such classes of capital stock or shares of
Common Stock and other capital stock.
(b) In case the Company shall issue options, rights or warrants
to holders of its outstanding shares of Common Stock entitling them (for
a period expiring within 45 days after the record date mentioned below)
to subscribe for or purchase shares of Common Stock or other securities
convertible or exchangeable for shares of Common Stock at a price per
share of Common Stock less than the Current Market Price (as determined
pursuant to subsection (d) of this Section 4.1) (other than pursuant to
any stock option, restricted stock or other incentive or benefit plan or
stock ownership or purchase plan for the benefit of employees, directors
or officers or any dividend reinvestment plan of the
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Company in effect at the time hereof or any other similar plan adopted or
implemented hereafter, it being agreed that none of the adjustments set
forth in this Section 4.1 shall apply to the issuance of stock, rights,
warrants or other property pursuant to such benefit plans), then the number
of shares of Common Stock issuable upon exercise of an Equity Warrant shall
be adjusted so that it shall equal the product obtained by multiplying the
number of shares of Common Stock issuable upon exercise of an Equity
Warrant immediately prior to the date of issuance of such rights or
warrants by a fraction of which the numerator shall be the number of shares
of Common Stock outstanding on the date of issuance of such rights or
warrants (immediately prior to such issuance) plus the number of additional
shares of Common Stock offered for subscription or purchase and of which
the denominator shall be the number of shares of Common Stock outstanding
on the date of issuance of such rights or warrants (immediately prior to
such issuance) plus the number of shares which the aggregate offering price
of the total number of shares so offered would purchase at such Current
Market Price. Such adjustment shall be made successively whenever any
rights or warrants are issued, and shall become effective immediately after
the record date for the determination of stockholders entitled to receive
such rights or warrants; PROVIDED, HOWEVER, in the event that all the
shares of Common Stock offered for subscription or purchase are not
delivered upon the exercise of such rights or warrants, upon the expiration
of such rights or warrants the number of shares of Common Stock issuable
upon exercise of an Equity Warrant shall be readjusted to the number of
shares of Common Stock issuable upon exercise of an Equity Warrant which
would have been in effect had the numerator and the denominator of the
foregoing fraction and the resulting adjustment been made based upon the
number of shares of Common Stock actually delivered upon the exercise of
such rights or warrants rather than upon the number of shares of Common
Stock offered for subscription or purchase. In determining whether any
security covered by this Section 4.1(b) entitles the holders to subscribe
for or purchase shares of Common Stock at less than such Current Market
Price, and in determining the aggregate offering price of such shares of
Common Stock, there shall be taken into account any consideration received
by the Company for the issuance of such options, rights, warrants or
convertible or exchangeable securities, plus the aggregate amount of
additional consideration (as set forth in the instruments relating thereto)
to be received by the Company upon the exercise, conversion or exchange of
such securities, the value of such consideration, if other than cash, to be
determined by the Company's board of directors in its good faith judgment
(whose determination shall be described in a statement filed by the Company
with the Equity Warrant Agent, and which statement the Equity Warrant Agent
shall be entitled to rely on for all purposes and the Equity Warrant Agent
shall have no obligation to investigate or confirm the accuracy thereof.)
(c) In case the Company shall, by dividend or otherwise, distribute to
all holders of its outstanding Common Stock, evidences of its indebtedness
or assets (including securities and cash, but excluding any regular
periodic cash dividend of the Company and dividends or distributions
payable in stock for which
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adjustment is made pursuant to subsection (a) of this Section 4.1) or
rights or warrants to subscribe for or purchase securities of the Company
(excluding those referred to in subsection (b) of this Section 4.1), then
in each such case the number of shares of Common Stock issuable upon
exercise of an Equity Warrant shall be adjusted so that the same shall
equal the product determined by multiplying the number of shares of Common
Stock issuable upon exercise of an Equity Warrant immediately prior to the
record date of such distribution by a fraction of which the numerator shall
be the Current Market Price as of the Time of Determination, and of which
the denominator shall be such Current Market Price less the Fair Market
Value on such record date (as determined by the Company's board of
directors in its good faith judgment, whose determination shall be
described in a statement filed by the Company with the stock transfer or
conversion agent and the Equity Warrant Agent, as appropriate, and which
statement the Equity Warrant Agent shall be entitled to rely on for all
purposes and the Equity Warrant Agent shall have no obligation to
investigate or confirm the accuracy thereof) of the portion of the capital
stock or assets or the evidences of indebtedness or assets so distributed
to the holder of one share of Common Stock or of such subscription rights
or warrants applicable to one share of Common Stock. Such adjustment shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such distribution.
(d) For the purpose of any computation under subsections (b) and(c) of
this Section 4.1, the "CURRENT MARKET PRICE" per share of Common Stock on
any date shall be deemed to be the average of the daily Closing Prices for
the shorter of (A) 10 consecutive Trading Days ending on the day
immediately preceding the applicable Time of Determination or (B) the
period commencing on the date next succeeding the first public announcement
of the issuance of such rights or warrants or such distribution through
such last day prior to the applicable Time of Determination. For purposes
of the foregoing, the term "TIME OF DETERMINATION" shall mean the time and
date of the record date for determining stockholder entitled to receive the
rights, warrants or distributions referred to in Section 4.1(b) and (c).
(e) In any case in which this Section 4.1 shall require that an
adjustment in the amount of Common Stock or other property to be received
by a Holder upon exercise of an Equity Warrant be made effective as of a
record date for a specified event, the Company may elect to defer (with
prompt notice of such election to the Equity Warrant Agent) until the
occurrence of such event the issuance to the Holder of any Equity Warrant
exercised after such record date the Common Stock or other property
issuable upon such exercise over and above the shares of Common Stock
issuable upon such exercise prior to such adjustment, PROVIDED, HOWEVER,
that the Company shall deliver to such Holder a due xxxx or other
appropriate instrument evidencing such Holder's right to receive such
additional
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shares of Common Stock or other property, if any, upon the occurrence of
the event requiring such adjustment.
(f) No adjustment in the number of shares of Common Stock issuable
upon exercise of an Equity Warrant shall be required to be made pursuant to
this Section 4.1 unless such adjustment would require an increase or
decrease of at least 1% of such number; PROVIDED, HOWEVER, that any
adjustments which by reason of this subsection (f) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 4.1(f) shall be made to the
nearest cent or to the nearest 1/1000th of a share, as the case may be.
Except as set forth in subsections 4.1 (a), (b), and (c) above, the number
of shares of Common Stock issuable upon exercise of an Equity Warrant shall
not be adjusted as a result of the issuance of Common Stock, or any
securities convertible into or exchangeable for Common Stock or carrying
the right to purchase any of the foregoing, in exchange for cash, property
or services.
Section 4.2. STATEMENT ON WARRANTS. Irrespective of any adjustment in the
amount of Common Stock issued upon exercise of an Equity Warrant, Equity Warrant
Certificates theretofore or thereafter issued may continue to express the same
number and kind of shares as are stated in the Equity Warrants initially
issuable pursuant to this Agreement.
Section 4.3. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No
fractional shares or scrip representing fractions of shares of Common Stock
shall be issued upon exercise of the Equity Warrants. If one or more Equity
Warrants shall be exercised at one time by the same Holder, the number of
full shares of Common Stock issuable to such Holder upon exercise thereof
shall be computed on the basis of the aggregate number of shares of Common
Stock issuable to such Holder. In lieu of any fractional interest in a share
of Common Stock which would otherwise be deliverable upon the exercise of
such Equity Warrants, the Company shall pay to the Holder of such Equity
Warrants an amount in cash (computed to the nearest cent) equal to the
Closing Price on the Exercise Date (or the next Trading Day if such date is
not a Trading Day) multiplied by the fractional interest that otherwise would
have been deliverable upon exercise of such Equity Warrants.
Section 4.4. NOTICES TO WARRANTHOLDERS. (a) Upon any adjustment of
the amount of Common Stock issuable upon exercise of an Equity Warrant
pursuant to Section 4.1 (but not for any fractional cumulation as described
in Section 4.1(f)), the Company within 30 days thereafter shall (i) cause to
be filed with the Equity Warrant Agent an Officer's Certificate (as defined
hereinafter) setting forth the amount of Common Stock issuable upon exercise
of an Equity Warrant after such adjustment and setting forth in reasonable
detail the method of calculation and the facts upon which such calculations
are based, which certificate absent manifest error and any failure to comply
with Section 4.1 (other than failures that are de minimus in nature), shall
be conclusive evidence of the correctness of the matters set forth therein,
and (ii) cause to be given to
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each of the registered Holders at his address appearing on the Equity Warrant
Register (as defined hereinafter) written notice of such adjustments by
first-class mail, postage prepaid; PROVIDED, HOWEVER, that the Equity Warrant
Agent shall be entitled to rely on such certificate for all purposes and shall
have no obligation to investigate any error or any failure to comply with
Section 4.1.
ARTICLE 5.
OTHER PROVISIONS RELATING TO RIGHTS OF
HOLDERS OF EQUITY WARRANTS
Section 5.1. NO RIGHTS AS HOLDER OF COMMON STOCK CONFERRED BY EQUITY
WARRANTS OR EQUITY WARRANT CERTIFICATES. No Equity Warrant or Equity Warrant
Certificate shall entitle the Holder to any of the rights of a holder of Common
Stock, including, without limitation, voting, dividend or liquidation rights.
Section 5.2. LOST, STOLEN, DESTROYED OR MUTILATED EQUITY WARRANT
CERTIFICATES. Upon receipt by the Company and the Equity Warrant Agent of
evidence reasonably satisfactory to them of the ownership of and the loss,
theft, destruction or mutilation of any Equity Warrant Certificate and of
indemnity (other than in connection with any mutilated Equity Warrant
certificates surrendered to the Equity Warrant Agent for cancellation)
satisfactory to them, the Company shall execute, and the Equity Warrant Agent
shall countersign and deliver, in exchange for or in lieu of each lost, stolen,
destroyed or mutilated Equity Warrant Certificate, a new Equity Warrant
Certificate evidencing a like number of Equity Warrants of the same title. Upon
the issuance of a new Equity Warrant Certificate under this Section, the Company
may require the Holder to pay an amount sufficient to cover any transfer, stamp
or other similar tax or other governmental charge that may be imposed in
connection therewith and any other expenses (including the fees and expenses of
the Equity Warrant Agent) in connection therewith. Every substitute Equity
Warrant Certificate executed and delivered pursuant to this Section in lieu of
any lost, stolen or destroyed Equity Warrant Certificate shall represent a
contractual obligation of the Company, whether or not such lost, stolen or
destroyed Equity Warrant Certificate shall be at any time enforceable by anyone,
and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Equity Warrant Certificates, duly
executed and delivered hereunder, evidencing Equity Warrants of the same title.
The provisions of this Section are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement of lost,
stolen, destroyed or mutilated Equity Warrant Certificates.
Section 5.3. HOLDERS OF EQUITY WARRANTS MAY ENFORCE RIGHTS. Notwithstanding
any of the provisions of this Agreement, any Holder may, without the consent of
the Equity Warrant Agent, enforce and may institute and maintain any suit,
action or proceeding against the Company suitable to enforce, or otherwise in
respect of his right to exercise his Equity Warrants as provided in the Equity
Warrants and in this Agreement.
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Section 5.4. CONSOLIDATION OR MERGER OR SALE OF ASSETS. For purposes of
this Section 5.4, a "SALE TRANSACTION" means any transaction or event, including
any merger, consolidation, sale of assets, tender or exchange offer,
reclassification, compulsory share exchange or liquidation, in which all or
substantially all outstanding shares of the Common Stock are converted into or
exchanged for stock, other securities, cash or assets or following which any
remaining outstanding shares of Common Stock fail to meet the listing standards
imposed by each of the New York Stock Exchange, the American Stock Exchange and
the Nasdaq National Market at the time of such transaction, but shall not
include any transaction the primary purpose of which is the reincorporation of
the Company in another jurisdiction of the United States of America so long as
in such transaction each Equity Warrant shall convert into an equity security of
the successor to the Company having rights identical to the Equity Warrant. If a
Sale Transaction occurs, then lawful provision shall be made by the entity
formed by such Sale Transaction or the entity whose securities, cash or other
property will immediately after the Sale Transaction be owned, by virtue of such
Sale Transaction, by the holders of Common Stock immediately prior to the Sale
Transaction, or the entity which shall have acquired such securities of the
Company (collectively the "FORMED, SURVIVING OR ACQUIRING CORPORATION"), as the
case may be, providing that each Equity Warrant then outstanding shall
thereafter be exercisable for the kind and amount of securities, cash or other
property receivable upon such Sale Transaction by a holder of the number of
shares of Common Stock that would have been received upon exercise of such
Equity Warrant immediately prior to such Sale Transaction assuming such holder
of Common Stock did not exercise his rights of election, if any, as to the kind
or amount of securities, cash or other property receivable upon such Sale
Transaction (provided that, if the kind or amount of securities, cash or other
property receivable upon such Sale Transaction is not the same for each share of
Common Stock in respect of which such rights of election shall not have been
exercised ("NON-ELECTING SHARE"), then for the purposes of this Section 5.4 the
kind and amount of securities, cash or other property receivable upon such Sale
Transaction for 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). At
the option of the Company, in lieu of the foregoing, the Company may require
that in a Sale Transaction each Holder of an Equity Warrant shall receive in
exchange for each such Equity Warrant a security of the Formed, Surviving or
Acquiring Corporation having substantially equivalent rights as the Equity
Warrant. Notwithstanding anything to the contrary herein, there will be no
adjustments pursuant to Article 4 hereof in case of the issuance of any shares
of Common Stock in a Sale Transaction except as provided in this Section 5.4.
The provisions of this Section 5.4 shall similarly apply to successive Sale
Transactions; PROVIDED, HOWEVER, that in no event shall a Holder of an Equity
Warrant be entitled to more than one adjustment pursuant to this Section 5.4 in
respect of a series of related transactions.
ARTICLE 6.
EXCHANGE AND TRANSFER OF EQUITY WARRANTS
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Section 6.1. EQUITY WARRANTS REGISTER; EXCHANGE AND TRANSFER OF
EQUITY WARRANTS. The Equity Warrant Agent shall maintain, at its office
designated for such purpose, a register (the "EQUITY WARRANT REGISTER") in
which, upon the issuance of Equity Warrants, and, subject to such reasonable
regulations as the Equity Warrant Agent may prescribe, it shall register the
Equity Warrants, whether held in electronic book-entry or as Equity Warrant
Certificates, and exchanges and transfers thereof. The Equity Warrant
Register shall be in written form or in any other form capable of being
converted into written form within a reasonable time.
Except as provided in the following sentence and subject to restrictions on
transfer prior to the vesting of the Equity Warrants, Equity Warrants, whether
held in electronic book-entry form or represented by Equity Warrant
Certificates, may be exchanged for one or more other Equity Warrants evidencing
the same aggregate number of Equity Warrants of the same title, or may be
transferred in whole or in part. A transfer shall be registered and an
appropriate entry made in the Equity Warrant Register (i) in the case of Equity
Warrants held in electronic book-entry form, upon receipt by the Equity Warrant
Agent at its office designated for such purpose of irrevocable written
instructions for exchange or transfer, all in form satisfactory to the Company
and the Equity Warrant Agent, and (ii) in the case of Equity Warrant
Certificates, upon surrender of an Equity Warrant Certificate to the Equity
Warrant Agent at its office designated for such purpose for transfer, properly
endorsed or accompanied by appropriate instruments of transfer and written
instructions for transfer, all in form satisfactory to the Company and the
Equity Warrant Agent. Whenever an Equity Warrant Certificate is surrendered for
exchange or transfer, the Equity Warrant Agent shall countersign and deliver to
the Person or Person entitled thereto one or more Equity Warrant Certificates
duly executed by the Company, as so requested. The Equity Warrant Agent shall
not be required to effect any exchange or transfer which will result in the
issuance of a fraction of an Equity Warrant or an Equity Warrant Certificate
evidencing a fraction of an Equity Warrant. All Equity Warrants, whether issued
in electronic book-entry form or represented by Equity Warrant Certificates,
issued upon any exchange or transfer of an Equity Warrant shall be the valid
obligations of the Company, evidencing the same obligations, and entitled to the
same benefits under this Agreement, as the Equity Warrants surrendered for such
exchange or transfer.
No service charge shall be made for any exchange or transfer of Equity
Warrants, but the Company may require payment of a sum sufficient to cover any
transfer, stamp or other similar tax or other governmental charge that may be
imposed in connection with any such exchange or transfer, in accordance with
Section 2.5 hereof.
Section 6.2. TREATMENT OF HOLDERS OF EQUITY WARRANTS. Every Holder of an
Equity Warrant, by accepting the Equity Warrant Certificate evidencing the same,
consents and agrees with the Company, the Equity Warrant Agent and with every
other Holder of Equity Warrants that the Company and the Equity Warrant Agent
may treat the record holder of an Equity Warrant Certificate as the absolute
owner of such Equity Warrant for all purposes and as the Person entitled to
exercise the rights represented by such Equity Warrant.
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Section 6.3. CANCELLATION OF EQUITY WARRANT CERTIFICATES. In the event that
the Company shall purchase, redeem or otherwise acquire any Equity Warrants
after the issuance thereof, the Equity Warrant Certificate shall thereupon be
delivered to the Equity Warrant Agent and be canceled by it. The Equity Warrant
Agent shall also cancel any Equity Warrant Certificate (including any mutilated
Equity Warrant Certificate) delivered to it for exercise, in whole or in part,
or for exchange or transfer. Equity Warrant Certificates so canceled shall be
delivered by the Equity Warrant Agent to the Company from time to time, or
disposed of in accordance with the written instructions of the Company.
ARTICLE 7. CONCERNING THE EQUITY WARRANT AGENT
Section 7.1. EQUITY WARRANT AGENT. The Company hereby appoints Mellon
Investor Services LLC as Equity Warrant Agent of the Company in respect of the
Equity Warrants upon the expressed terms and conditions set forth herein; and
Mellon Investor Services LLC hereby accepts such appointment. The Equity Warrant
Agent shall have the powers and authority expressly granted to and conferred
upon it in the Equity Warrant Certificates and hereby and such further powers
and authority acceptable in writing to the Equity Warrant Agent to act on behalf
of the Company as the Company may hereafter grant to or confer upon it. All of
the terms and provisions with respect to such powers and authority contained in
the Equity Warrant Certificates are subject to and governed by the terms and
provisions hereof.
Section 7.2. CONDITIONS OF EQUITY WARRANT AGENT'S OBLIGATIONS. The Equity
Warrant Agent accepts its obligations expressly set forth herein upon the terms
and conditions hereof, including the following, to all of which the Company
agrees and to all of which the rights hereunder of the Holders shall be subject:
(a) COMPENSATION AND INDEMNIFICATION. The Company agrees promptly to
pay the Equity Warrant Agent the compensation to be set forth in EXHIBIT C
attached hereto and to reimburse the Equity Warrant Agent for reasonable
out-of-pocket expenses (including reasonable counsel fees and
disbursements) incurred by the Equity Warrant Agent in connection with the
preparation, delivery, execution, administration and amendment of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Equity Warrant Agent for, and to hold
it harmless against, any loss, liability, damage, judgment, fine, penalty,
claim, demand, settlement, cost or expenses (including without limitation,
the reasonable costs and expense of defending against any claim of
liability) incurred without gross negligence or bad faith on the part of
the Equity Warrant Agent (as each is finally determined by a court of
competent jurisdiction) for any action taken, suffered or omitted by the
Equity Warrant Agent in connection with the acceptance and administration
of this Agreement or the exercise or performance of its duties hereunder.
The indemnification and exculpation provisions provided for herein,
including, but not limited to those in Sections 7.2(a) and 7.2(b) hereof,
shall survive the termination
15
of this Agreement and the resignation or removal of the Equity Warrant
Agent. The costs and expenses incurred in enforcing this right of
indemnification shall be paid by the Company.
(b) LIABILITY OF THE EQUITY WARRANT AGENT. The Equity Warrant Agent
shall be liable hereunder only for its own gross negligence or bad faith,
as each is finally determined by a court of competent jurisdiction.
Anything to the contrary notwithstanding, in no event shall the Equity
Warrant Agent be liable for special, punitive, indirect, consequential or
incidental loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Equity Warrant Agent has been advised of the
likelihood of such loss or damage. Any liability of the Equity Warrant
Agent under this Agreement will be limited to the amount of fees paid by
the Company to the Equity Warrant Agent pursuant to this Agreement.
(c) AGENT FOR THE COMPANY. In acting under this Agreement and in
connection with any Equity Warrant Certificate, the Equity Warrant Agent is
acting solely as agent of the Company and does not assume any obligation or
relationship of agency or trust for or with any Holder.
(d) COUNSEL. The Equity Warrant Agent may consult with counsel
reasonably satisfactory to it, and the advice or opinion of such counsel
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(e) DOCUMENTS. The Equity Warrant Agent shall be fully protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in reliance upon any notice, direction, consent,
certification, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the
proper parties.
(f) OFFICER'S CERTIFICATE. The Equity Warrant Agent is hereby
authorized and directed to accept instructions with respect to the
performance of its duties hereunder, contained in a certificate signed by
any one of the Chairman, the Vice Chairman, the Chief Executive Officer,
the President, a Vice President, the Treasurer, and Assistant Treasurer,
the Secretary or an Assistant Secretary of the Company (an "OFFICER'S
CERTIFICATE") delivered by the Company to the Equity Warrant Agent, and to
apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken, suffered or
omitted by it in good faith in accordance with any Officer's Certificate or
for any delay in acting while waiting for such Officer's Certificate.
(g) ACTIONS THROUGH AGENTS. The Equity Warrant Agent may execute and
exercise any of the rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys or agents, and,
with regard to
16
acts performed through its attorneys, the Equity Warrant Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, absent gross negligence or
bad faith of the Equity Warrant Agent (as each is finally determined by a
court of competent jurisdiction) in the selection and continued employment
of such attorneys or agents.
(h) CERTAIN TRANSACTIONS. The Equity Warrant Agent, and any
stockholder, director, affiliate, officer or employee of the Equity Warrant
Agent, may become the owner of, or acquire interest in, any Equity Warrant,
with the same rights that he, she or it would have if it were not the
Equity Warrant Agent, and, to the extent permitted by applicable law, he,
she or it may engage or be interested in any financial or other transaction
with the Company and may serve on, or as depositary, trustee or agent for,
any committee or body of holders of any obligations of the Company as if it
were not the Equity Warrant Agent.
(i) NO LIABILITY FOR INTEREST. The Equity Warrant Agent shall not be
liable for interest on any monies at any time received by it pursuant to
any of the provisions of this Agreement or of the Equity Warrant
Certificates, except as otherwise agreed in writing with the Company.
(j) NO LIABILITY FOR INVALIDITY. The Equity Warrant Agent shall incur
no liability with respect to the validity of this Agreement (except as to
the due execution hereof by the Equity Warrant Agent) or any Equity Warrant
Certificate (except as to the countersignature thereof by the Equity
Warrant Agent).
(k) NO RESPONSIBILITY FOR COMPANY REPRESENTATIONS. The Equity Warrant
Agent shall not be liable or responsible for any of the recitals or
representations contained herein (except as to such statements or recitals
as describe the Equity Warrant Agent or action taken or to be taken by it)
or in any Equity Warrant Certificate (except as to the Equity Warrant
Agent's countersignature on such Equity Warrant Certificate), all of which
recitals and representations are made solely by the Company,
(l) NO IMPLIED OBLIGATIONS. The Equity Warrant Agent shall be
obligated to perform only such duties as are specifically set forth herein,
and no other duties or obligations shall be implied. The Equity Warrant
Agent shall not be under any obligation to take or omit any action
hereunder that may subject it to any expense or liability, the payment of
which is not, in its reasonable opinion, assured to it. The Equity Warrant
Agent shall not be accountable or under any duty or responsibility for the
use by the Company of any Equity Warrant Certificate countersigned by the
Equity Warrant Agent and delivered by it to the Company pursuant to this
Agreement or for the application by the Company of the proceeds of the
issuance or exercise of Equity Warrants. The Equity Warrant Agent shall
have no duty, liability or responsibility in case of any default by the
Company in the performance of its covenants or agreements contained herein
or in any Equity
17
Warrant Certificate or in case of the receipt of any written demand from a
Holder with respect to such default, including, without limiting the
generality of the foregoing, any duty or responsibility to initiate or
attempt to initiate any proceedings at law or otherwise or, except as
provided in Section 8.2 hereof, to make any demand upon the Company.
(m) INCURRENCE OF FINANCIAL LIABILITY BY EQUITY WARRANT AGENT. No
provision of this Agreement shall require the Equity Warrant Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if it reasonably believes in good faith that repayment of such funds
or adequate indemnification against such risk or liability is not
reasonably assured to it.
Section 7.3. COMPLIANCE WITH APPLICABLE LAWS. The Equity Warrant Agent
agrees to comply with all applicable federal and state laws imposing obligations
on it in respect of the services rendered by it under this Agreement and in
connection with the Equity Warrants, including (but not limited to) the
provisions of United States federal income tax laws regarding information
reporting and backup withholding.
Section 7.4. RESIGNATION AND APPOINTMENT OF SUCCESSOR.
(a) The Company agrees, for the benefit of the Holders of the Equity
Warrants, that there shall at all times be an Equity Warrant Agent hereunder
until all the Equity Warrants are no longer exercisable.
(b) The Equity Warrant Agent may at any time resign by giving written
notice to the Company of such intention on its part, specifying the date on
which its desired resignation shall become effective, subject to the appointment
of a successor Equity Warrant Agent and acceptance of such appointment by such
successor Equity Warrant Agent, as hereinafter provided. The Equity Warrant
Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying such
removal and the date when it shall become effective. Such resignation or removal
shall take effect upon the appointment by the Company, as hereinafter provided,
of a successor Equity Warrant Agent (which shall be a Person organized under the
laws of the United States of America, or one of the states thereof) and the
acceptance of such appointment by such successor Equity Warrant Agent. In the
event a successor Equity Warrant Agent has not been appointed and has not
accepted its duties within 30 days of the Equity Warrant Agent's notice of
resignation, the Equity Warrant Agent may apply to any court of competent
jurisdiction for the designation of a successor Equity Warrant Agent.
(c) In case at any time the Equity Warrant Agent shall resign, or shall be
removed, or shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or make an assignment for the benefit of its creditors or consent to
the appointment of a receiver or custodian of all or any substantial part of its
property, or shall admit in writing its inability to pay or meet its debts as
they mature, or if a receiver or custodian of it or all or
18
any substantial part of its property shall be appointed, or if any public
officer shall have taken charge or control of the Equity Warrant Agent or of its
property or affairs, for the purpose of rehabilitation, conservation or
liquidation, a successor Equity Warrant Agent, qualified as aforesaid, shall be
appointed by the Company by an instrument in writing, filed with the successor
Equity Warrant Agent. Upon the appointment as aforesaid of a successor Equity
Warrant Agent and acceptance by the latter of such appointment, the Equity
Warrant Agent so superseded shall cease to be the Equity Warrant Agent
hereunder.
(d) Any successor Equity Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an instrument
accepting such appointment hereunder, and thereupon such successor Equity
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor with like effect as if originally named as
Equity Warrant Agent hereunder, and such predecessor, upon payment of its
charges and disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over, and such successor Equity Warrant Agent shall be
entitled to receive all monies, securities and other property on deposit with or
held by such predecessor, as Equity Warrant Agent hereunder.
(e) Any Person into which the Equity Warrant Agent hereunder may be merged
or converted or any Person with which the Equity Warrant Agent may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Equity Warrant Agent shall be a party, or any Person
to which the Equity Warrant Agent shall sell or otherwise transfer all or
substantially all of the assets and business of the Equity Warrant Agent,
provided that it shall be qualified as aforesaid, shall be the successor Equity
Warrant Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto.
ARTICLE 8.
MISCELLANEOUS
Section 8.1. AMENDMENT.
(a) This Agreement and the Equity Warrants may be amended by the Company
and the Equity Warrant Agent, without the consent of the Holders of Equity
Warrants, for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective or inconsistent provision contained herein or
therein or in any other manner which the Company may deem to be necessary or
desirable and which will not materially and adversely affect the interests of
the Holders of the Equity Warrants.
(b) The Company and the Equity Warrant Agent may modify or amend this
Agreement and the Equity Warrant Certificates with the consent of the Holders of
not fewer than a majority in number of the then outstanding unexercised Equity
Warrants
19
affected by such modification or amendment, for any purpose; PROVIDED, HOWEVER,
that no such modification or amendment that shortens the period of time during
which the Equity Warrants may be exercised, or increases the per share Exercise
Price, or otherwise materially and adversely affects the exercise rights of the
holders or reduces the percentage of holders of outstanding Equity Warrants the
consent of which is required for modification or amendment of this Agreement or
the Equity Warrants, may be made without the consent of each Holder affected
thereby.
Upon request, the Company shall deliver to the Equity Warrant Agent an
Officer's Certificate which states that the proposed modification or amendment
is in compliance with the terms of this Section 8.1.
Section 8.2. NOTICES AND DEMANDS TO THE COMPANY AND EQUITY WARRANT AGENT.
If the Equity Warrant Agent shall receive any written notice or demand addressed
to the Company by any Holder pursuant to the provisions of the Equity Warrant
Certificate, the Equity Warrant Agent shall promptly forward such notice or
demand to the Company.
Section 8.3. ADDRESSES FOR NOTICES. Any communications from the Company to
the Equity Warrant Agent with respect to this Agreement shall be addressed to
Mellon Investor Services LLC, 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000,
Attention: Xxx Xxxxxx; any communications from the Equity Warrant Agent to the
Company with respect to this Agreement shall be addressed to Expedia, Inc., 0000
000xx Xxxxxx XX Xxxxxxxx, XX 00000; Attention: General Counsel; or such other
addresses as shall be specified in writing by the Equity Warrant Agent or by the
Company.
Section 8.4. GOVERNING LAW. This Agreement and the Equity Warrants shall be
governed by the laws of the State of New York applicable to contracts made and
to be performed entirely within such state.
Section 8.5. GOVERNMENTAL APPROVALS. The Company will from time to time use
all reasonable efforts to obtain and keep effective any and all permits,
consents and approvals of governmental agencies and authorities and the national
securities exchange on which the Equity Warrants may be listed or authorized for
trading from time to time and filings under the United States federal and state
laws, which may be or become requisite in connection with the issuance, sale,
trading, transfer or delivery of the Equity Warrants, and the exercise of the
Equity Warrants. The Equity Warrant Agent shall have no responsibility or
liability to inquire as to whether the Company has filled its obligations under
this Section 8.5, or to perform any such obligations whatsoever.
Section 8.6. RESERVATION OF SHARES OF COMMON STOCK. The Company covenants
that it will at all times reserve and keep available, free from preemptive
rights (other than such rights as do not affect the ownership of shares issued
to a Holder), out of the aggregate of its authorized but unissued shares of
Common Stock or its issued shares of Common Stock held in its treasury, or both,
for the purpose of effecting exercises of Equity Warrants, the full number of
shares of Common Stock deliverable upon the exercise of all outstanding Equity
Warrants not theretofore exercised and on or before
20
taking any action that would cause an adjustment resulting in an increase in the
number of shares of Common Stock deliverable upon exercise above the number
thereof previously reserved and available therefor, the Company shall take all
such action so required. For purposes of this Section 8.6, the number of shares
of Common Stock which shall be deliverable upon the exercise of all outstanding
Equity Warrants shall be computed as if at the time of computation all
outstanding Equity Warrants were held by a single holder. Before taking any
action which would cause an adjustment reducing the price per share of Common
Stock issued upon exercise of the Equity Warrants below the then par value (if
any) of such shares of Common Stock, the Company shall take any corporate action
which may, in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue fully paid and non-assessable shares of Common
Stock at such Exercise Price.
Section 8.7. COVENANT REGARDING SHARES OF COMMON STOCK. All shares of
Common Stock which may be delivered upon exercise of the Equity Warrants will
upon delivery be duly and validly issued and fully paid and non-assessable, free
of all liens and charges and not subject to any preemptive rights (other than
rights which do not affect the Holder's right to own the shares of Common Stock
to be issued), and prior to the Exercise Date the Company shall take any
corporate action necessary therefor. The issuance of all such shares of Common
Stock shall, to the extent permitted by law, be registered under the Securities
Act of 1933, as amended.
Section 8.8. PERSONS HAVING RIGHTS UNDER AGREEMENT. Nothing in this
Agreement expressed or implied and nothing that may be inferred from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any Person other than the Company, the Equity Warrant Agent and the Holders
any right, remedy or claim under or by reason of this Agreement or of any
covenant, condition, stipulation, promise or agreement hereof, and all
covenants, conditions, stipulations, promises and agreements in this Agreement
contained shall be for the sole and exclusive benefit of the Company and the
Equity Warrant Agent and their successors and of the Holders of Equity Warrant
Certificates.
Section 8.9. DELIVERY OF PROSPECTUS. The Company will furnish to the Equity
Warrant Agent sufficient copies of a prospectus or prospectuses relating to the
Common Stock deliverable upon exercise of any outstanding Equity Warrants (each
a "PROSPECTUS"), and the Equity Warrant Agent agrees to deliver to the Holder of
the Equity Warrant, prior to or concurrently with the delivery of the Common
Stock issued upon the exercise thereof, a copy of the Prospectus relating to
such Common Stock.
Section 8.10. HEADINGS. The descriptive headings of the several Articles
and Sections and the Table of Contents of this Agreement are for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
Section 8.11. COUNTERPARTS. This Agreement may be executed by the parties
hereto in any number of counterparts, each of which when so executed and
delivered
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shall be deemed to be an original; but all such counterparts shall together
constitute but one and the same instrument.
Section 8.12. INSPECTION OF AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the office of the Equity Warrant Agent, for
inspection by the Holders of Equity Warrants.
Section 8.13. COMPLIANCE WITH EXPEDIA, INC. 2001 STOCK PLAN. Except as
specifically provided in this Agreement, the Equity Warrants shall be subject to
the terms and conditions of the Expedia, Inc. 2001 Stock Plan (as amended, the
"Plan"); PROVIDED, HOWEVER, that the Equity Warrant Agent has no responsibility
or obligation to comply with the Plan, or to verify or investigate whether the
Equity Warrants do in fact comply with or are subject to the terms of the Plan.
Section 8.14. WITHHOLDING.
(a) The Holder may satisfy, in whole or in part, any required tax
withholding obligation (but no more than the minimum required withholding
obligation) by delivery of Common Stock owned by the Holder (which is not
subject to any pledge or other security interest) with a Fair Market Value (as
defined in the Plan) equal to such withholding obligation or, in the case of a
tax withholding obligation arising from an exercise of an Equity Warrant, by
having the Company withhold from the number of shares of Common Stock otherwise
issuable pursuant to the exercise of the Equity Warrant a number of shares of
Common Stock with a Fair Market Value equal to such withholding obligation.
(b) Notwithstanding the foregoing, any required tax withholding obligation
(but no more than the minimum required withholding obligation) arising from the
vesting of an Equity Warrant shall be satisfied solely through the withholding
by the Company from the number of newly vested Equity Warrants held by the
Holder a number of such Equity Warrants having a value equal to such withholding
obligation, based on the closing price of an Equity Warrant on the Nasdaq
National Market (or other established stock exchange or national market system
on which such Equity Warrants are listed or traded) on the trading day prior to
the date of vesting.
[Remainder of page left intentionally blank]
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
EXPEDIA, INC.
By:
/s/ XXXXXX XXXXXX
_____________________________________________
Xxxxxx Xxxxxx
Senior Vice President,
General Counsel & Secretary
MELLON INVESTOR SERVICES LLC,
AS EQUITY WARRANT AGENT
By /s/AUTHORIZED
REPRESENTATIVE
____________________________________________
Name:
Title:
23
EXHIBIT A
SPECIMEN
FACE
30212P 12 1 EQUITY
WARRANTS
EQUITY WARRANT CERTIFICATE
EXPEDIA, INC.
This Warrant Certificate certifies that or
registered assigns, is the registered Holder of Equity Warrants (the "Equity
Warrants") to purchase Common Stock, par value $0.001 per share, of Expedia,
Inc., a Delaware corporation (the "Company"). Each Equity Warrant entitles the
Holder to purchase from the Company .969375 fully paid and non-assessable shares
of Common Stock, par value $0.001 per share, of the Company ("Common Stock") at
any time on or before 5:00 p.m. New York City time February 4, 2009, at the
exercise price (the "Exercise Price") of $11.56 payable in lawful money of the
United States of America upon surrender of this Equity Warrant Certificate and
payment of the Exercise Price at the office or agency of the Equity Warrant
Agent, upon such terms and conditions set forth herein and in the Optionholder
Equity Warrant Agreement (as hereinafter defined). Payment of the Exercise Price
must be made in lawful money of the United States of America, in cash or by
certified check or bank draft or bank wire transfer payable to the order of the
Company. The number of shares which may be purchasable upon exercise of the
Equity Warrants is subject to adjustment upon the occurrence of certain events
set forth in the Optionholder Equity Warrant Agreement. No fractional shares or
scrip representing fractions of shares of Common Stock shall be issued upon
exercise of the Equity Warrants.
By acceptance of this Equity Warrant Certificate, each Holder agrees to be
bound by the terms of the Optionholder Equity Warrant Agreement.
Reference is hereby made to the further provisions of this Equity Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
Capitalized defined terms used herein have the same meaning as in the
Optionholder Equity Warrant Agreement.
This Equity Warrant Certificate shall not be valid unless countersigned by
the Equity Warrant Agent, as such term is used in the Optionholder Equity
Warrant Agreement.
IN WITNESS WHEREOF, Expedia, Inc. has caused this Equity Warrant
Certificate to be duly executed under its corporate seal.
EXPEDIA, INC.
By:
_______________________________________
Name:
Title:
Attest:
_______________________________
Countersigned:
MELLON INVESTOR SERVICES LLC,
as Equity Warrant Agent
By
___________________________
Authorized Signature
Name:
Title:
REVERSE
EQUITY WARRANT CERTIFICATE
EXPEDIA, INC.
The Equity Warrants evidenced by this Equity Warrant Certificate are part
of a duly authorized issue of Equity Warrants issued pursuant to a Optionholder
Equity Warrant Agreement dated as of August 9, 2005 (the "Optionholder Equity
Warrant Agreement"), duly executed and delivered by the Company to Mellon
Investor Services LLC, a New Jersey limited liability company, as Equity Warrant
Agent (the "Equity Warrant Agent"), which Optionholder Equity Warrant Agreement
is hereby incorporated by reference in and made a part of this instrument and is
hereby referred to for a description of the rights, limitation of rights,
obligations, duties and immunities thereunder of the Equity Warrant Agent, the
Company and the Holders (the words "Holders" or "Holder" meaning the registered
Holders or registered Holder) of the Equity Warrants.
Equity Warrants evidenced by this Equity Warrant Certificate may be
exercised to purchase shares of Common Stock of the Company, par value $0.001
per share ("Common Stock"), subject to such terms and conditions as are set
forth in the Optionholder Equity Warrant Agreement, at any time on or before
5:00 p.m. New York City time on February 4, 2009, at the Exercise Price set
forth on the face hereof. Each Equity Warrant not exercised on or prior to the
Expiration Date shall become void, and all rights of the Holder of such Equity
Warrant hereunder and under the Optionholder Equity Warrant Agreement shall
cease. The issuance of shares upon the exercise of this Equity Warrant and/or
the transfer of this Equity Warrant shall be subject to the receipt by the
Company of all applicable withholding taxes.
The Holder of Equity Warrants evidenced by this Equity Warrant Certificate
may exercise them by surrendering the Equity Warrant Certificate, with the form
of election to purchase set forth hereon properly completed and executed,
together with payment of the Exercise Price at the office of the Equity Warrant
Agent. In the event that upon any exercise of Equity Warrants evidenced hereby
the number of Equity Warrants exercised shall be less than the total number of
Equity Warrants evidenced hereby, there shall be issued to the Holder hereof or
his assignee a new Equity Warrant Certificate evidencing the number of Equity
Warrants not exercised. Nothing contained in the Optionholder Equity Warrant
Agreement or in this Equity Warrant Certificate shall be construed as conferring
upon the Holders thereof the right to vote, to receive dividends or other
distributions, to exercise any preemptive right or to consent or to receive
notice as stockholders in respect of meetings of stockholders for the election
of Directors of the Company or any other matter, or any other rights whatsoever
as shareholders of the Company.
The Optionholder Equity Warrant Agreement provides that upon the occurrence
of certain events, the number of shares of Common Stock issuable upon exercise
of an Equity Warrant may, subject to certain conditions, be adjusted.
Equity Warrant Certificates, when surrendered at the office of the Equity
Warrant Agent by the registered Holder thereof in person or by a legal
representative duly authorized in writing or by registered mail, return receipt
requested, may be exchanged, in the manner and subject to the limitations
provided in the Optionholder Equity Warrant Agreement, but without payment of
any service charge, for another Equity Warrant Certificate or Equity Warrant
Certificates of like tenor evidencing in the aggregate a like number of Equity
Warrants and registered in the name of such registered Holder.
Upon due presentment for registration of transfer of this Equity Warrant
Certificate at the office of the Equity Warrant Agent or by registered mail,
return receipt requested, a new Equity Warrant Certificate or Equity Warrant
Certificates of like tenor and evidencing in the aggregate a like number of
Equity Warrants shall be issued to the transferee(s) in exchange for this Equity
Warrant Certificate, subject to the limitations provided in the Optionholder
Equity Warrant Agreement, without charge except for any applicable withholding
taxes and any transfer, stamp or similar tax or other governmental charge
imposed in connection therewith.
The Company and the Equity Warrant Agent may deem and treat the registered
Holder(s) hereof as the absolute owner(s) of this Equity Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, and of any distribution to the
Holder(s) hereof, and for all other purposes, and neither the Company nor the
Equity Warrant Agent shall be affected by any notice (other than a duly
presented registration of transfer in accordance with the previous paragraph) to
the contrary and shall not be bound to recognize any equitable or other claim to
or interest in such Equity Warrant on the part of any other person.
EXPEDIA, INC. ELECTION TO PURCHASE
EXPEDIA, INC.
000xx Xxxxxx XX
Xxxxxxxx, XX 00000
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by this Equity Warrant Certificate for Equity Warrants, and to
purchase thereunder the shares of Common Stock (the "Shares") provided for
therein, and requests that certificates for the Shares be issued in the name of:
______________________________________________________________________________
(Please Print Name, Address and Social Security Number)
If said number of Equity Warrants to be exercised shall not be all of the Equity
Warrants evidenced by this Equity Warrant Certificate, the undersigned requests
that a new Equity Warrant Certificate for the balance of the Equity Warrants be
registered in the name of the undersigned or his Assignee as below indicated and
delivered to the address stated below:
Dated: __________________, 200_
Name of Equity Warrant Holder
or Assignee (Please Print): ____________________________________________
Address: ____________________________________________
Signature: ____________________________________________
(Signature must conform to
name of Holder as specified on
the face of the Equity Warrant
Certificate)
Signature Guaranteed:
_______________________________________________________________________________
Signature of Guarantor
ASSIGNMENT
(To be executed by the registered Holder
if such Holder desires to transfer
Equity Warrants)
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
______________________________________________________________________________
(Print name and address of transferee)
Equity Warrants, evidenced by this Equity Warrant Certificate,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint Attorney, to transfer the Equity Warrant
Certificate on the books of the Company, with full power of substitution. If
said number of Equity Warrants to be transferred shall not be all of the Equity
Warrants evidenced by this Equity Warrant Certificate, the assignor and assignee
agree that such Attorney shall submit this Equity Warrant Certificate to the
Company and request that New Equity Warrant Certificates for the applicable
number of Equity Warrants be registered in the names of the undersigned as below
indicated and delivered to the addresses below:
Dated: Signature:
_____________________________ _____________________________________________
(Insert Social Security or (Signature must conform to
Identifying Number of Assignee) name of holder as specified
on the face of the Equity
Warrant Certificate)
Address of Assignor (if _____________________________________________
necessary):
Address of Assignee (if necessary): _________________________________________
Signature Guaranteed:
____________________________
Signature of Guarantor
EXHIBIT B
EXPEDIA, INC.
NOTICE OF PURCHASE
EXPEDIA, INC.
000xx Xxxxxx XX
Xxxxxxxx, XX 00000
The undersigned hereby irrevocably elects to exercise the right of purchase
shares of the common stock, par value $0.001 per share, of Expedia, Inc.
("Common Stock") pursuant to the terms of the Optionholder Equity Warrant
Agreement (the "Optionholder Equity Warrant Agreement"), dated as of August 9,
2005, duly executed and delivered by Expedia, Inc., a Delaware corporation (the
"Company"), to Mellon Investor Services LLC, a New Jersey limited liability
company, as Equity Warrant Agent, which Optionholder Equity Warrant Agreement is
hereby incorporated by reference and made a part of this instrument and is
hereby referred to for a description of the rights, limitation of rights,
obligations, duties and immunities thereunder of the Equity Warrant Agent, the
Company and the Holders (as defined in the Optionholder Equity Warrant
Agreement) of the Equity Warrants (as defined in the Optionholder Equity Warrant
Agreement), and tenders herewith payment of the purchase price in full, together
with all applicable transfer, stamp or similar taxes, if any.
Please issue a certificate or certificates representing the shares of
Common Stock indicated above in the name of the undersigned or in such other
name as is specified below:
(Please Print Name, Address and Social Security Number)
Dated:___________________, 200_
Name of Equity Warrant
Holder (Please Print): _______________________________________
Address: _______________________________________________________________
Signature: _______________________________________________________________
