EXHIBIT 4.2
EQUITY WARRANT AGREEMENT
dated as of August 9, 2005
for
WARRANTS TO PURCHASE
UP TO 14,590,514 SHARES OF COMMON STOCK
EXPIRING FEBRUARY 4, 2009
between
EXPEDIA, INC.
and
THE BANK OF NEW YORK, as
Equity Warrant Agent
TABLE OF CONTENTS
PAGE
Article 1. Definitions........................................... 2
Article 2. Issuance of Equity Warrants and Execution and
Delivery of Equity Warrant Certificates............... 3
2.1. Issuance of Equity Warrants........................... 3
2.2. Form and Execution of Equity Warrant Certificates..... 3
2.3. Issuance and Delivery of Equity Warrant Certificates.. 4
2.4. Temporary Equity Warrant Certificates................. 5
2.5. Payment of Taxes...................................... 5
Article 3. Duration and Exercise of Equity Warrants.............. 5
3.1. Exercise Price........................................ 5
3.2. Duration of Equity Warrants........................... 6
3.3. Exercise of Equity Warrants........................... 6
Article 4. Adjustments of Number of Shares....................... 7
4.1. Adjustments........................................... 7
4.2. Statement on Warrants................................. 9
4.3. Cash Payments in Lieu of Fractional Shares............ 10
4.4. Notices to Warrantholders............................. 10
Article 5. Other Provisions Relating to Rights of Holders of
Equity Warrants....................................... 10
5.1. No Rights as Holder of Common Stock Conferred by
Equity Warrants or Equity Warrant Certificates........ 10
5.2. Lost, Stolen, Destroyed or Mutilated Equity Warrant
Certificates.......................................... 11
5.3. Holders of Equity Warrants May Enforce Rights......... 11
5.4. Consolidation or Merger or Sale of Assets............. 14
Article 6. Exchange and Transfer of Equity Warrants.............. 12
6.1. Equity Warrant Register; Exchange and Transfer of
Equity Warrants....................................... 12
6.2. Treatment of Holders of Equity Warrants............... 13
6.3. Cancellation of Equity Warrant Certificates........... 13
Article 7. Concerning the Equity Warrant Agent................... 13
7.1. Equity Warrant Agent.................................. 13
7.2. Conditions of Equity Warrant Agent's Obligations...... 13
7.3. Compliance with Applicable Laws....................... 15
7.4. Resignation and Appointment of Successor.............. 16
Article 8. Miscellaneous......................................... 17
8.1. Amendment............................................. 17
8.2. Notices and Demands to the Company and Equity
Warrant Agent......................................... 17
8.3. Addresses for Notices................................. 18
8.4. Governing Law......................................... 18
8.5. Governmental Approvals................................ 18
8.6. Reservation of Shares of Common Stock................. 18
8.7. Covenant Regarding Shares of Common Stock............. 18
8.8. Persons Having Rights Under Agreement................. 19
8.9. Delivery of Prospectus................................ 19
8.10. Headings.............................................. 19
8.11. Counterparts.......................................... 19
8.12. Inspection of Agreement............................... 19
THIS EQUITY WARRANT AGREEMENT (the "AGREEMENT"), dated as of August 9,
2005, between Expedia, Inc., a Delaware corporation ("EXPEDIA" or the
"COMPANY"), and Bank of New York, a New York corporation, 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 Equity Warrant Agreement, by and between IAC (f/k/a USA
Networks, Inc.) and The Bank of New York, dated as of February 4, 2002 (the
"2002 IAC WARRANT AGREEMENT"), pursuant to which certain warrants were issued
(the "2002 IAC WARRANTS").
WHEREAS, in accordance with the terms of the Separation Agreement,
following the completion of the Spin-Off, each 2002 IAC Warrant will convert
into a warrant to purchase one half of one share of IAC Common Stock at an
exercise price of $19.49 (the "NEW IAC WARRANTS") and a warrant to purchase one
half of one share of Expedia Common Stock at an exercise price of $15.61 (the
"EQUITY WARRANTS"). The form and terms of the Equity Warrants shall mirror, in
all material respects, those of the 2002 IAC Warrants, in each case, as set
forth in detail in the 2002 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
"2002 IAC WARRANT AGREEMENT" shall have the meaning set forth in the
recitals.
"2002 IAC WARRANTS" shall have the meaning set forth in the recitals.
"AGREEMENT" shall have the meaning set forth in the recitals.
"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 mean common stock, par value $0.001 per share, of
Expedia.
"COMPANY" shall have the meaning set forth in the recitals.
"CURRENT MARKET PRICE" shall have the meaning set forth in Section
4.1(d).
"EQUITY WARRANT REGISTER" shall have the meaning set forth in Section
6.1.
"EQUITY WARRANT AGENT" shall have the meaning set forth in the recitals.
"EQUITY WARRANTS" shall have the meaning set forth in the recitals.
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"EXERCISE DATE" shall have the meaning set forth in 3.3(a).
"EXERCISE PRICE" shall have the meaning set forth in Section 3.1.
"EXPEDIA" shall have the meaning set forth in the recitals.
"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.
"IAC" shall have the meaning set forth in the recitals.
"NEW IAC WARRANTS" shall have the meaning set forth in the recitals.
"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(e).
"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.
"SPIN-OFF" shall have the meaning set forth in the recitals.
"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.
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ISSUANCE OF EQUITY WARRANTS AND EXECUTION AND
DELIVERY OF EQUITY WARRANT CERTIFICATES
2.1. ISSUANCE OF EQUITY WARRANTS. Equity Warrants may be issued by the
Company from time to time, together with or separately from the other equity
securities of the Company.
2.2. FORM AND EXECUTION OF EQUITY WARRANT CERTIFICATES.
(a) 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. 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, 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.
(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
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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.
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.
2.4. TEMPORARY EQUITY WARRANT CERTIFICATES. Pending the preparation of a
definitive Equity Warrant Certificate, the Company may execute, and upon the
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, 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 corporate trust office of the Equity Warrant Agent. 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. 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.
2.5. PAYMENT OF TAXES. The Company will pay all stamp and other duties, 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 stamp or other 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 or other charge shall
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have been paid or it has been established to the Company's satisfaction that no
such tax or other charge is due.
ARTICLE 3.
DURATION AND EXERCISE OF EQUITY WARRANTS
3.1. EXERCISE PRICE. Each Equity Warrant shall entitle the Holder
thereof to purchase one half of one share of Common Stock for $15.61 (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.
3.2. DURATION OF EQUITY WARRANTS. Each Equity Warrant may be exercised
at any time up to the Expiration Date. Each Equity Warrant not exercised at or
before the Expiration Date shall become void, and all rights of the Holder of
such Equity Warrant thereunder and under this Agreement shall cease.
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 one half of one share 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, an Equity Warrant may be exercised by completing the form of
election to purchase set forth on the reverse side of the Equity Warrant
Certificate, 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. 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.
(c) Unless the Equity Warrant Agent and the Company agree otherwise, the
Equity Warrant Agent shall deposit all funds received by it in payment of the
Equity Warrant Price for Equity Warrants in the 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 its account.
The Equity Warrant Agent shall promptly confirm such telephone advice in writing
to the Company.
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(d) The Equity Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company of (i) the number of Equity Warrants exercised
as provided herein, (ii) the instructions of each Holder of such Equity Warrants
with respect to 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 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
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 (A) pay a dividend or make a distribution
on its Common Stock in shares of Common Stock, (B) subdivide its outstanding
shares of Common Stock into a greater number of shares, (C) combine its
outstanding shares of Common Stock into a smaller number of shares, or (D) 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 4.1(a) shall become effective
immediately after the record date, 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
4.1(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 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) 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 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
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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 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).
(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 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 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, as appropriate) of the portion of the
capital
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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 stockholders 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 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 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.
4.2. STATEMENT ON WARRANTS. Irrespective of any adjustment in the amount
of Common Stock issued upon exercise of an Equity Warrant, Equity Warrants
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.
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
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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 upon
exercise thereof shall be computed on the basis of the aggregate number of
shares of Common Stock issuable. 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.
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 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.
ARTICLE 5.
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS
OF EQUITY WARRANTS
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.
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) reasonably 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 payment of a
sum sufficient to cover any stamp or other 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
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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.
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.
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 Company's 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 U.S. jurisdiction so long as in such
transaction each Equity Warrant shall convert into an equity security of the
successor to the Company having identical rights as the Equity Warrant. If a
Sale Transaction occurs, then lawful provision shall be made by the corporation
formed by such Sale Transaction or the corporation 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 corporation 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 USA, in lieu of the foregoing, USA 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, other than as set forth in
this Section 5.4, 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 our
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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
6.1. EQUITY WARRANT REGISTER; EXCHANGE AND TRANSFER OF EQUITY WARRANTS.
The Equity Warrant Agent shall maintain, at its corporate trust office at 000
Xxxxxxx Xxxxxx, Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000; Attention: Stock Transfer
Administration, 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 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, upon surrender at the
corporate trust office of the Equity Xxxxxxx Xxxxx, Xxxx Xxxxxxxx, Xxx Xxxxxx
00000, Equity Warrant Certificates may be exchanged for one or more other Equity
Warrant Certificates 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 upon
surrender of an Equity Warrant Certificate to the Equity Warrant Agent at its
corporate trust office, 000 Xxxxxxx Xxxxxx, Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000;
Attention: Stock Transfer Administration, 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 an Equity
Warrant Certificate evidencing a fraction of an Equity Warrant. All Equity
Warrant Certificates issued upon any exchange or transfer of an Equity Warrant
Certificate shall be the valid obligations of the Company, evidencing the same
obligations, and entitled to the same benefits under this Agreement, as the
Equity Warrant Certificate 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
tax or other governmental charge that may be imposed in connection with any such
exchange or transfer, in accordance with Section 2.5 hereof.
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
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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.
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 instructions of the Company.
ARTICLE 7.
CONCERNING THE EQUITY WARRANT AGENT
7.1. EQUITY WARRANT AGENT. The Company hereby appoints The Bank of New
York as Equity Warrant Agent of the Company in respect of the Equity Warrants
upon the terms and subject to the conditions set forth herein; and The Bank of
New York hereby accepts such appointment. The Equity Warrant Agent shall have
the powers and authority granted to and conferred upon it in the Equity Warrant
Certificates and hereby and such further powers and authority acceptable to it
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.
7.2. CONDITIONS OF EQUITY WARRANT AGENT'S OBLIGATIONS. The Equity
Warrant Agent accepts its obligations 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 to pay the Equity
Warrant Agent from time to time such compensation for its services as the
Company and the Equity Warrant shall agree in writing and to reimburse the
Equity Warrant Agent for reasonable out-of-pocket expenses (including reasonable
counsel fees) incurred by the Equity Warrant Agent in connection with the
services rendered hereunder by the Equity Warrant Agent. The Company also agrees
to indemnify the Equity Warrant Agent for, and to hold it harmless against, any
loss, liability or expenses (including the reasonable costs and expense of
defending against any claim of liability) incurred without negligence or bad
faith on the part of the Equity Warrant Agent arising out of or in connection
with its appointment as Equity Warrant Agent hereunder.
(b) 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.
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(c) COUNSEL. The Equity Warrant Agent may consult with counsel
reasonably satisfactory to it, and the advice 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 of
such counsel.
(d) DOCUMENTS. The Equity Warrant Agent shall be 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.
(e) OFFICER'S CERTIFICATE. Whenever in the performance of its duties
hereunder the Equity Warrant Agent shall reasonably deem it necessary that any
fact or matter be proved or established by the Company prior to taking,
suffering or omitting any action hereunder, the Equity Warrant Agent may (unless
other evidence in respect thereof be herein specifically prescribed), in the
absence of bad faith on its part, rely upon a certificate signed by 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.
(f) 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, provided,
however, that reasonable care shall be exercised in the selection and continued
employment of such attorneys and agents.
(g) CERTAIN TRANSACTIONS. The Equity Warrant Agent, and any officer,
director or employee thereof, 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.
(h) 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 with the Company.
(i) 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).
(j) NO RESPONSIBILITY FOR COMPANY REPRESENTATIONS. The Equity Warrant
Agent shall not be 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
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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.
(k) 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 any action hereunder that may subject it to any
expense or liability, the payment of which within a reasonable time 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 or responsibility in case of any
default by the Company in the performance of its covenants or agreements
contained herein or in any Equity 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.
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. The Equity Warrant Agent expressly assumes all liability for its
failure to comply with any such laws imposing obligations on it, including (but
not limited to) any liability for failure to comply with any applicable
provisions of United States federal income tax laws regarding information
reporting and backup withholding.
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 as such agent 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 banking
institution organized under the laws of the United States of America, or one of
the states thereof and having an office or an agent's office in the Borough of
Manhattan, the City of New York) and the acceptance of such appointment by such
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successor Equity Warrant Agent. In the event a successor Equity Warrant Agent
has not been appointed and has not accepted its duties within 90 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 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 moneys, securities and other property on deposit with or
held by such predecessor, as Equity Warrant Agent hereunder.
(e) Any corporation into which the Equity Warrant Agent hereunder may be
merged or converted or any corporation with which the Equity Warrant Agent may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Equity Warrant Agent shall be a party, or any
corporation 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
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
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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 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.
8.2. NOTICES AND DEMANDS TO THE COMPANY AND EQUITY WARRANT AGENT. If the
Equity Warrant Agent shall receive any 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.
8.3. ADDRESSES FOR NOTICES. Any communications from the Company to the
Equity Warrant Agent with respect to this Agreement shall be addressed to The
Bank of New York, 000 Xxxxxxx Xxxxxx, Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000;
Attention: Stock Transfer Administration; 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.
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.
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.
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 taking any action that would cause an
adjustment resulting in an
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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.
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.
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 or corporation 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.
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.
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.
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
shall be deemed to be an original; but all such counterparts shall together
constitute but one and the same instrument.
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8.12. INSPECTION OF AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the
Equity Warrant Agent, for inspection by the Holders of Equity Warrants.
-19-
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 X. XXXXXX
--------------------------------------
Xxxxxx X. Xxxxxx
Senior Vice President, General Counsel
& Secretary
THE BANK OF NEW YORK
By: /s/ XXXX XX XXXX
--------------------------------------
Xxxx Xx Xxxx
Assistant Treasurer
-20-
EXHIBIT A
SPECIMEN
30212P 11 3
FACE
No. W __ 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 one half of one fully paid and
non-assessable share 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 on
February 4, 2009, at the exercise price (the "Exercise Price") of $15.61 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 Warrant Agent in the City of New York, the State of New York, upon such
conditions set forth herein and in the 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 and the Exercise Price
is each subject to adjustment upon the occurrence of certain events set forth in
the Equity Warrant Agreement.
By acceptance of this Equity Warrant Certificate, each Holder agrees
to be bound by the terms of the 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
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 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: /S/
------------------------------
Attest:
----------------
Countersigned:
The Bank of New York, as Equity Warrant Agent
By
-------------------------------------
Authorized Signature
-2-
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 Warrant
Agreement dated as of August 9, 2005 (the "Equity Warrant Agreement"), duly
executed and delivered by the Company to The Bank of New York (the "Equity
Warrant Agent"), which 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 may be exercised to purchase shares of Common Stock
of the Company, par value $.001 per share ("Common Stock") upon such terms and
conditions as are set forth in the 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. 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 City of New York in the State of New
York. 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 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
shareholders in respect of meetings of shareholders for the election of
Directors of the Company or any other matter, or any other rights whatsoever as
shareholders of the Company.
The 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 in the City of New York in the State of New York 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 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 in the City of New
York in the State of New
York 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 Equity Warrant Agreement, without charge except for any 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.
-2-
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
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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):
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Address:
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Signature:
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(Signature must conform to name of Holder as specified on the
face of the Equity Warrant Certificate)
Signature Guaranteed:
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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
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(Print name and address of transferee)
Equity Warrants, evidenced by this Equity Warrant Certificate, together
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with all right, title and interest therein, and does hereby irrevocably
constitute and appoint Attorney, to transfer the
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within 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:
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(Insert Social Security or (Signature must conform to name
Identifying Number of of holder as specified on the face
Assignee) of the Equity Warrant Certificate)
Address of Assignor (if necessary):
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Address of Assignee (if necessary):
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Signature Guaranteed:
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Signature of Guarantor
