EXHIBIT 4.4
SHAREHOLDER EQUITY WARRANT AGREEMENT
dated as of _____________, 2001
for
WARRANTS TO PURCHASE
UP TO _________ SHARES OF COMMON STOCK
between
EXPEDIA, INC.
and
MELLON INVESTOR SERVICES LLC, as
Equity Warrant Agent
TABLE OF CONTENTS
PAGE
Article 1. Definitions.......................................................1
Article 2. Issuance of Equity Warrants and Execution And Delivery of Equity
Warrant Certificates...................................................3
Section 2.1 Issuance of Equity Warrants................................3
Section 2.2 Form and Execution of Equity Warrant Certificates..........3
Section 2.3 Issuance and Delivery of Equity Warrant Certificates.......4
Section 2.4 Temporary Equity Warrant Certificates......................4
Section 2.5 Payment of Taxes...........................................4
Article 3. Duration and Exercise of Equity Warrants..........................5
Section 3.1 Exercise Price.............................................5
Section 3.2 Duration of Equity Warrants................................5
Section 3.3 Exercise of Equity Warrants................................5
Article 4. Adjustments of Number of Shares...................................6
Section 4.1 Adjustments................................................6
Section 4.2 Statement on Warrants......................................8
Section 4.3 Cash Payments in Lieu of Fractional Shares.................8
Section 4.4 Notices to Warrantholders..................................9
Article 5. Other Provisions Relating to Rights of Holders of Equity
Warrants...............................................................9
Section 5.1 No Rights as Holder of Common Stock Conferred by Equity
Warrants or Equity Warrant Certificates..........................9
Section 5.2 Lost, Stolen, Destroyed or Mutilated Equity Warrant
Certificates.....................................................9
Section 5.3 Holders of Equity Warrants May Enforce Rights.............10
Section 5.4 Consolidation or Merger or Sale of Assets.................10
Article 6. Exchange and Transfer of Equity Warrants.........................11
Section 6.1 Equity Warrant Register; Exchange and Transfer of
Equity Warrants.................................................11
Section 6.2 Treatment of Holders of Equity Warrants...................11
Section 6.3 Cancellation of Equity Warrant Certificates...............12
Article 7. Concerning the Equity Warrant Agent..............................12
Section 7.1 Equity Warrant Agent......................................12
Section 7.2 Conditions of Equity Warrant Agent's Obligations..........12
Section 7.3 Compliance with Applicable Laws...........................14
i
Section 7.4 Resignation and Appointment of Successor..................15
Article 8. Miscellaneous....................................................16
Section 8.1 Amendment.................................................16
Section 8.2 Notices and Demands to the Company and Equity Warrant
Agent...........................................................16
Section 8.3 Addresses for Notices.....................................16
Section 8.4 Governing Law.............................................17
Section 8.5 Governmental Approvals....................................17
Section 8.6 Reservation of Shares of Common Stock.....................17
Section 8.7 Covenant Regarding Shares of Common Stock.................17
Section 8.8 Persons Having Rights Under Shareholder Equity Warrant
Agreement.......................................................18
Section 8.9 Delivery of Prospectus....................................18
Section 8.10 Headings.................................................18
Section 8.11 Counterparts.............................................18
Section 8.12 Inspection of Agreement..................................18
ii
THIS SHAREHOLDER EQUITY WARRANT AGREEMENT (the "AGREEMENT"), dated
as of ______________2001, between Expedia, Inc., a Washington corporation (the
"COMPANY"), and Mellon Investor Services LLC, a New Jersey limited liability
company, as warrant agent (the "EQUITY WARRANT AGENT").
WHEREAS, pursuant to the Amended and Restated Agreement and Plan of
Recapitalization and Merger, by and among USA Networks, Inc., the Company,
Taipei, Inc. ("TAIPEI"), Microsoft Corporation, and Microsoft E-Holdings, Inc.,
dated as of July 15, 2001 (the "MERGER AGREEMENT"), each Company shareholder who
retains its shares of common stock, par value $.01 per share, of the Company
(the "COMMON STOCK") in the recapitalization will be entitled to receive, in
connection with the merger of Taipei with and into the Company, for each
retained share of Common Stock, 0.1920 of a warrant, each full warrant (an
"EQUITY WARRANT", and collectively, the "EQUITY WARRANTS") representing the
right to purchase one share of Common Stock, such Equity Warrants to be
evidenced by certificates herein called the "EQUITY WARRANT CERTIFICATES";
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 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
"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
1
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 CERTIFICATE" shall have the meaning set forth in the
recitals hereto.
"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).
"EXERCISE PRICE" shall have the meaning set forth in Section 3.1.
"EXPIRATION DATE" means 5:00 p.m. New York City time on the seventh
anniversary of the Effective Time (as defined in the Merger Agreement).
"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.
"MERGER" means the merger contemplated by and referred to in the
Merger Agreement.
"MERGER AGREEMENT" 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(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.
"TIME OF DETERMINATION" shall have the meaning set forth in Section
4.1(d).
2
"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 may be
issued by the Company from time to time.
SECTION 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, which do not change the 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.
(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
3
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.
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 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
4
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 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
SECTION 3.1 EXERCISE PRICE. Each Equity Warrant shall entitle the
Holder thereof to purchase one share of Common Stock for $52.00 (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 EQUITY WARRANTS. Each Equity Warrant may be
exercised at any time up to the Expiration Date. 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 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 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 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.
(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 promptly
confirm such telephone advice in writing to the Company.
5
(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 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 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 (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 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 4.1(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 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 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
6
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, 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 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 and the Equity Warrant Agent, as
7
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 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 (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 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
8
Equity Warrants. If more than one share of 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 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 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
9
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.
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 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. 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 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 our 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.
10
ARTICLE 6.
EXCHANGE AND TRANSFER OF EQUITY WARRANTS
SECTION 6.1 EQUITY WARRANT 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 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
office of the Equity Warrant Agent designated for such purpose, 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 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 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.
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.
11
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 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 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.
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 B
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 Warrant Agent in connection with the acceptance and
administration of this Agreement or the exercise or performance of its duties
hereunder. The indemnity provided herein shall survive the termination of this
Agreement and the resignation or removal of the Warrant Agent. The costs and
expenses incurred in enforcing this right of indemnification shall be paid by
the Company.
(b) LIABILITY OF THE 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
12
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 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 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
13
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 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. The Equity Warrant Agent
expressly assumes all liability for its failure to comply with any such laws
14
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.
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 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.
15
(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 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.
(c) Upon request, the Company shall deliver to the Equity Warrant
Agent an Officers 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., 00000 XX Xxxxxxxx Xxx, Xxxxx 000, Xxxxxxxx, XX 00000,
16
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 Washington applicable to contracts
made and to be performed entirely within such state; provided, however, that all
provisions regarding the rights, duties and obligations of the Warrant Agent
shall be governed by and construed in accordance with 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 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.
17
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 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.
[Remainder of page left intentionally blank]
18
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
--------------------------------
--------------------------------
[Printed Name and Title] Attest:
Name:
-------------------------------------
Title:
-------------------------------------
MELLON INVESTOR SERVICES LLC
By
--------------------------------
--------------------------------
[Printed Name and Title] Attest:
Name:
-------------------------------------
Title:
-------------------------------------
19
EXHIBIT A
SPECIMEN
CUSIP
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 $0.01 per share, of Expedia,
Inc., a Washington corporation (the "Company"). Each Equity Warrant entitles the
Holder to purchase from the Company one fully paid and non-assessable share of
Common Stock, par value $0.01 per share, of the Company ("Common Stock") at any
time on or before 5:00 p.m. New York City time ___________, 2008, at the
exercise price (the "Exercise Price") of $52.00 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, upon
such conditions set forth herein and in the Shareholder 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 Shareholder
Equity Warrant Agreement.
By acceptance of this Equity Warrant Certificate, each Holder agrees
to be bound by the terms of the Shareholder 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
Shareholder 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
Shareholder 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:
MELLON INVESTOR SERVICES LLC,
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
Shareholder Equity Warrant Agreement dated as of ___________, 2001 (the
"Shareholder 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 Shareholder 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 $.01 per share ("Common Stock") upon such terms and
conditions as are set forth in the Shareholder Equity Warrant Agreement at any
time on or before 5:00 p.m. New York City time on __________, 2008, 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 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 Shareholder 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 Shareholder 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 Shareholder 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
Shareholder 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.
00000 XX Xxxxxxxx Xxx, Xxxxx 000
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 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: _________________________
(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):
-------------------------------------
Address of Assignee (if necessary):
-------------------------------------
Signature Guaranteed:
______________________________
Signature of Guarantor
