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EXHIBIT 10.9  

 
  RETIREMENT COMPENSATION ARRANGEMENT PLAN
  
    FOR EBERHARD SCHERKUS    
    

THIS AGREEMENT is made as of the 1st day of July 1997, 

BETWEEN:  

AGNICO-EAGLE MINES LIMITED, a company incorporated under the laws of the Province of Ontario and having its head office in the city of Toronto, Ontario, 

(the "Company")

- and -

EBERHARD SCHERKUS, an executive employee of the Company residing in Oakville, Ontario, 

(the "Executive").

WHEREAS in order to retain the valuable services of the Executive and to induce the Executive to continue in employment with the Company, the Company
wishes to provide and secure excess pension benefits to the Executive (to the extent not already provided under the Company's registered pension plan) under this Retirement Compensation
Arrangement Plan for Eberhard Scherkus (the "RCA Plan"). 

AND WHEREAS the intent of this Agreement is that if the Executive faithfully, honestly and diligently serves the Company, devotes his full time, labour,
skill and attention to such employment, uses his best efforts to promote the interest and welfare of the Company, the Company shall provide him with excess pension benefits. 

NOW THEREFORE in consideration of these premises and the mutual covenants herein contained and in consideration of the services to be performed by the
Executive as hereinafter mentioned, the Executive and the Company shall covenant and agree as follows: 

1

 
SECTION 1  

INTERPRETATION  

1.1   Definitions  

Unless
a different meaning is expressly required by the context, in this Agreement, terms have the meanings ascribed to them below. 

	•
	"Actuary" shall mean Buck Consultants Limited or such other person or firm from time to time retained by the Company
(or, following an event pursuant to Section 2.5 if it is necessary, the Trustee) to provide actuarial services as may be required from time to time for the purposes of the Trust Fund or
the Plan, who is (or, in the case of a firm, one of whose employees or members is) a Fellow of the Canadian Institute of Actuaries.

	•
	"Basic Pension Benefit" shall mean the normal form of pension benefit payable at the Executive's Normal Retirement Date under
the Basic Pension Plan and funded by the Company, and shall include the amount of any portion of the pension benefit earned by the Executive which has been assigned to or is required to be held for
the benefit of the Spouse or former Spouse of the Executive.

	•
	"Basic Pension Plan" shall mean the Agnico-Eagle Mines Limited Employees Pension Plan, as amended by the Company from time to
time, and shall include any successor or substitute plan or plans of the Company.

	•
	"Change of Control" shall mean a change of control of the Company which shall be deemed to have occurred at such time as
(i) any Person or group of Related Persons becomes the beneficial owner, directly or indirectly, of 25% or more of the Voting Shares of the Company (including voting shares issuable upon
conversion of any other outstanding securities of the Company) or (ii) Directors who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Board.

	•
	"Company" shall mean Agnico-Eagle Mines Limited and any subsidiary, associated, predecessor and successor companies as may be
designated from time to time.

	•
	"Contributions" shall mean, as the context permits, the amounts required (i) to purchase a Letter of Credit to cover
the Company's liability for Excess Benefits for each Year during the term of this RCA Plan, and (ii) to pay the refundable tax exigible under the Income Tax Act. Fifty percent of the
Contributions for any Year shall suffice, and shall be applied by the RCA Trustee to purchase the Letter of Credit for the following year; and 50% of such Contributions shall represent the "refundable
tax" required to be withheld and remitted to the Receiver General of Canada pursuant to the Income Tax Act. 

2

 

	•
	"Effective Date" shall mean July 1, 1997.

	•
	"Early Retirement Date", for purposes of this RCA Plan, shall mean, at the Executive's option, the first day of any month
coincident with or next following the Executive's fifty-fifth birthday, but not after his sixtieth birthday.

	•
	"Earnings" shall have the same meaning as defined in the Basic Pension Plan. Specifically, Earnings shall mean all basic
remuneration paid by the Company to the Executive for work done or services performed but not including the value of any benefits, bonuses, overtime pay, automobile allowances, entertainment
allowances or other like allowances or unusual payments, all as determined by the Company. Earnings shall also include Prescribed Compensation for purposes of determining the Executive's pension
adjustment as defined in the Regulations under the Income Tax Act (Canada).

	•
	"Excess Benefits" shall mean the projected annual pension benefit, in the same normal form as in the Basic Pension Plan,
payable on or after the Executive's Normal Retirement Date, as calculated and certified by the Actuary, which shall be determined as the excess of (a) over (b), where:

	(a)
	is
2% of the Final Average Earnings multiplied by the Executive's continuous service with the Company projected to Normal Retirement Date (in completed years and months); and

	(b)
	is
the annual amount of actual pension benefit payable under the Basic Pension Plan and funded by the Company.

	•
	"Executive" shall mean Eberhard Scherkus.

	•
	"Final Average Earnings" shall mean the annual average of the last three consecutive calendar years Earnings of the Executive
prior to the Executive's Normal Retirement Date, projected at the rate of three percent per annum, compounded annually, to the Executive's Normal Retirement Date.

	•
	"Income Tax Act" shall mean the Income Tax Act (Canada) and the
regulations thereunder, as amended from time to time.

	•
	"Incumbent Board" shall mean those persons who are Directors of the Company at the Effective Date of this RCA Plan, and shall
include any person who becomes a Director subsequent to the date hereof and whose election, or nomination for election, by the Company's shareholders, was approved by the Incumbent Board (either by a
specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination). 

3

 

	•
	"Letter of Credit" shall mean, as the context permits, the initial letter of credit or whatever succeeding renewal or
replacement letter of credit is in force and effect at the relevant time. Each and every letter of credit shall:

	(a)
	be
purchased from a Schedule I Bank under the Bank Act (Canada);

	(b)
	be
irrevocable and standby;

	(c)
	name
the RCA Trustee as the beneficiary permitted to draw down (an amount up to the face amount) on the letter of credit following an event pursuant to Section 2.5;

	(d)
	with
the exception of the initial letter of credit, be for a term of one year, expiring on June 30; and

	(e)
	have
a face amount equal to 110% of the Company's liability for Excess Benefits in respect of the Executive, as certified by the Actuary.

	•
	"Normal Retirement Date", for purposes of this RCA Plan, shall mean the first day of the month coincident with or next
following the Executive's sixtieth birthday or such later date as is mutually agreed to by the Company and the Executive.

	•
	"Person" shall mean an individual, partnership, association, body corporate, trustee, executor, administrator or legal
representative, other than the Company or a wholly-owned subsidiary of the Company.

	•
	"Qualifying Bank" shall mean a Schedule I Bank under the Bank Act
(Canada).

	•
	"RCA Plan" shall mean this Retirement Compensation Arrangement Plan, as the same may be amended from time to time.

	•
	"RCA Trust" shall mean the Retirement Compensation Arrangement Plan Trust.

	•
	"RCA Trust Agreement" shall mean the agreement establishing the RCA Trust, as the same may be amended from time to time. 

4

 

	•
	"RCA Trustee" shall mean the trust company or any successor RCA Trustee appointed pursuant to the RCA Trust Agreement.

	•
	"Related Persons" shall have the same meaning as defined in the Income Tax Act.

	•
	"Renewal Date" shall mean the date that is one month before the date on which the Letter of Credit or any replacement thereof
is due to expire.

	•
	"Spouse" shall have the same meaning as defined in the Basic Pension Plan.

	•
	"Voting Shares" shall mean the issued and outstanding shares of any class or classes of shares of the Company which carry
voting rights in all circumstances.

	•
	"Year" shall mean a twelve month period commencing on the first day of July and ending on the 30th day of June. 

Words
importing the singular shall include the plural and vice versa and words importing the masculine gender shall extend to and include the feminine gender and/or body corporate, unless the context
in which a particular word is used clearly requires otherwise. 

All
other words and expressions in this Agreement that are defined for purposes of the Basic Pension Plan shall be given an interpretation that is consistent with the meaning ascribed to them in the
Basic Pension Plan. 

1.2   Governing Law  

This
Agreement shall be governed by and interpreted in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein and the courts of the Province of Ontario shall be
the sole and proper forum with respect to any suits brought with respect to this Agreement. 

1.3   Records  

Wherever
the records of the Company are used for the purposes of this Agreement, such records shall be conclusive of the facts for which they are recommended. 

1.4   Prior Agreements  

This
Agreement supersedes and replaces all prior agreements, whether oral or written, of the parties hereto in connection with the subject matter hereof and the Executive hereby agrees that such
agreements are hereby cancelled and of no further effect. 

5

 

1.5   Interpretation of Agreement  

The
Executive acknowledges that questions requiring the interpretation of this Agreement may arise from time to time, and the Executive agrees that the Company, in consultation with the Actuary, shall
have the right to interpret and perform this Agreement in a manner consistent with the efficient administration of this and similar agreements in effect from time to time with executives of the
Company, and such interpretation or performance, fairly and reasonably done, shall be final and conclusive as between the parties. 

1.6   Effect of Agreement  

Nothing
herein shall constitute an agreement or undertaking by the Executive to remain in the employ of the Company for any specific period of time, nor an agreement or undertaking by the Company to
employ the Executive for any specific period of time. 

6

 
SECTION 2  

CREATION AND PURPOSE OF THE RCA PLAN  

2.1   Purpose of the RCA Plan  

The
purpose of the RCA Plan is to: 

	(a)
	provide
the Executive with Excess Benefits on retirement, termination by the Company without cause, disability or death prior to retirement in a manner that, as closely as possible on
an after-tax basis, the Executive will receive Excess Benefits as if such Excess Benefits were provided directly from the registered Basic Pension Plan; and

	(b)
	provide
security for payment by the Company of Excess Benefits. 

At
any given time, the main asset of the RCA Trust shall be the current Letter of Credit. 

2.2   Funding the RCA Trust  

In
conjunction with the execution of the RCA Trust Agreement, the Company shall make a Contribution to enable the RCA Trustee to purchase the initial Letter of Credit; and thereafter, on or before
each Renewal Date, the Company shall make a Contribution to enable the RCA Trustee to purchase a renewal or replacement Letter of Credit. 

2.3   Letter of Credit  

In
conjunction with the execution and delivery of the RCA Trust Agreement, the RCA Trustee shall purchase the initial Letter of Credit in an amount sufficient to cover 110% of the Company's liability
for Excess Benefits for the remainder of the Year to June 30, 1998. Prior to the Renewal Date of the initial Letter of Credit, and thereafter prior to the Renewal Date of each succeeding Letter
of Credit, the RCA Trustee shall purchase a renewal or replacement Letter of Credit in an amount sufficient to cover 110% of the Company's liability for Excess Benefits for the following Year. The
Actuary shall make the actuarial determination of the Company's liability for Excess Benefits for the remainder of the Year to June 30, 1998 and for any and all Years thereafter, such
determination to be made at least 60 days prior to the Renewal Date. 

7

 

2.4   Purchase of Letters of Credit  

If
and provided that it has funds to do so, on or before each Renewal Date the RCA Trustee shall pay to the Qualifying Bank which has agreed to issue the Letter of Credit for the next year the premium
for such Letter of Credit; such premium to be paid from monies then held in the RCA Trust and/or Contributions made by the Company. 

2.5   Demand on Letter of Credit  

Upon
the following events occurring, the RCA Trustee shall (i) present the Letter of Credit (together with such other documentation as may be required pursuant to the terms of the Letter of
Credit) to the Qualifying Bank for payment; and (ii) upon receipt of payment from the Qualifying Bank, and in consultation with the Actuary, immediately purchase an annuity contract (that would
qualify as a prescribed annuity contract within the meaning of the Income Tax Act in the hands of the Executive) to provide for payment of the Excess Benefits to the Executive and shall assign
such annuity contract to the Executive: 

	(a)
	the
Company fails to cause the Actuary to prepare and deliver to the Trustee a report at least 60 days prior to the expiration of the then current Letter of Credit setting out
the estimated actuarial present value of the accrued liabilities in respect of the Executive's benefits under this RCA Plan and the future administrative costs of this RCA Plan and the RCA Trust;

	(b)
	the
Company fails to either

	(i)
	cause
an existing Letter of Credit to be renewed or replaced in accordance with the RCA Trust Agreement at least 15 days prior to the expiration of the Letter of
Credit, or

	(ii)
	deposit
with the RCA Trustee an amount in cash or kind equal to 110% of the accrued liabilities in respect of the Executive's benefits under the RCA Plan as certified
by the Actuary;

	(c)
	the
Company fails to contribute to the RCA Trust an amount sufficient, after the payment of applicable taxes, to permit the RCA Trustee to obtain the replacement of the then current
Letter of Credit;

	(d)
	the
Company fails to make a payment to the RCA Trustee of all expenses incurred under section 4.07 of the RCA Trust Agreement after 30 days following delivery to the
Company by the RCA Trustee of a written notice from the RCA Trustee that such payment is overdue; 

8

 

	(e)
	the
Executive has informed the Trustee (and the Trustee acting reasonably, has confirmed such information to its own satisfaction) or the Trustee otherwise has knowledge, in
each case, that

	(i)
	the
Executive has retired from the Company at his Early Retirement Date, or

	(ii)
	the
Executive has retired from the Company on or after his Normal Retirement Date, or

	(iii)
	the
Executive has been terminated by the Company without cause, or

	(iv)
	the
Executive has been laid-off by the Company; or

	(f)
	the
Executive has informed the Trustee (and the Trustee, relying on sources generally available to the public and acting reasonably, has confirmed such information to its own
satisfaction) or the Trustee otherwise has knowledge, in each case, that

	(i)
	the
Company is insolvent within the meaning of the Canada Business Corporations Act,

	(ii)
	the
Company has commenced a proceeding, (including, without limitation, the filing of a petition or an assignment or a proposal or a notice of intention to make a
proposal) under the Companies' Creditors Arrangement Act (Canada),

	(iii)
	the
Company has suffered the appointment of any receiver or trustee, or

	(iv)
	there
has been a Change of Control of the Company. 

Fifty
percent of the payment from the Letter of Credit shall be applied by the RCA Trustee to purchase the annuity contract noted above; and 50% of such payment from the Letter of Credit shall
represent the "refundable tax" required to be withheld and remitted to the Receiver General of Canada pursuant to the Income Tax Act. 

2.6   RCA Plan Entitlement  

The
Executive acknowledges that the RCA Trustee may be obliged to reclaim part or all of the "refundable tax' in order to make any required disbursements to the Executive or any other person entitled
to a benefit from this RCA Plan. The Executive acknowledges that the full amount of the interim or final disbursement may be delayed until such time as the RCA Trustee has received the "refundable
tax" from the government of Canada, provided that the RCA Trustee may, with the consent of the Company, borrow all or such portion of the amount of the "refundable tax" in order to complete the
required disbursement or to accelerate the payment of it and the Company agrees to pay the cost of such borrowing. 

9

   SECTION 3  

OTHER BENEFITS  

3.1   Disability Benefit  

If
the Executive is eligible to receive payment of disability benefits under a long term disability plan covering employees of the Company, notwithstanding any termination of the Executive's
employment with the Company as a result of his disability, the Executive shall be deemed to continue to accrue further service for the purpose of this RCA Plan until the Executive ceases to be
eligible to receive payment of such long term disability benefits, at which time, if the Executive does not return to work, the Executive shall be entitled to the Excess Benefits assuming the
Executive had retired on the day that the Executive ceases to be eligible to receive payment of such long term disability benefits, without any further projection for continuous service or Earnings
(and for purposes of calculating the benefit payable, "Earnings" during a period of such disability shall be as set out in the Basic Pension Plan). 

3.2   Early Retirement Benefit  

If
the Executive retires on his Early Retirement Date but prior to his Normal Retirement Date, the Executive shall be entitled to the Excess Benefits commencing on his Early Retirement Date, without
any further projection for continuous service or Earnings. 

3.3   Death Before Normal Retirement Date  

If
the Executive dies before his Normal Retirement Date, the Executive's Spouse, or if there is no Spouse, the Executive's designated beneficiary or estate shall be entitled to a lump sum payment
equal to the liability for the Excess Benefits, as determined by the Actuary. 

3.4   Death After Normal Retirement Date  

If
the Executive dies after his Normal Retirement Date, a death benefit shall be paid in accordance with the form of benefit elected or deemed to be elected by the Executive for the payment of the
Excess Benefits. 

3.5   Benefit Conditional on Long Service  

The
Executive shall not be entitled to any benefit hereunder whatsoever in the event that the Executive's employment with the Company should cease as a result of: 

10

 

	(a)
	termination
by the Company for cause prior to the Executive's fifty-fifth birthday; or

	(b)
	voluntary
termination other than retirement on the Executive's Early Retirement Date or retirement on or after the Executive's Normal Retirement Date. 

No
benefit shall be paid or payable under this Agreement if the Executive is in breach of any covenant contained in Section 4. 

11

 
SECTION 4  

OBLIGATIONS OF THE EXECUTIVE  

4.1   Employment Obligations  

As
long as employment with the Company continues, the Executive agrees to faithfully, honestly and diligently serve the Company and to devote his full time, labour, skill and attention to such
employment and to use his best efforts to promote the interests and welfare of the Company. The Executive shall exercise and carry out all such powers and duties and shall observe all such directions
as the board of directors of the Company or the executive officers of the Company from time to time confer or impose upon the Executive. 

4.2   Confidentiality and Theft  

If
at any time, the Executive uses or discloses trade secrets or information that is proprietary and confidential to the Company, embezzles or steals cash or other property of the Company, the Company
shall have no further obligation to make the payments otherwise required under this Agreement and all rights of the Executive or any person entitled to a payment hereunder shall immediately cease and
terminate. Notwithstanding the foregoing, nothing herein shall prevent disclosure of information which is publicly available or which is required to be disclosed under appropriate statues, rules of
law or legal process. 

4.3   Breach of Executive's Covenant  

Notwithstanding
anything herein contained to the contrary, all obligations of the Company under this Agreement are expressly made conditional upon the due observance and performance by the Executive
of all the covenants contained in this Section 4. If the Executive fails to fulfil and carry out any such covenants, all liability and obligations of the Company and all the Executive's rights
and entitlements hereunder shall immediately cease and terminate and this Agreement shall thereafter be of no further effect. 

12

 
SECTION 5  

GENERAL  

5.1   Amendment  

	(a)
	Notwithstanding
anything to the contrary herein, the Company, with the consent of the Executive, reserves the right to amend this RCA Plan in whole or in part, at any time. In
particular, it is recognized that certain provisions of this RCA Plan are not meant to operate in connection with or correspond to provisions of the Basic Pension Plan. Therefore, without restricting
the generality of the foregoing, in the event of future amendment to the Basic Pension Plan, the Company, on written notice to the Executive, reserves the right to make consequential amendments to
this RCA Plan. Any amendment to this RCA Plan shall be communicated in writing by the Company to the Executive;

	(b)
	The
Company, on written notice to the Executive, may amend this RCA Plan as a result of a change in income tax or other applicable legislation, or interpretation thereof, and such
amendment may take effect as of the same effective date as the change in legislation, or interpretation thereof;

	(c)
	Subject
to paragraph (b) of this Section 5.1, no amendment to this RCA Plan by the Company pursuant to this Section 5.1, can have the effect of impairing
the provision of security for payment by the Company of the Excess Benefits. 

5.2   Termination  

This
RCA Plan may, with the consultation of the Executive, be terminated at any time by the Company, subject to the Company maintaining arrangements to adequately secure the Excess Benefits, whether
by a Letter of Credit or otherwise, which such arrangements are acceptable to the Executive, acting reasonably. 

Upon
the termination of this RCA Plan and the purchase of an annuity contract to provide for the Excess Benefits or the payment of any benefits provided in Section 3, the RCA Trustee shall
wind-up and terminate the RCA Trust as follows: 

	(a)
	provide
for a final accounting for the purposes of the termination of the RCA Trust;

	(b)
	file
final information and tax returns under the Income Tax Act and obtain any necessary clearance certificates and any balance of "refundable tax" owing to the RCA Trust; 

13

 

	(c)
	pay
all proper amounts payable out of the RCA Trust; and

	(d)
	distribute
the balance, if any, remaining in the RCA Trust in accordance with the RCA Trust Agreement. 

For
greater certainty, after all of the obligations of the RCA Trust have been satisfied, the RCA Trustee shall remit to the Company for its absolute use and benefit, the balance of the RCA Trust. 

5.3   Information to be Provided Before Benefits Paid  

Payment
of the Excess Benefits or other benefits from this RCA Plan shall not be made until the person entitled to the payment delivers to the RCA Trustee reasonable proof or evidence of the facts
necessary to calculate the Excess Benefits or other benefits. 

5.4   Interest Not Transferable or Assignable  

Except
with respect to withholding tax or as otherwise required by Section 5.6 of this Agreement, all benefits and entitlements provided hereunder are for the use and benefit of the Executive
and are not capable of being assigned, sold, transferred, pledged, hypothecated, given as security or otherwise alienated or encumbered during the lifetime of the Executive, and shall not be subject
to attachment, garnishment, set-off, deduction, execution or seizure by or on behalf of the creditors of the person entitled to payment hereunder. For greater certainty, the Company shall
not, as a result of this Agreement, be liable for or subject to the debts, contracts, liabilities, engagements or torts of any person entitled to a payment hereunder. 

5.5   Incompetence  

If,
in the opinion of the Company, any person receiving or entitled to receive a benefit under this Agreement is, as a result of physical or mental infirmity, incapable of managing his affairs, and no
guardian, committee or other representative of the estate of such a person has been duly appointed by a court of competent jurisdiction, the Company may, on the advice of competent legal counsel,
authorize any payment to which the person is entitled, to be made to his Spouse, child or other person on his behalf or to a court of competent jurisdiction and such payment shall be a complete
discharge of the obligation under this Agreement to make such payment. The reasonable expenses incurred by the Company in order to effect payment shall be paid by the Company. 

14

 

5.6   Payments Subject to Tax Withholding, Set-Offs, Etc.  

The
Company may require a retention by way of deduction or set-off out of any amount that may be or is payable under this Agreement: 

	(a)
	if
the person entitled to payment, or the Executive, is indebted to the Company at the time payment is made;

	(b)
	a
statute so provides; or

	(c)
	a
court order so requires. 

The
amount to be set-off or deducted shall not exceed the amount of the indebtedness plus interest or the amount specified in the statute or court order. 

5.7   Severability  

If
any provision of this RCA Plan is ever held illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining provisions of this RCA Plan, and this RCA Plan shall be
construed and enforced as if such illegal or invalid provision had never formed part hereof. 

5.8   No Enlargement of Employment Right  

Nothing
in this Agreement shall be construed to give to the Executive or to any person claiming through the Executive any right, title or interest in or to any assets, profits, earnings, or property
of the Company except as specifically provided herein. This Agreement does not enlarge any rights which the Executive may have as an employee apart from this Agreement. If this Agreement is terminated
in whole or in part, or any provision of benefits under this Agreement is merged or consolidated with the provision of benefits under any other agreement, or if the employment of the Executive is
terminated or if his employment status changes, the Executive shall have only such rights as are specifically defined and provided for in this Agreement, subject to any statutory requirements which
may apply to this Agreement at any time. 

5.9   Termination of Employment  

The
Executive agrees that nothing herein contained shall prevent the Company from terminating the Executive's employment with the Company at any time with or without cause. 

15

 

5.10 Notice  

Any
notice or other communication required or permitted hereunder shall be in writing and shall be effectively given if delivered personally, sent by registered mail, postage prepaid, or by facsimile
or other means of electronic communication (if, in the case of the Executive, a facsimile number has been provided) addressed: 

	(i)
	If
to the Executive, to: 

Mr. Eberhard Scherkus

1183 Carey Road

Oakville, Ontario

L6J 2E3

	(ii)
	If
to the Company, to: 

Agnico-Eagle Mines Limited

401 Bay Street, Suite 2302

Toronto, Ontario

M5H 2Y4

Attention: Mr. Barry Landen, Vice-President and Corporate Secretary

Facsimile: (416) 367-4681

5.11 Binding Effect  

Subject
to the foregoing, this Agreement shall enure to the benefit of and be binding upon both the Executive, his heirs and legal personal representatives and the Company, its successors and assigns. 

*
* * * * * 

IN
WITNESS WHEREOF the parties have duly executed and delivered this Agreement this 10th day of December, 1997 with effect as of the Effective Date. 

	 	 	AGNICO-EAGLE MINES LIMITED
	
 	
 	

By:	
 	

                

	
 	
 	

 	
 	

	

        
Witness	
 	

/s/  EBERHARD SCHERKUS      
Eberhard Scherkus

16

QuickLinks

RETIREMENT COMPENSATION ARRANGEMENT PLAN FOR EBERHARD SCHERKUSExhibit 4.4

FORM OF WARRANT AGREEMENT

dated as of [       ], 2005

for

WARRANTS TO PURCHASE

UP TO [   ] SHARES OF COMMON STOCK

between

EXPEDIA, INC.

and

[                 ],
as

Equity Warrant Agent

 

TABLE OF CONTENTS

	
   

  	
   

  	
   

  	
   

  
	
  Article 1.

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 2.

  	
  Issuance of New Equity Warrants and Execution and
  Delivery of New Equity Warrant Certificates

  	
   

  
	
   

  	
  Section 2.1

  	
  Issuance of New Equity Warrants

  	
   

  
	
   

  	
  Section 2.2

  	
  Form and Execution of New Equity Warrant
  Certificates

  	
   

  
	
   

  	
  Section 2.3

  	
  Issuance and Delivery of New Equity Warrant
  Certificates

  	
   

  
	
   

  	
  Section 2.4

  	
  Temporary New Equity Warrant Certificates

  	
   

  
	
   

  	
  Section 2.5

  	
  Payment of Taxes

  	
   

  
	
   

  	
  Section 2.6

  	
  Book-Entry Provisions for New Equity Warrants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 3.

  	
  Duration and Exercise of New Equity Warrants

  	
   

  
	
   

  	
  Section 3.1

  	
  Exercise Price

  	
   

  
	
   

  	
  Section 3.2

  	
  Duration of New Equity Warrants

  	
   

  
	
   

  	
  Section 3.3

  	
  Exercise of New Equity Warrants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 4.

  	
  Adjustments of Number of Shares

  	
   

  
	
   

  	
  Section 4.1

  	
  Adjustments

  	
   

  
	
   

  	
  Section 4.2

  	
  Statement on Warrants

  	
   

  
	
   

  	
  Section 4.3

  	
  Cash Payments in Lieu of Fractional Shares

  	
   

  
	
   

  	
  Section 4.4

  	
  Notices to Warrantholders

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 5.

  	
  Other Provisions Relating to Rights of Holders of
  New Equity Warrants

  	
   

  
	
   

  	
  Section 5.1

  	
  No Rights as Holder of Common Stock Conferred by
  New Equity Warrants or New Equity Warrant Certificates

  	
   

  
	
   

  	
  Section 5.2

  	
  Lost, Stolen, Destroyed or Mutilated New Equity
  Warrant Certificates

  	
   

  
	
   

  	
  Section 5.3

  	
  Holders of New Equity Warrants May Enforce Rights

  	
   

  
	
   

  	
  Section 5.4

  	
  Consolidation or Merger or Sale of Assets

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 6.

  	
  Exchange and Transfer of New Equity Warrants

  	
   

  
	
   

  	
  Section 6.1

  	
  Equity Warrant Register; Exchange and Transfer of
  New Equity Warrants

  	
   

  
	
   

  	
  Section 6.2

  	
  Treatment of Holders of New Equity Warrants

  	
   

  
	
   

  	
  Section 6.3

  	
  Cancellation of New Equity Warrant Certificates

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 7.

  	
  Concerning the Equity Warrant Agent

  	
   

  
	
   

  	
  Section 7.1

  	
  Equity Warrant Agent

  	
   

  
	
   

  	
  Section 7.2

  	
  Conditions of Equity Warrant Agent’s Obligations

  	
   

  

 

i

 

	
   

  	
  Section 7.3

  	
  Compliance with Applicable Laws

  	
   

  
	
   

  	
  Section 7.4

  	
  Resignation and Appointment of Successor

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 8.

  	
  Miscellaneous

  	
   

  
	
   

  	
  Section 8.1

  	
  Amendment

  	
   

  
	
   

  	
  Section 8.2

  	
  Notices and Demands to the Company and Equity
  Warrant Agent

  	
   

  
	
   

  	
  Section 8.3

  	
  Addresses for Notices

  	
   

  
	
   

  	
  Section 8.4

  	
  Governing Law

  	
   

  
	
   

  	
  Section 8.5

  	
  Governmental Approvals

  	
   

  
	
   

  	
  Section 8.6

  	
  Reservation of Shares of Common Stock

  	
   

  
	
   

  	
  Section 8.7

  	
  Covenant Regarding Shares of Common Stock

  	
   

  
	
   

  	
  Section 8.8

  	
  Persons Having Rights Under Agreement

  	
   

  
	
   

  	
  Section 8.9

  	
  Delivery of Prospectus

  	
   

  
	
   

  	
  Section 8.10

  	
  Headings

  	
   

  
	
   

  	
  Section 8.11

  	
  Counterparts

  	
   

  
	
   

  	
  Section 8.12

  	
  Inspection of Agreement

  	
   

  
	
   

  	
  Section 8.13

  	
  Compliance with Expedia, Inc. 2001 Stock Plan

  	
   

  
	
   

  	
  Section 8.14

  	
  Withholding

  	
   

  

 

ii

 

THIS EQUITY WARRANT AGREEMENT (the “Agreement”),
dated as of [                   ], 2005,
between Expedia, Inc., a Delaware corporation (the “Company” or “Expedia”),
and [               ], a [                ], as warrant agent (the “Equity
Warrant Agent”).

WHEREAS, the Board of Directors of IAC/InterActiveCorp,
a Delaware corporation (“IAC”) has determined it is appropriate and
desirable to separate IAC and Expedia into two publicly-traded companies
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 “Expedia Spin-Off”);

WHEREAS, IAC and Expedia have entered in that certain
Separation Agreement, dated as of [                   ], 2005 (the “Separation
Agreement”), which sets forth, among other things, the necessary steps for
the reclassification and division of IAC securities and the issuance Expedia
securities, in each case, for purposes of effecting the Expedia 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
an outstanding certain equity warrants (each, a “Current IAC Warrant”)
including, warrants governed by (1) 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 Expedia Warrant Agreement” and warrants
issued pursuant thereto, the “2002 Expedia Warrants”), (2) that certain
Equity Warrant Agreement, by and between IAC (f/k/a USA Networks, Inc.) and The
Bank of New York, dated as of May 7, 2002 (the “2002 Vivendi Warrant
Agreement” and the warrants issued pursuant thereto, the “2002 Vivendi
Warrants”), (3) that certain Optionholder Equity Warrant Agreement, by and
between IAC (f/k/a InterActiveCorp) and Mellon Investor Services LLC, dated as
of August 8, 2003 (the “Optionholder Warrant Agreement” and the warrants
issued pursuant thereto, the “Optionholder Warrants”) and (4) that
certain Stockholder Equity Warrant Agreement, by and between IAC (f/k/a
InterActiveCorp) and Mellon Investor Services LLC, dated as of August 8, 2003
(the “Stockholder Warrant Agreement” and warrants issued pursuant to the
Stockholder Warrant Agreement, the  “Stockholder
Warrants”, together with the 2002 Expedia Warrants, 2002 Vivendi Warrants
and Optionholder Warrants, the “Applicable Warrants”);

WHEREAS, in connection with the Expedia Spin-Off, each
Current IAC Warrant will be adjusted pursuant to its terms such that each
holder will continue to hold a Current IAC Warrant (adjusted to give effect to
the two-for-one reverse stock split) and will also receive a warrant of the
Company (each such warrant of the Company a “New Equity Warrant” or,
collectively, the “New Equity Warrants”).  Such New Equity Warrants to be evidenced
either in electronic book-entry form or by certificates herein called the “New
Equity Warrant Certificates”);

WHEREAS, from and after the Expedia Spin-Off and the
one-for-two reverse stock split: (1) the number of shares of IAC common stock
subject to the Current IAC Warrant will equal one half the number of shares of
IAC common stock underlying the Current IAC

 

Warrant prior to the Expedia Spin-Off and the reverse
stock split and (2) the per share exercise price of the Current IAC Warrant
(rounded up to the nearest whole cent) will equal the per share exercise price
of the Current IAC Warrant prior to the Expedia Spin-Off and the reverse stock
split multiplied by a fraction equal to the opening price of IAC common stock
on the first trading day after the date of the Expedia Spin-Off, divided by the
closing price of IAC common stock on the date of the Expedia Spin-Off; and (3)
the number of shares of common stock, par value $0.001 per share, of the
Company (“Common Stock”) subject to the New Equity Warrant will equal
one half the number of shares of IAC common stock underlying the IAC warrant
prior to the Expedia Spin-Off and the reverse stock split and (4) the per share
exercise price of the New Equity Warrant will equal the per share exercise
price of the Current IAC Warrant (rounded to nearest whole cent) prior to the
Expedia Spin-Off and the reverse stock split multiplied by a fraction equal to
the opening price of the Common Stock on the first trading day after the date
of the Expedia Spin-Off, divided by the closing price of IAC common stock on
the date of the Expedia Spin-Off.

WHEREAS, the Company desires the Equity Warrant Agent
to assist the Company in connection with the issuance, transfer, exchange,
cancellation, replacement and exercise of the New Equity Warrants, and in this
Agreement wishes to set forth, among other things, the terms and conditions on
which the New Equity Warrants may be issued, transferred, 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 New 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 Expedia Warrant Agreement” shall have the
meaning set forth in the recitals.

“2002 Expedia Warrants” shall have the meaning
set forth in the recitals.

“2002 Vivendi Warrant Agreement” shall have the
meaning set forth in the recitals.

“2002 Vivendi Warrants” shall have the meaning
set forth in the recitals.

“Applicable Warrants” shall have the meaning
set forth in the recitals hereto.

“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 National Market or, if not listed or quoted on such
market, on

2

the principal national securities exchange on which
the shares of Common Stock are listed or admitted to trading or, if not listed
or admitted to trading on a national securities exchange, the last sale price
regular way for the Common Stock as published by the National Association of
Securities Dealers Automated Quotation System (“NASDAQ”), or if such
last sale price is not so published by NASDAQ or if no such sale takes place on
such day, the mean between the closing bid and asked prices for the Common
Stock as published by NASDAQ.  If the
Common Stock is not publicly held or so listed or publicly traded, “Closing
Price” shall mean the Fair Market Value per share as determined in good
faith by the board of directors of the Company or, if such determination cannot
be made, by a nationally recognized independent investment banking firm
selected in good faith by the board of directors of the Company.

“Common Stock” shall have the meaning set forth
in the recitals hereto.

“Current IAC Warrant” shall have the meaning
set forth in the recitals 5.

.“Current Market Price” shall have the meaning
set forth in Section 4.1(d).

“Effective Date” has the meaning referred to in
the Separation Agreement.

“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.

“Expedia” shall have the meaning set forth in
the recitals.

“Expedia Spin-Off” shall have the meaning set
forth in the recitals.

“Expiration Date” shall have the meaning set
forth in Section 3.2(b).

“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 New 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 Equity Warrant” shall have the meaning set
forth in the recitals hereto.

“New Equity Warrant Certificate” shall have the
meaning set forth in the recitals hereto.

“Non-Electing Share” shall have the meaning set
forth in Section 5.4.

3

“Officer’s Certificate” shall have the meaning
set forth in Section 7.2(f).

“Optionholder Warrant Agreement” shall have the
meaning set forth in the recitals.

“Optionholder Warrants” shall have the meaning
set forth in the recitals.

“Person” means an individual, corporation,
limited liability company, partnership, association, trust or any other entity
or organization.

“Prospectus” shall have the meaning set forth
in Section 8.9.

“Sale Transaction” shall have the meaning set
forth in Section 5.4.

“Separation Agreement” shall have the meaning
set forth in the recitals.

“Stockholder Warrant Agreement” shall have the
meaning set forth in the recitals.

“Stockholder Warrants” 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 National
Market is open for business.

Article 2.

Issuance of New Equity Warrants and Execution and

Delivery of New Equity Warrant Certificates

Section 2.1             Issuance of New Equity
Warrants.  New Equity Warrants shall only
be issued by the Company on the Effective Date on account of the Applicable
Warrants as contemplated by the Separation Agreement.  The Company shall promptly notice the Equity
Warrant Agent in writing of the occurrence of the Effective Date and the
issuance of the New Equity Warrants.

Section 2.2             Form and Execution of New Equity
Warrant Certificates.

(a)           Except as provided in Section 2.6,
the New Equity Warrants shall be evidenced by the New Equity Warrant
Certificates, which shall be in registered form and substantially in the form
set forth as Exhibit A attached hereto. 
Each New Equity Warrant Certificate shall be dated the date it is
countersigned by the Equity Warrant Agent and may have such letters, numbers or
other marks of identification and such legends or endorsements printed,
lithographed or engraved thereon as are not inconsistent with the provisions of
this Agreement, which do not change the Equity Warrant Agent’s duties,
liabilities or obligations, or as may be required to comply with any law or
with

4

any rule or regulation made pursuant thereto or with
any rule or regulation of any securities exchange on which the New 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 New Equity
Warrant Certificate shall evidence one or more New Equity Warrants.

(b)           The New 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 New 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 New Equity Warrant Certificates.

(c)           No New Equity Warrant Certificate
shall be valid for any purpose, and no New Equity Warrant evidenced thereby
shall be deemed issued or exercisable, until such New 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 New Equity Warrant Certificate executed by
the Company shall be conclusive evidence that the New Equity Warrant
Certificate so countersigned has been duly issued hereunder.

(d)           In case any officer of the Company
who shall have signed any New Equity Warrant Certificate either manually or by
facsimile signature shall cease to be such officer before the New Equity
Warrant Certificate so signed shall have been countersigned and delivered by
the Equity Warrant Agent, such New Equity Warrant Certificate nevertheless may
be countersigned and delivered as though the person who signed such New Equity
Warrant Certificate had not ceased to be such officer of the Company; and any
New Equity Warrant Certificate may be signed on behalf of the Company by such
person as, at the actual date of the execution of such New 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 New Equity
Warrant Certificates.  At any time and
from time to time after the execution and delivery of this Agreement, the
Company may deliver New 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 New Equity Warrant Certificates to
or upon the written request of the Company. 
Subsequent to the original issuance of an New Equity Warrant Certificate
evidencing New Equity Warrants, the Equity Warrant Agent shall countersign a
new New Equity Warrant Certificate evidencing such New Equity Warrants only if
such New Equity Warrant Certificate is issued in exchange or substitution for
one or more previously

5

countersigned
New Equity Warrant Certificates evidencing such New Equity Warrants or in
connection with their transfer, as hereinafter provided.

Section 2.4             Temporary New Equity Warrant
Certificates.  Pending the preparation of
a definitive New Equity Warrant Certificate, the Company may execute, and upon
the written order of the Company, the Equity Warrant Agent shall countersign
and deliver, temporary New Equity Warrant Certificates that are printed,
lithographed, typewritten, mimeographed or otherwise produced, substantially of
the tenor of the definitive New 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 New Equity Warrant
Certificates may determine are in compliance with this Agreement, as evidenced
by his execution of such New Equity Warrant Certificates.

If temporary New Equity Warrant Certificates are issued,
the Company will cause definitive New Equity Warrant Certificates to be
prepared without unreasonable delay. 
After the preparation of definitive New Equity Warrant Certificates, the
temporary New Equity Warrant Certificates shall be exchangeable for definitive
New Equity Warrant Certificates upon surrender of the temporary New 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 New Equity Warrant Certificates, the
Company shall execute and the Equity Warrant Agent shall countersign and
deliver in exchange therefor definitive New Equity Warrant Certificates
representing the same aggregate number of New Equity Warrants which were
represented on the temporary New Equity Warrant Certificate.  Until so exchanged, the temporary New Equity
Warrant Certificates shall in all respects be entitled to the same benefits
under this Agreement as definitive New Equity Warrant Certificates.

Section 2.5             Payment of Transfer Taxes.  The Company will pay all transfer, stamp and
other similar taxes, if any, to which this Agreement or the original issuance,
or exercise, of the New Equity Warrants or New Equity Warrant Certificates may
be subject under the laws of the United States of America or any state or
locality; provided, however, that the Holder, and not the Company, shall be
required to pay any transfer, stamp or other similar tax or other governmental
charge that may be imposed in connection with any transfer involved in the
issuance of the Common Stock where the Holder designates the shares to be
issued in a name other than the name of the Holder; and in the event that any
such transfer is involved, the Company shall not be required to issue any
Common Stock (and the purchase of the shares of Common Stock issued upon the
exercise of such Holder’s New 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.

Section 2.6             Book-Entry Provisions for New
Equity Warrants.  Unless (i)
a Holder specifically requests in writing to the Equity Warrant Agent and the
Company that the New Equity Warrants be in certificated form; provided, that,
with respect to Optionholder
Warrants, such certification request may be made only with respect to such
Holder’s vested New Equity Warrants or (ii) the Company instructs the Equity
Warrant Agent in writing to issue New Equity Warrant Certificates in respect of
a Holder’s New Equity Warrants that fall below a de minimus amount, as
determined by the Company, paper certificates representing the New Equity
Warrants will not be issued by the Company. 
Instead, the New Equity Warrants shall (i) be

6

registered on the books and records of the
Equity Warrant Agent in the name of the Holder, and the Holder shall, subject
to any cancellation or expiration thereof, be treated as the owner of such New
Equity Warrants for all purposes, (ii) be delivered to the Equity Warrant
Agent in electronic form to be held for the account for such Holder, and
(iii) bear the same restrictions and legends applicable to such New Equity
Warrants had such New Equity Warrants been certificated as provided herein,
including the applicable vesting schedule with respect to the Optionholder
Warrants.

Article 3.

Duration and Exercise of New Equity Warrants

Section 3.1             Exercise Price.

(a)           Each New Equity Warrant shall entitle
the Holder thereof to purchase a number of shares of Common Stock and at a
price (the “Exercise Price”) as set forth below, subject to the terms
herein:

	
  Applicable Warrants

  	
   

  	
  Number of

  Shares

  	
   

  	
  Exercise

  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Each New Warrant
  exchanged for a 2002 Expedia Warrant

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Each New
  Warrants exchanged for a 2002 Vivendi Warrant

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Each New Warrant
  exchanged for an Optionholder Warrant

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Each Warrants
  exchanged for a Stockholder Warrant

  	
   

  	
   

  	
   

  	
   

  	
   

  

(b)           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 New Equity Warrant

(a)           Each New Equity Warrant issued in
exchange for an Optionholder Warrant is subject to the same vesting schedule as
the Optionholder Warrants, and each New Equity Warrant shall be deemed vested
to the same extent as and proportionate to the respective New Linked Options
(as defined in the Optionholder Warrant Agreement).  Upon the forfeiture of a New Linked Option
related to a New Equity Warrant, such New Equity Warrant shall be automatically
forfeited without any further action required on the part of the Company or the
Holder.  The Equity Warrant Agent shall
not permit the exercise or transfer of a New Equity Warrant by the initial
holder thereof until it has received confirmation in a manner mutually agreed
upon between the Equity Warrant Agent and the Company that as of the date of
exercise the New Equity Warrant has not been forfeited, and the Equity Warrant
Agent may rely conclusively on such confirmation

7

and the Equity Warrant Agent shall have no obligation
or duty to investigate or confirm the accuracy thereof.

(b)           Each New Equity Warrant (i) not
exercised on or prior to the Expiration Date, or (ii) forfeited pursuant to
Section 3.2(a), shall become void, and all rights of the Holder of such New
Equity Warrant thereunder and under this Agreement shall cease.  For purposes of this Agreement, the “Expiration
Date” for each New Equity Warrant means 5:00 p.m. New York City Time on the
date as set forth below:  

	
  Applicable Warrants

  	
   

  	
  Expiration Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Each New Warrant
  exchanged for a 2002 Expedia Warrant

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Each New Warrants
  exchanged for a 2002 Vivendi Warrant

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Each New Warrant
  exchanged for an Optionholder Warrant

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Each Warrants
  exchanged for a Stockholder Warrant

  	
   

  	
   

  	
   

  

Section 3.3             Exercise of New Equity Warrants.

(a)           The Holder of a New Equity Warrant
shall have the right, at its option, to exercise such New Equity Warrant and
purchase shares of Common Stock as set forth in Section 3.1 during the period
referred to in Section 3.2, subject to adjustment pursuant to Article 4 hereof.  Except as may be provided in a New Equity
Warrant Certificate, and, in the case of New Equity Warrants issued in exchange
for Optionholder Warrants, subject to receipt by the Equity Warrant Agent of confirmation
from the Company that such New Equity Warrant is exercisable, a New Equity
Warrant may be exercised (i) in the event that such New Equity Warrant has been
certificated, by completing the form of election to purchase set forth on the
reverse side of the New Equity Warrant Certificate, or (ii) in the event that
such New Equity Warrant has not be certificated, by completing a Notice of
Purchase in the form attached hereto as Exhibit B, in each case, 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 a New Equity
Warrant Certificate, the date on which such New Equity Warrant Certificate and
payment are received by the Equity Warrant Agent as aforesaid shall be deemed
to be the date on which the New Equity Warrant is exercised and the relevant
shares of Common Stock are issued (the “Exercise Date”).

(b)           Upon the exercise of a New Equity
Warrant, the Company shall, as soon as practicable, issue, to or upon the order
of the Holder of such New Equity Warrant, the shares of Common Stock to which
such Holder is entitled, registered in such name or names as may be directed by
such Holder.  Such issuance of shares of
Common Stock and/or the transfer of Equity Warrants shall be conditioned upon
the Company’s receipt

8

of applicable withholding taxes from the Holder of such
New Equity Warrant pursuant to Section 8.14 hereof.

(c)           Unless the Equity Warrant Agent and
the Company agree in writing otherwise, the Equity Warrant Agent shall deposit
all funds received by it in payment of the Exercise Price for New 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 New 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.

(d)           The Equity Warrant Agent shall, from
time to time, as promptly as practicable, advise the Company of (i) the number
of New Equity Warrants exercised as provided herein, (ii) the written
instructions it receives from each Holder of such New Equity Warrants with
respect to the delivery of the Common Stock issued upon exercise of such New
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 New Equity Warrants shall be subject to
adjustment as follows:

(a)           In case the Company shall (i) pay a
dividend or make a distribution on its Common Stock in shares of Common Stock,
(ii) subdivide its outstanding shares of Common Stock into a greater number of
shares, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares, or (iv) issue by reclassification, recapitalization or
reorganization of its Common Stock any shares of capital stock of the Company,
then in each such case the number of shares of Common Stock issuable upon
exercise of a New Equity Warrant shall be equitably adjusted so that the Holder
of any New 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 New 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 New
Equity Warrant thereafter exercised shall become entitled to receive shares of
two or more classes of capital stock or shares of Common Stock and other
capital stock of the Company, the Company’s board of directors (whose
determination shall be in its good

9

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 pursuant to such
benefit plans), then the number of shares of Common Stock issuable upon
exercise of a New 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 a New 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 a New Equity Warrant shall be readjusted to the number of shares of
Common Stock issuable upon exercise of a New Equity Warrant which would have
been in effect had the numerator and the denominator of the foregoing fraction
and the resulting adjustment been made based upon the number of shares of
Common Stock actually delivered upon the exercise of such rights or warrants
rather than upon the number of shares of Common Stock offered for subscription
or purchase.  In determining whether any
security covered by this Section 4.1(b) entitles the holders to subscribe for
or purchase shares of Common Stock at less than such Current Market Price, and
in determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received by the Company for
the issuance of such options, rights, warrants or convertible or exchangeable
securities, plus the aggregate amount of additional consideration (as set forth
in the instruments relating thereto) to be received by the Company upon the
exercise, conversion or exchange of such securities, the value of such
consideration, if other than cash, to be determined by the Company’s

10

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 a New 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 a New Equity Warrant immediately
prior to the record date of such distribution by a fraction of which the
numerator shall be the Current Market Price as of the Time of Determination,
and of which the denominator shall be such Current Market Price less the Fair
Market Value on such record date (as determined by the Company’s board of
directors in its good faith judgment, whose determination shall be described in
a statement filed by the Company with the stock transfer or conversion agent
and the Equity Warrant Agent, as appropriate, and which statement the Equity
Warrant Agent shall be entitled to rely on for all purposes and the Equity
Warrant Agent shall have no obligation to investigate or confirm the accuracy
thereof) of the portion of the capital stock or assets or the evidences of
indebtedness or assets so distributed to the holder of one share of Common
Stock or of such subscription rights or warrants applicable to one share of
Common Stock.  Such adjustment shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such distribution.

(d)           For the purpose of any computation
under subsections (b) and (c) of this Section 4.1, the “Current Market Price”
per share of Common Stock on any date shall be deemed to be the average of the
daily Closing Prices for the shorter of (A) 10 consecutive Trading Days ending
on the day immediately preceding the applicable Time of Determination or (B)
the period commencing on the date next succeeding the first public announcement
of the issuance of such rights or warrants or such distribution through such
last day prior to the applicable Time of Determination.  For purposes of the foregoing, the term “Time
of Determination” shall mean the time and date of the record date for
determining 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 a New 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 New 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

11

such Holder a due bill 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 a New 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 a New 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 a New Equity Warrant, New Equity
Warrant Certificates theretofore or thereafter issued may continue to express
the same number and kind of shares as are stated in the New 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 New Equity Warrants.  If one or
more New 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 New Equity Warrants, the
Company shall pay to the Holder of such New 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 New Equity Warrants.

Section 4.4             Notices to Warrantholders.  (a) 
Upon any adjustment of the amount of Common Stock issuable upon exercise
of a New 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 a New 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 certificates, 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

12

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 New Equity Warrants

Section 5.1             No Rights as Holder of Common Stock
Conferred by New Equity Warrants or New Equity Warrant Certificates.  No New Equity Warrant or New 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 New 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 New Equity Warrant Certificate and of
indemnity (other than in connection with any mutilated New 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 New Equity Warrant Certificate, a new New Equity Warrant
Certificate evidencing a like number of New Equity Warrants of the same
title.  Upon the issuance of a new New
Equity Warrant Certificate under this Section, the Company may require the
Holder to pay an amount sufficient to cover any transfer, stamp or other
similar tax or other governmental charge that may be imposed in connection
therewith and any other expenses (including the fees and expenses of the Equity
Warrant Agent) in connection therewith. 
Every substitute Equity Warrant Certificate executed and delivered
pursuant to this Section in lieu of any lost, stolen or destroyed New Equity
Warrant Certificate shall represent a contractual obligation of the Company,
whether or not such lost, stolen or destroyed New 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
New Equity Warrant Certificates, duly executed and delivered hereunder,
evidencing New 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 New Equity
Warrant Certificates.

Section 5.3             Holders of New 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 New Equity Warrants as provided in the New 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 Common Stock are converted into or
exchanged for stock, other securities, cash or assets or following

13

which any remaining outstanding shares of Common Stock
fail to meet the listing standards imposed by each of the New York Stock
Exchange, the American Stock Exchange and the Nasdaq National Market at the
time of such transaction, but shall not include any transaction the primary
purpose of which is the reincorporation of the Company in another jurisdiction
of the United States of America so long as in such transaction each New Equity
Warrant shall convert into an equity security of the successor to the Company
having substantially identical rights as the New Equity Warrant.  If a Sale Transaction occurs, then lawful
provision shall be made by the entity formed by such Sale Transaction or the
entity whose securities, cash or other property will immediately after the Sale
Transaction be owned, by virtue of such Sale Transaction, by the holders of
Common Stock immediately prior to the Sale Transaction, or the entity which
shall have acquired such securities of the Company (collectively the “Formed,
Surviving or Acquiring Corporation”), as the case may be, providing that
each New 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 New 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 a
New Equity Warrant shall receive in exchange for each such New 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 New
Equity Warrant.  Notwithstanding anything
to the contrary herein, there will be no adjustments pursuant to Article 4 hereof
in case of the issuance of any shares of Common Stock in a Sale Transaction
except as provided in this Section 5.4. 
The provisions of this Section 5.4 shall similarly apply to successive
Sale Transactions; provided, however, that in no event shall a Holder of a New
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 New Equity Warrants

Section 6.1             Equity Warrant Register; Exchange
and Transfer of New 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 New Equity Warrants, and, subject to such reasonable regulations as the
Equity Warrant Agent may prescribe, it shall register the New Equity Warrants,
whether held in electronic book-entry or as New 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.

14

Except as provided in the following sentence and
subject to restrictions on transfer prior to the vesting of New Equity Warrants
issued in exchange for Optionholder Warrants, New Equity Warrants, whether held
in electronic book-entry form or represented by New Equity Warrant
Certificates, may be exchanged for one or more other New Equity Warrants
evidencing the same aggregate number of New Equity Warrants of the same title,
or may be transferred in whole or in part. 
A transfer shall be registered and an appropriate entry made in the
Equity Warrant Register (i) in the case of New Equity Warrants held in
electronic book-entry form, upon receipt by the Equity Warrant Agent at its
office designated for such purpose of irrevocable written instructions for
exchange or transfer, all in form satisfactory to the Company and the Equity
Warrant Agent, and (ii) in the case of New Equity Warrant Certificates, upon
surrender of a New 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 a New 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 New Equity Warrant Certificates duly executed by the Company, as so
requested.  The Equity Warrant Agent
shall not be required to effect any exchange or transfer which will result in
the issuance of a fraction of a New Equity Warrant or a New Equity Warrant
Certificate evidencing a fraction of a New Equity Warrant.  All New Equity Warrants, whether issued in
electronic book-entry form or represented by New Equity Warrant Certificates,
issued upon any exchange or transfer of a New Equity Warrant shall be the valid
obligations of the Company, evidencing the same obligations, and entitled to
the same benefits under this Agreement, as the New Equity Warrants surrendered
for such exchange or transfer.

No service charge shall be made for any exchange or
transfer of New Equity Warrants, but the Company may require payment of a sum
sufficient to cover any transfer, stamp or other similar tax or other
governmental charge that may be imposed in connection with any such exchange or
transfer, in accordance with Section 2.5 hereof.

Section 6.2             Treatment of Holders of New Equity
Warrants.  Every Holder of a New 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 New Equity Warrants that the Company and the Equity Warrant
Agent may treat the record holder of a New Equity Warrant Certificate as the
absolute owner of such New Equity Warrant for all purposes and as the Person
entitled to exercise the rights represented by such New Equity Warrant.

Section 6.3             Cancellation of New Equity Warrant
Certificates.  In the event that the
Company shall purchase, redeem or otherwise acquire any New Equity Warrants
after the issuance thereof, the New 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 New Equity Warrant Certificate (including any mutilated New Equity Warrant
Certificate) delivered to it for exercise, in whole or in part, or for exchange
or transfer.  New 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.

15

Article 7.

Concerning the Equity Warrant Agent

Section 7.1             Equity Warrant Agent.  The Company hereby appoints [                           ] as Equity Warrant
Agent of the Company in respect of the New Equity Warrants upon the expressed
terms and conditions set forth herein; and [                           ] hereby accepts
such appointment.  The Equity Warrant
Agent shall have the powers and authority expressly granted to and conferred
upon it in the New Equity Warrant Certificates and hereby and such further
powers and authority acceptable in writing to the Equity Warrant Agent to act
on behalf of the Company as the Company may hereafter grant to or confer upon
it.  All of the terms and provisions with
respect to such powers and authority contained in the New 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 Equity Warrant Agent in connection with the acceptance and administration
of this Agreement or the exercise or performance of its duties hereunder.  The indemnification and exculpation
provisions provided for herein, including, but not limited to those in Section
7.2(a) and 7.2(b) hereof, shall survive the termination of this Agreement and
the resignation or removal of the Equity Warrant Agent.  The costs and expenses incurred in enforcing
this right of indemnification shall be paid by the Company.

(b)           Liability of the Equity Warrant
Agent.  The Equity Warrant Agent shall be
liable hereunder only for its own gross negligence or bad faith, as each is
finally determined by a court of competent jurisdiction.  Anything to the contrary notwithstanding, in
no event shall the Equity Warrant Agent be liable for special, punitive,
indirect, consequential or incidental loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Equity Warrant Agent
has been advised of the likelihood of such loss or damage.  Any liability of the Equity Warrant Agent
under this Agreement will be limited to the amount of fees paid by the Company
to the Equity Warrant Agent pursuant to this Agreement.

16

(c)           Agent for the Company.  In acting under this Agreement and in connection
with any New Equity Warrant Certificate, the Equity Warrant Agent is acting
solely as agent of the Company and does not assume any obligation or
relationship of agency or trust for or with any Holder.

(d)           Counsel.  The Equity Warrant Agent may consult with
counsel reasonably satisfactory to it, and the advice or opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.

(e)           Documents.  The Equity Warrant Agent shall be fully
protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in reliance upon any notice, direction, consent,
certification, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the proper
parties.

(f)            Officer’s Certificate.  The Equity Warrant Agent is hereby authorized
and directed to accept instructions with respect to the performance of its
duties hereunder, contained in a certificate signed by any one of the Chairman,
the Vice Chairman, the Chief Executive Officer, the President, a Vice
President, the Treasurer, and Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company (an “Officer’s Certificate”)
delivered by the Company to the Equity Warrant Agent, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken, suffered or omitted by it in good faith in
accordance with any Officer’s Certificate or for any delay in acting while
waiting for such Officer’s Certificate.

(g)           Actions Through Agents.  The Equity Warrant Agent may execute and
exercise any of the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents, and, with
regard to 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 New 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.

17

(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 New 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 New 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 New Equity Warrant Certificate (except as to the Equity Warrant Agent’s
countersignature on such New 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 New 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 New
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 New 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 New 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,

18

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 New Equity Warrants, that there shall at all times be a
New Equity Warrant Agent hereunder until all the New 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

19

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 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 New 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 New 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 New
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 New Equity Warrants the
consent of which is required for modification or amendment of this Agreement or
the New 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 Officer’s Certificate which states that
the proposed modification or amendment is in compliance with the terms of this
Section 8.1.

Section 8.2             Notices and Demands to the Company
and Equity Warrant Agent.  If the Equity
Warrant Agent shall receive any written notice or demand addressed to the
Company by any Holder pursuant to the provisions of the New 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 [                         ],

20

Attention:
[               ]; any communications
from the Equity Warrant Agent to the Company with respect to this Agreement
shall be addressed to Expedia, Inc., 3150 139th Avenue SE, Bellevue,
Washington 98005, 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 New Equity Warrants
shall be governed by the laws of the State of New York applicable to contracts
made and to be performed entirely within such state.

Section 8.5             Governmental Approvals.  The Company will from time to time use all
reasonable efforts to obtain and keep effective any and all permits, consents
and approvals of governmental agencies and authorities and the national
securities exchange on which the New 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 New Equity Warrants, and
the exercise of the New 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 New Equity Warrants, the full number of
shares of Common Stock deliverable upon the exercise of all outstanding New
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 New Equity Warrants shall be computed as if at the
time of computation all outstanding New 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 New 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 nonassessable 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 New Equity Warrants will upon delivery be
duly and validly issued and fully paid and nonassessable, 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.

21

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 New 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 New Equity Warrants
(each a “Prospectus”), and the Equity Warrant Agent agrees to deliver to
the Holder of the New 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.

Section 8.13           Compliance with Expedia, Inc. 2001
Stock Plan.  Except as specifically
provided in this Agreement, the New Equity Warrants exchanged for Optionholder
Warrants shall be subject to the terms and conditions of the Expedia, Inc. 2001
Stock Plan (as amended, the “Plan”); provided, however, that the Equity
Warrant Agent has no responsibility or obligation to comply with the Plan, or
to verify or investigate whether the Equity Warrants do in fact comply with or
are subject to the terms of the Plan.

Section 8.14           Withholding.

(a)           The Holder may satisfy, in whole or
in part, any required tax withholding obligation (but no more than the minimum
required withholding obligation) by delivery of Common Stock owned by the
Holder (which is not subject to any pledge or other security interest) with a
Fair Market Value equal to such withholding obligation or, in the case of a tax
withholding obligation arising from an exercise of a New Equity Warrant, by
having the Company withhold from the number of shares of Common Stock otherwise
issuable pursuant to the exercise of the New Equity Warrant a number of shares
of Common Stock with a Fair Market Value equal to such withholding obligation.

22

(b)           Notwithstanding the foregoing, any
required tax withholding obligation (but no more than the minimum required
withholding obligation) arising from the vesting of a New Equity Warrant exchanged
for Optionholder Warrants shall be satisfied solely through the withholding by
the Company from the number of newly vested New Equity Warrants held by the
Holder a number of such New Equity Warrants having a value equal to such
withholding obligation, based on the closing price of a New Equity Warrant on
the Nasdaq National Market (or other established stock exchange or national
market system on which such New Equity Warrants are listed or traded) on the
trading day prior to the date of vesting.

[Remainder of page left intentionally blank]

23

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:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  [                                   ]

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
				

 

24

EXHIBIT A

 

	
  SPECIMEN

  
	
   

  	
  CUSIP

  
	
  FACE

  
	
  No. W ___

  	
  New Equity
  Warrants

  

NEW EQUITY WARRANT
CERTIFICATE

EXPEDIA

This Warrant Certificate certifies that
________________________, or registered assigns, is the registered Holder of
New Equity Warrants (the “New Equity Warrants”) to purchase Common
Stock, par value $0.001 per share, of Expedia, Inc., a Delaware corporation (the
“Company”).  Each New Equity
Warrant entitles the Holder to purchase from the Company [________] fully paid
and nonassessable shares of Common Stock, par value $0.001 per share, of the
Company (“Common Stock” or “Shares”) at any time on or before
5:00 p.m. New York City time [________], at the exercise price (the “Exercise
Price”) of [______] payable in lawful money of the United States of America
upon surrender of this New 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 New Expedia 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 New Equity Warrants is
subject to adjustment upon the occurrence of certain events set forth in the New
Expedia Equity Warrant Agreement.  No
fractional shares or scrip representing fractions of shares of Common Stock
shall be issued upon exercise of the New Equity Warrants.

By acceptance of this Equity Warrant Certificate, each
Holder agrees to be bound by the terms of the New Expedia Equity Warrant
Agreement.

Reference is hereby made to the further provisions of
this New 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 New Expedia Equity
Warrant Agreement.

This New Equity Warrant Certificate shall not be valid
unless countersigned by the Equity Warrant Agent, as such term is used in the New
Expedia Equity Warrant Agreement.

IN WITNESS WHEREOF, Expedia, Inc. has caused this New
Equity Warrant Certificate to be duly executed under its corporate seal.

	
   

  	
  EXPEDIA, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Countersigned:

  	
   

  
	
   

  	
   

  
	
  [                                                   ]

  	
   

  
	
  as Equity
  Warrant Agent

  	
   

  

 

	
  By:

  	
   

  
	
   

  	
  Authorized
  Signature

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
			

 

REVERSE

 

NEW EQUITY WARRANT CERTIFICATE

 

EXPEDIA, INC.

 

 

The New Equity Warrants evidenced by this New Equity
Warrant Certificate are part of a duly authorized issue of New Equity Warrants
issued pursuant to that certain Equity Warrant Agreement dated as of [               ], 2005 (the “New Expedia
Equity Warrant Agreement”), duly executed and delivered by the Company to
[                                ], a
[            ], as Equity Warrant Agent
(the “Equity Warrant Agent”), which New Expedia 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 New Equity Warrants.

New Equity Warrants may be exercised to purchase
shares of Common Stock of the Company, par value $0.001 per share (“Common
Stock” or “Shares”) subject to such terms and conditions as are set
forth in the New Expedia Equity Warrant Agreement at any time on or before 5:00
p.m. New York City time on [              
], at the Exercise Price set forth on the face hereof.  The Holder of New Equity Warrants evidenced
by this New Equity Warrant Certificate may exercise them by surrendering the
New 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 New
Equity Warrants evidenced hereby the number of New Equity Warrants exercised
shall be less than the total number of New Equity Warrants evidenced hereby,
there shall be issued to the Holder hereof or his assignee a new New Equity
Warrant Certificate evidencing the number of New Equity Warrants not
exercised.  Nothing contained in the New
Expedia Equity Warrant Agreement or in this New Equity Warrant Certificate
shall be construed as conferring upon the Holders thereof the right to vote, to
receive dividends or other distributions, to exercise any preemptive right or
to consent or to receive notice as stockholders in respect of meetings of
stockholders for the election of Directors of the Company or any other matter,
or any other rights whatsoever as stockholders of the Company.

The New Expedia Equity Warrant Agreement provides that
upon the occurrence of certain events, the number of shares of Common Stock
issuable upon exercise of a New Equity Warrant may, subject to certain
conditions, be adjusted.

New 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 New Expedia Equity Warrant Agreement, but
without payment of any service charge, for another New Equity Warrant
Certificate or New Equity Warrant Certificates of like tenor evidencing in the
aggregate a like number of New Equity Warrants and registered in the name of
such registered Holder.

Upon due presentment for registration of transfer of
this New Equity Warrant Certificate at the office of the Equity Warrant Agent
or by registered mail, return receipt requested, a new New Equity Warrant
Certificate or New Equity Warrant Certificates of like tenor and evidencing in
the aggregate a like number of New Equity Warrants shall be issued to the
transferee(s) in exchange for this New Equity Warrant Certificate, subject to
the limitations provided in the New Expedia Equity Warrant Agreement, without
charge except for any transfer, stamp or other similar tax or other
governmental charge imposed in connection therewith.

The Company and the Equity Warrant Agent may deem and
treat the registered Holder(s) hereof as the absolute owner(s) of this New
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 New Equity Warrant on the part
of any other person.

EXPEDIA, INC.

ELECTION TO PURCHASE

EXPEDIA, INC.

3150 139th Avenue, SE

Bellevue, Washington 98005

The undersigned hereby irrevocably elects to exercise
the right of purchase represented by this New Equity Warrant Certificate for
___ New 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 New Equity Warrants to be exercised shall not be all
of the New Equity Warrants evidenced by this New Equity Warrant Certificate,
the undersigned requests that a new New Equity Warrant Certificate for the
balance of the New 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

New Equity Warrants.)

FOR VALUE RECEIVED
the undersigned hereby sells, assigns and transfers unto

 

 

	
   

  	
   

  	
   

  
	
   

  	
  (Print name and address
  of transferee)

  	
   

  

 

_______ New Equity Warrants, evidenced by this New
Equity Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint _______________
Attorney, to transfer the New Equity Warrant Certificate on the books of the
Company, with full power of substitution. 
If said number of New Equity Warrants to be transferred shall not be all
of the New Equity Warrants evidenced by this New Equity Warrant Certificate,
the assignor and assignee agree that such Attorney shall submit this New Equity
Warrant Certificate to the Company and request that new New Equity Warrant
Certificates for the applicable number of New 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 Identifying Number of Assignee)

  	
   

  	
  (Signature must conform to name of holder as specified on the face of
  the Equity Warrant Certificate)

  
	
   

  	
   

  	
   

  
	
  Address of Assignor (if necessary):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address of Assignee (if necessary):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guaranteed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature of Guarantor

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