Document:

exv4w2

 

Exhibit 4.2

REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT dated August 21, 2006 (the “Agreement”) is entered into by
and among Expedia, Inc., a Delaware corporation (the “Company”), the subsidiary guarantors listed
in Schedule 1 hereto (the “Guarantors”), and J.P. Morgan Securities Inc. and Lehman Brothers Inc.,
as representatives (the “Representatives”) of the initial purchasers (the “Initial Purchasers”)
listed in Schedule 1 to the Purchase Agreement dated August 16, 2006 (the “Purchase Agreement”).

     The Company, the Guarantors and the Initial Purchasers are parties to the Purchase Agreement,
which provides for the sale by the Company to the Initial Purchasers of $500,000,000 aggregate
principal amount of the Company’s 7.456% Senior Notes due 2018(the “Securities”) which will be
guaranteed on an unsecured senior basis by each of the Guarantors. As an inducement to the Initial
Purchasers to enter into the Purchase Agreement, the Company and the Guarantors have agreed to
provide to the Initial Purchasers and their direct and indirect transferees the registration rights
set forth in this Agreement. The execution and delivery of this Agreement is a condition to the
closing under the Purchase Agreement.

     In consideration of the foregoing, the parties hereto agree as follows:

     1. Definitions. As used in this Agreement, the following terms shall have the
following meanings:

     “Additional Guarantor” shall mean any subsidiary of the Company that becomes a Guarantor under
the Indenture after the date of this Agreement.

     “Business Day” shall mean any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain closed.

     “Company” shall have the meaning set forth in the preamble and shall also include the
Company’s successors.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

     “Exchange Dates” shall have the meaning set forth in Section 2(a)(ii) hereof.

     “Exchange Offer” shall mean the exchange offer by the Company and the Guarantors of Exchange
Securities for Registrable Securities pursuant to Section 2(a) hereof.

 

 

     “Exchange Offer Registration” shall mean a registration under the Securities Act effected
pursuant to Section 2(a) hereof.

     “Exchange Offer Registration Statement” shall mean an exchange offer registration statement on
Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to
such registration statement, in each case including the Prospectus contained therein or deemed a
part thereof, all exhibits thereto and any document incorporated by reference therein.

     “Exchange Securities” shall mean senior notes issued by the Company and guaranteed by the
Guarantors under the Indenture containing terms identical to the Securities (except that the
Exchange Securities will not be subject to restrictions on transfer or to any increase in annual
interest rate for failure to comply with this Agreement) and to be offered to Holders of Securities
in exchange for Securities pursuant to the Exchange Offer.

     “Free Writing Prospectus” means each free writing prospectus (as defined in Rule 405 under the
Securities Act) prepared by or on behalf of the Company or used or referred to by the Company in
connection with the sale of the Securities or the Exchange Securities.

     “Guarantors” shall have the meaning set forth in the preamble and shall also include any
Additional Guarantors.

     “Holders” shall mean the Initial Purchasers, for so long as they own any Registrable
Securities, and each of their successors, assigns and direct and indirect transferees who become
owners of Registrable Securities under the Indenture; provided that for purposes of Sections 4 and
5 of this Agreement, the term “Holders” shall include Participating Broker-Dealers.

     “Indemnified Person” shall have the meaning set forth in Section 5(c) hereof.

     “Indemnifying Person” shall have the meaning set forth in Section 5(c) hereof.

     “Indenture” shall mean the Indenture relating to the Securities dated as of August 21, 2006
among the Company, the Guarantors and The Bank of New York Trust Company, N.A., as trustee, and as
the same may be amended from time to time in accordance with the terms thereof.

     “Initial Purchasers” shall have the meaning set forth in the preamble.

     “Inspector” shall have the meaning set forth in Section 3(a)(xiii) hereof.

 

 

     “Issuer Information” shall have the meaning set forth in Section 5(a) hereof.

     “Majority Holders” shall mean the Holders of a majority of the aggregate principal amount of
the outstanding Registrable Securities; provided that whenever the consent or approval of Holders
of a specified percentage of Registrable Securities is required hereunder, any Registrable
Securities owned directly or indirectly by the Company or any of its affiliates shall not be
counted in determining whether such consent or approval was given by the Holders of such required
percentage or amount; and provided, further, that if the Company shall issue any additional
Securities under the Indenture prior to consummation of the Exchange Offer or, if applicable, the
effectiveness of any Shelf Registration Statement, such additional Securities and the Registrable
Securities to which this Agreement relates shall be treated together as one class for purposes of
determining whether the consent or approval of Holders of a specified percentage of Registrable
Securities has been obtained.

     “Participating Broker-Dealers” shall have the meaning set forth in Section 4(a) hereof.

     “Person” shall mean an individual, partnership, limited liability company, corporation, trust
or unincorporated organization, or a government or agency or political subdivision thereof.

     “Prospectus” shall mean the prospectus included in, or, pursuant to the rules and regulations
of the Securities Act, deemed a part of, a Registration Statement, including any preliminary
prospectus, and any such prospectus as amended or supplemented by any prospectus supplement,
including a prospectus supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and
supplements to such prospectus, and in each case including any document incorporated by reference
therein.

     “Purchase Agreement” shall have the meaning set forth in the preamble.

     “Representatives” shall have the meaning set forth in the preamble.

     “Registrable Securities” shall mean the Securities; provided that the Securities shall cease
to be Registrable Securities (i) when a Registration Statement with respect to such Securities has
become effective under the Securities Act and such Securities have been exchanged or disposed of
pursuant to such Registration Statement, (ii) when such Securities are eligible to be sold pursuant
to Rule 144(k) (or any similar provision then in force, but not Rule 144A) under the Securities Act
or (iii) when such Securities cease to be outstanding.

 

 

     “Registration Expenses” shall mean any and all expenses incident to performance of or
compliance by the Company and the Guarantors with this Agreement, including without limitation: (i)
all SEC, stock exchange or National Association of Securities Dealers, Inc. registration and filing
fees, (ii) all fees and expenses incurred in connection with compliance with state securities or
blue sky laws (including reasonable fees and disbursements of counsel for any Underwriters or
Holders in connection with blue sky qualification of any Exchange Securities or Registrable
Securities), (iii) all expenses of any Persons in preparing or assisting in preparing, word
processing, printing and distributing any Registration Statement, any Prospectus and any amendments
or supplements thereto, any underwriting agreements, securities sales agreements or other similar
agreements and any other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, (v) all fees and disbursements relating to the
qualification of the Indenture under applicable securities laws, (vi) the fees and disbursements of
the Trustee and its counsel, (vii) the reasonable fees and disbursements of counsel for the Company
and the Guarantors and, in the case of a Shelf Registration Statement, the fees and disbursements
of one counsel for the Holders (which counsel shall be selected by the Majority Holders and which
counsel may also be counsel for the Initial Purchasers) and (viii) the fees and disbursements of
the independent public accountants of the Company and the Guarantors, including the expenses of any
special audits or “comfort” letters required by or incident to the performance of and compliance
with this Agreement, but excluding fees and expenses of counsel to the Underwriters (other than
fees and expenses set forth in clause (ii) above) or the Holders and underwriting discounts and
commissions, brokerage commissions and transfer taxes, if any, relating to the sale or disposition
of Registrable Securities by a Holder.

     “Registration Default” shall have the meaning set forth in Section 2(d) hereof.

     “Registration Statement” shall mean any registration statement of the Company and the
Guarantors that covers any of the Exchange Securities or Registrable Securities pursuant to the
provisions of this Agreement and all amendments and supplements to any such registration statement,
including post-effective amendments, in each case including the Prospectus contained therein or
deemed a part thereof, all exhibits thereto and any document incorporated by reference therein.

     “SEC” shall mean the United States Securities and Exchange Commission.

     “Securities” shall have the meaning set forth in the preamble.

     “Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

 

 

     “Shelf Additional Interest Date” shall have the meaning set forth in Section 2(d) hereof.

     “Shelf Effectiveness Period” shall have the meaning set forth in Section 2(b) hereof.

     “Shelf Registration” shall mean a registration effected pursuant to Section 2(b) hereof.

     “Shelf Registration Statement” shall mean a “shelf” registration statement of the Company and
the Guarantors that covers all or a portion of the Registrable Securities (but no other securities
unless approved by a majority of the Holders whose Registrable Securities are to be covered by such
Shelf Registration Statement) on an appropriate form under Rule 415 under the Securities Act, or
any similar rule that may be adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case including the Prospectus
contained therein or deemed a part thereof, all exhibits thereto and any document incorporated by
reference therein.

     “Shelf Request” shall have the meaning set forth in Section 2(b) hereof.

     “Subsidiary Guarantees” shall mean the guarantees of the Securities and Exchange Securities by
the Guarantors under the Indenture.

     “Staff” shall mean the staff of the SEC.

     “Trust” shall have the meaning set forth in Section 6(j) hereof.

     “Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended from time to
time.

     “Trustee” shall mean the trustee with respect to the Securities under the Indenture.

     “Underwriter” shall have the meaning set forth in Section 3(e) hereof.

     “Underwritten Offering” shall mean an offering in which Registrable Securities are sold to an
Underwriter for reoffering to the public.

     2. Registration Under the Securities Act. (a) To the extent not prohibited by any
applicable law or applicable interpretations of the Staff, the Company and the Guarantors shall use
their commercially reasonable best efforts to (i) cause to be filed as soon as practicable, but in
any event no later than February 17, 2007 an Exchange Offer Registration Statement covering an

 

 

offer to the Holders to exchange all the Registrable Securities for Exchange Securities and
(ii) cause such Exchange Offer Registration Statement to become effective as soon as practicable,
but in no event later than May 18, 2007 and (iii) have such Registration Statement remain effective
until 180 days after the last Exchange Date for use by one or more Participating Broker-Dealers.
The Company and the Guarantors shall commence the Exchange Offer promptly after the Exchange Offer
Registration Statement is declared effective by the SEC and use their commercially reasonable best
efforts to complete the Exchange Offer not later than 30 days after such effective date.

     The Company and the Guarantors shall commence the Exchange Offer by mailing the related
Prospectus, appropriate letters of transmittal and other accompanying documents to each Holder
stating, in addition to such other disclosures as are required by applicable law, substantially the
following:

	(i)	 	that the Exchange Offer is being made pursuant to this Agreement and that all Registrable
Securities validly tendered and not properly withdrawn will be accepted for exchange;
	 
	(ii)	 	the dates of acceptance for exchange (which shall be a period of at least 20 Business Days
from the date such notice is mailed) (the “Exchange Dates”);
	 
	(iii)	 	that any Registrable Security not tendered will remain outstanding and continue to accrue
interest but will not retain any rights under this Agreement, except as otherwise specified
herein;
	 
	(iv)	 	that any Holder electing to have a Registrable Security exchanged pursuant to the Exchange
Offer will be required to (A) surrender such Registrable Security, together with the
appropriate letters of transmittal, to the institution and at the address (located in the
Borough of Manhattan, The City of New York) and in the manner specified in the notice, or (B)
effect such exchange otherwise in compliance with the applicable procedures of the depositary
for such Registrable Security, in each case prior to the close of business on the last
Exchange Date; and
	 
	(v)	 	that any Holder will be entitled to withdraw its election, not later than the close of
business on the last Exchange Date, by (A) sending to the institution and at the address
(located in the Borough of Manhattan, The City of New York) specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the
principal amount of Registrable Securities delivered for exchange and a statement that such
Holder is withdrawing its election to have such Securities exchanged or (B) effecting such
withdrawal in compliance with the applicable procedures of the depositary for the Registrable
Securities.

 

 

     As a condition to participating in the Exchange Offer, a Holder will be required to represent
to the Company and the Guarantors that (i) any Exchange Securities to be received by it will be
acquired in the ordinary course of its business, (ii) at the time of the commencement of the
Exchange Offer it has no arrangement or understanding with any Person to participate in the
distribution (within the meaning of the Securities Act) of the Exchange Securities in violation of
the provisions of the Securities Act, (iii) it is not an “affiliate” (within the meaning of Rule
405 under the Securities Act) of the Company or any Guarantor and (iv) if such Holder is a
broker-dealer that will receive Exchange Securities for its own account in exchange for Registrable
Securities that were acquired as a result of market-making or other trading activities, then such
Holder will deliver a Prospectus (or, to the extent permitted by law, make available a Prospectus
to purchasers) in connection with any resale of such Exchange Securities.

     As soon as practicable after the last Exchange Date, the Company and the Guarantors shall:

	(i)	 	accept for exchange Registrable Securities or portions thereof validly tendered and not
properly withdrawn pursuant to the Exchange Offer; and
	 
	(ii)	 	deliver, or cause to be delivered, to the Trustee for cancellation all Registrable Securities
or portions thereof so accepted for exchange by the Company and issue, and cause the Trustee
to promptly authenticate and deliver to each Holder, Exchange Securities equal in principal
amount to the principal amount of the Registrable Securities tendered by such Holder.

     The Company and the Guarantors shall use their commercially reasonable best efforts to
complete the Exchange Offer as provided above and shall comply with the applicable requirements of
the Securities Act, the Exchange Act and other applicable laws and regulations in connection with
the Exchange Offer. The Exchange Offer shall not be subject to any conditions, other than that the
Exchange Offer does not violate any applicable law or applicable interpretations of the Staff.

     (b) In the event that (i) the Company and the Guarantors determine that the Exchange Offer
Registration provided for in Section 2(a) above is not available or may not be completed as soon as
reasonably practicable after the last Exchange Date because it would violate any applicable law or
applicable interpretations of the Staff, (ii) the Exchange Offer is not for any other reason
completed by June 17, 2007 or (iii) upon receipt of a written request (a “Shelf Request”) from any
Initial Purchaser representing that it holds Registrable Securities that are or were ineligible to
be exchanged in the Exchange Offer, the Company and the Guarantors shall use their commercially
reasonable best efforts to cause to be filed as soon as practicable after such determination date
or Shelf Request, as the case may be, a Shelf Registration Statement providing

 

 

for the sale of all the Registrable Securities by the Holders thereof and to have such Shelf
Registration Statement become effective.

     In the event that the Company and the Guarantors are required to file a Shelf Registration
Statement pursuant to clause (iii) of the preceding sentence, the Company and the Guarantors shall
use their commercially reasonable best efforts to file and have become effective both an Exchange
Offer Registration Statement pursuant to Section 2(a) with respect to all Registrable Securities
and a Shelf Registration Statement (which may be a combined Registration Statement with the
Exchange Offer Registration Statement) with respect to offers and sales of Registrable Securities
held by the Initial Purchasers after completion of the Exchange Offer.

     The Company and the Guarantors agree to use their commercially reasonable best efforts to keep
the Shelf Registration Statement continuously effective until the expiration of the period referred
to in Rule 144(k) (or any similar rule then in force, but not Rule 144A) under the Securities Act
with respect to the Registrable Securities or such shorter period that will terminate when all the
Registrable Securities covered by the Shelf Registration Statement have been sold pursuant to the
Shelf Registration Statement (the “Shelf Effectiveness Period”). The Company and the Guarantors
further agree to supplement or amend the Shelf Registration Statement and the related Prospectus if
required by the rules, regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement or by the Securities Act or by any other rules and
regulations thereunder or if reasonably requested by a Holder of Registrable Securities with
respect to information relating to such Holder, and to use their commercially reasonable best
efforts to cause any such amendment to become effective, if required, and such Shelf Registration
Statement and Prospectus to become usable as soon as thereafter practicable. The Company and the
Guarantors agree to furnish to the Holders of Registrable Securities (or file on EDGAR) copies of
any such supplement or amendment promptly after its being used or filed with the SEC.

     (c) The Company and the Guarantors shall pay all Registration Expenses in connection with any
registration pursuant to Section 2(a) or Section 2(b) hereof. Each Holder shall pay all
underwriting discounts and commissions, brokerage commissions and transfer taxes, if any, relating
to the sale or disposition of such Holder’s Registrable Securities pursuant to the Shelf
Registration Statement.

     (d) An Exchange Offer Registration Statement pursuant to Section 2(a) hereof will not be
deemed to have become effective unless it has been declared effective by the SEC. A Shelf
Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC or is automatically effective upon filing with the
SEC as provided by Rule 462 under the Securities Act.

 

 

     In the event that (i) the Exchange Offer Registration Statement is not filed with the SEC on
or prior to February 17, 2007, (ii) the Exchange Offer Registration Statement has not been declared
effective by the SEC on or prior to May 18, 2007 or (iii) the Exchange Offer is not completed or
the Shelf Registration Statement, if required pursuant to Section 2(b)(i) or 2(b)(ii) hereof, has
not become effective on or prior to June 17, 2007 (each such event referred to in clauses (i)
through (iii) above, a “Registration Default”), the interest rate on the Registrable Securities
will be increased by 0.25% per annum from the date of such Registration Default until such
Registration Default is cured or the Securities become freely tradable under the Securities Act.
In the event that the Company receives a Shelf Request pursuant to Section 2(b)(iii), and the Shelf
Registration Statement required to be filed thereby has not become effective by the later of (a)
June 17, 2007 or (b) 90 days after delivery of such Shelf Request (such later date, the “Shelf
Additional Interest Date”), then the interest rate on the Registrable Securities will be increased
by 0.25% per annum from such date until the Shelf Registration Statement becomes effective or the
Securities become freely tradable under the Securities Act.

     Notwithstanding the foregoing, (1) the Company and the Guarantors shall in no event be
required to pay additional interest for more than one Registration Default at any given time and
(2) a Holder of Notes or Exchange Notes who is not entitled to the benefits of a Shelf Registration
Statement shall not be entitled to additional interest with respect to a Registration Default that
pertains to such Shelf Registration Statement.

     If the Shelf Registration Statement, if required hereby, has become effective and thereafter
either ceases to be effective or the Prospectus contained therein ceases to be usable, in each case
whether or not permitted by this Agreement, at any time during the Shelf Effectiveness Period, and
such failure to remain effective or usable exists for more than 30 days (whether or not
consecutive) in any 12-month period, then the interest rate on the Registrable Securities will be
increased by 0.25% per annum commencing on the 31st day in such 12-month period and
ending on such date that the Shelf Registration Statement has again become effective or the
Prospectus again becomes usable.

     (e) Without limiting the remedies available to the Initial Purchasers and the Holders, the
Company and the Guarantors acknowledge that any failure by the Company or the Guarantors to comply
with their obligations under Section 2(a) and Section 2(b) hereof may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy
at law, that it will not be possible to measure damages for such injuries precisely and that, in
the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may
be required to specifically enforce the Company’s and the Guarantors’ obligations under Section
2(a) and Section 2(b) hereof.

 

 

     (f) The Company represents, warrants and covenants that it (including its agents and
representatives) will not prepare, make, use, authorize, approve or refer to any “written
communication” (as defined in Rule 405 under the Securities Act), other than any communication
pursuant to Rule 134 under the Securities Act, any document constituting an offer to sell or
solicitation of an offer to buy the Securities or the Exchange Securities that falls within the
exception from the definition of prospectus in Section 2(a)(10)(a) of the Securities Act or a
prospectus satisfying the requirements of section 10(a) of the Securities Act or of Rule 430, Rule
430A, Rule 430B, Rule 430C or Rule 431 under the Securities Act.

     3. Registration Procedures. (a) In connection with their obligations pursuant to
Section 2(a) and Section 2(b) hereof, the Company and the Guarantors shall as expeditiously as
reasonably possible:

     (i) prepare and file with the SEC a Registration Statement on the appropriate form under the
Securities Act, which form (x) shall be selected by the Company and the Guarantors, (y) shall, in
the case of a Shelf Registration, be available for the sale of the Registrable Securities by the
Holders thereof and (z) shall comply as to form in all material respects with the requirements of
the applicable form and include all financial statements required by the SEC to be filed therewith;
and use their commercially reasonable best efforts to cause such Registration Statement to become
effective and remain effective for the applicable period in accordance with Section 2 hereof;

     (ii) prepare and file with the SEC such amendments and post-effective amendments to each
Registration Statement as may be necessary to keep such Registration Statement effective for the
applicable period in accordance with Section 2 hereof and cause each Prospectus to be supplemented
by any required prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424
under the Securities Act; and keep each Prospectus current during the period described in Section
4(3) of and Rule 174 under the Securities Act that is applicable to transactions by brokers or
dealers with respect to the Registrable Securities or Exchange Securities;

     (iii) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities,
to counsel for the Initial Purchasers, to counsel for such Holders and to each Underwriter of an
Underwritten Offering of Registrable Securities, if any, without charge, upon request, as many
copies of each Prospectus or preliminary prospectus, and any amendment or supplement thereto, as
such Holder, counsel or Underwriter may reasonably request in order to facilitate the sale or other
disposition of the Registrable Securities thereunder; and the Company and the Guarantors consent to
the use of such Prospectus, preliminary prospectus and any amendment or supplement thereto in
accordance with applicable law by each of the Holders of Registrable Securities and any such
Underwriters in connection with the offering and sale of the Registrable

 

 

Securities covered by and in the manner described in such Prospectus, preliminary prospectus
or any amendment or supplement thereto in accordance with applicable law;

     (iv) use their commercially reasonable best efforts to register or qualify the Registrable
Securities under all applicable state securities or blue sky laws of such jurisdictions as any
Holder of Registrable Securities covered by a Registration Statement shall reasonably request in
writing by the time the applicable Registration Statement becomes effective; cooperate with such
Holders in connection with any filings required to be made with the National Association of
Securities Dealers, Inc.; and do any and all other acts and things that may be reasonably necessary
or advisable to enable each Holder to complete the disposition in each such jurisdiction of the
Registrable Securities owned by such Holder; provided that neither the Company nor any Guarantor
shall be required to (1) qualify as a foreign corporation or other entity or as a dealer in
securities in any such jurisdiction where it would not otherwise be required to so qualify, (2)
file any general consent to service of process in any such jurisdiction or (3) subject itself to
taxation or tariff in any such jurisdiction if it is not so subject;

     (v) notify counsel for the Initial Purchasers and, in the case of a Shelf Registration, notify
each Holder of Registrable Securities and counsel for such Holders promptly and, if requested by
any such Holder or counsel, confirm such advice in writing (1) when a Registration Statement has
become effective, when any post-effective amendment thereto has been filed and becomes effective
and when any amendment or supplement to the Prospectus has been filed, (2) of any request by the
SEC or any state securities authority for amendments and supplements to a Registration Statement or
Prospectus or for additional information after the Registration Statement has become effective, (3)
of the issuance by the SEC or any state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any proceedings for that purpose,
including the receipt by the Company of any notice of objection of the SEC to the use of a Shelf
Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the
Securities Act, (4) if, between the applicable effective date of a Shelf Registration Statement and
the closing of any sale of Registrable Securities covered thereby, the representations and
warranties of the Company or any Guarantor contained in any underwriting agreement, securities
sales agreement or other similar agreement, if any, relating to an offering of such Registrable
Securities cease to be true and correct in all material respects or if the Company or any Guarantor
receives any notification with respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, (5)
of the happening of any event during the period a Registration Statement is effective that makes
any statement made in such Registration Statement or the related Prospectus untrue in any material
respect or that requires the making of any changes in such Registration Statement or

 

 

Prospectus in order to make the statements therein not misleading and (6) of any determination
by the Company or any Guarantor that a post-effective amendment to a Registration Statement or any
amendment or supplement to the Prospectus would be appropriate;

     (vi) use their commercially reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement or, in the case of a Shelf Registration,
the resolution of any objection of the SEC pursuant to Rule 401(g)(2), including by filing an
amendment to such Shelf Registration Statement on the proper form, as soon as practicable and
provide prompt notice to each Holder of the withdrawal of any such order or such resolution;

     (vii) in the case of a Shelf Registration, upon request, furnish to each Holder of Registrable
Securities, without charge, at least one conformed copy of each Registration Statement and any
post-effective amendment thereto (without any documents incorporated therein by reference or
exhibits thereto, unless requested);

     (viii) in the case of a Shelf Registration, cooperate with the Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends and enable such
Registrable Securities to be issued in such denominations and registered in such names (consistent
with the provisions of the Indenture) as such Holders may reasonably request at least two Business
Days prior to the closing of any sale of Registrable Securities;

     (ix) in the case of a Shelf Registration, upon the occurrence of any event contemplated by
Section 3(a)(v)(5) hereof, use their reasonable best efforts to prepare and file with the SEC a
supplement or post-effective amendment to such Shelf Registration Statement or the related
Prospectus or any document incorporated therein by reference or file any other required document so
that, as thereafter delivered (or, to the extent permitted by law, made available) to purchasers of
the Registrable Securities, such Prospectus will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the Company and the Guarantors shall
notify the Holders of Registrable Securities to suspend use of the Prospectus as promptly as
practicable after the occurrence of such an event, and such Holders hereby agree to suspend use of
the Prospectus until the Company and the Guarantors have amended or supplemented the Prospectus to
correct such misstatement or omission;

     (x) a reasonable time prior to the filing of any Registration Statement, any Prospectus, any
amendment to a Registration Statement or amendment or supplement to a Prospectus (other than
documents that will be incorporated by

 

 

reference therein), provide copies of such document to the Initial Purchasers and their
counsel (and, in the case of a Shelf Registration Statement, to the Holders of Registrable
Securities and their counsel) and make such of the representatives of the Company and the
Guarantors as shall be reasonably requested by the Initial Purchasers or their counsel (and, in the
case of a Shelf Registration Statement, the Holders of Registrable Securities or their counsel)
available for discussion of such document; and the Company and the Guarantors shall not, at any
time after initial filing of a Registration Statement, use or file any Prospectus, any amendment of
or supplement to a Registration Statement or a Prospectus (other than documents that will be
incorporated by reference therein), of which the Initial Purchasers and their counsel (and, in the
case of a Shelf Registration Statement, the Holders of Registrable Securities and their counsel)
shall not have previously been advised and furnished a copy or to which the Initial Purchasers or
their counsel (and, in the case of a Shelf Registration Statement, the Holders of Registrable
Securities or their counsel) shall reasonably object;

     (xi) obtain a CUSIP number for all Exchange Securities or Registrable Securities, as the case
may be, not later than the initial effective date of a Registration Statement;

     (xii) cause the Indenture to be qualified under the Trust Indenture Act in connection with the
registration of the Exchange Securities or Registrable Securities, as the case may be; cooperate
with the Trustee and the Holders to effect such changes to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and execute,
and use their reasonable best efforts to cause the Trustee to execute, all documents as may be
required to effect such changes and all other forms and documents required to be filed with the SEC
to enable the Indenture to be so qualified in a timely manner;

     (xiii) in the case of a Shelf Registration, make available for inspection prior to the filing
of the Shelf Registration Statement and during the Shelf Effectiveness Period by a representative
of the Holders of the Registrable Securities (an “Inspector”), any Underwriter participating in any
disposition pursuant to such Shelf Registration Statement, any attorneys and accountants designated
by a majority of the Holders of Registrable Securities to be included in such Shelf Registration
and any attorneys and accountants designated by such Underwriter, at reasonable times and in a
reasonable manner, all pertinent financial and other records, documents and properties of the
Company and its subsidiaries, and cause the respective officers, directors and employees of the
Company and the Guarantors to supply all information reasonably requested by any such Inspector,
Underwriter, attorney or accountant in connection with a Shelf Registration Statement; provided
that if any such information is identified by the Company or any Guarantor as being confidential or
proprietary, each Person receiving such information shall take such actions as are reasonably
necessary

 

 

to protect the confidentiality of such information to the extent such action is otherwise not
inconsistent with, an impairment of or in derogation of the rights and interests of any Inspector,
Holder or Underwriter);

     (xiv) in the case of a Shelf Registration, use their commercially reasonable best efforts to
cause all Registrable Securities to be listed on any securities exchange or any automated quotation
system on which similar securities issued or guaranteed by the Company or any Guarantor are then
listed if requested by the Majority Holders, to the extent such Registrable Securities satisfy
applicable listing requirements;

     (xv) if reasonably requested by any Holder of Registrable Securities covered by a Shelf
Registration Statement, promptly include in a Prospectus supplement or post-effective amendment
such information with respect to such Holder as such Holder reasonably requests to be included
therein and make all required filings of such Prospectus supplement or such post-effective
amendment as soon as reasonably practicable after the Company has received notification of the
matters to be so included in such filing;

     (xvi) as may be reasonably be required in the case of a Shelf Registration, enter into such
customary agreements and take all such other actions in connection therewith (including those
requested by the Holders of a majority in principal amount of the Registrable Securities covered by
the Shelf Registration Statement) in order to expedite or facilitate the disposition of such
Registrable Securities including, but not limited to, an Underwritten Offering and in such
connection, (1) to the extent possible, make such representations and warranties to the Holders and
any Underwriters of such Registrable Securities with respect to the business of the Company and its
subsidiaries and the Registration Statement, Prospectus and documents incorporated by reference or
deemed incorporated by reference, if any, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings and confirm the same if and
when requested, (2) obtain opinions of counsel to the Company and the Guarantors (which counsel and
opinions, in form, scope and substance similar to that provided in the Purchase Agreement, as
modified for registered offering, shall be reasonably satisfactory to the Holders and such
Underwriters and their respective counsel) addressed to each selling Holder and Underwriter of
Registrable Securities, covering the matters customarily covered in opinions requested in
underwritten offerings, (3) obtain “comfort” letters from the independent certified public
accountants of the Company and the Guarantors (and, if necessary, any other certified public
accountant of any subsidiary of the Company or any Guarantor, or of any business acquired by the
Company or any Guarantor for which financial statements and financial data are or are required to
be included in the Registration Statement) addressed to each selling Holder (to the extent
permitted by applicable professional standards) and Underwriter of Registrable Securities, such
letters to be in customary form and covering matters of the type customarily

 

 

covered in “comfort” letters in connection with underwritten offerings, including but not
limited to financial information contained in any preliminary prospectus or Prospectus and (4)
deliver such documents and certificates as may be reasonably requested by the Holders of a majority
in principal amount of the Registrable Securities being sold or the Underwriters, and which are
customarily delivered in underwritten offerings, to evidence the continued validity of the
representations and warranties of the Company and the Guarantors made pursuant to clause (1) above
and to evidence compliance with any customary conditions contained in an underwriting agreement;
and

     (xvii) so long as any Registrable Securities remain outstanding, cause each Additional
Guarantor upon the creation or acquisition by the Company of such Additional Guarantor, to execute
a counterpart to this Agreement in the form attached hereto as Annex A and to deliver such
counterpart, together with an opinion of counsel as to the enforceability thereof against such
entity, to the Initial Purchasers no later than five Business Days following the execution thereof.

     (b) In the case of a Shelf Registration Statement, the Company may require each Holder of
Registrable Securities to furnish to the Company such information regarding such Holder and the
proposed disposition by such Holder of such Registrable Securities as the Company and the
Guarantors may from time to time reasonably request in writing.

     (c) In the case of a Shelf Registration Statement, each Holder of Registrable Securities
covered in such Shelf Registration Statement agrees that, upon receipt of any notice from the
Company and the Guarantors of the happening of any event of the kind described in Section
3(a)(v)(3) or 3(a)(v)(5) hereof, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to the Shelf Registration Statement until such Holder’s receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 3(a)(ix) hereof and, if so
directed by the Company and the Guarantors, such Holder will deliver to the Company and the
Guarantors all copies in its possession, other than permanent file copies then in such Holder’s
possession, of the Prospectus covering such Registrable Securities that is current at the time of
receipt of such notice.

     (d) If the Company and the Guarantors shall give any notice to suspend the disposition of
Registrable Securities pursuant to a Registration Statement, the Company and the Guarantors shall
extend the period during which such Registration Statement shall be maintained effective pursuant
to this Agreement by the number of days during the period from and including the date of the giving
of such notice to and including the date when the Holders of such Registrable Securities shall have
received copies of the supplemented or amended Prospectus necessary to resume such dispositions.
The Company and the Guarantors may give any such notice only three times during any 365-day

 

 

period and any such suspensions shall not exceed 30 days for each suspension and there shall
not be more than two suspensions in effect during any 365-day period.

     (e) The Holders of Registrable Securities covered by a Shelf Registration Statement who desire
to do so may sell such Registrable Securities in an Underwritten Offering. In any such
Underwritten Offering, the investment bank or investment banks and manager or managers (each an
“Underwriter”) that will administer the offering will be selected by the Holders of a majority in
principal amount of the Registrable Securities included in such offering.

     4. Participation of Broker-Dealers in Exchange Offer. (a) The Staff has taken the
position that any broker-dealer that receives Exchange Securities for its own account in the
Exchange Offer in exchange for Securities that were acquired by such broker-dealer as a result of
market-making or other trading activities (a “Participating Broker-Dealer”) may be deemed to be an
“underwriter” within the meaning of the Securities Act and must deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of such Exchange
Securities.

     The Company and the Guarantors understand that it is the Staff’s position that if the
Prospectus contained in the Exchange Offer Registration Statement includes a plan of distribution
containing a statement to the above effect and the means by which Participating Broker-Dealers may
resell the Exchange Securities, without naming the Participating Broker-Dealers or specifying the
amount of Exchange Securities owned by them, such Prospectus may be delivered by Participating
Broker-Dealers (or, to the extent permitted by law, made available to purchasers) to satisfy their
prospectus delivery obligation under the Securities Act in connection with resales of Exchange
Securities for their own accounts, so long as the Prospectus otherwise meets the requirements of
the Securities Act.

     (b) In light of the above, and notwithstanding the other provisions of this Agreement, the
Company and the Guarantors agree to amend or supplement the Prospectus contained in the Exchange
Offer Registration Statement for a period of up to 180 days after the last Exchange Date (as such
period may be extended pursuant to Section 3(d) of this Agreement), in order to expedite or
facilitate the disposition of any Exchange Securities by Participating Broker-Dealers consistent
with the positions of the Staff recited in Section 4(a) above. The Company and the Guarantors
further agree that Participating Broker-Dealers shall be authorized to deliver such Prospectus (or,
to the extent permitted by law, make available) during such period (but not thereafter) in
connection with the resales contemplated by this Section 4.

 

 

     (c) The Initial Purchasers shall have no liability to the Company, any Guarantor or any Holder
with respect to any request that they may make pursuant to Section 4(b) above.

     5. Indemnification and Contribution. (a) The Company and each Guarantor, jointly and
severally, agree to indemnify and hold harmless each Initial Purchaser and each Holder, their
respective affiliates, directors and officers and each Person, if any, who controls any Initial
Purchaser or any Holder within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages and liabilities (including,
without limitation, reasonable legal fees and other expenses incurred in connection with any suit,
action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or
several, that arise out of, or are based upon, (1) any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or (2) any untrue statement or alleged untrue statement of a
material fact contained in any Prospectus, any Free Writing Prospectus used in violation of this
Agreement or any “issuer information” (“Issuer Information”) filed or required to be filed pursuant
to Rule 433(d) under the Securities Act, or any omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in each case except insofar as such losses, claims,
damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any information relating
to any Initial Purchaser or information relating to any Holder furnished to the Company in writing
through the Representatives or any selling Holder, respectively expressly for use therein. In
connection with any Underwritten Offering permitted by Section 3, the Company and the Guarantors,
jointly and severally, will also indemnify the Underwriters, if any, selling brokers, dealers and
similar securities industry professionals participating in the distribution, their respective
affiliates and each Person who controls such Persons (within the meaning of the Securities Act and
the Exchange Act) to the same extent as provided above with respect to the indemnification of the
Holders, if requested in connection with any Registration Statement, any Prospectus, any Free
Writing Prospectus or any Issuer Information.

     (b) Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company,
the Guarantors, the Initial Purchasers and the other selling Holders, the directors of the Company
and the Guarantors, each officer of the Company and the Guarantors who signed the Registration
Statement and each Person, if any, who controls the Company, the Guarantors, any Initial Purchaser
and any other selling Holder within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only
with respect to any losses, claims, damages or liabilities that arise out of, or are based upon,
any untrue

 

 

statement or omission or alleged untrue statement or omission made in reliance upon and in
conformity with any information relating to such Holder furnished to the Company in writing by such
Holder expressly for use in any Registration Statement and any Prospectus.

     (c) If any suit, action, proceeding (including any governmental or regulatory investigation),
claim or demand shall be brought or asserted against any Person in respect of which indemnification
may be sought pursuant to either paragraph (a) or (b) above, such Person (the “Indemnified Person”)
shall promptly notify the Person against whom such indemnification may be sought (the “Indemnifying
Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve
it from any liability that it may have under this Section 5 except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure;
and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from
any liability that it may have to an Indemnified Person otherwise than under this Section 5. If
any such proceeding shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 5 that the Indemnifying Person may designate in such
proceeding and shall pay the reasonable fees and expenses of such proceeding and shall pay the fees
and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person
and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person; or (iii) the named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing interests between them.
It is understood and agreed that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and
that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm
(x) for any Initial Purchaser, its affiliates, directors and officers and any control Persons of
such Initial Purchaser shall be designated in writing by the Representatives, (y) for any Holder,
its directors and officers and any control Persons of such Holder shall be designated in writing by
the Majority Holders and (z) in all other cases shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final judgment for the
plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any
loss or

 

 

liability by reason of such settlement or judgment. No Indemnifying Person shall, without the
written consent of the Indemnified Person (not to be unreasonably withheld), effect any settlement
of any pending or threatened proceeding in respect of which any Indemnified Person is or could have
been a party and indemnification could have been sought hereunder by such Indemnified Person,
unless such settlement (A) includes an unconditional release of such Indemnified Person, in form
and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that
are the subject matter of such proceeding and (B) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

     (d) If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an
Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying
such Indemnified Person thereunder, shall contribute to the amount paid or payable by such
Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company and the
Guarantors from the offering of the Securities and the Exchange Securities, on the one hand, and by
the Holders from receiving Securities or Exchange Securities registered under the Securities Act,
on the other hand, or (ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative benefits referred to in
clause (i) but also the relative fault of the Company and the Guarantors on the one hand and the
Holders on the other in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company and the Guarantors on the one hand and the Holders on the other shall
be determined by reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Guarantors or by the Holders and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission.

     (e) The Company, the Guarantors and the Holders agree that it would not be just and equitable
if contribution pursuant to this Section 5 were determined by pro rata allocation
(even if the Holders were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred to in paragraph (d)
above. The amount paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred by such
Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of
this Section 5, in no event shall a Holder be required to contribute any amount in excess of the
amount by

 

 

which the total price at which the Securities or Exchange
Securities sold by such Holder exceeds
the amount of any damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’
obligations to contribute pursuant to this Section 5 are several and not joint.

     (f) The remedies provided for in this Section 5 are not exclusive and shall not limit any
rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.

     (g) The indemnity and contribution provisions contained in this Section 5 shall remain
operative and in full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of the Initial Purchasers or any Holder or any Person
controlling any Initial Purchaser or any Holder, or by or on behalf of the Company or the
Guarantors or the officers or directors of or any Person controlling the Company or the Guarantors,
(iii) acceptance of any of the Exchange Securities and (iv) any sale of Registrable Securities
pursuant to a Shelf Registration Statement.

     6. General.

     (a) No Inconsistent Agreements. The Company and the Guarantors represent, warrant and agree
that (i) the rights granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of any other outstanding securities issued or
guaranteed by the Company or any Guarantor under any other agreement and (ii) neither the Company
nor any Guarantor has entered into, or on or after the date of this Agreement will enter into, any
agreement that is inconsistent with the rights granted to the Holders of Registrable Securities in
this Agreement or otherwise conflicts with the provisions hereof.

     (b) Amendments and Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given unless the Company and the Guarantors have obtained the
written consent of Holders of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement, waiver or consent;
provided that no amendment, modification, supplement, waiver or consent to any departure from the
provisions of Section 5 hereof shall be effective as against any Holder of Registrable Securities
unless consented to in writing by such Holder. Any amendments, modifications, supplements, waivers
or consents pursuant to this Section 6(b) shall be by a writing executed by each of the parties
hereto.

 

 

     (c) Notices. All notices and other communications provided for or permitted hereunder shall
be made in writing by hand-delivery, registered first-class mail, telex, telecopier, or any courier
guaranteeing overnight delivery (i) if to a Holder, at the most current address given by such
Holder to the Company by means of a notice given in accordance with the provisions of this Section
6(c), which address initially is, with respect to the Initial Purchasers, the address set forth in
the Purchase Agreement; (ii) if to the Company and the Guarantors, initially at the Company’s
address set forth in the Purchase Agreement and thereafter at such other address, notice of which
is given in accordance with the provisions of this Section 6(c); and (iii) to such other persons at
their respective addresses as provided in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this Section 6(c). All such
notices and communications shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the
next Business Day if timely delivered to an air courier guaranteeing overnight delivery. Copies of
all such notices, demands or other communications shall be concurrently delivered by the Person
giving the same to the Trustee, at the address specified in the Indenture.

     (d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors, assigns and transferees of each of the parties, including, without limitation and
without the need for an express assignment, subsequent Holders; provided that nothing herein shall
be deemed to permit any assignment, transfer or other disposition of Registrable Securities in
violation of the terms of the Purchase Agreement or the Indenture. If any transferee of any Holder
shall acquire Registrable Securities in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all the terms of this Agreement, and by taking and
holding such Registrable Securities such Person shall be conclusively deemed to have agreed to be
bound by and to perform all of the terms and provisions of this Agreement and such Person shall be
entitled to receive the benefits hereof. The Initial Purchasers (in their capacity as Initial
Purchasers) shall have no liability or obligation to the Company or the Guarantors with respect to
any failure by a Holder to comply with, or any breach by any Holder of, any of the obligations of
such Holder under this Agreement.

     (e) Third Party Beneficiaries. Each Holder shall be a third party beneficiary to the
agreements made hereunder between the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights or the rights of
other Holders hereunder.

 

 

     (f) Counterparts. This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement.

     (g) Headings. The headings in this Agreement are for convenience of reference only, are not a
part of this Agreement and shall not limit or otherwise affect the meaning hereof.

     (h) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.

     (i) Entire Agreement; Severability. This Agreement contains the entire agreement between the
parties relating to the subject matter hereof and supersedes all oral statements and prior writings
with respect thereto. If any term, provision, covenant or restriction contained in this Agreement
is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public
policy, the remainder of the terms, provisions, covenants and restrictions contained herein shall
remain in full force and effect and shall in no way be affected, impaired or invalidated. The
Company, the Guarantors and the Initial Purchasers shall endeavor in good faith negotiations to
replace the invalid, void or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, void or unenforceable provisions.

     (j) Limitation of Liability for Massachusetts Business Trust. The Agreement and
Declaration of Trust of TripAdvisor Business Trust (the “Trust”), one of the Guarantors, is on file
with the Secretary to the Commonwealth of Massachusetts. This Agreement is executed on behalf of
the Trust by the Trust’s trustee or officers, as applicable, as trustee or as officers and not
individually and the obligations imposed upon the Trust by this Agreement are not binding upon any
of the Trust’s trustees, officers or shareholders individually but are binding only upon the assets
and property of the Trust.

 

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 	 	 
	 	 	EXPEDIA, INC.	 	 
	 	 	EXPEDIA, INC. (WA)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Dara Khosrowshahi
 

Dara Khosrowshahi
	 	 
	 

	 	Title:
	 	Chief Executive Officer & President	 	 
	 
	 	 	 	 	 	 
	 	 	TRAVELSCAPE, LLC	 	 
	 	 	HOTELS.COM 

HOTWIRE, INC.	 	 
	 	 	TRIPADVISOR, LLC	 	 
	 	 	INTERACTIVE AFFILIATE NETWORK, L.L.C.	 	 
	 	 	HOTELS.COM GP, LLC	 	 
	 	 	OWL HOLDING COMPANY, INC.	 	 
	 	 	CLASSIC VACATIONS, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Michael B. Adler
 

Michael B. Adler
	 	 
	 

	 	Title:
	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	HRN 99 HOLDINGS, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Amy Weaver
 

Amy Weaver
	 	 
	 

	 	Title:
	 	Manager	 	 
	 
	 	 	 	 	 	 
	 	 	IAN.COM, L.P.	 	 
	 	 	HOTELS.COM, L.P.	 	 
	 
	 	 	 	 	 	 
	 	 	By: HOTELS.COM GP, LLC,	 	 
	 	 	its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Michael B. Adler
 

Michael B. Adler
	 	 
	 

	 	Title:
	 	Chief Financial Officer	 	 

[Expedia Registration Rights Agreement]

 

 

	 	 	 	 	 	 	 
	 	 	TRIPADVISOR BUSINESS TRUST	 	 
	 
	 

	 	By:

Name:
	 	/s/ Stephen Kaufer
 

Stephen Kaufer
	 	 
	 

	 	Title:
	 	Trustee, President and Chief
 Executive
Officer, and not
 individually
	 	 

Confirmed and accepted as of the date first above written:

	 	 	 	 	 
	J.P. MORGAN SECURITIES INC.	 	 
	 
	 	 	 	 
	By 

Name:

	 	/s/ Stephen L. Sheiner
 

Stephen L. Sheiner
	 	 
	Title:

	 	Vice President	 	 
	 
	 	 	 	 
	LEHMAN BROTHERS INC.	 	 
	 
	 	 	 	 
	By 

Name:

	 	/s/ Martin Ragde
 

Martin Ragde
	 	 
	Title:

	 	Managing Director	 	 

for themselves and on behalf of the several

Initial Purchasers listed in Schedule 1 to the

Purchase Agreement.

[Expedia Registration Rights Agreement]

 

 

Schedule 1

	 	 	 
	Name of Guarantor	 	State of Incorporation
	Expedia, Inc.

	 	WA
	Travelscape, LLC

	 	NV
	Hotels.com

	 	DE
	Hotwire, Inc.

	 	DE
	TripAdvisor, LLC

	 	DE
	TripAdvisor Business Trust

	 	MA
	Interactive Affiliate Network, LLC

	 	DE
	Hotels.com, L.P.

	 	TX
	Hotels.com GP, LLC

	 	TX
	HRN 99 Holdings, LLC

	 	NY
	IAN.com, L.P.

	 	DE
	Owl Holding Company, Inc.

	 	DE
	Classic Vacations, LLC

	 	NV

 

 

Annex A

Counterpart to Registration Rights Agreement

     The undersigned hereby absolutely, unconditionally and irrevocably agrees as a Guarantor (as
defined in the Registration Rights Agreement, dated as of August ___, 2006 by and among Expedia,
Inc., a Delaware corporation, the subsidiary guarantors party thereto, J.P. Morgan Securities Inc.
and Lehman Brothers Inc., to be bound by the terms and provisions of such Registration Rights
Agreement.

     IN WITNESS WHEREOF, the undersigned has executed this counterpart as of                                         .

	 	 	 	 	 
	 	[NAME OF SUBSIDIARY

GUARANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

26exv10w19

 

Exhibit 10.19

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into by and between Michael Adler
(“Executive”) and Expedia, Inc., a Delaware corporation (the “Company”), and is effective as of May
16, 2006 (the “Effective Date”).

     WHEREAS, the Company desires to establish its right to the services of Executive, in the
capacity described below, on the terms and conditions hereinafter set forth, and Executive is
willing to accept such employment on such terms and conditions.

     NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, Executive and
the Company have agreed and do hereby agree as follows:

1.A. EMPLOYMENT. The Company agrees to employ Executive as Executive Vice President and
Chief Financial Officer of the Company; Executive accepts and agrees to such employment. During
Executive’s employment with the Company, Executive shall perform all services and acts necessary or
advisable to fulfill the duties and responsibilities as are commensurate and consistent with
Executive’s position and shall render such services on the terms set forth herein. During
Executive’s employment with the Company, Executive shall report directly to the Chief Executive
Officer of the Company or such person(s) as from time to time may be designated by the Company
(hereinafter referred to as the “Reporting Officer”). Executive shall have such powers and duties
with respect to the Company as may reasonably be assigned to Executive by the Reporting Officer, to
the extent consistent with Executive’s position and status. Executive agrees to devote all of
Executive’s working time, attention and efforts to the Company and to perform the duties of
Executive’s position in accordance with the Company’s policies as in effect from time to time.
Executive’s principal place of employment shall be the Company’s offices located in Bellevue,
Washington.

2.A. TERM OF AGREEMENT. The term (“Term”) of this Agreement shall commence on the
Effective Date and shall continue through the third anniversary of the Effective Date (including,
for the avoidance of doubt, May 16, 2009), unless sooner terminated in accordance with the
provisions of Section 1 of the Standard Terms and Conditions attached hereto.

3.A. COMPENSATION.

(a) BASE SALARY. During the Term, the Company shall pay Executive an annual base salary of
$375,000.00 (the “Base Salary”), payable in equal biweekly installments or in accordance with the
Company’s payroll practice as in effect from time to time. For all purposes under this Agreement,
the term “Base Salary” shall refer to Base Salary as in effect from time to time.

(b) DISCRETIONARY BONUS. During the Term, Executive shall be eligible to receive
discretionary annual bonuses with an annual target bonus equal to 60% of Base Salary, with amounts,
if any, for any partial year payable on a pro rata basis.

 

 

(c) SIGNING BONUS. The Company shall pay to Executive a special signing bonus of $250,000
within ten (10) business days following the Effective Date. Notwithstanding the foregoing, (i) the
Company shall not be required to make any payment described in this Section 3A(c) if Executive has
resigned without Good Reason or been terminated by the Company for Cause (both as defined in the
Standard Terms and Conditions incorporated herein) prior to the first anniversary of the Effective
Date and (ii) Executive shall forfeit and repay to the Company any amounts paid to Executive
pursuant to this Section 3A(c) if, within 12 months following any such payment, Executive resigns
without Good Reason or is terminated by the Company for Cause.

(d) BENEFITS. During the Term, from the Effective Date through the date of termination of
Executive’s employment with the Company for any reason, Executive shall be entitled to participate
in any welfare, health and life insurance and pension benefit and incentive programs as may be
adopted from time to time by the Company on the same basis as that provided to similarly situated
executives of the Company generally. Without limiting the generality of the foregoing, Executive
shall be entitled to the following benefits:

     (i) Reimbursement for Relocation Expenses. The Company shall reimburse
Executive for all reasonable and necessary expenses incurred by Executive in relocating to
Washington State on the same basis as similarly situated executives of the Company generally
and in accordance with the Company’s policies (including repayment policies) as in effect
from time to time.

     (ii) Reimbursement for Business Expenses. During the Term, the Company shall
reimburse Executive for all reasonable and necessary expenses incurred by Executive in
performing Executive’s duties for the Company, on the same basis as similarly situated
executives of the Company generally and in accordance with the Company’s policies as in
effect from time to time.

     (iii) Vacation. During the Term, Executive shall be entitled to paid vacation
in accordance with the plans, policies, programs and practices of the Company applicable to
similarly situated executives of the Company generally.

(e) RESTRICTED STOCK UNITS. Pursuant to the Company’s 2005 Stock and Annual Incentive
Plan, in consideration of Executive’s entering into this Agreement and as an inducement to join the
Company, Executive has been granted restricted stock units (representing shares of Common Stock of
the Company) in the amounts and on the terms set forth in the agreement attached hereto as Exhibit
A.

4.A NOTICES. All notices and other communications under this Agreement shall be in writing
and shall be given by first-class mail, certified or registered with return receipt requested or
hand delivery acknowledged in writing by the recipient personally, and shall be deemed to have been
duly given three days after mailing or immediately upon duly acknowledged hand delivery to the
respective persons named below:

2

 

	 	 	 	 	 
	 

	 	If to the Company:
	 	Expedia, Inc.
	 

	 	 	 	3150 139th Avenue SE
	 

	 	 	 	Bellevue, Washington 98005
	 

	 	 	 	Attention: General Counsel
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Wachtell, Lipton, Rosen & Katz
	 

	 	 	 	51 West 52nd Street
	 

	 	 	 	New York, New York 10019
	 

	 	 	 	Attention: Andrew J. Nussbaum, Esq.
	 
	 	 	 	 
	 

	 	If to Executive:
	 	At the most recent address on record for Executive at the Company

Either party may change such party’s address for notices by notice duly given pursuant hereto.

5.A. GOVERNING LAW; JURISDICTION. This Agreement and the legal relations thus created
between the parties hereto shall be governed by and construed under and in accordance with the
internal laws of the State of Washington without reference to the principles of conflicts of laws.
Any and all disputes between the parties which may arise pursuant to this Agreement will be heard
and determined before an appropriate federal court in Washington, or, if not maintainable therein,
then in an appropriate Washington state court. The parties acknowledge that such courts have
jurisdiction to interpret and enforce the provisions of this Agreement, and the parties consent to,
and waive any and all objections that they may have as to, personal jurisdiction and/or venue in
such courts.

6.A COUNTERPARTS. This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original but all of which together will constitute one and the same
instrument. Executive expressly understands and acknowledges that the Standard Terms and
Conditions attached hereto are incorporated herein by reference, deemed a part of this Agreement
and are binding and enforceable provisions of this Agreement. References to “this Agreement” or
the use of the term “hereof” shall refer to this Agreement and the Standard Terms and Conditions
attached hereto, taken as a whole.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and delivered by its
duly authorized officer and Executive has executed and delivered this Agreement as of the Effective
Date.

3

 

	 	 	 
	 

	 	EXPEDIA, INC.
	 
	 	 
	 

	 	     /s/ Dara Khosrowshahi
	 

	 	 
	 

	 	By: Dara Khosrowshahi
	 

	 	Title: President & Chief Executive Officer
	 
	 	 
	 

	 	     /s/ Michael Adler
	 

	 	 
	 

	 	Michael Adler

4

 

STANDARD TERMS AND CONDITIONS

1. TERMINATION OF EXECUTIVE’S EMPLOYMENT.

(a) DEATH. Upon termination of Executive’s employment prior to the expiration of the Term
by reason of Executive’s death, the Company shall pay Executive’s designated beneficiary or
beneficiaries, within 30 days of Executive’s death in a lump sum in cash, (i) Executive’s Base
Salary from the date of Executive’s death through the end of the month in which Executive’s death
occurs and (ii) any Accrued Obligations (as defined in Section 1(f) below).

(b) DISABILITY. If, as a result of Executive’s incapacity due to physical or mental
illness (“Disability”), Executive shall have been absent from the full-time performance of
Executive’s duties with the Company for a period of four consecutive months and, within 30 days
after written notice is provided to Executive by the Company (in accordance with Section 4A
hereof), Executive shall not have returned to the full-time performance of Executive’s duties,
Executive’s employment under this Agreement may be terminated by the Company for Disability.
During any period prior to such termination during which Executive is absent from the full-time
performance of Executive’s duties with the Company due to Disability, the Company shall continue to
pay Executive’s Base Salary at the rate in effect at the commencement of such period of Disability,
offset by any amounts payable to Executive under any disability insurance plan or policy provided
by the Company. Upon termination of Executive’s employment due to Disability, the Company shall
pay Executive within 30 days of such termination (i) Executive’s Base Salary through the end of the
month in which Executive’s termination of employment for Disability occurs in a lump sum in cash,
offset by any amounts payable to Executive under any disability insurance plan or policy provided
by the Company; and (ii) any Accrued Obligations (as defined in Section 1(f) below).

(c) TERMINATION FOR CAUSE/RESIGNATION WITHOUT GOOD REASON. The Company may terminate
Executive’s employment under this Agreement with or without Cause at any time and Executive may
resign under this Agreement with or without Good Reason at any time. As used herein, “Cause”
shall mean: (i) the plea of guilty or nolo contendere to, conviction for, or the commission of, a
felony offense by Executive; provided, however, that after indictment, the Company
may suspend Executive from the rendition of services, but without limiting or modifying in any
other way the Company’s obligations under this Agreement; (ii) a material breach by Executive of a
fiduciary duty owed to the Company; (iii) a material breach by Executive of any of the covenants
made by Executive in Section 2 hereof; (iv) the willful or gross neglect by Executive of the
material duties required by this Agreement; or (v) a knowing and material violation by Executive of
any Company policy pertaining to ethics, wrongdoing or conflicts of interest that, in the case of
the conduct described in clauses (iv) or (v) above, if curable, is not cured by Executive within
thirty (30) days after Executive is provided with written notice thereof. Upon Executive’s (A)
termination of employment by the Company for Cause prior to the expiration of the Term or (B)
resignation without Good Reason prior to the expiration of the Term, this Agreement shall terminate
without further obligation by the Company, except for the payment of any Accrued Obligations (as
defined in Section 1(f) below).

 

 

(d) TERMINATION BY THE COMPANY OTHER THAN FOR DEATH, DISABILITY OR CAUSE OR RESIGNATION BY
EXECUTIVE FOR GOOD REASON. Upon termination of Executive’s employment prior to the expiration
of the Term (i) by the Company without Cause (other than for death or Disability) or (ii) by
Executive for Good Reason (as defined below), then (a) the Company shall continue to pay Executive
the Base Salary through the longer of (x) the end of the Term over the course of the then remaining
Term and (y) twelve months (such period, the “Salary Continuation Period”), in each case payable in
equal biweekly installments in accordance with the Company’s payroll practice as in effect from
time to time, subject in all events to Section 9 below; (b) the Company shall pay Executive within
30 days of the date of such termination in a lump sum in cash any Accrued Obligations (as defined
in Section 1(f) below) and (c) the Company will consider in good faith the payment of a target
discretionary bonus on a pro rata basis for the year in which the Termination of Employment occurs.
The payment to Executive of the severance benefits described in this Section 1(d) shall be subject
to Executive’s execution and non-revocation of a general release of the Company and its affiliates
in a form substantially similar to that used for similarly situated executives of the Company and
its affiliates and Executive’s compliance with the restrictive covenants set forth in Section 2
(other than any non-compliance that is immaterial, does not result in harm to the Company or its
affiliates, and, if curable, is cured by Executive promptly after receipt of notice thereof given
by the Company). Executive acknowledges and agrees that the Company’s payment of severance
benefits described in this Section 1(d) constitutes good and valuable consideration for such
release. As used herein, “Good Reason” shall mean the occurrence of any of the following without
Executive’s prior written consent: (A) the Company’s material breach of any material provision of
this Agreement, (B) the material reduction in Executive’s title, duties, reporting responsibilities
or level of responsibilities as Chief Financial Officer of the Company, excluding for this purpose
any such reduction that is an isolated and inadvertent action not taken in bad faith or that is
authorized pursuant to this Agreement, (C) the reduction in Executive’s Base Salary or the
percentage of Executive’s discretionary annual target bonus, or (D) the relocation of Executive’s
principal place of employment more than 50 miles outside the Seattle metropolitan area,
provided that in no event shall Executive’s resignation be for “Good Reason” unless (x) an
event or circumstance set forth in clauses (A) through (D) shall have occurred and Executive
provides the Company with written notice thereof within thirty (30) days after the Executive has
knowledge of the occurrence or existence of such event or circumstance, which notice specifically
identifies the event or circumstance that Executive believes constitutes Good Reason, (y) the
Company fails to correct the circumstance or event so identified within 30 days after the receipt
of such notice, and (z) the Executive resigns within 90 days after the date of delivery of the
notice referred to in clause (x) above.

(e) MITIGATION; OFFSET. If Executive obtains other employment during the Salary
Continuation Period, any payments to be made to Executive under Section 1(d) hereof after the date
such employment is secured shall be offset by the amount of compensation earned by Executive from
such employment. For purposes of this Section 1(e), Executive shall have an obligation to inform
the Company regarding Executive’s employment status following termination and during the Salary
Continuation Period, but shall have no affirmative duty to seek alternate employment.

2

 

(f) ACCRUED OBLIGATIONS. As used in this Agreement, “Accrued Obligations” shall mean the
sum of (i) any portion of Executive’s accrued and earned but unpaid Base Salary through the date of
death or termination of employment for any reason, as the case may be; (ii) any compensation
previously earned but deferred by Executive (together with any interest or earnings thereon) that
has not yet been paid; (iii) other than in the event of Executive’s resignation without Good Reason
or termination by the Company for Cause (except as required by applicable law), any portion of
Executive’s accrued but unpaid vacation pay through the date of death or termination of employment;
and (iv) any vested benefits or amounts that Executive is otherwise entitled to receive under any
plan, policy, practice or program of or any other contract or agreement with the Company or its
affiliates in accordance with the terms thereof.

2. CONFIDENTIAL INFORMATION; NON-SOLICITATION; AND PROPRIETARY RIGHTS.

     (a) CONFIDENTIALITY. Executive acknowledges that while employed by the Company,
Executive will occupy a position of trust and confidence. Executive shall not, except as is
appropriate to perform Executive’s duties hereunder or as required by applicable law, disclose to
others, use, copy, transmit, reproduce, summarize, quote or make commercial, whether directly or
indirectly, any Confidential Information. Executive will also take reasonable steps to safeguard
such Confidential Information and prevent its loss, theft, or inadvertent disclosure to third
persons. This Section 2 shall apply to Confidential Information acquired by Executive whether
prior or subsequent to the execution of this Agreement. “Confidential Information” shall mean
information about the Company or any of its subsidiaries or affiliates, and their respective
clients and customers, including (without limitation) any proprietary knowledge, trade secrets,
data, formulae, information and client and customer lists and all papers, resumes, and records
(including computer records) of the documents containing such Confidential Information,
provided that Confidential Information shall not mean any such information that is
previously disclosed to, or in possession of, the public other than by reason of Executive’s breach
of this Agreement. Notwithstanding the foregoing provisions, if Executive is required to disclose
any such confidential or proprietary information pursuant to applicable law or a subpoena or court
order, Executive shall promptly notify the Company in writing of any such requirement so that the
Company may seek an appropriate protective order or other appropriate remedy or waive compliance
with the provisions hereof. Executive shall reasonably cooperate with the Company to obtain such a
protective order or other remedy. If such order or other remedy is not obtained prior to the time
Executive is required to make the disclosure, or the Company waives compliance with the provisions
hereof, Executive shall disclose only that portion of the confidential or proprietary information
which he is advised by counsel that he is legally required to so disclose. Executive acknowledges
that such Confidential Information is specialized, unique in nature and of great value to the
Company and its subsidiaries or affiliates, and that such information gives the Company and its
subsidiaries or affiliates a competitive advantage. Executive agrees to deliver or return to the
Company, at the Company’s request at any time or upon termination or expiration of Executive’s
employment or as soon thereafter as possible, all documents, computer tapes and disks, records,
lists, data, drawings, prints, notes and written information (and all copies thereof) furnished by
the Company and its subsidiaries or affiliates or prepared by Executive in the course of
Executive’s employment by the Company and its subsidiaries or affiliates. As used in this Agreement,

3

 

“affiliates” shall mean any
company controlled by, controlling or under common control with the Company.

(b) DUTY OF LOYALTY. In consideration of the Company’s promise to disclose, and disclosure
of, its Confidential Information and other good and valuable consideration provided hereunder, the
receipt and sufficiency of which are hereby acknowledged by Executive, Executive hereby agrees and
covenants that: Until the longer of (i) the last day of the Term and (ii) a period of twenty four
(24) months beyond Executive’s date of termination of employment for any reason, including the
expiration of the Term (the “Restricted Period”), Executive shall not, directly or indirectly,
engage in, assist or become associated with a Competitive Activity. For purposes of this Section
2(b): (i) a “Competitive Activity” means, at the time of Executive’s termination, any business or
other endeavor in any jurisdiction of a kind being conducted by the Company or any of its
subsidiaries or affiliates (or demonstrably anticipated by the Company or its subsidiaries or
affiliates), including, without limitation, those that are engaged in the provision of any lodging
or travel related services (including, without limitation, corporate travel services), in any
jurisdiction as of the Effective Date or at any time thereafter (such affiliates including, without
limitation, Hotels.com, Hotwire, Inc. and TripAdvisor); and (ii) Executive shall be considered to
have become “associated with a Competitive Activity” if Executive becomes directly or indirectly
involved as an owner, principal, employee, officer, director, independent contractor,
representative, stockholder, financial backer, agent, partner, advisor, lender, or in any other
individual or representative capacity with any individual, partnership, corporation or other
organization that is engaged in a Competitive Activity. Notwithstanding the foregoing, Executive
may make and retain investments during the Restricted Period, for investment purposes only, in less
than five percent (5%) of the outstanding capital stock of any publicly-traded corporation engaged
in a Competitive Activity if stock of such corporation is either listed on a national stock
exchange or on the NASDAQ National Market System if Executive is not otherwise affiliated with such
corporation.

(c) NON-SOLICITATION OF EMPLOYEES. Executive agrees that during the Restricted Period,
Executive shall not, without the prior written consent of the Company, directly or indirectly,
hire, recruit or solicit the employment or services of (whether as an employee, officer, director,
agent, consultant or independent contractor), any employee, officer, director, agent, consultant or
independent contractor of the Company or any of its subsidiaries or affiliates or any such person
who has terminated his or her relationship with the Company or any of its subsidiaries or
affiliates within the six-month period prior to such hiring, recruiting or soliciting (except for
(i) such employment or hiring by the Company or any of its subsidiaries or affiliates or (ii) such
employment or hiring by Executive of an agent, consultant or independent contractor where the
primary duties of such person are not for the Company); provided, however that a
general solicitation of the public for employment shall not constitute a solicitation hereunder so
long as such general solicitation is not designed to target, or does not have the effect of
targeting, any employee, officer, director, agent, consultant or independent contractor of the
Company or any of its subsidiaries or affiliates. This Section 2(c) shall not apply to any
administrative assistant working directly for Executive.

(d) NON-SOLICITATION OF BUSINESS PARTNERS. During the Restricted Period, Executive shall
not, without the prior written consent of the Company, directly or indirectly,

4

 

persuade or encourage or attempt to persuade or encourage any business partners or business
affiliates of the Company or its subsidiaries or affiliates to cease doing business with the
Company or any of its subsidiaries or affiliates or to engage in any business competitive with the
Company or its subsidiaries or affiliates on its own or with any competitor of the Company or its
subsidiaries or affiliates.

(e) PROPRIETARY RIGHTS; ASSIGNMENT. All Executive Developments (as defined below) shall be
made for hire by Executive for the Company or any of its subsidiaries or affiliates. “Executive
Developments” means any idea, discovery, invention, design, method, technique, improvement,
enhancement, development, computer program, machine, algorithm or other work or authorship, in each
case, (i) that (A) relates to the business or operations of the Company or any of its subsidiaries
or affiliates, or (B) results from or is suggested by any undertaking assigned to Executive or work
performed by Executive for or on behalf of the Company or any of its subsidiaries or affiliates,
whether created alone or with others, during or after working hours and (ii) that is conceived or
developed during the Term. All Confidential Information and all Executive Developments shall
remain the sole property of the Company or any of its subsidiaries or affiliates. Executive shall
acquire no proprietary interest in any Confidential Information or Executive Developments developed
or acquired during the Term. To the extent Executive may, by operation of law or otherwise,
acquire any right, title or interest in or to any Confidential Information or Executive
Development, Executive hereby assigns to the Company all such proprietary rights. Executive shall,
both during and after the Term, upon the Company’s request, promptly execute and deliver to the
Company all such assignments, certificates and instruments, and shall promptly perform such other
acts, as the Company may from time to time in its reasonable discretion deem necessary or desirable
to evidence, establish, maintain, perfect, enforce or defend the Company’s rights in Confidential
Information and Executive Developments.

(f) COMPLIANCE WITH POLICIES AND PROCEDURES. During the Term, Executive shall adhere to
the policies and standards of professionalism set forth in the Company’s Policies and Procedures as
they may exist from time to time. Executive hereby consents to, and expressly authorizes, the
Company’s use of Executive’s name and likeness in trade publications and other media for trade or
commercial purposes.

(g) REMEDIES FOR BREACH. Executive expressly agrees and understands that the Company will
have 30 days from receipt of Executive’s notice of any alleged breach by the Company of this
Agreement to cure any such breach. Executive expressly agrees and understands that the remedy at
law for any breach by Executive of this Section 2 will be inadequate and that damages flowing from
such breach are not usually susceptible to being measured in monetary terms. Accordingly, it is
acknowledged that upon Executive’s violation or threatened violation of any provision of this
Section 2, the Company shall be entitled to obtain from any court of competent jurisdiction
immediate injunctive relief and obtain a temporary order restraining any threatened or further
breach as well as an equitable accounting of all profits or benefits arising out of such violation
without the requirement of posting any bond. Nothing in this Section 2 shall be deemed to limit
the Company’s remedies at law or in equity for any breach by Executive of any of the provisions of
this Section 2, which may be pursued by or available to the Company.

5

 

(h) SURVIVAL OF PROVISIONS. The obligations contained in this Section 2 shall, to the
extent provided in this Section 2, survive the termination or expiration of Executive’s employment
with the Company and, as applicable, shall be fully enforceable thereafter in accordance with the
terms of this Agreement. If it is determined by a court of competent jurisdiction in any state
that any restriction in this Section 2 is excessive in duration or scope or is unreasonable or
unenforceable under the laws of that state, it is the intention of the parties that such
restriction may be modified or amended by the court to render it enforceable to the maximum extent
permitted by the law of that state.

3. TERMINATION OF PRIOR AGREEMENTS/EXISTING CLAIMS. This Agreement constitutes the entire
agreement between the parties and terminates and supersedes any and all prior agreements and
understandings (whether written or oral) between the parties with respect to the subject matter of
this Agreement. Executive acknowledges and agrees that neither the Company nor anyone acting on
its behalf has made, and is not making, and in executing this Agreement, Executive has not relied
upon, any representations, promises or inducements except to the extent the same is expressly set
forth in this Agreement. Executive hereby represents and warrants to the Company that Executive is
not party to any contract, understanding, agreement or policy, whether or not written, with
Executive’s most-recent employer (the “Previous Employer”) or otherwise, that would be breached by
Executive’s entering into, or performing services under, this Agreement. Executive further
represents that, prior to the Effective Date, he has disclosed in writing to the Company all
material existing, pending or threatened claims against him, if any, as a result of his employment
with the Previous Employer or his membership on any boards of directors.

4. ASSIGNMENT; SUCCESSORS. This Agreement is personal in its nature and none of the
parties hereto shall, without the consent of the others, assign or transfer this Agreement or any
rights or obligations hereunder; provided, that, in the event of a merger, consolidation,
transfer, reorganization, or sale of all, substantially all or a substantial portion of, the assets
of the Company with or to any other individual or entity, this Agreement shall, subject to the
provisions hereof, be binding upon and inure to the benefit of the Company’s successor in interest
in such transaction, and such successor shall discharge and perform all the promises, covenants,
duties, and obligations of the Company hereunder, and all references herein to the “Company” shall
refer to such successor.

5. WITHHOLDING. The Company shall make such deductions and withhold such amounts from each
payment and benefit made or provided to Executive hereunder, as may be required from time to time
by applicable law, governmental regulation or order.

6. HEADING REFERENCES. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement for any other
purpose. References to “this Agreement” or the use of the term “hereof” shall refer to these
Standard Terms and Conditions and the Employment Agreement attached hereto, taken as a whole.

7. WAIVER; MODIFICATION. Failure to insist upon strict compliance with any of the terms,
covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant, or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance

6

 

with, any right or power hereunder at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times. This Agreement shall not be modified in any
respect except by a writing executed by each party hereto.

8. SEVERABILITY. In the event that a court of competent jurisdiction determines that any
portion of this Agreement is in violation of any law or public policy, only the portions of this
Agreement that violate such law or public policy shall be stricken. All portions of this Agreement
that do not violate any statute or public policy shall continue in full force and effect. Further,
any court order striking any portion of this Agreement shall modify the stricken terms as narrowly
as possible to give as much effect as possible to the intentions of the parties under this
Agreement.

9. SECTION 409A. If any compensation or benefits provided by this Agreement may result in
the application of Section 409A of the Code, the Company shall, in consultation with the Executive,
modify the Agreement in the least restrictive manner necessary in order to exclude such
compensation from the definition of “deferred compensation” within the meaning of such Section 409A
or in order to comply with the provisions of Section 409A, other applicable provision(s) of the
Code and/or any rules, regulations or other regulatory guidance issued under such statutory
provisions and without any diminution in the value of the payments to the Executive. Without
limiting the generality of the foregoing, to the extent required in order to comply with Section
409A of the Code, amounts that would otherwise be payable under this Agreement during the six-month
period immediately following the date of termination of Executive’s employment shall instead be
paid, on the first business day after the date that is six months following the Executive’s
“separation from service” within the meaning of Section 409A of the Code.

ACKNOWLEDGED AND AGREED AS OF THE EFFECTIVE DATE:

	 	 	 
	 

	 	EXPEDIA, INC.
	 
	 	 
	 

	 	     /s/ Dara Khosrowshahi
	 

	 	 
	 

	 	By: Dara Khosrowshahi
	 

	 	Title: President & Chief Executive Officer
	 
	 	 
	 

	 	     /s/ Michael Adler
	 

	 	 
	 

	 	Michael Adler

7

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