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EXHIBIT 10.3
FORM OF COMMITMENT FEE WARRANT
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR ANY APPLICABLE STATE LAW, AND
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED
WITHOUT (A) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR (B) AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.
No. - CZ1 Number of Shares: 135,000
Date of Issuance: September 29, 2000 Subject To Adjustment in
The Manner Described Below
LENDINGTREE, INC.
WARRANT
LendingTree, Inc., a Delaware corporation (the "COMPANY"), for value
received, hereby certifies that Capital Z Management LLC (collectively with its
registered assigns, the "REGISTERED HOLDER"), is entitled, subject to the terms
set forth below, to purchase from the Company, at any time on or after the one
year anniversary of the date hereof until the five year anniversary of the date
hereof (the "EXERCISE PERIOD"), 135,000 fully paid and nonassessable shares of
the Company's common stock, par value $.01 per share (the "COMMON STOCK"), or
any other equity securities that may be issued in addition thereto or in
substitution therefor, as provided herein, at a price of $7.975 per share (the
"EXERCISE PRICE"). This warrant (the "WARRANT") is being issued pursuant to the
letter agreement, dated as of September 29, 2000, between the Company and the
Registered Holder (the "LETTER AGREEMENT"). As used herein, the term "WARRANT
STOCK" shall mean the Common Stock issuable upon exercise of this Warrant.
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1. EXERCISE.
(a) This Warrant may be exercised in whole or part by the
Registered Holder at any time during the Exercise Period by surrendering this
Warrant, with the purchase form appended hereto as Appendix-A duly executed by
such Registered Holder or by such Registered Holder's duly authorized attorney,
at the principal office of the Company, or at such other office or agency as the
Company may designate, accompanied by payment in full by cash, check or wire
transfer in the amount of the Exercise Price multiplied by the number of shares
of Warrant Stock for which this Warrant is being exercised (the "PURCHASE
PRICE").
(b) The exercise of this Warrant, if any, shall be deemed to
have been effected immediately prior to the close of business on the day on
which this Warrant shall have been surrendered to the Company as provided in
Section 1(a) above. At such time, the person or persons in whose name or names
any certificates for Warrant Stock shall be issuable upon such exercise as
provided in Section 1(d) below shall be deemed to have become the Registered
Holder or Registered Holders of record of the Warrant Stock represented by such
certificates.
(c) NET ISSUE EXERCISE.
(i) Notwithstanding the payment provisions set forth
above, in lieu of exercising this Warrant in the manner provided above in
Section 1(a), the Registered Holder may elect to receive shares of Warrant Stock
equal to the value of this Warrant by surrender of this Warrant at the principal
office of the Company, together with notice of such election, in which event the
Company shall issue to the Registered Holder a number of shares of Warrant Stock
computed using the following formula:
X =Y (A - B)
------------
A
Where X = The number of shares of Warrant Stock to be issued to
the Registered Holder.
Y = The number of shares of Warrant Stock as to which the
Warrant is being exercised.
A = The Fair Market Value (as defined below) of one share
of Warrant Stock (at the date of such calculation).
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B = The Exercise Price (as adjusted to the date of such
calculation).
(ii) For purposes of this Section 1(c), the Fair
Market Value of the Warrant Stock shall be equal to the closing price of the
Common Stock on the trading day immediately preceding the date of delivery of
the notice of exercise pursuant to this Section 1(c) or, if the Common Stock is
not then traded on any national securities exchange or automated quotation
system, the fair market value of a share of Common Stock as agreed to by the
Company and the Registered Holder (or, if such parties cannot agree, as
determined by an independent third party valuation firm mutually acceptable to
the parties) (it being understood that the original Warrant may be surrendered
on the day subsequent to the notice of exercise if such original Warrant is
provided to an overnight courier service (e.g. Federal Express) on the date of
such notice).
(d) As soon as practicable after the exercise of this Warrant,
and in any event within ten (10) days thereafter, the Company at its expense
will cause to be issued in the name of, and delivered to, the Registered Holder,
or as such Registered Holder (upon payment by such Registered Holder of any
applicable transfer taxes) may direct, a certificate or certificates for the
number of shares of Warrant Stock to which such Registered Holder shall be
entitled.
2. OTHER ADJUSTMENTS.
(a) STOCK DIVIDENDS, SPLITS, COMBINATIONS, RECLASSIFICATION,
ETC. In the event that the Company shall, at any time from the date of the
Letter Agreement until the expiration of the Exercise Period, (i) pay a dividend
or make a distribution on its Common Stock, (ii) subdivide shares of its
outstanding Common Stock into a greater number of shares, (iii) combine its
outstanding Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock by reclassification of its Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), the Registered Holder shall be
entitled to purchase the aggregate number and kind of shares which, if the
Warrant had been exercised at the Exercise Price in effect immediately prior to
such event, the Registered Holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, distribution, subdivision,
combination or reclassification; and the Exercise Price shall automatically be
adjusted immediately after the payment date, in the case of a dividend or
distribution,
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or the effective date, in the case of a subdivision, combination or
reclassification, to allow the purchase of such aggregate number and kind of
shares.
(b) In case of any reclassification or change of the
outstanding securities of the Company or of any merger, reorganization or
consolidation of the Company (other than a Reorganization (as defined below),
causing an adjustment in accordance with Section 4 below) or any similar
corporate reorganization on or after the date of the Letter Agreement, then and
in each such case the Registered Holder of this Warrant, upon the exercise
hereof at any time after the consummation of such reclassification, change,
reorganization, merger or conveyance, shall be entitled to receive, in lieu of
the stock or other securities and property receivable upon the exercise hereof
prior to such consummation, the stock or other securities or property to which
such Registered Holder would have been entitled upon such consummation if such
Registered Holder had exercised this Warrant immediately prior thereto, all
subject to further adjustment as provided in paragraph (a); and in each such
case, the terms of this Section 2 shall be applicable to the shares of stock or
other securities properly receivable upon the exercise of this Warrant after
such consummation.
(c) When any adjustment is required to be made pursuant to
this Section 2, the Company shall promptly mail to the Registered Holder a
certificate setting forth the Exercise Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment. Such certificate
shall also set forth the kind and amount of stock or other securities or
property into which this Warrant shall be exercisable following the occurrence
of any of the events specified in this Section 2.
3. ANTI-DILUTION.
(a) In the event that the Company shall, at any time during
the exercise period applicable to and defined in the Equity Rights Certificate
dated as of September 29, 2000, (the "CERTIFICATE"), effect a Subsequent Event
(as defined in the Certificate), and the Registered Holder (as defined in the
Certificate) elects to exercise the Certificate for the securities described in
clause (ii) of the definition of "Securities" as set forth in the Certificate,
then the Exercise Price of this Warrant, shall be adjusted so that it is equal
to the average of the closing prices per share for regular way trading, rounded
to three (3) decimal places, of the shares of Common Stock, as reported on the
Nasdaq National Market, for the five consecutive trading days ending on the
Subsequent Event Measurement Date (as hereinafter defined).
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For the purposes of this Warrant, the "SUBSEQUENT EVENT MEASUREMENT DATE" shall
be (i) in the case of a Subsequent Financing (as defined in the Certificate),
that date upon which the exercise price of the warrants and/or the purchase
price per share of the securities issued in such Subsequent Financing is
determined, (ii) in the case of a Sale Transaction (as defined in the
Certificate), the date of announcement to the public of the Sale Transaction,
(iii) in the case of a Going-Private Transaction (as defined in the
Certificate), the date of announcement to the public of the Going-Private
Transaction, and (iv) in the case of a Subsequent Event represented by the
occurrence of June 30, 2001, June 30, 2001. If, in the case of clause (i) of the
immediately preceding sentence, the relevant determination date for the warrant
and other securities portions of such Subsequent Event shall not occur on the
same date, the Company shall use the date that would provide the registered
Holder with a lower Exercise Price.
(b) When any adjustment is required to be made pursuant to
this Section 3, the Company shall promptly mail to the Registered Holder a
certificate setting forth the Exercise Price and the kind and amount of stock or
other securities or property into which this Warrant shall be exercisable after
such adjustment. Such certificate shall also set forth a brief statement of the
facts requiring such adjustment.
4. REORGANIZATION. Simultaneous with the closing of a consolidation or
merger in which the Company is not the surviving entity or the closing of a
merger, consolidation, acquisition of all or substantially all of the assets or
stock, of the Company by another entity (the "SURVIVING ENTITY") as a result of
which the stockholders of the Company will own less than 50% of the voting
capital stock of the surviving entity or the entity that controls such surviving
entity immediately after the transaction or, in the case of a sale of assets,
the Company will own after the transaction less than 50% of the assets owned by
the Company prior to the transaction (collectively, a "REORGANIZATION") prior to
the exercise of the Warrant or the expiration of the Exercise Period, as a
result of which the stockholders of the Company receive cash, stock or other
property in respect of their shares of Warrant Stock, this Warrant shall become,
if it is not already, immediately exercisable. Furthermore, the Surviving Entity
will, at the closing of such Reorganization, assume the obligations of the
Company hereunder and this Warrant will be exchanged for a warrant to purchase
such kind and number of shares of capital stock or other securities or property
of the Company or the Surviving Entity to which the Registered Holder would have
been entitled if it had held the Warrant Stock issuable upon the exercise hereof
immediately prior to such Reorganization, which warrant shall have the same
terms and conditions hereof. The Company shall deliver to the Registered
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Holder notice of the Reorganization no less than thirty (30) business days
before the date scheduled for closing of the Reorganization
5. TRANSFERS. Neither this Warrant nor any securities purchased upon
exercise of this Warrant may be transferred unless either (i) such transfer is
registered under the Securities Act of 1933 (the "SECURITIES ACT") and any
applicable state securities or blue sky laws or (ii) the transfer is exempt from
the prospectus delivery and registration requirements of the Securities Act and
any applicable state securities or blue sky laws. If the Registered Holder
wishes to transfer the shares pursuant to (ii) above and in the good faith
determination of the General Counsel (and/or outside counsel) of the Company),
there is a reasonable basis for the belief that such transfer would require
registration under the Securities Act and/or any applicable state securities or
blue sky laws, the Company may require that the Registered Holder furnish the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration under the Securities Act and any
applicable state securities or blue sky laws. Upon any transfer of all or a
portion of the Warrant in compliance with this Section 5, the transferee shall
be deemed a Registered Holder.
6. LEGEND. A legend setting forth or referring to the above
restrictions shall be placed on this Warrant, any replacement hereof and any
certificate representing a security issued pursuant to the exercise hereof, and
a stop transfer restriction or order shall be placed on the books of the Company
and with any transfer agent until such securities may be legally sold or
otherwise transferred; provided, however, that such legend shall not be required
and a stop transfer restriction order shall not be placed if (i) in the opinion
of counsel to the Registered Holder (reasonably satisfactory to the Company)
registration of any future transfer is not required by the applicable provisions
of the Securities Act, (ii) the Company shall have waived the requirements of
such legends or (iii) the transfer of Warrant Stock shall be made in compliance
with the requirements of Rule 144(k).
7. REGISTERED HOLDER ITS OWNER. Except as provided in Section 5 hereto,
the Company may deem and treat the Registered Holder of this Warrant as the
absolute owner hereof for all purposes regardless of any notice to the contrary.
8. NO IMPAIRMENT. The Company will not, by amendment of its charter or
through reorganization, consolidation, merger, dissolution, sale of assets or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will (subject to Section 17 below) at
all times in
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good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Registered Holder of this Warrant against impairment.
9. EXPIRATION. This Warrant (and the right to purchase securities upon
exercise hereof) shall be void and all rights represented thereby shall cease
unless exercised during the Exercise Period. All restrictions set forth herein
on the shares of capital stock issued upon exercise of any rights hereunder
shall survive such exercise and expiration of the rights granted hereunder.
10. NOTICES OF CERTAIN TRANSACTIONS. In case:
(a) the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time deliverable upon the
exercise of this Warrant) for the purpose of entitling or enabling them to
receive any dividend or other distribution other than as described in Section 2,
or to receive any right to subscribe for or purchase any shares of stock of any
class or any other securities, or to receive any other right, to subscribe for
or purchase any shares of stock of any class or any other securities, or to
receive any other right, or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company, any consolidation or merger of the Company with or into
another corporation (other than a consolidation or merger in which the Company
is the surviving entity), or any transfer of all or substantially all of the
assets of the Company, or
(c) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Company, or
(d) of any redemption of the Common Stock,
then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i)
the date on which a record is to be taken for the purpose of such dividend,
distribution or right and stating the amount and character of such dividend
distribution or right, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation,
winding-up, redemption or conversion is to take place, and the time, if any is
to be fixed, as of which the holders of record of
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Common Stock shall be entitled to exchange their shares of Common Stock for the
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation,
winding-up, redemption or conversion. Such notice shall be mailed at least ten
(10) days prior to the record date or effective date for the event specified in
such notice.
11. RESERVATION OF STOCK; TAXES. The Company will at all times reserve
and keep available, solely for the issuance and delivery upon the exercise of
this Warrant, such shares of Common Stock and other stock, securities and
property, as from time to time shall be issuable upon the exercise of this
Warrant. The Company covenants that all Common Stock that may be issued upon the
exercise of rights represented by this Warrant will, upon exercise, be fully
paid and nonassessable and free from all taxes, liens and charges in respect of
the issue (other than taxes in respect of any transfer occurring
contemporaneously with such issue.) The Company shall pay all taxes and any and
all United States federal, state and local taxes and other charges that may be
payable in connection with the preparation, issuance and delivery of the
certificates representing Common Stock issued hereunder.
12. EXCHANGE OF WARRANT. Upon the surrender by the Registered Holder of
this Warrant, properly endorsed, to the Company at the principal office of the
Company, the Company will, subject to the provisions of Section 5 hereof, issue
and deliver to or upon the order of such Registered Holder, at the Company's
expense, a new Warrant of like tenor, in the name of such Registered Holder or
as such Registered Holder (upon payment by such Registered Holder of any
applicable transfer taxes) may direct, calling in the aggregate on the face or
faces thereof for the number of shares of Warrant Stock called for on the face
or faces of the Warrant so surrendered.
13. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
14. MAILING OF NOTICES. Any notice required or permitted pursuant to
this Warrant shall be in writing and shall be deemed sufficient (i) immediately
when delivered personally or by facsimile, (ii) twenty (20) hours after being
deposited with an overnight courier service (e.g. Federal Express) for next day
delivery, or (iii)
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forty-eight (48) hours after being deposited in the U.S. mail, as certified or
registered mail, with postage prepaid, addressed as follows:
If to the Registered Holder:
Capital Z Partners
54 Thompson Street
New York, NY 10012
Fax: (212) 965-2301
Attention:
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court B Suite 1300
Dallas, Texas 75201
Fax: (214) 746-7777
Attention: R. Jay Tabor, Esq.
If to the Company:
LendingTree
11115 Rushmore Drive
Charlotte, NC 28277
Fax: (704)
Attention: CEO
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
Fax: (212) 735-2000
Attention: David Goldschmidt, Esq.
Each of the foregoing parties shall be entitled to specify a different
address by giving five (5) days' advance written notice as aforesaid to the
other parties.
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15. NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company; and except as otherwise provided
herein, no dividend or interest shall be payable or shall accrue in respect of
this Warrant or the Warrant Stock purchasable hereunder unless, until and to the
extent that this Warrant shall be exercised.
16. NO FRACTIONAL SHARES. No fractional shares of Warrant Stock will be
issued in connection with any exercise hereunder. In lieu of any fractional
shares which would otherwise be issuable, the Company shall pay cash equal to
the product of such fraction multiplied by the fair market value of one share of
Warrant Stock on the date of exercise, as determined in accordance with Section
1(c)(ii).
17. AMENDMENT OR WAIVER. This Warrant or any provision thereof may be
changed, waived, discharged or terminated only by a statement in writing signed
by the party against which enforcement of the change, waiver, discharge or
termination is sought.
18. HEADINGS. The headings in this Warrant are for purposes of
reference only and shall not limit or otherwise affect the meaning of any
provision of this Warrant.
19. GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
20. SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon the
Company and inure to the benefit of the Registered Holder and its successors and
assigns.
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IN WITNESS WHEREOF, the Company has executed this Warrant as
of the date first written above.
LendingTree, Inc.
By:_______________________
Name:
Title:
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APPENDIX-A
FORM OF PURCHASE
[To be executed only upon exercise of Warrant]
To LendingTree, Inc.:
The undersigned registered holder of the within Warrant hereby irrevocably
exercises such Warrant for, and purchases thereunder, [_______] shares of
Warrant Stock of LendingTree, Inc. and herewith makes payment of $ therefor OR
by conversion of % of the Warrant, and requests that the certificates for such
shares be issued in the name of, and delivered to ________________, whose
address is set forth below.
Dated: ____________________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
Warrant)
__________________________
(Street Address)
__________________________
(City)(State)(Zip Code)
