Exhibit 10.1

 

priceline.com Incorporated

 

1.25% Convertible Senior Notes due 2015

 

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Purchase Agreement

 

March 4, 2010

 

J.P. Morgan Securities Inc.

383 Madison Avenue

New York, NY 10179

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated

One Bryant Park

New York, NY 10036

 

As representative of the several Purchasers

named in Schedule I hereto (the “Representatives”)

 

Ladies and Gentlemen:

 

Priceline.com Incorporated, a Delaware corporation (the “Company”), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Purchasers named in Schedule I hereto (the “Purchasers”) an aggregate of
$500,000,000 principal amount of its 1.25% Convertible Senior Notes due 2015
(the “Firm Securities”), convertible into shares of the Company’s common stock,
par value $0.008 per share (“Stock”), and, at the election of the Purchasers, up
to an aggregate of $75,000,000 additional principal amount of its 1.25%
Convertible Senior Notes due 2015 (the “Optional Securities”) (the Firm
Securities and the Optional Securities which the Purchasers elect to purchase
pursuant to Section 2 hereof are herein collectively called the “Securities”).

 

1.                           The Company represents and warrants to, and agrees
with each of the Purchasers that:

 

(a)                      A preliminary offering circular, dated March 4, 2010
(the “Preliminary Offering Circular”), and an offering circular, dated March 4,
2010 (the “Offering Circular”), have been prepared in connection with the
offering of the Securities and shares of the Stock issuable upon conversion
thereof.  The Preliminary Offering Circular, as amended and supplemented
immediately prior to the Applicable Time (as defined in Section 1(b)), is
hereinafter referred to as the “Pricing Circular”.  Any reference to the
Preliminary Offering Circular, the Pricing Circular or the Offering Circular
shall be deemed to refer to and include the Company’s most recent Annual Report
on Form 10-K and all subsequent documents filed with the United States

 

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Securities and Exchange Commission (the “Commission”) pursuant to Section 13(a),
13(c) or 15(d) of the United States Securities Exchange Act of 1934, as amended
(the “Exchange Act”) on or prior to the date of such circular, and any reference
to the Preliminary Offering Circular or the Offering Circular, as the case may
be, as amended or supplemented, as of any specified date, shall be deemed to
include (i) any documents filed with the Commission pursuant to Section 13(a),
13(c) or 15(d) of the Exchange Act after the date of the Preliminary Offering
Circular or the Offering Circular, as the case may be, and prior to such
specified date and (ii) any Additional Issuer Information (as defined in
Section 5(f)) furnished by the Company prior to the completion of the
distribution of the Securities; and all documents filed under the Exchange Act
and so deemed to be included in the Preliminary Offering Circular, the Pricing
Circular or the Offering Circular, as the case may be, or any amendment or
supplement thereto are hereinafter called the “Exchange Act Reports.”  The
Exchange Act Reports, when they were or are filed with the Commission, conformed
or will conform in all material respects to the applicable requirements of the
Exchange Act and the applicable rules and regulations of the Commission
thereunder; and no such documents were filed with the Commission since the
Commission’s close of business on the business day immediately prior to the date
of this Agreement and prior to the execution of this Agreement, except as set
forth on Schedule II-A(a) hereof. The Preliminary Offering Circular or the
Offering Circular and any amendments or supplements thereto and the Exchange Act
Reports did not and will not, as of their respective dates, contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company by a
Purchaser through the Representatives expressly for use therein;

 

(b)                     For the purposes of this Agreement, the “Applicable
Time” is 7:00 a.m. (Eastern time) on the date immediately following the date of
this Agreement; the Pricing Circular as supplemented by the information set
forth in Schedule V hereto, taken together (collectively, the “Pricing
Disclosure Package”) as of the Applicable Time, did not include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and each Company Supplemental Disclosure
Document (as defined in Section 6(a)(ii)) listed on Schedule II-A(b) hereto does
not conflict with the information contained in the Pricing Circular or the
Offering Circular and each such Company Supplemental Disclosure Document, as
supplemented by and taken together with the Pricing Disclosure Package as of the
Applicable Time, did not include any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to
statements or omissions made in a Company Supplemental Disclosure Document in
reliance upon and in conformity with information furnished in writing to the
Company by a Purchaser through the Representatives expressly for use therein;

 

(c)                      Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements included in
the Pricing Circular any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Pricing Circular; and, since
the

 

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respective dates as of which information is given in the Pricing Circular, there
has not been any change in the capital stock (except for changes or adjustments
made in the ordinary course of business pursuant to employee equity plans in
existence on the date of this Agreement, and other than the exercise of options
outstanding on the date of this Agreement) or long-term debt of the Company or
any of its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders’ equity or results of
operations of the Company and its subsidiaries, taken as a whole, otherwise than
as set forth or contemplated in the Pricing Circular;

 

(d)                     The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the Pricing
Circular or such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;

 

(e)                      The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its properties
and conduct its business as described in the Pricing Circular, and has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification,
or is subject to no material liability or disability by reason of the failure to
be so qualified in any such jurisdiction; and each subsidiary of the Company has
been duly incorporated and is validly existing as an entity, and where such
concept applies, in good standing under the laws of its jurisdiction of
organization;

 

(f)                        The Company has an authorized capitalization as set
forth in the Pricing Circular, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and are fully paid
and non-assessable; the shares of Stock initially issuable upon conversion of
the Securities have been duly and validly authorized and reserved for issuance
and, when issued and delivered in accordance with the provisions of the
Securities and the Indenture referred to below, will be duly and validly issued,
fully paid and non-assessable and will conform to the description of the Stock
contained in the Pricing Disclosure Package and the Offering Circular; and all
of the issued shares of capital stock of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and (except for directors’ qualifying shares) are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or claims;

 

(g)                     The Securities have been duly authorized and, when
issued and delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
indenture to be dated as of March 10, 2010 (the “Indenture”) between the Company
and American Stock Transfer and Trust Company, as Trustee (the “Trustee”), under
which they are to be issued; the Indenture, which will be substantially in the
form previously delivered to you, has been duly authorized and, when executed
and delivered by the Company and the Trustee, the Indenture will constitute a
valid and legally binding instrument, enforceable in accordance

 

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with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors’ rights and to general equity principles; and the Securities and the
Indenture will conform to the descriptions thereof in the Pricing Disclosure
Package and the Offering Circular and will be in substantially the form
previously delivered to you;

 

(h)                     None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of the
Securities) will violate or result in a violation of Section 7 of the Exchange
Act, or any regulation promulgated thereunder, including, without limitation,
Regulations T, U, and X of the Board of Governors of the Federal Reserve System;

 

(i)                         Prior to the date hereof, neither the Company nor
any of its affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the Company in
connection with the offering of the Securities;

 

(j)                         The issue and sale of the Securities, the issuance
of the Stock upon conversion of the Securities and the compliance by the Company
with all of the provisions of the Securities, the Indenture and this Agreement
and the consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such action result in any
violation of the provisions of the Amended and Restated Certificate of
Incorporation, as amended, or By-laws of the Company,  or any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities, the issue of the Stock upon
conversion of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement or the Indenture except for such
consents, approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the purchase
and distribution of the Securities by the Purchasers;

 

(k)                      Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound;

 

(l)                         The statements set forth in the Pricing Circular and
the Offering Circular under the caption “Description of Notes” and “Description
of Capital Stock,” insofar as they purport to constitute a summary of the terms
of the Securities and the Stock issuable upon conversion of the Securities,
under the caption “Certain United States Federal Income Tax Considerations,” and
under the caption “Plan of Distribution,” insofar as they purport to describe
the provisions of the laws and documents referred to therein, are accurate,
complete and fair;

 

(m)                   Other than as set forth in the Pricing Circular, there are
no legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any

 

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property of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the current
or future financial position, stockholders’ equity or results of operations of
the Company and its subsidiaries, taken as a whole; and, to the best of the
Company’s knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;

 

(n)                     When the Securities are issued and delivered pursuant to
this Agreement, the Securities will not be of the same class (within the meaning
of Rule 144A under the Securities Act of 1933, as amended (the “Act”)) as
securities which are listed on a national securities exchange registered under
Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system;

 

(o)                     The Company is subject to Section 13 or 15(d) of the
Exchange Act; and has filed all the material required to be filed pursuant to
Section 13, 14 or 15(d) for a period of at least 36 months immediately preceding
the date hereof and has filed in a timely manner all reports required to be
filed during the 12 calendar months and any portion of a month immediately
preceding the date hereof;

 

(p)                     The Company is not, and after giving effect to the
offering and sale of the Securities and the application of the proceeds thereof,
will not be an “investment company,” as such term is defined in the United
States Investment Company Act of 1940, as amended (the “Investment Company
Act”);

 

(q)                     Neither the Company, nor any person acting on its or
their behalf has offered or sold the Securities by means of any general
solicitation or general advertising within the meaning of Rule 502(c) under the
Act;

 

(r)                        Within the preceding six months, neither the Company
nor any other person acting on behalf of the Company has offered or sold to any
person any Securities, or any securities of the same or a similar class as the
Securities, other than Securities offered or sold to the Purchasers hereunder. 
The Company will take reasonable precautions designed to insure that any offer
or sale, direct or indirect, in the United States or to any U.S. person (as
defined in Rule 902 under the Act) of any Securities or any substantially
similar security issued by the Company, within six months subsequent to the date
on which the distribution of the Securities has been completed (as notified to
the Company by the Representatives), is made under restrictions and other
circumstances reasonably designed not to affect the status of the offer and sale
of the Securities in the United States and to U.S. persons contemplated by this
Agreement as transactions exempt from the registration provisions of the
Securities Act;

 

(s)                      This Agreement has been duly authorized, executed and
delivered by the Company;

 

(t)                        Deloitte & Touche LLP, who have certified certain
financial statements of the Company and its subsidiaries, and have audited the
Company’s internal control over financial reporting and management’s assessment
thereof is an independent registered public accounting firm as required by the
Act and the rules and regulations of the Commission thereunder;

 

(u)                     The Company maintains a system of internal control over
financial reporting (as such term is defined in Rule 13a-15(f) under the
Exchange Act) that complies with the requirements of the Exchange Act and has
been designed by the Company’s principal

 

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executive officer and principal financial officer, or under their supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles.  The Company’s internal control
over financial reporting was effective as of a December 31, 2009 evaluation
thereof.  The Company is not aware of any material weaknesses in its internal
control over financial reporting;

 

(v)                     Other than as set forth in the Pricing Circular, since
the date of the latest audited financial statements included or incorporated by
reference in the Pricing Circular, there has been no change in the Company’s
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting;

 

(w)                   The Company maintains disclosure controls and procedures
(as such term is defined in Rule 13a-15(e) of the Exchange Act) that comply with
the requirements of the Exchange Act; such disclosure controls and procedures
have been designed to ensure that material information relating to the Company
and its subsidiaries is made known to the Company’s principal executive officer
and principal financial officer by others within those entities; such disclosure
controls and procedures are effective;

 

(x)                       The financial statements and the related notes thereto
included or incorporated by reference in each of the Pricing Disclosure Package
and the Offering Circular present fairly the financial position of the Company
and its subsidiaries as of the dates indicated and the results of their
operations and the changes in their cash flows for the periods specified; such
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
covered thereby; and the other financial information included or incorporated by
reference in each of the Pricing Disclosure Package and the Offering Circular
has been derived from the accounting records of the Company and its subsidiaries
and presents fairly the information shown; and

 

(y)                     Neither the Company nor any of its consolidated or
unconsolidated subsidiaries have, since December 31, 2009: (i) failed  to pay
any dividend or sinking fund installment on preferred stock; or (ii) defaulted
on either any installment or installments on indebtedness for borrowed money or
on any rental on one or more long term leases, which defaults in the aggregate
are material to the financial position of the Company and its consolidated and
unconsolidated subsidiaries, taken as a whole.

 

2.                                       Subject to the terms and conditions
herein set forth, (a) the Company agrees to issue and sell to each of the
Purchasers, and each of the Purchasers agrees, severally and not jointly, to
purchase from the Company, at a purchase price of 97.75% of the principal amount
thereof, the principal amount of Securities set forth opposite the name of such
Purchaser in Schedule I hereto, and (b) in the event and to the extent that the
Purchasers shall exercise the election to purchase Optional Securities as
provided below, the Company agrees to issue and sell to each of the Purchasers,
and each of the Purchasers agrees, severally and not jointly, to purchase from
the Company, at the same purchase price set forth in clause (a) of this
Section 2, that portion of the aggregate principal amount of the applicable
series of Optional Securities as to which such election shall have been
exercised (to be adjusted by you so as to eliminate fractions of $1,000)
determined by multiplying such aggregate principal amount of the applicable
series of Optional Securities by a fraction, the numerator of which is the
maximum aggregate principal amount of the applicable series of Optional
Securities which such Purchaser is entitled to purchase as set forth opposite
the name of such Purchaser in Schedule I hereto and the denominator of which is
the maximum aggregate

 

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principal amount of the applicable series of Optional Securities which all of
the Purchasers are entitled to purchase hereunder.

 

The Company hereby grants to the Purchasers the right to purchase at their
election up to $75,000,000 aggregate principal amount of the Optional
Securities, at the purchase price set forth in clause (a) of the first paragraph
of this Section 2, for the sole purpose of covering sales of securities in
excess of the aggregate principal amount of Firm Securities.  Any such election
to purchase Optional Securities may be exercised by written notice from you to
the Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate principal amount of Optional Securities
to be purchased and the date on which such Optional Securities are to be
delivered, as determined by you but in no event earlier than the First Time of
Delivery (as defined in Section (4) hereof) or, unless you and the Company
otherwise agree in writing, earlier than three or later than ten New York
Business Days after the date of such notice; provided, however, that Optional
Securities may not be issued in whole or in part after the period which ends 13
days after the date hereof unless the Purchaser determines that such Optional
Securities would not be treated as having been issued with more than a “de
minimis” amount of “original issue discount” for purposes of Sections 1271-1275
of the Internal Revenue Code of 1986, as amended from time to time, and the
applicable Treasury regulations promulgated thereunder.  As used in this
Agreement, “New York Business Day” shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close.

 

3.                           Upon the authorization by you of the release of the
Securities, the several Purchasers propose to offer the Securities for sale upon
the terms and conditions set forth in this Agreement and the Offering Circular
and each Purchaser hereby represents and warrants to, and agrees with the
Company that:

 

(a)                      It will offer and sell the Securities only to persons
who it reasonably believes are “qualified institutional buyers” (“QIBs”) within
the meaning of Rule 144A under the Act in transactions meeting the requirements
of Rule 144A;

 

(b)                     It is an Accredited Investor, as defined under
Rule 501(a)(1) under the Act; and

 

(c)                      It will not offer or sell the Securities by any form of
general solicitation or general advertising, including but not limited to the
methods described in Rule 502(c) under the Act.

 

4.                           (a) The Securities to be purchased by each
Purchaser hereunder will be represented by one or more definitive global
Securities in book-entry form which will be deposited by or on behalf of the
Company with The Depository Trust Company (“DTC”) or its designated custodian. 
The Company will deliver the Securities to the Representatives, for the account
of each Purchaser, against payment by or on behalf of such Purchaser of the
purchase price therefore by wire transfer in immediately available funds, by
causing DTC to credit the Securities to the account of the Purchasers at DTC. 
The Company will cause the certificates representing the Securities to be made
available to the the Representatives for checking at least 24 hours prior to the
Time of Delivery (as defined below) at the office of DTC or its designated
custodian (the “Designated Office”).  The time and date of such delivery and
payment shall be, with respect to the Firm Securities, 9:00 a.m., New York City
time, on March 10, 2010 or such other time and date as the Purchasers and the
Company may agree upon in writing and, with respect to the Optional Securities,
9:00 a.m., New York City time, on the date specified by the Purchasers in the
written notice given by the Purchasers of the Purchasers’ election to purchase
such Optional Securities, or such other time and date as the Purchasers and the
Company may agree upon in writing.  Such time and date for delivery of the Firm
Securities is herein

 

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called the “First Time of Delivery,” such time and date for delivery of the
Optional Securities, if not the First Time of Delivery, is herein called the
“Second Time of Delivery,” and each such time and date for delivery is herein
called a “Time of Delivery.”

 

(b)                     The documents to be delivered at the Time of Delivery by
or on behalf of the parties hereto pursuant to Section 8 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Purchasers pursuant to Section 8(i) hereof, will be delivered at such time and
date at the offices of Latham & Watkins LLP, 885 Third Avenue, New York, New
York 10022 (the “Closing Location”), and the Securities will be delivered at the
Designated Office, all at the Time of Delivery.  A meeting will be held at the
Closing Location at 5:00 p.m., New York City time, on the New York Business Day
next preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto.  For the purposes of this Section 4, “New York
Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.

 

5.                           The Company agrees with each of the Purchasers:

 

(a)                      To prepare the Offering Circular in a form approved by
you; to make no amendment or any supplement to the Offering Circular which shall
be disapproved by you promptly after reasonable notice thereof; and to furnish
you with copies thereof;

 

(b)                     Promptly from time to time to take such action as you
may reasonably request to qualify the Securities and the shares of Stock
issuable upon conversion of the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;

 

(c)                      To furnish the Purchasers with written and electronic
copies thereof in such quantities as you may from time to time reasonably
request, and if, at any time prior to the expiration of nine months after the
date of the Offering Circular, any event shall have occurred as a result of
which the Offering Circular as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made when such Offering Circular is delivered, not misleading,
or, if for any other reason it shall be necessary or desirable during such same
period to amend or supplement the Offering Circular, to notify you and upon your
request to prepare and furnish without charge to each Purchaser and to any
dealer in securities as many written and electronic copies as you may from time
to time reasonably request of an amended Offering Circular or a supplement to
the Offering Circular which will correct such statement or omission or effect
such compliance;

 

(d)                     During the period beginning from the date hereof and
continuing until the date 90 days after the Time of Delivery, not to offer,
sell, contract to sell or otherwise dispose of, except as provided hereunder,
any securities of the Company that are substantially similar to the Securities
or the Stock issuable upon conversion of the Securities, including but not
limited to any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than pursuant to employee equity plans, stock purchase plans
existing on, or upon the conversion or exchange of convertible or exchangeable
securities outstanding as of, the date of this Agreement, dividends on the
Company’s existing Series B Redeemable

 

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Preferred Stock (as defined in the Offering Circular) and the issuance by the
Company of securities as consideration in connection with mergers, acquisitions
of companies or assets, joint ventures, reclassifications, strategic
relationships or other similar transactions not primarily for financing
purposes; provided that (i) in connection with the execution of any agreement
relating to any such merger, acquisition of companies or assets, joint venture,
reclassification, strategic relationship or other similar transaction not
primarily for financing purposes, all persons that are either parties to such
agreement or are required to file reports under Section 16 of the Exchange Act
as a result of being a director, officer or principal stockholder of a party to
such agreement shall agree in writing not to hedge or make any short sale of
such securities prior to the expiration of such 90 day period and (ii) all
persons that are issued such securities shall agree in writing to be bound by
the foregoing as if it were the Company), without your prior written consent;

 

(e)                      Not to be or become, at any time prior to the
expiration of three years after the Time of Delivery, an open-end investment
company, unit investment trust, closed-end investment company or face-amount
certificate company that is or is required to be registered under Section 8 of
the Investment Company Act;

 

(f)                        At any time when the Company is not subject to
Section 13 or 15(d) of the Exchange Act, for the benefit of holders from time to
time of Securities, to furnish at its expense, upon request, to holders of
Securities and prospective purchasers of securities information (the “Additional
Issuer Information”) satisfying the requirements of subsection (d)(4)(i) of
Rule 144A under the Act;

 

(g)                     To furnish or make available to the holders of the
Securities as soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income, stockholders’ equity
and cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the date of the Offering Circular), to make available to
its stockholders consolidated summary financial information of the Company and
its subsidiaries for such quarter in reasonable detail;

 

(h)                     During a period of three years from the date of the
Offering Circular, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders of the Company,
and to deliver to you (i) as soon as they are available, copies of any reports
and financial statements furnished to or filed with the Commission or any
securities exchange on which the Securities or any class of securities of the
Company is listed; and (ii) such additional information concerning the business
and financial condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to the extent
the accounts of the Company and its subsidiaries are consolidated in reports
furnished to its stockholders generally or to the Commission);

 

(i)                         During the period of two years after the Time of
Delivery, the Company will not, and will not permit any of its “affiliates” (as
defined in Rule 144 under the Securities Act) to, resell any of the Securities
which constitute “restricted securities” under Rule 144 that have been
reacquired by any of them;

 

(j)                         To use the net proceeds received by it from the sale
of the Securities pursuant to this Agreement in the manner specified in the
Pricing Circular under the caption “Use of Proceeds;”

 

(k)                      To reserve and keep available at all times, free of
preemptive rights, shares of Stock for the purpose of enabling the Company to
satisfy any obligations to issue shares of its Stock upon conversion of the
Securities; and

 

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(l)                         To use its commercially reasonable efforts to list
for quotation, subject to notice of issuance, the shares of Stock issuable upon
conversion of the Securities on The NASDAQ Global Select Market.

 

6.                                       (a)                                 
(i)  The Company represents and agrees that, without the prior consent of the
Representatives, it has not made and will not make any offer relating to the
Securities that, if the offering of the Securities contemplated by this
Agreement were conducted as a public offering pursuant to a registration
statement filed under the Act with the Commission, would constitute an “issuer
free writing prospectus,” as defined in Rule 433 under the Act (any such offer
is hereinafter referred to as a “Company Supplemental Disclosure Document”);

 

(ii)                    each Purchaser represents and agrees that, without the
prior consent of the Company and the Representatives, other than one or more
term sheets relating to the Securities containing customary information and
conveyed to purchasers of securities, it has not made and will not make any
offer relating to the Securities that, if the offering of the Securities
contemplated by this Agreement were conducted as a public offering pursuant to a
registration statement filed under the Act with the Commission, would constitute
a “free writing prospectus,” as defined in Rule 405 under the Act (any such
offer (other than any such term sheets), is hereinafter referred to as a
“Purchaser Supplemental Disclosure Document”); and

 

(iii)                 any Company Supplemental Disclosure Document or Purchaser
Supplemental Disclosure Document the use of which has been consented to by the
Company and the Representatives is listed on Schedule II-A(b) hereto.

 

7.                           The Company covenants and agrees with the several
Purchasers that the Company will pay or cause to be paid the following: (i) the
fees, disbursements and expenses of the Company’s counsel and accountants in
connection with the issue of the Securities and the shares of Stock issuable
upon conversion of the Securities and all other expenses in connection with the
preparation, printing, reproduction and filing of the Preliminary Offering
Circular and the Offering Circular and any amendments and supplements thereto
and the mailing and delivering of copies thereof to the Purchasers and dealers;
(ii) the cost of printing or producing this Agreement, any Agreement among
Purchasers, the Indenture, the Blue Sky Memorandum, closing documents (including
any compilations thereof) and any other documents in connection with the
offering, purchase, sale and delivery of the Securities; (iii) all expenses in
connection with the qualification of the Securities and the shares of Stock
issuable upon conversion of the Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Purchasers in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(iv) any fees charged by securities rating services for rating the Securities;
(v) the cost of preparing the Securities; (vi) the fees and expenses of the
Trustee and any agent of the Trustee and the fees and disbursements of counsel
for the Trustee in connection with the Indenture and the Securities; (vii) any
cost incurred in connection with the listing of the shares of Stock issuable
upon conversion of the Securities; and (viii) all other costs and expenses
incident to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section.  It is understood, however, that,
except as provided in this Section, and Sections 9 and 12 hereof, the Purchasers
will pay all of their own costs and expenses, including the fees of their
counsel, transfer taxes on resale of any of the Securities  by them, and any
advertising expenses connected with any offers they may make.

 

8.                           The obligations of the Purchasers hereunder shall
be subject, in their discretion, to the condition that all representations and
warranties and other statements of the Company herein are, at

 

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and as of the Time of Delivery, true and correct, the condition that the Company
shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:

 

(a)                      Latham & Watkins LLP, counsel for the Purchasers, shall
have furnished to you such opinion or opinions and letter, dated the Time of
Delivery, with respect to the matters you may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;

 

(b)                     Sullivan & Cromwell LLP, counsel for the Company, shall
have furnished to you their written opinion and letter, subject to the
limitations and qualifications set forth in such opinion or letter, dated the
Time of Delivery, in form and substance satisfactory to you, to the effect that:

 

(i)                         The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the jurisdiction of its
incorporation;

 

(ii)                      The shares of Stock initially issuable upon conversion
of the Securities have been duly and validly authorized and reserved for
issuance upon such conversion and, when issued and delivered in accordance with
the provisions of the Securities and the Indenture, will be duly and validly
issued and fully paid and non-assessable;

 

(iii)                   This Agreement has been duly authorized, executed and
delivered by the Company;

 

(iv)                  The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors’ rights
and to general equity principles;

 

(v)                     The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding obligation
of the Company, enforceable in accordance with its terms subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles;

 

(vi)                  No consent, approval, authorization, order, registration
or qualification of any United States federal or New York state governmental
authority or regulatory body is required for the consummation of the
transactions contemplated by this Agreement or the Indenture in connection with
the Securities to be sold by the Company to the Purchasers hereunder and the
shares of Stock issuable upon conversion of the Securities, except for such
consents, approvals, authorizations, orders, registrations or qualifications as
have been obtained under the Act in connection with the shares of Stock issuable
upon conversion of the Securities and such as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
such Securities by the Purchasers;

 

(vii)           The statements contained in the Offering Circular under the
captions “Description of Notes” and “Description of Capital Stock” insofar as
they relate to the terms of the Securities and the Stock, under the caption
“Certain United States Federal Income Tax Considerations” insofar as they relate
to provisions of United States Federal income tax law therein described, and
under the caption “Plan of Distribution” insofar as they relate to provisions of
documents therein described are accurate, complete and fair;

 

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(viii)            No registration of the Securities under the Act, and no
qualification of the Indenture under the United States Trust Indenture Act of
1939, as amended, is required for (1) the offer and sale of the Securities by
the Company to the Purchasers or (2) the re-offer and resale of the Securities
by the Purchasers, in each case in the manner contemplated by this Agreement and
the Offering Circular relating to the Securities;

 

(ix)                    Nothing has caused such counsel to believe that (A) the
Pricing Disclosure Package, as of the Applicable Time (other than the financial
statements therein, as to which such counsel need express no opinion or belief),
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; or (B) the
Offering Circular and any further amendments or supplements thereto made by the
Company prior to the Time of Delivery (other than the financial statements
therein, as to which such counsel need express no opinion or belief) contained
as of its date or contains as of the Time of Delivery an untrue statement of a
material fact or omitted or omits, as the case may be, to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and

 

(x)                       The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds thereof,
will not be an “investment company”, as such term is defined in the Investment
Company Act of 1940, as amended.

 

(c)                      Peter J. Millones, Executive Vice President and General
Counsel for the Company, shall have furnished to you his written opinion,
subject to the limitations and qualifications set forth in such opinion, dated
the Time of Delivery, in form and substance satisfactory to you, to the effect
that:

 

(i)                         The Company has such power and authority (corporate
and other) to own its properties and conduct its business as described in the
Offering Circular;

 

(ii)                      The Company, as of the date specified in the Offering
Circular, has an authorized capitalization as set forth under the caption
“Capitalization” in the Offering Circular and all of the issued shares of
capital stock of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable;

 

(iii)                   The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so qualified in
any such jurisdiction (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect of matters
of fact upon certificates of officers of the Company, provided that such counsel
shall state that they believe that both you and they are justified in relying
upon such opinions and certificates);

 

(iv)                  Those subsidiaries listed on Schedule II hereto (the
“Scheduled Subsidiaries”) have each been duly incorporated or organized and each
is validly existing as an entity, and where such term applies, in good standing
under the laws of its jurisdiction of incorporation or organization; and all of
the issued shares of capital stock of each such Scheduled Subsidiary held by the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and (except for directors’ qualifying shares and as otherwise set
forth in the Offering Circular) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims (such counsel
being entitled to rely in respect of the opinion in this clause upon opinions of
local counsel and in respect of matters of fact upon certificates

 

12

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of officers of the Company or such Scheduled Subsidiaries, provided that such
counsel shall state that they believe that both you and they are justified in
relying upon such opinions and certificates);

 

(v)                     The Company and the Scheduled Subsidiaries have good and
marketable title in fee simple to all real property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Offering Circular or would not individually or in the aggregate
have a material adverse effect on the current or future consolidated financial
position, stockholders’ equity or results of operations of the Company and its
subsidiaries taken as a whole and do not interfere with the use made and
proposed to be made of such property by the Company and the Scheduled
Subsidiaries; and any real property and buildings held under lease by the
Company and the Scheduled Subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as would not individually or in the
aggregate have a material adverse effect on the current or future consolidated
financial position, stockholders’ equity or results of operations of the Company
and its subsidiaries taken as a whole and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and the
Scheduled Subsidiaries (in giving the opinion in this clause, such counsel may
state that no examination of record titles for the purpose of such opinion has
been made, and that they are relying upon a general review of the titles of the
Company and the Scheduled Subsidiaries, upon opinions of local counsel and
abstracts, reports and policies of title companies rendered or issued at or
subsequent to the time of acquisition of such property by the Company or the
Scheduled Subsidiaries, upon opinions of counsel to the lessors of such property
and, in respect of matters of fact, upon certificates of officers of the Company
or the Scheduled Subsidiaries, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such opinions,
abstracts, reports, policies and certificates);

 

(vi)                  To the best of such counsel’s knowledge and other than as
set forth in the Offering Circular, there are no legal or governmental
proceedings pending to which the Company or any of the Scheduled Subsidiaries is
a party or of which any property of the Company or any of the Scheduled
Subsidiaries is the subject which, if determined adversely to the Company or any
of the Scheduled Subsidiaries, would individually or in the aggregate have a
material adverse effect on the current or future consolidated financial
position, stockholders’ equity or results of operations of the Company and its
subsidiaries taken as a whole; and, to the best of such counsel’s knowledge and
other than as set forth in the Offering Circular, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others;

 

(vii)               No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by the
Company of the transactions contemplated by this Agreement or the Indenture,
except, such as may be required under the Act in connection with the shares of
Stock issuable upon conversion of the Securities and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Securities by the Purchasers;

 

(viii)            The resolutions of the Board of Directors of the Company
approving the issuance of the Securities have reserved the Conversion Shares for
issuance;

 

(ix)                    Neither the Company nor any of the Scheduled
Subsidiaries is in violation of its Certificate of Incorporation or By-laws or
in default in the performance or observance of any

 

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obligation, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound except for such
defaults which would not individually or in the aggregate have a material
adverse effect on the current or future consolidated financial position,
stockholders’ equity or results of operations of the Company and its
subsidiaries taken as a whole;

 

(x)                       The issue and sale of the Securities and the
compliance by the Company with all of the provisions of the Securities, the
Indenture and this Agreement and the consummation of the transactions herein and
therein contemplated will not (1) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any of the Scheduled
Subsidiaries is a party or by which the Company or any of the Scheduled
Subsidiaries is bound or to which any of the property or assets of the Company
or any of the Scheduled Subsidiaries is subject, (2) result in any violation of
the provisions of the Certificate of Incorporation or By-laws of the Company or
(3) result in any violation of the provisions of any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of the Scheduled Subsidiaries or any of
their properties except in the case of clauses (1) and (3) above which would not
individually or in the aggregate have a material adverse effect on the current
or future consolidated financial position, stockholders’ equity or results of
operations of the Company and its subsidiaries taken as a whole;

 

(xi)                    The documents incorporated by reference in the Offering
Circular or any further amendment or supplement thereto, made by the Company
prior to such Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), when they
were filed with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder; and they
have no reason to believe that any of such documents, when they were so filed,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;

 

(xii)                 No registration of the Securities under the Act, and no
qualification of an indenture under the United States Trust Indenture Act of
1939 with respect thereto, is required for the offer, sale and initial resale of
the Securities  by the Purchasers in the manner contemplated by this Agreement;
and

 

(xiii)              The Company is not, and after giving effect to the offering
and sale of the Securities to be issued and sold by the Company under this
Agreement and the Indenture and the application of the net proceeds from such
sale as described in the Offering Circular under the caption “Use of Proceeds”,
will not be required to register as an “investment company”, as such term is
defined in the Investment Company Act.

 

(d)                     On the date of the Offering Circular prior to the
execution of this Agreement and also at the Time of Delivery, Deloitte & Touche
LLP shall have furnished to you a letter or letters, dated the respective dates
of delivery thereof, in form and substance satisfactory to you, to the effect
set forth in Annex I hereto;

 

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(e)                      (i) Neither the Company nor any of its subsidiaries
shall have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Pricing Circular any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Pricing Circular, and (ii) since the respective dates as of
which information is given in the Pricing Circular there shall not have been any
change in the capital stock (except for changes or adjustments made in the
ordinary course of business pursuant to employee equity plans in existence on
the date of this Agreement, and other than the exercise of options outstanding
on the date of this Agreement) or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders’ equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated in
the Pricing Circular, the effect of which, in any such case described in clause
(i) or (ii), is in the judgment of the Representatives so material and adverse
as to make it impracticable or inadvisable to proceed with the offering or the
delivery of the Securities on the terms and in the manner contemplated in this
Agreement and in the Offering Circular;

 

(f)                        On or after the Applicable Time (i) no downgrading
shall have occurred in the rating accorded the Company’s debt securities or
preferred stock by any “nationally recognized statistical rating organization”,
as that term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act, and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating of
any of the Company’s debt securities or preferred stock;

 

(g)                     On or after the Applicable Time, there shall not have
occurred any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange or on The NASDAQ
Global Select Market; (ii) a suspension or material limitation in trading in the
Company’s securities on The NASDAQ Global Select Market; (iii) a general
moratorium on commercial banking activities declared by either Federal or New
York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war or (v) the
occurrence of any other calamity or crisis or any change in financial, political
or economic conditions in the United States or elsewhere, if the effect of any
such event specified in clause (iv) or (v) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Offering Circular;

 

(h)                     The shares of Stock issuable upon conversion of the
Securities shall have been duly listed, subject to notice of issuance, on The
NASDAQ Global Select Market;

 

(i)                         The Company shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and warranties of
the Company herein at and as of such Time of Delivery, as to the performance by
the Company of all of its obligations hereunder to be performed at or prior to
such Time of Delivery, as to the matters set forth in subsection (e) of this
Section and as to such other matters as you may reasonably request;

 

(j)                         The Company shall have delivered executed copies of
the Securities and the Indenture to the Purchasers, in each case in form and
substance reasonably satisfactory to the Company and the Purchasers;

 

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(k)                      The Company shall have obtained and delivered to the
Purchasers executed copies of a lock-up agreement from the executive officers of
the Company listed on Schedule III hereto substantially in the forms set forth
in Schedule IV hereto; and

 

(l)                         The Company shall have furnished or caused to be
furnished to the Purchasers and Latham & Watkins LLP, counsel for the
Purchasers, a certificate from its transfer agent stating the number of
authorized, issued and outstanding shares of Stock.

 

9.                           (a)  The Company will indemnify and hold harmless
each Purchaser against any losses, claims, damages or liabilities, joint or
several, to which such Purchaser may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Offering Circular, the
Pricing Circular, the Offering Circular, or any amendment or supplement thereto,
any Company Supplemental Disclosure Document, or arise out of or are based upon
the omission or alleged omission to state therein a material fact necessary to
make the statements therein not misleading, and will reimburse each Purchaser
for any legal or other expenses reasonably incurred by such Purchaser in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Offering Circular, the
Pricing Circular, the Offering Circular or any such amendment or supplement, or
any Company Supplemental Disclosure Document, in reliance upon and in conformity
with written information furnished to the Company by any Purchaser through the
Representatives expressly for use therein.

 

(b)                     Each Purchaser will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Circular, the Pricing Circular, the
Offering Circular, or any amendment or supplement thereto, or any Company
Supplemental Disclosure Document, or arise out of or are based upon the omission
or alleged omission to state therein a material fact or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Offering Circular, the Pricing
Circular, or the Offering Circular or any such amendment or supplement, or any
Company Supplemental Disclosure Document in reliance upon and in conformity with
written information furnished to the Company by such Purchaser through the
Representatives expressly for use therein, it being understood and agreed that
the only such information consists of (i) the second sentence in the third
paragraph of text, (ii) the fourth, fifth and sixth sentences of the sixteenth 
paragraph of text and (iii) the eighteenth paragraph of text, in each case under
the caption “Plan of distribution”; and will reimburse the Company for any legal
or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.

 

(c)                      Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection.  In case any such
action shall be brought against any indemnified party and it shall notify the

 

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indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation.  No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to, or an admission of, fault, culpability or a failure
to act, by or on behalf of any indemnified party.

 

(d)                     If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Purchasers on
the other from the offering of the Securities.  If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations.  The relative benefits received by the
Company on the one hand and the Purchasers on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Purchasers, in each case as set forth
in the Offering Circular.  The relative fault 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 on the one hand or the Purchasers
on the other and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.  The Company
and the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d).  The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim.  Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
investors were offered to

 

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investors exceeds the amount of any damages which such Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.  The Purchasers’ obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.

 

(e)                      The obligations of the Company under this Section 8
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to any affiliate of each
Purchaser and each person, if any, who controls any Purchaser within the meaning
of the Act; and the obligations of the Purchasers under this Section 9 shall be
in addition to any liability which the respective Purchasers may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the Company
within the meaning of the Act.

 

10.                     (a)  If any Purchaser shall default in its obligation to
purchase the Securities which it has agreed to purchase hereunder, you may in
your discretion arrange for you or another party or other parties to purchase
such Securities on the terms contained herein.  If within thirty-six hours after
such default by any Purchaser you do not arrange for the purchase of such
Securities, then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to you
to purchase such Securities on such terms.  In the event that, within the
respective prescribed periods, you notify the Company that you have so arranged
for the purchase of such Securities or the Company notifies you that it has so
arranged for the purchase of such Securities, you or the Company shall have the
right to postpone the Time of Delivery for a period of not more than  seven
days, in order to effect whatever changes may thereby be made necessary in the
Offering Circular, or in any other documents or arrangements, and the Company
agrees to prepare promptly any amendments to the Offering Circular which in your
opinion may thereby be made necessary.  The term “Purchaser” as used in this
Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Securities.

 

(b)                     If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Purchaser or Purchasers by you and
the Company as provided in subsection (a) above, the aggregate principal amount
of such Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.

 

(c)                      If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Purchaser or Purchasers by you and
the Company as provided in subsection (a) above, the aggregate principal amount
of Securities which remains unpurchased exceeds one-eleventh of the aggregate
principal amount of all the Securities, or if the Company shall not exercise the
right described in subsection (b) above to require non-defaulting Purchasers to
purchase Securities of a defaulting Purchaser or Purchasers, then this Agreement
shall thereupon terminate, without liability on the part of any non-defaulting
Purchaser or the Company, except for the expenses to be borne by the Company and
the Purchasers as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 9 hereof; but nothing herein shall relieve a
defaulting Purchaser from liability for its default.

 

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11.                     The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Purchasers, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Purchaser or any controlling person of any Purchaser, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.

 

12.                     If this Agreement shall be terminated pursuant to
Section 10 hereof, the Company shall not then be under any liability to any
Purchaser except as provided in Sections 7 and 9 hereof; but, if for any other
reason, the Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Purchaser for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Purchaser except as provided in Sections 7 and
9 hereof.

 

13.                     In all dealings hereunder, the Representatives shall act
on behalf of each of the Purchasers, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of any
Purchaser made or given by the Representatives.

 

All statements, requests, notices and agreements hereunder shall be in writing,
and if to the Purchasers shall be delivered or sent by mail, telex or facsimile
transmission to you at as the representatives in care of J.P. Morgan Securities
Inc., 383 Madison Avenue, New York, New York 10179, Facsimile: (212) 622-8358,
Attention: Equity Syndicate Desk; and care of Merrill Lynch, Pierce, Fenner &
Smith Incorporated, One Bryant Park, New York, New York 10036, Facsimile: (646)
855-3073, Attention: Syndicate Department (with a copy to: Facsimile: (212)
230-8730, Attention: ECM Legal); and if to the Company shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company set
forth in the Offering Circular, Attention: Secretary; provided, however, that
any notice to a Purchaser pursuant to Section 8(i) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Purchaser at its address
set forth in its Purchasers’ Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request.  Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.

 

14.                     This Agreement shall be binding upon, and inure solely
to the benefit of, the Purchasers, the Company and, to the extent provided in
Sections 9 and 11 hereof, the officers and directors of the Company and each
person who controls the Company or any Purchaser, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Securities from any Purchaser shall be deemed a successor or assign
by reason merely of such purchase.

 

15.                     Time shall be of the essence of this Agreement.

 

16.                     The Company acknowledges and agrees that (i) the
purchase and sale of the Securities pursuant to this Agreement is an
arm’s-length commercial transaction between the Company, on the one hand, and
the several Purchasers, on the other, (ii) in connection therewith and with the
process leading to such transaction each Purchaser is acting solely as a
principal and not the agent or fiduciary of the Company, (iii) no Purchaser has
assumed an advisory or fiduciary responsibility in favor of the Company with
respect to the offering contemplated hereby or the process leading thereto
(irrespective of whether such Purchaser has advised or is currently advising the
Company on other matters) or any other obligation to the Company except the
obligations expressly set forth in this Agreement and (iv) the Company has
consulted its own legal and financial advisors to the extent it

 

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deemed appropriate.  The Company agrees that it will not claim that the
Purchasers, or any of them, has rendered advisory services of any nature or
respect, or owes a fiduciary or similar duty to the Company, in connection with
such transaction or the process leading thereto.

 

17.                     This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the Purchasers,
or any of them, with respect to the subject matter hereof.

 

18.                   This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

 

19.                     The Company and each of the Purchasers hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby.

 

20.                     This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such respective counterparts shall together constitute
one and the same instrument.

 

21.                     Notwithstanding anything herein to the contrary, the
Company (and the Company’s employees, representatives, and other agents) are
authorized to disclose to any and all persons, the tax treatment and tax
structure of the potential transaction and all materials of any kind (including
tax opinions and other tax analyses) provided to the Company relating to that
treatment and structure, without the Purchasers’ imposing any limitation of any
kind. However, any information relating to the tax treatment and tax structure
shall remain confidential (and the foregoing sentence shall not apply) to the
extent necessary to enable any person to comply with securities laws. For this
purpose, “tax treatment” means US federal and state income tax treatment, and
“tax structure” is limited to any facts that may be relevant to that treatment.

 

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If the foregoing is in accordance with your understanding, please sign and
return to us five counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Purchasers, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Purchasers and the Company. 
It is understood that your acceptance of this letter on behalf of each of the
Purchasers is pursuant to the authority set forth in a form of Agreement among
Purchasers, the form of which shall be submitted to the Company for examination
upon request, but without warranty on your part as to the authority of the
signers thereof.

 

 

Very truly yours,

 

 

 

priceline.com Incorporated

 

 

 

 

 

 

By:

/s/Daniel J. Finnegan

 

Name: Daniel J. Finnegan

 

Title: Chief Financial Officer

 

 

 

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Accepted as of the date hereof:

 

 

 

 

 

J.P. MORGAN SECURITIES INC.

 

 

 

 

 

 

By:

/s/Jeff Zajkowski

 

Authorized Signatory

 

 

 

 

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

 

 

 

 

 

 

By:

/s/ Richard Spencer

 

Name: Richard Spencer

 

Title: Managing Director

 

 

 

 

 

Each for itself and on behalf of the
several Initial Purchasers listed
in Schedule 1 hereto.

 

 

 

 

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