Document:

Exhibit 10.21

 

2010 Executive
Incentive Plan Targets

 

	
  Senior Manager

  	
   

  	
  2010 Executive Incentive Plan Target

  as a Percent of 2010 Base Salary

  	
   

  
	
  Gary
  D. Blackford

  	
   

  	
  85%

  	
   

  
	
  Rex
  T. Clevenger

  	
   

  	
  75%

  	
   

  
	
  Timothy
  W. Kuck

  	
   

  	
  70%

  	
   

  
	
  Jeffrey
  L. Singer

  	
   

  	
  70%

  	
   

  
	
  Walter
  T. Chesley

  	
   

  	
  65%

  	
   

  
	
  Diana
  Vance-Bryan

  	
   

  	
  65%

  	
   

  
	
  David
  Lawson

  	
   

  	
  65%

  	
   

  
	
  William
  Heintze

  	
   

  	
  65%

  	
   

  

 

	
  Target Achievement*

  	
   

  	
  Bonus Multiplier

  	
   

  
	
  110%

  	
   

  	
  150%

  	
   

  
	
  105%

  	
   

  	
  125%

  	
   

  
	
  100%

  	
   

  	
  100%

  	
   

  
	
  99%

  	
   

  	
  95%

  	
   

  
	
  98%

  	
   

  	
  90%

  	
   

  
	
  97%

  	
   

  	
  85%

  	
   

  
	
  96%

  	
   

  	
  80%

  	
   

  
	
  95%

  	
   

  	
  75%

  	
   

  
	
  94%

  	
   

  	
  70%

  	
   

  
	
  93%

  	
   

  	
  65%

  	
   

  
	
  <93%

  	
   

  	
  Zero

  	
   

  

 

*
The target is set by the compensation committee

 

Scale
Methodology

 

Directionally,
every 1% variance to Target has a 5 times multiplier, with bookends at 110% and
93%, subject to the discretion of the compensation committeeExhibit 10.1

 

priceline.com Incorporated

 

1.25% Convertible Senior Notes due 2015

 

 

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 

 

 

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 

 

2

 

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 

 

3

 

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 

 

4

 

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 

 

5

 

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 

 

6

 

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 

 

7

 

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 

 

8

 

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

 

9

 

(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 

 

10

 

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;

 

11

 

(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

 

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 

 

13

 

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;

 

14

 

(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;

 

15

 

(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 

 

16

 

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 

 

17

 

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.

 

18

 

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 

 

19

 

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.

 

20

 

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

  

 

 

 

 

	
  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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