Document:

Exhibit 10.78

 

Execution Copy

 

 

 

 

AMENDED
AND RESTATED

SECURITYHOLDERS’ AGREEMENT

 

 

among

 

 

HUTCHISON-PRICELINE
LIMITED,

 

 

PCLN
ASIA, INC.,

 

 

TRIO
HAPPINESS LIMITED

 

 

and

 

 

ANY
OTHER PERSON

BECOMING A SIGNATORY HERETO

AFTER THE DATE HEREOF

 

dated
as of October 3, 2003

 

 

 

 

AMENDED AND RESTATED

SECURITYHOLDERS’
AGREEMENT

 

This AMENDED AND RESTATED SECURITYHOLDERS’ AGREEMENT, dated as of October 3, 2003, among
HUTCHISON-PRICELINE LIMITED, a company organized under the laws of the Cayman
Islands (the “Company”), PCLN ASIA, INC., a corporation organized under
the laws of the State of Delaware, United States of America (“PCLN SUB”),
and TRIO HAPPINESS LIMITED, a company organized under the laws of the British
Virgin Islands and a wholly owned subsidiary of Hutchison Whampoa Limited (“TH”
and, together with PCLN SUB, the “Investors”), and any other Person
becoming a signatory hereto after the date hereof (each of the aforementioned,
a “Party” and, collectively, the “Parties”).  Capitalized terms used and not otherwise
defined herein have the respective meanings ascribed to such terms in
Section 1.01.

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS, PCLN SUB is a wholly owned subsidiary of Priceline, an
Internet-based company with significant name recognition of its trademarked “priceline”
name and patented “demand collection system” for selling products over the
Internet through buyer driven commerce;

 

WHEREAS, Hutchison and its Affiliates are a conglomerate with interests
in ports and related services, telecommunications, property development and
holdings, retail and manufacturing and energy, infrastructure, finance and
investment, and has extensive and long-standing global business relationships,
including relationships in many parts of the Asia Pacific region;

 

WHEREAS, the Parties hereto have entered into a Securityholders’
Agreement, dated as of June 27, 2000, as supplemented by the Supplemental
Agreement relating to the Securityholders’ Agreement dated February 15,
2001 (collectively, the “Original Securityholders’ Agreement”), pursuant
to which, among other things, the Parties formed the Company for the purpose of
conducting an Internet-based buyer driven commerce business in Bangladesh,
Bhutan, Brunei, Cambodia, Hong Kong, Taiwan, the People’s Republic of China,
North Korea, South Korea, Singapore, Sri-Lanka, Thailand, Laos, Macau,
Malaysia, Maldives, Mongolia, Myanmar, Nepal, Pakistan, Papua New Guinea,
Tibet, Vietnam, Indonesia, the Philippines and India (the “Territory”);

 

 

WHEREAS, pursuant to the terms of the Original Securityholders’
Agreement and in connection with the transactions contemplated thereby (the “Transactions”),
(i) Priceline and the Company entered into a Technology License Agreement,
dated as of June 27, 2000, as supplemented and amended to date (the “Priceline
License Agreement”); (ii) Priceline and the Company entered into a Services
Agreement, dated as of June 27, 2000, as supplemented and amended to date
(the “Priceline Services Agreement”); (iii) Priceline and the Company
entered into a Trademark License Agreement, dated as of June 27, 2000, as
supplemented and amended to date (the “Priceline Trademark Agreement”);
(iv) Hutchison Whampoa Enterprises Limited, a company organized under the laws
of the British Virgin Islands, and the Company entered into a Trademark License
Agreement, dated as of June 27, 2000 (the “Hutchison License Agreement”);
and (v) TH and the Company entered into a Services Agreement, dated as of
June 27, 2000, as supplemented and amended to date (the “TH Services
Agreement”); (vi) Priceline guaranteed the performance of the obligations
of PCLN SUB under the Original Securityholders’ Agreement, pursuant to the
terms of a separate guaranty; and (vii) A.S. Watson guaranteed the performance
of the obligations of TH under the Original Securityholders’ Agreement,
pursuant to the terms of a separate guaranty.

 

WHEREAS, contemporaneously with entering into this Agreement, the
Company, PCLN SUB and TH are entering into a Restructuring Agreement (the “Restructuring
Agreement”), pursuant to which (i) PCLN SUB and TH are reducing the
conversion price under certain convertible notes issued by the Company to PCLN
SUB and TH, from US$1.25 per Original Ordinary Share to US$1.00 per Original
Ordinary Share, and are converting such convertible notes at the reduced
conversion price into Original Ordinary Shares; (ii) PCLN SUB and TH are
passing shareholders’ resolutions to cause the Company to, among other things,
sub-divide each Original Ordinary Share into five Ordinary Shares (the
“Sub-division”) and to alter its authorised share capital; (iii) following the
Sub-division, PCLN SUB and TH are subscribing for and purchasing Ordinary
Shares; (iv) following the Sub-division, the Company is re-purchasing from PCLN
SUB and TH the Ordinary Shares 
resulting from the Sub-division 
with funds from the subscriptions referred to in (iii) above; (v)
following the Sub-division, the Company is issuing and allotting to TH new
Ordinary Shares in satisfaction of certain amounts owed by it to TH, and the
Company is granting TH an option to purchase, from time to time, on or prior to
March 31, 2004, up to 979,390 new Ordinary Shares for cash at par value of
US$0.20 per Ordinary Share (as adjusted from time to time); (vi) following the
Sub-division, the Company is issuing and allotting to TH new Ordinary Shares in
satisfaction of certain amounts owed by it to TH ; (vii) following the
Sub-division, the Company is issuing and allotting new Ordinary Shares to PCLN
SUB in satisfaction of certain amounts owed by it to Priceline; (viii) the
Company and Priceline are amending and restating the Priceline Services
Agreement; (ix) the Company and Priceline are amending the Priceline

 

2

 

License Agreement; and (x) the Company and TH are amending the TH
Services Agreement.

 

WHEREAS, in connection with the transactions contemplated by the
Restructuring Agreement, the Parties desire to amend and restate the Original
Securityholders’ Agreement by entering into this Agreement on the terms and
conditions set forth herein;

 

NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the Parties hereby agree, with
effect from 1 January 2003, as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01.          Certain Defined Terms.  As used in this Agreement, the following
terms shall have the following meanings:

 

“A.S. Watson” means A.S. Watson & Company, Limited, a Hong
Kong company and a wholly owned subsidiary of Hutchison.

 

“A.S. Watson Guaranty” means the guaranty, dated as of
June 27, 2000, of A.S. Watson in favor of PCLN SUB and the Company,
including all confirmations thereof.

 

“Affiliate” has the meaning specified in Rule 12b-2 promulgated
under the Exchange Act, as amended, and the rules and regulations promulgated
thereunder.

 

“Agreement” means this Amended and Restated Securityholders’
Agreement and all amendments hereto made in accordance with the provisions
hereof.

 

“Ancillary Agreements” means the Restructuring Agreement, the
Priceline License Agreement, the Priceline Services Agreement, the Priceline
Trademark Agreement, the Hutchison License Agreement, the TH Services
Agreement, the Priceline Guaranty and the A.S. Watson Guaranty.

 

“Approved Underwriter” has the meaning specified in
Section 6.02(f).

 

“Board” means the board of directors of the Company.

 

3

 

“Business Day” means any day other than a Saturday, Sunday or
other day on which banks in the City of New York, State of New York, United
States of America or Hong Kong are authorized or required to be closed.

 

“Business Plan” means the business plan for the Company’s fiscal
year 2000, including the annual budget, as agreed between TH and PCLN SUB as
attached as Schedule I to the Original Securityholders’ Agreement,
and for each successive fiscal year of the Company.

 

“Change of Control” shall be deemed to have occurred (a) if TH
or, in the event of a Transfer to a Permitted Transferee of TH, such Permitted
Transferee, ceases to be a wholly owned subsidiary of Hutchison or any
successor thereto, in each case, without the prior written consent of PCLN SUB;
or (b) if PCLN SUB or, in the event of a Transfer to a Permitted Transferee of
PCLN SUB, such Permitted Transferee, ceases to be a wholly owned subsidiary of
Priceline or any successor thereto, in each case, without the prior written
consent of TH.

 

“Closing Price” means, with respect to the Registrable
Securities, as of the date of determination, (a) the average of the closing bid
and ask prices on such date, as officially reported on the principal national
securities exchange (including The Nasdaq Stock Market, Inc.) on which the
Registrable Securities are then listed or admitted to trading; or (b) if the
Registrable Securities are not then listed or admitted to trading on any
national securities exchange but are designated as national market system
securities by the NASD, the last trading price per share of a Registrable
Security on such date; or (c) if there shall have been no trading on such date or
if the Registrable Securities are not so designated, the average of the
reported closing bid and asked prices of the Registrable Securities on such
date as shown by The Nasdaq Stock Market, Inc. (or its successor) and reported
by any member firm of the New York Stock Exchange, Inc. selected by the
Company; or (d) if none of (a), (b) or (c) is applicable, a market price per
share determined in good faith by the Board; provided, however,
that, in the case of this clause (d), any Designated Holder, by notice to the
Board and all other Designated Holders, may require that such fair market value
of the Shares be determined by an internationally recognized, independent
investment banking firm that is nationally recognized both within the United
States and Hong Kong, which firm shall be selected by the Board in the
reasonable exercise of its good faith judgment, which selection shall be
approved by at least one TH Director and the PCLN Director.  If trading is conducted on a continuous
basis on any exchange, then the closing price shall be at 4:00 p.m., New York
City time.

 

“Commission” means the United States Securities and Exchange
Commission.

 

4

 

“Company” has the meaning specified in the Preamble.

 

“Company Underwriter” has the meaning specified in
Section 6.03(a).

 

“Control” (including the terms “Controlled by” and “under
common Control with”) means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, as trustee or
executor, by contract or otherwise, including the ownership, directly or
indirectly, of securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.

 

“Convertible Note” means the 6% Convertible Note in the
aggregate principal amount of US$11,110,000, dated as of June 27, 2000
issued by the Company to PCLN SUB and converted in accordance with its terms
into Ordinary Shares on the date of this Agreement.

 

“Default Value” of any Shares means, as of the date when
determined, the par value of such Shares.

 

“Demand Registration” has the meaning specified in
Section 6.02(a).

 

“Designated Holder” means each of TH and PCLN SUB.

 

“Exchange Act” means the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated by the
Commission thereunder.

 

“Holders’ Counsel” has the meaning specified in
Section 6.05(a)(i).

 

“Hong Kong” means the Hong Kong Special Administrative Region of
the People’s Republic of China.

 

“Hutchison” means Hutchison Whampoa Limited, a Hong Kong public
company.

 

“Hutchison License Agreement” has the meaning specified in the
Recitals.

 

“Incidental Registration” has the meaning specified in
Section 6.03(a).

 

5

 

“Indemnified Party” has the meaning specified in
Section 6.06(c).

 

“Indemnifying Party” has the meaning specified in
Section 6.06(c).

 

“Independent Bank” has the meaning specified in
Section 7.11.

 

“Initial Public Offering” means the first Public Offering of the
Shares resulting in aggregate net proceeds (after expenses and underwriting
commissions and discounts) to the Company, if such Public Offering occurs in the
United States of America, of at least US$50 million or, if such Public Offering
does not occur in the United States of America, an amount denominated in the
currency of the jurisdiction in which such Public Offering occurs equivalent to
US$50 million at then applicable exchange rate.

 

“Initiating Holder” has the meaning specified in
Section 6.02(a).

 

“Inspector” has the meaning specified in
Section 6.05(a)(vii).

 

“Investors” has the meaning specified in the Preamble.

 

“IPO Effective Date” means, if the Company’s primary listing is
in the United States, the date upon which the registration statement with
respect to the Initial Public Offering is declared effective by the Commission.

 

“Liability” has the meaning specified in Section 6.06(a).

 

“Licensed Field” has the meaning specified in the Priceline
License Agreement.

 

“Market Price” means, on any date of determination, the average
of the daily Closing Price of the Registrable Securities for the immediately
preceding 20 days on which the national securities exchanges are open for
trading.

 

“NASD” means the National Association of Securities Dealers,
Inc.

 

“NASDAQ” means the National Association of Securities Dealers
Automated Quotation System.

 

“Non-Exercising Securityholder” has the meaning specified in Section 5.02.

 

“Note Purchase Agreement” has the meaning specified in the
Recitals.

 

“Option Limit” has the meaning specified in Section 5.06.

 

6

 

“Option Plan” has the meaning specified in Section 5.06.

 

“Ordinary Shares” means ordinary shares of US$0.20 par value
each in the capital of the Company.

 

“Original Ordinary Shares” means the ordinary shares of US $1.00
par value each in the capital of the Company prior to the Sub-division.

 

“Original Securityholders Agreement” has the meaning specified
in the Recitals.

 

“Party” and “Parties” have the respective meanings
specified in the Preamble.

 

“PCLN SUB” has the meaning specified in the Preamble.

 

“Permitted Transferee” has the meaning specified in
Section 4.01.

 

“Person” means any individual, firm, corporation, proprietary,
public or private company, partnership, limited liability company, public
liability company, trust or other entity, and shall include any successor (by
merger or otherwise) of such entity.

 

“Priceline” means priceline.com Incorporated, a corporation
organized under the laws of the State of Delaware, United States of America.

 

“Priceline Guaranty” means the guaranty, dated as of
June 27, 2000, of Priceline in favor of TH and the Company, including all
confirmations thereof.

 

“Priceline License Agreement” has the meaning specified in the
Recitals.

 

“Priceline Market Price”
means, with respect to any issuance of shares of common stock of Priceline, the
weighted average of the closing prices per share of common stock of Priceline
on NASDAQ on the twenty (20) trading days immediately preceding such issuance.

 

“Priceline Services Agreement” has the meaning specified in the
Recitals.

 

“Priceline Trademark Agreement” has the meaning specified in the
Recitals.

 

7

 

“Public Offering” means a public offering of Shares pursuant to
a prospectus, an effective registration statement or listing agreement in
compliance with the laws, rules and regulations in such jurisdiction as may be
approved by the Board to be the jurisdiction for the primary listing and
trading of the Company’s securities.

 

“Records” has the meaning specified in
Section 6.05(a)(vii).

 

“Registrable Securities” means, each of the following:  (a) any and all Shares owned by the
Designated Holders or issued or issuable upon exercise, exchange or conversion
of any securities held by the Designated Holders or acquired by any of the
Designated Holders after the date hereof, (b) any other Shares acquired or
owned by any of the Designated Holders prior to the IPO Effective Date or
acquired or owned by any of the Designated Holders after the IPO Effective
Date, if such Designated Holder is an Affiliate of the Company, and (c) any
Shares issued or issuable to any of the Designated Holders with respect to the
Registrable Securities by way of stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise and any shares or voting common stock issuable upon
conversion, exercise or exchange thereof. 
For purposes of this Agreement, Registrable Securities will cease to be
Registrable Securities when (i) a Registration Statement covering such
Registrable Securities has been declared effective under the Securities Act by
the Commission and such Registrable Securities have been disposed of pursuant
to such effective Registration Statement, (ii) such Registrable Securities
shall have been distributed pursuant to Rule 144, or (iii) the entire amount of
Registrable Securities proposed to be sold in a single sale, in the opinion of
counsel satisfactory to the Company and the Designated Holders, each in their
reasonable judgment, may be distributed to the public without any limitation as
to volume pursuant to Rule 144.

 

“Registration Expenses” has the meaning specified in
Section 6.05(d).

 

“Registration Statement” means a Registration Statement filed
pursuant to the Securities Act.

 

“Restricted Shares” means all Shares other than (a) Shares that
have been registered under a registration statement pursuant to the Securities
Act, (b) Shares with respect to which a sale has been made in reliance on and
in accordance with Rule 144 or (c) Shares with respect to which the holder
thereof shall have delivered to the Company either (i) an opinion, in form and
substance reasonably satisfactory to the Company, of counsel, who shall be
reasonably satisfactory to the Company, or (ii) a “no action” letter from the
staff of the Commission, to the effect

 

8

 

that subsequent transfers of such Shares may be effected without
registration under the Securities Act or compliance with Rule 144.

 

“Restructuring Agreement” has the meaning set forth in the
Recitals.

 

“Rule 144” means Rule 144 (or any successor provision) under the
Securities Act.

 

“Sale Assumption”, with respect to any Shares, means the
assumption that such Shares are sold to a third party that is not an Affiliate
of Priceline, PCLN SUB, Hutchison, A.S. Watson or TH in a single, private
transaction, negotiated at arm’s-length.

 

“Securities Act” means the United States Securities Act of 1933,
as amended, and the rules and regulations promulgated by the Commission
thereunder.

 

“Securityholder” means each holder of (i) Shares or (ii) any
other security of the Company, that is exercisable or exchangeable for, or
convertible into, Shares, provided, in each case, that such Person becomes a
party to this Agreement by executing and delivering to each of the other Securityholders
a Deed of Adherence.

 

“Shares” means the Ordinary Shares owned by each Securityholder
on the date hereof, as set forth opposite each Securityholder’s name on Annex
I hereto, and additional Ordinary Shares acquired by one or more
Securityholders after the date hereof, including Ordinary Shares acquired as a
result of a subsequent purchase, conversion, reorganization, recapitalization,
reclassification, stock dividend, split-up, sale of assets, distribution or
redemption of securities of the Company, and including the Ordinary Shares
issued upon conversion or exercise or exchange of any security convertible
into, or exercisable or exchangeable for, Ordinary Shares.

 

“Sub-division” has the meaning specified in the Recitals.

 

“Subsidiary” means any and all Persons (other than individuals)
Controlled by the Company directly or indirectly through one or more
intermediaries.

 

“Territory” has the meaning specified in the Recitals.

 

“TH” has the meaning specified in the Preamble.

 

9

 

“TH Services Agreement” has the meaning specified in the
Recitals.

 

“Third Party” means, with respect to any Securityholder, any
other Person (other than a Permitted Transferee of such Securityholder).

 

“Transactions” has the meaning specified in the Recitals.

 

“Transfer” means any voluntary or involuntary attempt to,
directly or indirectly, through the transfer of legal or beneficial interests
in any Securityholder or in Affiliates or otherwise, offer, sell, assign,
transfer, grant a participation in, pledge or otherwise dispose of any Shares,
or the consummation of any such transaction, or the soliciting of any offer to
purchase or otherwise acquire, or taking a pledge of, any of the Shares; provided,
however, that no Transfer shall be deemed to have occurred (i) with
respect to any Shares owned by PCLN SUB by reason of any sale, assignment,
transfer, grant, pledge or other disposition of any securities of Priceline or
(ii) with respect to any Shares owned by TH by reason of any sale, assignment,
transfer, grant, pledge or other disposition of any securities of Hutchison.

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES OF THE PARTIES

 

Each Party represents and warrants to each other Party as follows:

 

(a)          Corporate Authority.  Such Party has full power, capacity and
authority to execute, deliver and perform this Agreement;

 

(b)          Due Authorization.  This Agreement has been duly and validly
authorized, executed and delivered by such Party and constitutes a valid and
binding obligation of such Party, enforceable against such Party in accordance
with its terms, except that (i) the enforceability hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting creditors’ rights, (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to certain equitable defenses and to the discretion of the court before which
any proceedings therefor may be brought, and (iii) the rights to indemnity
hereunder may be limited by law or the public policy underlying such law; and

 

(c)          No Conflict.  The execution, delivery and performance of this Agreement by such
Party do not violate or conflict with, or constitute a default or breach under,
(i) such Party’s organizational documents, (ii) any judgment, order

 

10

 

or decree or
statute, law, ordinance, rule or regulation of any governmental entity
applicable to such Party or (iii) any material agreement to which it is a party
or by which it or its assets and properties are bound, except, with respect to
the violations, conflicts, defaults and breaches referred to in clause (i) or
(ii) above, such as would not, (A) individually or in the aggregate, have a
material adverse effect on the business, condition (financial or otherwise),
assets or results of operations of such Party or the Company or (B) prevent or
materially delay the consummation of the transactions contemplated by this
Agreement or the Ancillary Agreements.

 

ARTICLE III

 

CORPORATE GOVERNANCE

 

Section 3.01.          Composition of the
Board.  Prior to the Initial Public
Offering, the Board shall consist of seven (7) members, of which: (a) a member
shall be designee of PCLN SUB (the “PCLN Director”), (b) five (5) members shall
be designees of TH (the “TH Directors”) and (c) a member shall be
the Chief Executive Officer of the Company from time to time.

 

Section 3.02.          Nomination and
Election of Directors.   

 

(a)          (i) No director may be removed from office
other than by the Person or Persons having the right, as set forth in
Section 3.01, to designate such director, except that TH shall have the
right to remove any Person who is a member of the Board by reason of
Section 3.01(c) who is no longer Chief Executive Officer of the Company,
and (ii) in the event of a vacancy on the Board, the Securityholders agree to
procure appointment of or to vote to elect, a substitute director designated by
the same Person or Persons having the right, as set forth in Section 3.01,
to designate the director vacating his or her position on the Board.

 

(b)          Prior to the Initial Public Offering, each
Securityholder shall take all actions and do all things necessary to provide
for the annual election of the Board.

 

Section 3.03.          Voting.  Each Securityholder shall, prior to the
Initial Public Offering, take all actions and do all things necessary to effect
the election or appointment of the nominees for the Board nominated by PCLN SUB
or TH, and the Chief Executive Officer, in accordance with Section 3.01
above.  The Parties agree to vote their
Shares and, subject to applicable fiduciary duties, to cause their nominated
directors and other representatives to effectuate the policies and rules
established by this Agreement during the continuance of this Agreement.  Except as

 

11

 

set forth in this
Article III, each Securityholder acknowledges and agrees that nothing
contained in this Agreement shall constitute a voting agreement or require any
Securityholder to vote its Shares in any manner other than as it deems fit, in
its sole discretion.

 

Section 3.04.          Chairman of the Board.  Prior to the Initial Public Offering, TH
shall nominate one of the TH Directors to be appointed Chairman of the Board
who will not have a second or casting vote.

 

Section 3.05.          Committees.  Each of the following committees of the
Board shall consist of at least the PCLN Director and one TH Director.  Prior to the Initial Public Offering, the
Company will establish and maintain the following committees:

 

(a)          Executive Committee.  The Executive Committee of the Board shall
consist of at least two (2) members of the Board, including the PCLN Director
and one (1) TH Director

 

(b)          Audit Committee.  The Audit Committee of the Board shall
consist of three (3) members, two of whom shall be members of the Board,
comprised of the PCLN Director and one (1) TH Director, and the third of which
shall be the chief financial controller of the Company, provided that the
adoption of any resolution or other action by the Audit Committee shall require
the affirmative vote of the  PCLN
Director and such TH Director.

 

Section 3.06.          Meetings of the
Board; Quorum; Actions.  The Board
shall meet at least once a quarter and more frequently at the request of at
least two (2)  directors.  A majority of the total number of directors,
which majority must include at least the PCLN Director and one TH Director,
shall constitute a quorum for the transaction of business at a meeting of the
Board.  In the event that a quorum of
the directors is not so present at the start of a duly convened Board meeting,
that meeting shall be adjourned to a day not earlier than 7 days from the date
of such meeting and a quorum at such adjourned meeting shall consist of such
directors as are present in person or represented by their alternates.  All members of the Board shall have equal
voting rights, being one vote for each director (either in person or by his or
her alternate).  Except as set forth in
Section 3.07, the vote of a majority of the total number of directors
shall be the act of the Board.  Prior to
the Initial Public Offering, it is the intention of each Securityholder that
designees of any Securityholder to the Board shall, subject to any fiduciary
duty existing under applicable law, be permitted to take into account the
interests of such Securityholder.

 

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Section 3.07.          Supermajority
Provisions.

 

(a)           Prior
to the Initial Public Offering, in addition to any approval required under
applicable law, the prior approval of (x) the holder(s) of at least two-thirds
of the outstanding Ordinary Shares and (y) the Board, which approval shall
include the affirmative vote of the PCLN Director and at least one TH Director,
shall be required for the Company to:

 

(i)            (A) 
merge, combine or consolidate with, or agree to merge, combine or
consolidate with, or purchase, or agree to purchase, all or substantially all
of the stock of, any Person or (B) purchase, or agree to purchase, all or
substantially all of the assets and properties of, or otherwise acquire, or
agree to acquire, all or any portion of, any Person, in each case with respect
to this clause (B), having a value in excess of US$3,000,000, including assets
and assumed liabilities;

 

(ii)           sell all or substantially all of the assets
and properties of the Company;

 

(iii)          liquidate or dissolve the Company, effect any
recapitalization or reorganization of the Company, or any stock split or
reverse stock split, or, in each case, obligate itself to do so, except for any
recapitalization or reorganization of the Company, or any stock split or
reverse stock split, which shall not dilute the shareholding of any
Securityholder in the Company or which shall not prejudice the rights attaching
to the Shares held by any Securityholder;

 

(iv)          amend or propose to amend the Memorandum of
Association or Articles of Association of the Company where such amendment
shall prejudice the rights attaching to the Shares held by any Securityholder;

 

(v)           issue any Ordinary Shares, or securities
exercisable or exchangeable for, or convertible into, Ordinary Shares, for
consideration per Ordinary Share (or an exercise, exchange or conversion price
per Ordinary Share) in an amount less than par value of the Ordinary Shares ;
or

 

(vi)          adopt or amend any equity incentive plan for
directors, officers or employees, including the Option Plan, to permit the
grant of, or otherwise grant, options or any other rights to acquire Ordinary
Shares in excess of the Option Limit.

 

(b)           Prior
to the Initial Public Offering, the prior approval of (x) PCLN SUB and TH; and
(y) the Board, which approval shall include the

 

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affirmative
vote of the PCLN Director and at least one TH Director shall be required for
the Company to

 

(i)            enter into any contract, agreement or other
arrangement involving aggregate payments to or from the Company in excess of
US$1,000,000 in the aggregate during any twelve-month period with any Securityholder
or any Affiliate of any Securityholder, except as contemplated by the
Restructuring Agreement, the Business Plan or by the Priceline License
Agreement, the Priceline Services Agreement, the Hutchison License Agreement or
the TH Services Agreement; or

 

(ii)           declare, set aside or pay a dividend or make
any distribution with respect to its capital stock in excess of US$100,000
annually (whether in cash, securities or other property) or redeem, purchase or
otherwise acquire any of its capital stock.

 

Section 3.08.          Intentionally deleted. 

 

(a)

 

Section 3.09.          Intentionally deleted. 

 

(a)

 

Section 3.10.          Officers.

 

(a)          There shall be a chief executive officer of
the Company (the “Chief Executive Officer”) who shall be appointed by
the Board and serve as such until the expiration of the term of his or her
executive services agreement or until his or her death, resignation or removal
in accordance with the terms of his or her executive service agreement.  The Chief Executive Officer shall have the
responsibility for managing the day-to-day business operations and affairs of
the Company, implementing the Business Plan and supervising its other officers,
subject to the direction, supervision and control of the Board.  In general, the Chief Executive Officer
shall have such other powers and perform such other duties as usually pertain
to the office of the Chief Executive Officer, and as from time to time may be
assigned to such officer by the Board, including the authority to recommend for
appointment by the Board, the officers of the Company.

 

(b)          Any vacancy in the position of Chief
Executive Officer shall be filled by appointment of the Board.

 

14

 

ARTICLE IV

 

TRANSFER OF SHARES

 

Section 4.01.          General Restrictions.  Prior to the earlier to occur of (a) the
expiration of any lock-up period required under applicable law or by the
underwriters in connection with the Company’s Initial Public Offering and (b) June 27,
2005, no Securityholder may Transfer any Shares or any other securities of the
Company without the prior written consent of the other Securityholders, except
for Transfers, (i) by TH to any wholly owned subsidiary of Hutchison or by PCLN
SUB to any wholly owned subsidiary of Priceline (in each case, a “Permitted
Transferee”); provided, however, that, prior to any such Transfer, such
Permitted Transferee shall agree in writing to take such Shares or other
securities subject to, and shall become a party to, this Agreement by executing
and delivering a deed of adherence, substantially in the form of Schedule I
hereto, which shall be filed with the Secretary of the Company and shall
include the address of such Person to which notices hereunder shall be sent
(the “Deed of Adherence”), a copy of which writing shall be filed with the
Secretary of the Company and shall include the address of such Permitted
Transferee to which notices hereunder shall be sent and the transferring
Securityholder shall guarantee all of the Permitted Transferee’s obligations
under this Agreement, (ii) pursuant to any offer, including a tender or
exchange offer (“Offer”), by any Person (including the Company) to
purchase all of the outstanding Ordinary Shares and any other securities of the
Company, which Offer has been approved by the Board, including the affirmative
vote of at least the PCLN Director and one TH Director, or (iii) pursuant to
any transaction requiring the approval of PCLN SUB and TH pursuant to and in
accordance with Section 3.07(a), and as to which the requisite approval of
such Securityholders shall have been obtained. 
Each Securityholder shall provide the Company with prior written notice
of any proposed Transfer of Shares or other securities of the Company which
shall be in compliance with this Agreement. 
A Permitted Transferee of Shares may transfer its Shares only to the
transferor Securityholder or to a Person that is a Permitted Transferee of such
transferor Securityholder.  In the event
that an Offer is presented to the Board for consideration and such Offer (x) is
approved by the TH Directors, and (y) is not made by a Prohibited Transferee
(as defined in the Priceline License Agreement), PCLN SUB shall procure that
the PCLN Director shall not unreasonably withhold his affirmative vote for the
approval of such Offer.  If the PCLN
Director’s affirmative vote for the approval of such Offer is unreasonably
withheld, TH shall have the right, by notice in writing to PCLN SUB, to require
PCLN SUB to purchase all of the Ordinary Shares and other securities of the
Company held by TH at a price and on terms which are no less favourable that
those contained in the Offer.

 

Section 4.02.          Transfers Not In
Compliance.  In the event of any
purported or attempted Transfer of Shares or other securities of the Company by
a Securityholder that does not comply with this Agreement, the purported or

 

15

 

attempted transferee, including
any successor by operation of law, shall not be deemed to be a Securityholder
of the Company for any purpose and shall not be entitled to any of the rights
of a Securityholder, including the right to vote any such securities (if the
securities are in the form of Shares), to receive a certificate or to have its
name registered in the register of members for any such securities or any
dividends, interest or other distributions on or with respect to any such
securities or to exercise any conversion right attached to any such securities.

 

Section 4.03.          Legends.

 

(a)          The Company shall affix to each certificate
evidencing Shares issued to Securityholders a legend in substantially the
following form:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AS SET FORTH IN AN AMENDED AND RESTATED
SECURITYHOLDERS’ AGREEMENT
DATED                    ,
2003, AS IT MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER. 
NO REGISTRATION OF TRANSFER OF THESE SHARES WILL BE MADE ON THE BOOKS OF
THE ISSUER UNLESS AND UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH.”

 

(b)          Any Securityholder with Shares issued prior
to the date hereof has delivered to the Company its certificates representing
such Shares in exchange for certificates representing such Shares bearing the
legend set forth in Section 4.03(a).

 

(c)          In the event that the Shares shall cease to
be subject to the restrictions on transfer set forth in this Agreement, the
Company shall, upon the written request of the holder thereof, issue to such
holder a new certificate evidencing such Shares without the legend required by
Section 4.03(a).  Before issuing a
new certificate omitting part or all of the legend set forth in
Section 4.03(a), the Company may request an opinion of counsel reasonably
satisfactory to it to the effect that the restrictions discussed in the legend
to be omitted no longer apply to the Shares represented by such certificate.

 

16

 

Section 4.04.          Rights of First
Refusal Transfer Offers.

 

(a)          Subject to the general restrictions above in
this Article IV, if at any time after June 27, 2005, but prior to the
Initial Public Offering, any Securityholder or Permitted Transferee (a
“Transferring Securityholder”) receives a bona fide offer (a “Transfer Offer”)
to acquire all or any portion of the Shares then owned by such Transferring
Securityholder (the “Transfer Shares”) from any Person that is not a Permitted
Transferee of such Transferring Securityholder (the “Offeror”), which such
Transferring Securityholder desires to accept, such Transferring Securityholder
shall cause the Offeror to reduce the Transfer Offer to writing and shall
deliver written notice of such Offer (a “Transfer Notice”) to the Company and
each other Securityholder.  The Transfer
Notice shall also contain an irrevocable offer by such Transferring
Securityholder to sell all, but not less than all, of the Transfer Shares to
each other Securityholder at the same price and upon the same terms contained
in the Transfer Offer, and shall be accompanied by a true and correct copy of
the Transfer Offer (which shall identify the Offeror, the address of the
Offeror, the amount and form of consideration contained in the Transfer Offer
and all other terms and conditions of the Transfer Offer).

 

(b)          Procedures.  Each Securityholder to whom a Transfer Notice is delivered shall
have the irrevocable right and option, within the thirty (30) day period after
receipt of the Transfer Notice (the “Notice Period”), to accept or
reject the offer made therein by delivering written notice of such acceptance
(an “Acceptance Notice”) to the Transferring Securityholder within the
Notice Period, specifying the number of Transfer Shares as to which it desires
to accept such offer.  Each Transferring
Securityholder delivering an Acceptance Notice shall concurrently deliver a
copy thereof to the Company and each other Securityholder.  In the event that Acceptance Notices are
delivered by Securityholders with respect to a number of Shares in excess of
the total number of Transfer Shares, then each such Securityholder shall be
entitled to purchase a number of Transfer Shares equal to the product of (i)
the number of Transfer Shares multiplied by (ii) a fraction, the numerator of
which is the number of Transfer Shares as to which such Securityholder specified
its desire to accept the Offer in its Acceptance Notice, and the denominator of
which is the total number of Transfer Shares as to which all Securityholders
specified their desire to accept the Offer in their respective Acceptance
Notices.

 

(c)          Closings.  Any purchase of Transfer Shares by a Securityholder shall take
place at a closing to be held at the location and on the date mutually agreed
upon by the Transferring Securityholder and such Securityholder, which date
shall be not less than fifteen (15) days nor more than thirty (30) days after
the expiration of the Notice Period.  At
such closing, each Securityholder that is purchasing Transfer Shares shall
deliver the consideration therefor by wire

 

17

 

transfer of
immediately available funds to an account, such account to be designated by the
Transferring Securityholder at least two (2) Business Days prior to such
closing against delivery of a certificate or certificates representing the
Transfer Shares so purchased, together with a duly signed share transfer form
in respect of all Transfer Shares, and the Transfer Shares are to be
Transferred free and clear of any and all liens, claims, charges, security
interests or other encumbrances of any nature whatsoever.

 

(d)          Certain Permitted Transfers.  If at the expiration of the Notice Period,
the offer contained in the Transfer Notice shall not have been accepted with
respect to all of the Transfer Shares (the “Unaccepted Shares”), then
the Transferring Securityholder shall have sixty (60) days after the expiration
of the Notice Period with respect to Unaccepted Shares to sell such Unaccepted
Shares to the Offeror, at the price and upon the terms contained in the
Transfer Notice.  If any Transfer Shares
are not purchased at the closing described above due to any reason other than a
default by the Transferring Securityholder (the “Default Shares”), then
(i) all other Securityholders accepting the offer contained in the Transfer
Notice, if any, shall acquire such Default Shares or (ii) the Transferring
Securityholder shall have sixty (60) days after such default and subsequent
determination by the other Securityholders not to acquire the Default Shares,
to sell such Default Shares to the Offeror, at the price and upon the terms
contained in the Transfer Notice. 
Promptly after any such sale to the Offeror, the Transferring
Securityholder shall notify the Company and each other Securityholder, and
shall furnish the Company and each other Securityholder with evidence, of such
sale and the price and terms thereof. 
If, at the end of the respective periods set forth above, the
Transferring Securityholder has not completed the sale of all Transfer Shares,
such Transferring Securityholder shall no longer be permitted to sell the
Transfer Shares pursuant to this Section without again fully complying
with the provisions hereof, and the Transfer Shares shall remain subject to the
terms of this Agreement as if they had never been offered for sale.

 

Section 4.05.          Call Rights.

 

(a)          Rights Upon Change of Control.  Prior to the Initial Public Offering, upon
the occurrence of any Change of Control of TH, PCLN SUB may elect to require TH
and all Permitted Transferees of TH to Transfer to PCLN SUB all Shares and
other securities convertible into, or exercisable or exchangeable for, Shares
owned or held, whether directly or indirectly, by TH and such Permitted
Transferees in exchange, at the option of PCLN SUB, for cash or common stock of
Priceline equal in value to the Default Value of such Shares as of the date of
such Change of Control.  The number of
shares of common stock of Priceline to be issued will be equal to (i) such
aggregate Default Value of such Shares divided by (ii) the Priceline Market
Price.  Upon the occurrence of any
Change of Control of

 

18

 

PCLN SUB, TH
may elect to require PCLN SUB and all Permitted Transferees of PCLN SUB to
transfer to TH all Shares and other securities convertible into, or exercisable
or exchangeable for, Shares owned or held, whether directly or indirectly, by
PCLN SUB and such Permitted Transferee in exchange for cash equal in value to
the Default Value of such Shares as of the date of such Change of Control.  Not less than ten (10) Business Days prior
to the occurrence of a Change of Control, TH or PCLN SUB (as the case may be)
shall notify PCLN SUB or TH and the Company of such occurrence (the “Change of
Control Notice”).

 

(b)          Procedures.  If PCLN SUB or TH elects to exercise its rights pursuant to
Section 4.05(a), such Party shall have thirty (30) days after the later to
occur of the Change of Control and the receipt of the Change of Control Notice,
as the case may be, within which to notify the other such Party and the Company
of its exercise of such rights (the “Exercise Notice”).

 

(c)          Closing.

 

(i)        Any purchase of Shares or other securities in
the Company by PCLN SUB or TH pursuant to this Section 4.05 shall take
place at a closing to be held at the location and on the date mutually agreed
upon by TH and PCLN SUB, which date shall be not less than fifteen (15) days
nor more than thirty (30) days after the date on which the Exercise Notice is
given and, failing agreement, such closing shall take place simultaneously at
the offices of Baker & McKenzie located at Hutchison House, 14th
Floor, 10 Harcourt Road, Hong Kong, and at the offices of Blank Rome LLP
located at One Logan Square, Philadelphia, Pennsylvania, United States of
America, at 8:00 a.m., Hong Kong time, on the date which is thirty (30) days
after the date on which the Exercise Notice is given.

 

(ii)       At such closing, the transferee of the Shares or
other securities in the Company shall (A) deliver any cash consideration
therefor by wire transfer of immediately available funds to the account or
accounts to be designated at least two (2) Business Days prior to such closing
by the transferor and its respective Permitted Transferees as may be required
or as may determine to Transfer such Shares or other securities in the Company,
or (B) in the event PCLN SUB determines to acquire such Shares or other
securities in the Company, in exchange for shares of Priceline common stock,
cause to be delivered a certificate or certificates for such shares of
Priceline common stock, in each case, against delivery of a certificate or
certificates representing the Shares or other securities in the Company so
purchased, together with a duly signed share transfer form or other appropriate
instruments of transfer in respect of all Shares and other securities in the

 

19

 

Company and the Shares and other securities in the Company are to be
Transferred free and clear of any and all liens, claims, charges, security
interests or other encumbrances of any nature whatsoever.

 

ARTICLE V

 

ADDITIONAL AGREEMENTS

 

Section 5.01.          New Investors to
Execute Agreement. The Company shall not, at any time prior to its Initial
Public Offering, issue any Ordinary Shares or issue any security convertible
into, or exercisable or exchangeable for, Ordinary Shares, other than pursuant
to the option granted to TH in the Restructuring Agreement, Ordinary Shares
issued to option holders upon exercise of options granted under the Option
Plan, unless, prior to the consummation of any such issuance, each Person to
whom such security is proposed to be issued agrees in writing to take such
Shares subject to, and shall become a party to this Agreement by executing and
delivering the Deed of Adherence, which shall be filed with the Secretary of the
Company and shall include the address of such Person to which notices hereunder
shall be sent.  Upon the execution and
delivery by any Person of such Deed of Adherence, Annex I hereto shall
be revised to include the name of such Person and such Person shall be deemed a
“Securityholder” for purposes of this Agreement and shall have the rights and
be subject to the obligations of a Securityholder as such under this Agreement.

 

Section 5.02.          Rights to Purchase
New Securities.  If, prior to the
Initial Public Offering, the Company proposes to issue any Ordinary Shares (or
other securities exercisable or exchangeable for, or convertible into, Ordinary
Shares) to any Person, including to any Securityholder (whether for cash,
securities or other property), except such as are issued (a) pursuant to the
Initial Public Offering, (b) to any director, officer or employee of the
Company pursuant to any equity incentive plan approved by the Board, which
approval must include the affirmative vote of at least one TH Director and the
PCLN Director (except in an amount in excess of the Option Limit, whether under
the Option Plan or otherwise), (c) pursuant to the option granted to TH in the
Restructuring Agreement  or (d) as
consideration in any transaction approved by the Board, which approval must
include the affirmative vote of at least one TH Director and the PCLN Director,
including issues to the Company’s suppliers (other than PCLN SUB or TH), TH and
PCLN SUB and their respective Permitted Transferees shall have the right to
subscribe for and be issued a number of Ordinary Shares or other securities
proposed to be issued by the Company such that, following such transactions,
such Securityholder shall maintain the same proportionate interest, whether
direct or indirect, in the issued and outstanding Ordinary Shares on a fully
diluted basis, as held by such Securityholder immediately prior to such
transaction.  Such subscription by each

 

20

 

Securityholder shall be on the
same terms and conditions as such subscription by such Person.  Any Ordinary Shares or other securities
issued to any Person other than a Securityholder, for which TH or PCLN SUB have
elected not to exercise their respective rights under this Section 5.02
(each, a “Non-Exercising Securityholder”), shall dilute each Non-Exercising
Securityholder ratably.

 

Section 5.03.          Further Assurances.  Each of the Parties hereto shall use
reasonable efforts to take, or cause to be taken, all appropriate action, and
to do, or cause to be done, all things necessary, proper or advisable under
applicable laws to consummate and make effective the transactions contemplated
hereunder, including, using reasonable efforts to obtain all licenses, permits,
consents, approvals, authorizations, qualifications and orders of the competent
governmental entities.  Without limiting
the generality of the foregoing, the Parties shall, when required in order to
effect the transactions contemplated hereunder, make all necessary filings, and
thereafter make any other required or appropriate submissions and shall supply
as promptly as practicable to the appropriate governmental entity any
additional information and documentary material that may be requested.  Each of the Parties shall cooperate with the
other when required in order to effect the transactions contemplated
hereunder.  In case at any time after
the date hereof, any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of each of the
Parties shall use their reasonable best efforts to take all such action.

 

Section 5.04.          Use of Names.  Neither the Company nor any of its
Affiliates shall use the names of any Securityholder or any Affiliate of a
Securityholder in any press release, notice or other publication without the
prior consent of such Securityholder, which consent shall not be unreasonably
withheld or delayed.

 

Section 5.05.          Covenants by the
Company.  The Company hereby
covenants to each Securityholder as follows:

 

(a)          The Company shall maintain financial
statements in accordance with International Accounting Standards applied on a
consistent basis, with a reconciliation to United States generally accepted
accounting principles included in the footnotes;

 

(b)          Prior to the Initial Public Offering, each
Securityholder holding at least 20% of the issued and outstanding Ordinary
Shares shall have reasonable rights to inspect the books and records of the
Company and shall have reasonable access to the legal, tax, accounting and other
personnel of the Company; and

 

21

 

(c)          Prior to the Initial Public Offering, the
Company shall deliver to each Securityholder holding at least 20% of the issued
and outstanding Ordinary Shares, the following documents:

 

(i)        Annual audited consolidated financial
statements within ninety (90) days after the end of each fiscal year and
quarterly unaudited consolidated financial statements within forty-five (45)
days after the end of each fiscal quarter, in each case, of the Company and its
subsidiaries;

 

(ii)       Monthly financial reports furnished to senior
management of the Company, contemporaneously with delivery to senior
management; and

 

(iii)      Copies of reports, if any, submitted to the
Company by independent accountants in connection with each annual or interim
audit of the books and records of the Company made by such accountants and such
other financial and management reports as may reasonably be requested.

 

(d)          From and after June 27, 2000, the
Company shall, to the fullest extent permitted under applicable law, indemnify,
defend and hold harmless each director and officer of the Company and each such
Person who served at the request of the Company as a director, officer,
trustee, partner, fiduciary, employee or agent of another Person, including any
trust, pension or other employee benefit plan, against all claims and losses
against such Person by reason of the fact that such Person is or was a director
or officer of the Company or served in any such capacity.  From and after June 27, 2000, the
Company shall cause to be maintained in effect appropriate policies of
directors’ and officers’ liability insurance having customary terms and
conditions, taking into account the identity and nature of potential claimants
and claims prior to and after the Initial Public Offering.

 

Section 5.06.          Stock Option Plan.
The Company shall establish a stock option plan for directors, officers and
employees of the Company on such terms and at such time as to be approved by
the Board, which terms shall include provisions substantially to the effect set
forth in Article IV, including with respect to restrictions on transfer of
such options and the Ordinary Shares issuable upon exercise thereof, and which
approval shall include the affirmative vote of at least the PCLN Director and
one TH Director  (the “Option Plan”),
provided that such Option Plan shall limit the number of Ordinary Shares
issuable upon exercise of options granted thereunder to no more than 10% of the
outstanding Ordinary Shares on a fully diluted basis, including after giving
effect to the issuance of Ordinary Shares upon exercise of options granted
under any equity incentive plan

 

22

 

(the “Option Limit”).  Any Ordinary Shares issued pursuant to such
Option Plan shall dilute all Securityholders ratably.

 

Section 5.07.          Confidentiality.

 

(a)          Without limiting the Confidentiality
Agreement dated December 10, 1999 between Priceline and A.S. Watson, which
shall remain in full force and effect in accordance with its terms, the Parties
agree that the content and existence of this Agreement and all information
disclosed by either of them to the other relating to the Parties’ respective
businesses shall be treated as strictly confidential and shall not, save as
required by law or any rule or regulation of any recognized stock exchange,
including the NASDAQ, or with the mutual consent of the Parties, be disclosed
by them to any Third Party (save their respective legal and financial advisors
for use in connection with the matters contemplated herein).

 

(b)          If one of the Parties is required by law or
any regulation or rule of any stock exchange, including the NASDAQ, on which
its shares are listed to make an announcement concerning its entering into this
Agreement, such Party may make such an announcement provided that it has first
agreed with the other Parties on the content of the announcement, such
agreement not to be unreasonably withheld or delayed by any other Party.  Each Party hereby acknowledges that each
other Party or its Affiliates is subject to the rules and regulations of the
stock exchange on which its shares are listed, and shall use all reasonable
endeavors to agree with the other Parties on the content of any announcement
referred to in this Section 5.07 so as to comply with the requirements of
law or such rules and regulations.

 

Section 5.08.          Initial Public
Offering.  Upon the Initial Public
Offering, the Company is to be listed and the Ordinary Shares are to be quoted
on such stock exchange as is approved by the Board.  In the event that the Ordinary Shares are listed on any national
securities exchange in the United States, the Company shall grant registration
rights to the Investors in accordance with Article VI hereof.  Neither PCLN SUB nor TH shall unreasonably
withhold its consent to such Initial Public Offering, taking into account the
amount of proceeds that may be raised from such Initial Public Offering and the
timing of the Initial Public Offering, it being understood that neither PCLN
SUB nor TH shall be required to so consent solely by reason of the fact that
the Company proposes to issue securities in an amount meeting the minimum
requirements set forth in the definition of Initial Public Offering.

 

Section 5.09.          Funding.  The initial capital and cash requirements of
the Company shall be satisfied by utilization of the proceeds of the issue of
Shares pursuant to the Share Purchase Agreement and the issue of the
Convertible Note

 

23

 

pursuant to the Note Purchase
Agreement.  In the event that, prior to
the Initial Public Offering, the Company’s financial resources are at any stage
insufficient to satisfy its working capital requirements as determined by the
Board, such additional funding requirements of the Company may  be met by way of the subscription by the
Securityholders of new securities of the Company or the advance of loans from
the Securityholders to the Company in proportion to their then existing securities
in the Company.  PCLN SUB and TH may,
prior to the Initial Public Offering, also authorize additional third party
equity financing (including funding from venture capitalists) in form and from
entities acceptable to PCLN SUB and TH.

 

Section 5.10.          Default in Funding.  If, prior to the Initial Public Offering,
any Securityholder (the “Defaulting Party”) fails to participate in additional
funding as specifically set forth in and required by the Business Plan, each
other Securityholder shall have the right to dilute the equity interest,
whether direct or indirect, of the Defaulting Party, after taking into account
any convertible securities in the Company held by the Defaulting Party (if
any), by subscribing for additional securities of the Company in the form of
either (i) notes on terms not more favorable than the Convertible Note and/or
the option granted to TH in the Restructuring Agreement except as to the
conversion price thereof or (ii) Ordinary Shares, at the option of the
subscriber, and in an amount equal to the additional funding not contributed by
the Defaulting Party.

 

ARTICLE VI

 

REGISTRATION RIGHTS

 

Section 6.01.          Listing in the United
States.  In the event that the
Ordinary Shares are listed on a national securities exchange in the United States
following the Initial Public Offering, the Investors shall have the
Registration Rights set forth in this Article VI.

 

Section 6.02.          Demand Registration.

 

(a)          Request for Demand Registration.  At any time commencing on the later of (i)
six (6) months after the IPO Effectiveness Date or (ii) expiration of the
underwriters’ lock-up period applicable to the Initial Public Offering, any
Designated Holder may make a written request to the Company to register, and
the Company shall register, under the Securities Act (other than pursuant to a
Registration Statement on Form S-4 or S-8 or any successor thereto) (each, a “Demand
Registration”), the number of Registrable Securities stated in such
request; provided, however, that the Company shall not be
obligated to effect

 

24

 

more than two
(2) such Demand Registrations for TH and its Permitted Transferees and two (2)
such Demand Registrations for PCLN SUB and its Permitted Transferees.  If at the time of any request to register
Registrable Securities pursuant to this Section 6.02(a), the Company is
engaged in, or has fixed plans to engage in within ninety (90) days of the time
of such request, a registered public offering or is engaged in any other
activity which, in the good faith determination of the Board, would be
adversely affected in any material respect by the Demand Registration, then the
Company may at its option direct that such request be delayed for a reasonable
period not in excess of ninety (90) days from the effective date of such
offering or the date of completion of such other material activity, as the case
may be, such right to delay a request to be exercised by the Company not more
than once in any one (1) year period. 
In addition, the Company shall not be required to file any registration
statement (i) within ninety (90) days after the effective date of any other
Registration Statement of the Company or (ii) if the Designated Holder
requesting such registration (the “Initiating Holder”) proposes to sell
Registrable Securities at an aggregate price (calculated based on the Market
Price of the Registrable Securities on the date of filing of the Registration
Statement in respect of Registrable Securities) to the public of less than
US$10,000,000.  Each request for a
Demand Registration by the Initiating Holder shall state the amount of the
Registrable Securities proposed to be sold and the intended method of
disposition thereof.

 

(b)          Incidental or “Piggy-Back” Rights with
Respect to a Demand Registration. 
Each of the Designated Holders (other than the Initiating Holder which
has requested a registration under Section 6.02(a) above) may offer its
Registrable Securities under any Demand Registration pursuant to this
Section 6.02(b).  Within ten (10)
Business Days after the receipt of a request for a Demand Registration from an
Initiating Holder (unless such request is delayed pursuant to
Section 6.02(a) above), the Company shall (i) give written notice thereof
to all of the Designated Holders (other than the Initiating Holder which has
requested a registration under Section 6.02(a)) and (ii) subject to
Section 6.02(e), include in such registration all of the Registrable
Securities held by such Designated Holders from whom the Company has received a
written request for inclusion therein within ten (10) Business Days of the
receipt by such Designated Holders of such written notice referred to in clause
(i) above.  In connection with any
Incidental Registration under this Section 6.02(b) involving an underwritten
offering, the Company shall not be required to include any Registrable
Securities in such underwritten offering unless such Designated Holders thereof
accept the terms of the underwritten offering as agreed upon between the
Company, the Initiating Holder and the Approved Underwriter, and then only in
such quantity as the Approved Underwriter believes will not jeopardize the
success of the offering.  Each such
request by such Designated Holders shall specify the number of Registrable
Securities proposed to be registered. 
The failure of any Designated

 

25

 

Holder to
respond within such 10-Business Day period referred to in clause (ii) above
shall be deemed to be a waiver of such Designated Holder’s rights under this
Section 6.02 with respect to such Demand Registration, provided
that any Designated Holder may waive its rights under this Section 6.02
prior to the expiration of such 10-Business Day period by giving written notice
to the Company, with a copy to the Initiating Holder.

 

(c)          Effective Demand Registration.  The Company shall use its reasonable best
efforts to cause any such Demand Registration to become and remain effective
not later than ninety (90) days after it receives a request under
Section 6.02(a) hereof.  A
registration shall not constitute a Demand Registration until it has become
effective and remains continuously effective for the lesser of (i) the period
during which all Registrable Securities registered in the Demand Registration
are sold and (ii) ninety (90) days; provided, however, that a
registration shall not constitute a Demand Registration if (x) after such
Demand Registration has become effective, such registration or the related
offer, sale or distribution of Registrable Securities thereunder is interfered
with by any stop order, injunction or other order or requirement of the
Commission or other governmental agency or court for any reason not
attributable to the Initiating Holders and such interference is not thereafter
eliminated or (y) the conditions specified in the underwriting agreement, if
any, entered into in connection with such Demand Registration are not satisfied
or waived, other than by reason of a failure by the Initiating Holder.

 

(d)          Expenses.  The Company shall pay all Registration Expenses in connection
with a Demand Registration, whether or not such Demand Registration becomes
effective.

 

(e)          Underwriting Procedures.  If the Company or the Initiating Holder  so elects, the Company shall use its
reasonable best efforts to cause such Demand Registration to be in the form of
a firm commitment underwritten offering and the managing underwriter or
underwriters selected for such offering shall be the Approved Underwriter
selected in accordance with Section 6.02(f).  In connection with any Demand Registration under this
Section 6.02 involving an underwritten offering, none of the Registrable
Securities held by any Designated Holder making a request for inclusion of such
Registrable Securities pursuant to Section 6.02(b) hereof shall be
included in such underwritten offering unless such Designated Holder accepts
the terms of the offering as agreed upon by the Company, the Initiating Holder
and the Approved Underwriter, and then only in such quantity as will not, in
the opinion of the Approved Underwriter, jeopardize the success of such
offering.  If the Approved Underwriter
advises the Company that the aggregate amount of such Registrable Securities
requested to be included in such offering is sufficiently large to be materially
detrimental to the success of such

 

26

 

offering, then
the Company shall be required to include in the underwritten offering, to the
extent of the amount that the Approved Underwriter believes may be sold without
being so materially detrimental, first, all of the Registrable
Securities to be offered for the account of the Designated Holders (including
the Initiating Holder), pro rata based on the number of Registrable Securities
owned by each such Designated Holder; second, any Securities to be
offered for the account of the Company; and third, any other securities
requested to be included in such underwritten offering.

 

(f)           Selection of Underwriters.  If any Demand Registration of Registrable
Securities is in the form of an underwritten offering, the Company shall select
and obtain an investment banking firm of national reputation to act as the
managing underwriter of the offering (the “Approved Underwriter”), which
selection shall be approved by the Board, including the affirmative vote of at
least the PCLN Director and one TH Director.

 

Section 6.03.          Incidental or
“Piggy-Back” Registration.

 

(a)          Request for Incidental Registration.  At any time after the IPO Effective Date, if
the Company proposes to file a Registration Statement under the Securities Act
with respect to an offering of Ordinary Shares by the Company for its own
account (other than a Registration Statement on Form S-4 or S-8 or any
successor thereto) or for the account of any stockholder of the Company other
than the Designated Holders, then the Company shall give written notice of such
proposed filing to each of the Designated Holders as promptly as practicable
(but in any event not less than ten (10) Business Days) before the anticipated
filing date, and such notice shall describe the proposed registration and
distribution and offer such Designated Holders the opportunity to register the
number of Registrable Securities as each such Designated Holder may request (an
“Incidental Registration”).  The
Company shall use its reasonable best efforts (within ten (10) Business Days of
the notice provided for in the preceding sentence) to cause the managing
underwriter or underwriters of a proposed underwritten offering (the “Company
Underwriter”) to permit each of the Designated Holders who has requested in
writing to participate in the Incidental Registration to include its or his
Registrable Securities in such offering on the same terms and conditions as the
securities for the account of the Company or for the account of such other
stockholder, as the case may be, included therein.  In connection with any Incidental Registration under this
Section 6.03(a) involving an underwritten offering, the Company shall not
be required to include any Registrable Securities in such underwritten offering
unless the Designated Holders thereof accept the terms of the underwritten
offering as agreed upon between the Company, such other stockholder, if any,
and the Company Underwriter, and then only in such quantity as the Company
Underwriter believes will not be materially detrimental to the

 

27

 

success of the offering by the
Company.  If the Company Underwriter
determines that the registration of all or part of the Registrable Securities
which the Designated Holders have requested to be included would be materially
detrimental to the success of such offering, then the Company shall be required
to include in such Incidental Registration, to the extent of the amount that the
Company Underwriter believes may be sold without being so materially
detrimental, first, all of the securities to be offered by the Company
for its account and for the account of such other stockholder; second,
the Registrable Securities to be offered for the account of the Designated
Holders pursuant to this Section 6.03, pro rata based on the number of
Registrable Securities owned by each such Designated Holder; and third,
any other securities requested to be included in such underwritten offering.

 

(b)          Termination of Registration.  If, at any time after giving such written
notice in accordance with Section 6.03(a) and prior to the effective date
of the registration statement filed in connection with such Incidental
Registration, the Company shall determine for any reason to withdraw such
registration statement and terminate its proposed Incidental Registration, then
the Company may, at its election, given written notice of such determination to
each holder of Registrable Securities and thereupon the Company shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration (but not from its obligation to pay the Registration
Expenses in connection therewith to the extent provided in
Section 6.03(c)).

 

(c)          Expenses.  The Company shall bear all Registration Expenses in connection
with any Incidental Registration pursuant to this Section 6.03, whether or
not such Incidental Registration becomes effective.

 

Section 6.04.          Holdback Agreements.

 

(a)          Restrictions on Public Sale by Designated
Holders.  To the extent requested
(i) by the Company or the Initiating Holder, as the case may be, in the case of
a non-underwritten public offering and (ii) by the Approved Underwriter or the
Company Underwriter, as the case may be, in the case of an underwritten public
offering, each Designated Holder of Registrable Securities agrees (x) not to
effect any public sale or distribution of any Registrable Securities or of any
securities convertible into or exchangeable or exercisable for such Registrable
Securities, including a sale pursuant to Rule 144, and (y) not to make any
request for a Demand Registration under this Agreement, during the ninety (90)
day period (or one hundred and eighty (180) day period in the case of the
Company’s Initial Public Offering) or such shorter period, if any, mutually
agreed upon by such Designated Holder and the requesting party beginning on the
effective date of such Registration Statement (except as part of such
registration).

 

28

 

(b)          Restrictions on Public Sale by the Company.  The Company agrees not to effect any public
sale or distribution of any of its securities, or any securities convertible
into or exchangeable or exercisable for such securities (except pursuant to
registrations on Form S-4 or S-8 or any successor thereto), during the period
beginning on the effective date of any Registration Statement in which the
Designated Holders of Registrable Securities are participating and ending on
the earlier of (i) the date on which all Registrable Securities registered on
such Registration Statement are sold and (ii) ninety (90) days after the
effective date of such Registration Statement (except as part of such
registration).

 

Section 6.05.          Registration
Procedures.

 

(a)          Obligations of the Company.  Whenever registration of Registrable
Securities has been requested pursuant to Section 6.02 or
Section 6.03 of this Agreement, the Company shall use its reasonable best
efforts to effect the registration and sale of such Registrable Securities in
accordance with the intended method of distribution thereof (or an underwritten
distribution elected pursuant to Section 6.02(e) above) as promptly as
practicable, and in connection with any such request, the Company shall, as
expeditiously as possible:

 

(i)        prepare
and file with the Commission a Registration Statement on any form for which the
Company then qualifies or which counsel for the Company shall deem appropriate
and which form shall be available for the sale of such Registrable Securities
in accordance with the intended method of distribution thereof, and cause such
Registration Statement to become effective; provided, however,
that (x) before filing a Registration Statement or prospectus or any amendments
or supplements thereto, the Company shall provide counsel selected by the
Designated Holders holding a majority of the Registrable Securities being
registered in such registration (“Holders’ Counsel”) and any other
Inspector with an adequate and appropriate opportunity to review and comment on
such Registration Statement and each prospectus included therein (and each
amendment or supplement thereto) to be filed with the Commission, subject to
such documents being under the Company’s control, and (y) the Company shall
notify the Holders’ Counsel and each seller of Registrable Securities of any
stop order issued or threatened by the Commission and take all action required
to prevent the entry of such stop order or to remove it if entered;

 

(ii)       prepare
and file with the Commission such amendments and supplements to such
Registration Statement and the prospectus used in connection therewith as may
be necessary to keep such Registration Statement effective for the lesser of
(x) one hundred and twenty (120) days and (y) such shorter period which will
terminate when all Registrable Securities covered by such Registration
Statement have been sold, and comply with the provisions of the

 

29

 

Securities Act
with respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement;

 

(iii)      furnish
to each seller of Registrable Securities, prior to filing a Registration
Statement, at least one copy of such Registration Statement as is proposed to
be filed, and thereafter such number of copies of such Registration Statement,
each amendment and supplement thereto (in each case including all exhibits
thereto), and the prospectus included in such Registration Statement (including
each preliminary prospectus) as each such seller may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by such
seller;

 

(iv)      register
or qualify such Registrable Securities under such other securities or “blue
sky” laws of such jurisdictions as any seller of Registrable Securities may
request, and to continue such qualification in effect in such jurisdiction for
as long as permissible pursuant to the laws of such jurisdiction, or for as
long as any such seller requests or until all of such Registrable Securities
are sold, whichever is shortest, and do any and all other acts and things which
may be reasonably necessary or advisable to enable any such seller to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such seller; provided, however, that the Company shall
not be required to (x) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
Section 6.05(a)(iv), (y) subject itself to taxation in any such
jurisdiction or (z) consent to general service of process in any such
jurisdiction;

 

(v)       notify
each seller of Registrable Securities at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon discovery
that, or upon the happening of any event as a result of which, the prospectus
included in such Registration Statement contains an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading and the Company shall promptly prepare
a supplement or amendment to such prospectus and furnish to each seller a
reasonable number of copies of such supplement to or an amendment of such
prospectus as may be necessary so that, after delivery to the purchasers of
such Registrable Securities, such prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;

 

30

 

(vi)      enter
into and perform customary agreements (including an underwriting agreement in
customary form with the Approved Underwriter or Company Underwriter, if any,
selected as provided in Section 6.02, Section 6.03 or
Section 6.05, as the case may be) and take such other actions as are
prudent and reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities;

 

(vii)     make
available at reasonable times for inspection by any seller of Registrable
Securities, any managing underwriter participating in any disposition of such
Registrable Securities pursuant to a Registration Statement, Holders’ Counsel
and any attorney, accountant or other agent retained by any such seller or any
managing underwriter (each, an “Inspector” and, collectively, the “Inspectors”),
all financial and other records, pertinent corporate documents and properties
of the Company and its subsidiaries (collectively, the “Records”) as
shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s and its subsidiaries’ officers,
directors and employees, and the independent public accountants of the Company,
to supply all information reasonably requested by any such Inspector in
connection with such Registration Statement. 
Records that the Company determines, in good faith, to be confidential
and which it notifies the Inspectors are confidential shall not be disclosed by
the Inspectors (and the Inspectors shall confirm their agreement in writing in
advance to the Company if the Company shall so request) unless (x) the
disclosure of such Records is necessary, in the Company’s judgment, to avoid or
correct a misstatement or omission in the Registration Statement, (y) the
release of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction after exhaustion of all appeals therefrom or
(z) the information in such Records was known to the Inspectors on a non-confidential
basis prior to its disclosure by the Company or has been made generally
available to the public.  Each seller of
Registrable Securities agrees that it shall, upon learning that disclosure of
such Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at the Company’s expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential;

 

(viii)    if
such sale is pursuant to an underwritten offering, use its best efforts to obtain
a “cold comfort” letter from the Company’s independent public accountants in
customary form and covering such matters of the type customarily covered by
“cold comfort” letters as Holders’ Counsel or the managing underwriter
reasonably requests;

 

(ix)      use
its reasonable best efforts to furnish, at the request of any seller of
Registrable Securities on the date such securities are delivered to the
underwriters for sale pursuant to such registration or, if such

 

31

 

securities are
not being sold through underwriters, on the date the Registration Statement
with respect to such securities becomes effective, an opinion, dated such date,
of counsel representing the Company for the purposes of such registration,
addressed to the underwriters, if any, and to the seller making such request,
covering such legal matters with respect to the registration in respect of
which such opinion is being given as the underwriters, if any, and such seller
may reasonably request and are customarily included in such opinions;

 

(x)       comply
with all applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable but no later than
fifteen (15) months after the effective date of the Registration Statement, an
earnings statement covering a period of twelve (12) months beginning after the
effective date of the Registration Statement, in a manner which satisfies the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

 

(xi)      cause
all such Registrable Securities to be listed on each securities exchange on
which similar securities issued by the Company are then listed, provided
that the applicable listing requirements are satisfied;

 

(xii)     keep
Holders’ Counsel advised in writing as to the initiation and progress of any
registration under Section 6.02 or Section 6.03 hereunder;

 

(xiii)    cooperate
with each seller of Registrable Securities and each underwriter participating
in the disposition of such Registrable Securities and their respective counsel
in connection with any filings required to be made with the NASD; and

 

(xiv)    take
all other steps reasonably necessary to effect the registration of the
Registrable Securities contemplated hereby.

 

(b)          Seller Information.  The Company may require each seller of
Registrable Securities as to which any registration is being effected to
furnish, and such seller shall furnish, to the Company such information
regarding the distribution of such securities as the Company may from time to
time reasonably request in writing.

 

(c)          Notice to Discontinue.  Each Designated Holder of Registrable
Securities agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 6.05(a)(v), such
Designated Holder shall forthwith discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until

 

32

 

such
Designated Holder’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section 6.05(a)(v) and, if so directed by the
Company, such Designated Holder shall deliver to the Company (at the Company’s
expense) all copies, other than permanent file copies then in such Designated
Holder’s possession, of the prospectus covering such Registrable Securities
which is current at the time of receipt of such notice.  If the Company shall give any such notice,
the Company shall extend the period during which such Registration Statement
shall be maintained effective pursuant to this Agreement (including the period
referred to in Section 6.05(a)(ii)) by the number of days during the
period from and including the date of the giving of such notice pursuant to Section 6.05(a)(v)
to and including the date when sellers of such Registrable Securities under
such Registration Statement shall have received the copies of the supplemented
or amended prospectus contemplated by and meeting the requirements of Section 6.05(a)(v).

 

(d)          Registration Expenses.  The Company shall pay all expenses arising
from or incident to its performance of, or compliance with, this Agreement,
including (i) Commission, stock exchange and NASD registration and filing fees,
(ii) all fees and expenses incurred in complying with securities or “blue sky”
laws (including reasonable fees, charges and disbursements of counsel to any
underwriter incurred solely in connection with “blue sky” qualifications of the
Registrable Securities as may be set forth in any underwriting agreement),
(iii) all printing, messenger and delivery expenses, (iv) the fees, charges and
disbursements of counsel to the Company and of its independent public
accountants and any other accounting fees, charges and expenses incurred by the
Company (including any expenses arising from any “cold comfort” letters or any
special audits incident to or required by any registration or qualification)
and any legal fees, charges and expenses incurred by the Company, and (v) any
liability insurance or other premiums for insurance obtained in connection with
any Demand Registration or piggy-back registration thereon or Incidental
Registration pursuant to the terms of this Agreement, regardless of whether
such Registration Statement is declared effective.  All of the expenses described in the preceding sentence of this
Section 6.05(d) are referred to herein as “Registration Expenses.”  The Designated Holders of Registrable
Securities sold pursuant to a Registration Statement shall bear the expense of
any broker’s commission or underwriter’s discount or commission relating to
registration and sale of such Holders’ Registrable Securities and, subject to
clause (iv) above, shall bear the fees and expenses of their own counsel.

 

Section 6.06.          Indemnification;
Contribution.

 

(a)          Indemnification by the Company.  The Company agrees to indemnify and hold
harmless each Designated Holder and each Person who controls (within the
meaning of Section 15 of the Securities Act) such Designated

 

33

 

Holder from
and against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) (collectively, “Liability”),
arising out of or based upon any untrue, or allegedly untrue, statement of a
material fact contained in any Registration Statement, prospectus or
preliminary prospectus or notification or offering circular (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading under the circumstances such
statements were made, except insofar as such Liability arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission contained in such Registration Statement, preliminary
prospectus or final prospectus in reliance upon information concerning such
Designated Holder furnished in writing to the Company by such Designated Holder
expressly for use therein, including the information furnished to the Company
pursuant to Section 6.06(b).  The
Company shall also provide customary indemnities to any underwriters of the Registrable
Securities, their officers, directors and employees and each Person who
controls such underwriters (within the meaning of Section 15 of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Designated Holders of Registrable Securities.

 

(b)          Indemnification by Designated Holders.  In connection with any Registration
Statement in which a Designated Holder is participating pursuant to
Section 6.02 or Section 6.03 hereof, each such Designated Holder
shall promptly furnish to the Company in writing such information with respect
to such Designated Holder as the Company may reasonably request or as may be
required by law for use in connection with any such Registration Statement or
prospectus and all information required to be disclosed in order to make the
information previously furnished to the Company by such Designated Holder not
materially misleading or necessary to cause such Registration Statement not to
omit a material fact with respect to such Designated Holder necessary in order
to make the statements therein not misleading. 
Each Designated Holder agrees, severally but not jointly, to indemnify
and hold harmless the Company, any underwriter retained by the Company and each
Person who controls the Company or such underwriter (within the meaning of
Section 15 of the Securities Act) to the same extent as the foregoing
indemnity from the Company to the Designated Holders, but only with respect to
any such information with respect to such Designated Holder furnished in
writing to the Company by such Designated Holder expressly for use in such
registration statement or prospectus, including the information furnished to
the Company pursuant to this Section 6.06(b); provided, however,
that the total amount to be indemnified by such Designated Holder pursuant to
this Section 6.06(b) shall be limited to the net proceeds received by such
Designated Holder in the offering to which the Registration Statement or
prospectus relates.

 

34

 

(c)          Conduct of Indemnification Proceedings.  Any Person entitled to indemnification
hereunder (the “Indemnified Party”) agrees to give prompt written notice
to the indemnifying party (the “Indemnifying Party”) after the receipt
by the Indemnified Party of any written notice of the commencement of any
action, suit, proceeding or investigation or threat thereof made in writing for
which the Indemnified Party intends to claim indemnification or contribution
pursuant to this Agreement; provided, however, that the failure
so to notify the Indemnifying Party shall not relieve the Indemnifying Party of
any Liability that it may have to the Indemnified Party hereunder (except to
the extent that the Indemnifying Party is materially prejudiced or otherwise
forfeits substantive rights or defenses by reason of such failure).  If notice of commencement of any such action
is given to the Indemnifying Party as above provided, the Indemnifying Party
shall be entitled to participate in and, to the extent it may wish, jointly
with any other Indemnifying Party similarly notified, to assume the defense of
such action at its own expense, with counsel chosen by it and reasonably
satisfactory to such Indemnified Party. 
The Indemnified Party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be paid by the Indemnified Party unless (i) the
Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails to
assume the defense of such action with counsel reasonably satisfactory to the
Indemnified Party or (iii) the named parties to any such action (including any
impleaded parties) include both the Indemnifying Party and the Indemnified
Party and such parties have been advised by such counsel that either (x)
representation of such Indemnified Party and the Indemnifying Party by the same
counsel would be inappropriate under applicable standards of professional
conduct or (y) there may be one or more legal defenses available to the
Indemnified Party which are different from or additional to those available to
the Indemnifying Party.  In any of such
cases, the Indemnifying Party shall not have the right to assume the defense of
such action on behalf of such Indemnified Party, it being understood, however,
that the Indemnifying Party shall not be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all Indemnified Parties.  No
Indemnifying Party shall be liable for any settlement entered into without its
written consent, which consent shall not be unreasonably withheld.  No Indemnifying Party shall, without the
consent of such Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which such Indemnified Party is a party and
indemnity has been sought hereunder by such Indemnified Party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability for claims that are the subject matter of such proceeding.

 

(d)          Contribution.  If the indemnification provided for in this
Section 6.06 from the Indemnifying Party is unavailable to an Indemnified
Party hereunder in respect of any Liabilities referred to therein, then the
Indemnifying

 

35

 

Party, in lieu
of indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Liabilities in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions which resulted in
such Liabilities, as well as any other relevant equitable considerations.  The relative faults of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action.  The amount paid or payable by a
party as a result of the Liabilities referred to above shall be deemed to
include, subject to the limitations set forth in Sections 6.06(a), 6.06(b) and
6.06(c), any legal or other fees, charges or expenses reasonably incurred by
such party in connection with any investigation or proceeding; provided
that the total amount to be contributed by such Designated Holder shall be
limited to the net proceeds received by such Designated Holder in the offering.

 

The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.06(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph.  No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

 

Section 6.07.          Rule 144.  The Company covenants that from and after
the IPO Effective Date, it shall (a) file any reports required to be filed by
it under the Exchange Act and (b) take such further action as each Designated
Holder of Registrable Securities may reasonably request (including providing
any information necessary to comply with Rule 144 under the Securities Act),
all to the extent required from time to time to enable such Designated Holder
to sell Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such rule may be amended from time to time, or Regulation S
under the Securities Act or (ii) any similar rules or regulations hereafter
adopted by the Commission.  The Company
shall, upon the request of any Designated Holder of Registrable Securities,
deliver to such Designated Holder a written statement as to whether it has
complied with such requirements.

 

36

 

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.01.          Termination.

 

(a)          This Agreement may be terminated by a written
agreement to that effect, signed by the Company, PCLN SUB, TH and
Securityholders owning at least 80% of the outstanding Shares.

 

(b)          This Agreement shall terminate with respect
to the rights and obligations of the Company upon the occurrence of the Initial
Public Offering; provided, however, that in addition to the
obligations set forth in Section 7.02(b), the obligations of the Company
set forth in Section 5.07 and Article VI shall survive any such
termination.

 

(c)          This Agreement shall terminate with respect
to the rights and obligations of any Securityholder following the Transfer, in
accordance with the terms of this Agreement, by such Securityholder of all
Shares owned by such Securityholder, except as otherwise set forth herein.

 

Section 7.02.          Effect of Termination.

 

(a)          In the event of the termination of this
Agreement pursuant to Section 7.01(a) above, this Agreement shall
forthwith become null and void, there shall be no further liability on the part
of any Party to any other Party and all rights and the obligations hereunder of
all Parties shall cease; provided that no termination of this Agreement
shall affect the right of any Party hereto to recover damages or collect
indemnification for any breach of the representations, warranties, agreements
or covenants herein that occurred prior to such termination; and, provided
further, that the terms and conditions set forth in Sections 5.04 and
5.07, and this Article VII (other than Sections 7.01, 7.03 and 7.04),
shall survive any such termination.

 

(b)         In the event of the termination of this
Agreement with respect to any Party pursuant to Section 7.01(b) or (c)
above, this Agreement shall forthwith become null and void as to such Party,
there shall be no further liability on the part of such Party to any other
Party, and all rights and obligations hereunder of such Party shall cease; provided
that no termination of this Agreement shall affect the right of any Party to
recover damages or collect indemnification for any breach of the
representations, warranties, agreements or covenants herein that occurred prior
to such termination; and, provided  further, that the terms and

 

37

 

conditions set
forth in Sections 5.04 and 5.07, and this Article VII (other than Sections
7.01, 7.03 and 7.04), shall survive any such termination.

 

Section 7.03.          Actions by the
Company.  Prior to the Initial
Public Offering, any right, option, discretion, obligation, notice, approval,
consent, authorization or other action required or permitted to be exercised,
performed, given or taken by the Company or the Board in order to enforce the
Company’s rights under this Agreement shall be exercised, performed, given or
taken only pursuant to a resolution duly adopted by the Board with the
affirmative vote of at least the PCLN Director and at least one TH Director to
the extent so provided for expressly in Section 3.07 above.

 

Section 7.04.          Compliance with Law.  The Parties hereto shall at all times act to
ensure that all business and affairs of the Company shall be carried out in all
material respects in accordance with any and all applicable laws, rules or
regulations.

 

Section 7.05.          Specific Performance.  Each Party acknowledges and agrees that in
the event of any breach of this Agreement, the non-breaching Party or Parties
would be irreparably harmed and could not be made whole solely by monetary
damages.  The Parties hereby agree that
in addition to any other remedy to which any party may be entitled at law or in
equity, to the extent permitted by applicable law, each Party shall be entitled
to obtain an injunction or compel specific performance of this Agreement in any
action instituted in any court having subject matter jurisdiction for such action.

 

Section 7.06.          Costs.  TH, on the one hand, and PCLN SUB, on the
other hand, shall each bear all costs, fees and expenses incurred by it in
connection with the preparation, negotiation, execution and delivery of this
Agreement and the consummation of the transactions contemplated by the
Restructuring Agreement, and all such costs, fees and expenses of all
representatives hired, engaged or retained by it.

 

Section 7.07.          Interpretation.  The headings and captions in this Agreement
are for convenience of reference only and shall not control or affect the
meaning or construction of any provisions hereof.  When used in this Agreement, (i) the symbol “HK$” shall refer to
the lawful currency of Hong Kong, (ii) the symbol “US$” shall refer to the
lawful currency of the United States of America and (iii) the words “including”
and “include” shall be deemed followed by the words “without limitation”.

 

Section 7.08.          Entire Agreement.  This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the
Transactions

 

38

 

and the transactions
contemplated by the Restructuring Agreement, and there are no restrictions,
promises, representations, warranties, covenants, conditions or undertakings
with respect to the subject matter hereof, other than those expressly set forth
or referred to herein.  From and after
the date hereof, this Agreement supersedes all prior agreements and
understandings between the parties hereto with respect to the subject matter
hereof, including, the Memorandum of Agreement dated as of January 24,
2000 by and among the Parties and the Original Securityholders’ Agreement.

 

Section 7.09.          Notices.  All notices and other communications
required or permitted to be given hereunder shall be in writing and shall be
(a) delivered by hand, (b) delivered by a reputable commercial overnight
delivery service, or (c) transmitted by facsimile, in each case, sent to the
address or telecopier number set forth below. 
Such notices shall be effective: 
(i) in the case of hand deliveries, when received; (ii) in the case of
an overnight delivery service, when received; and (iii) in the case of
facsimile transmission, when electronic confirmation of receipt is received by
the sender.  Any Party may change its
address and telecopy number by written notice to another Party in accordance
with this provision, provided that such notice shall be effective only upon
receipt.

 

	
  If to the Company, to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Hutchison-Priceline Limited

  	
   

  
	
   

  	
  Suite 408, 4th Floor, Lincoln House,

  	
   

  
	
   

  	
  Taikoo Place,

  	
   

  
	
   

  	
  979 King’s Road,

  	
   

  
	
   

  	
  Hong Kong

  	
   

  
	
   

  	
  Telecopy:  011-852-3192 0777

  	
   

  
	
   

  	
  Attention:  Chief Executive
  Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to TH and PCLN SUB.

  	
   

  
	
   

  	
   

  	
   

  
	
  If to TH, to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Trio Happiness Limited

  	
   

  
	
   

  	
  P.O. Box 957

  	
   

  
	
   

  	
  Offshore Incorporation Centre

  	
   

  
	
   

  	
  Road Town, Tortola, the British Virgin Islands

  	
   

  
	
   

  	
  Telecopy: 011-852-2693-4404

  	
   

  
	
   

  	
  Attention: Managing Director

  	
   

  
	
   

  	
   

  	
   

  
	
  with copies to:

  	
   

  

 

39

 

	
  A.S. Watson & Company, Limited, at:

  	
   

  
	
   

  
	
  (1)

  	
  Watson House

  
	
   

  	
  1-5 Wo Liu Hang Road

  
	
   

  	
  Fo Tan, Shatin, New Territories, Hong Kong

  
	
   

  	
  Telecopy:  011-852-2693-4404

  
	
   

  	
  Attention:  Managing Director

  
	
   

  	
   

  
	
  (2)

  	
  22/F, Hutchison House

  
	
   

  	
  10 Harcourt Road

  	
   

  
	
   

  	
  Hong Kong

  	
   

  
	
   

  	
  Telecopy: 011-852-2128-1778

  	
   

  
	
   

  	
  Attention: The Company Secretary

  	
   

  
	
   

  	
   

  	
   

  
	
  If to PCLN SUB, to:

  	
   

  
	
   

  	
   

  	
   

  
	
  PCLN Asia, Inc.

  	
   

  
	
   

  	
  In care of priceline.com Incorporated

  	
   

  
	
   

  	
  800 Connecticut Avenue

  	
   

  
	
   

  	
  Norwalk, CT 06854

  	
   

  
	
   

  	
  Telecopy:  +1-203-299-8915

  	
   

  
	
   

  	
  Attention:  General Counsel

  	
   

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Blank Rome LLP

  	
   

  
	
   

  	
  One Logan Square

  	
   

  
	
   

  	
  Philadelphia, Pennsylvania, PA 
  19103

  	
   

  
	
   

  	
  Telecopy:  (215) 832-5479

  	
   

  
	
   

  	
  Attention:  Ronald Fisher

  	
   

  

 

Section 7.10.          Dispute Resolution.

 

(a)          In the event of any dispute between one of
the Parties hereto (the “Petitioner”) and one or more of the other
Parties hereto (the “Respondents”) arising after the date hereof and
relating to or arising out of any provision of this Agreement, the Petitioner
shall give written notice to the Respondents of the fact that a dispute has
arisen pursuant hereto.  Such notice
shall include (i) a statement setting forth in reasonable detail the facts,
events, circumstances, evidence and arguments underlying such dispute and (ii)
proposed arrangements for a meeting to attempt to resolve the dispute to be
held within sixty (60) days after such notice is given.  Within thirty (30) days after such notice is

 

40

 

given, the
Respondents shall submit to the Petitioner a written summary responding to such
statement of facts, events, circumstances, evidence and arguments contained in
the notice and an acceptance of, or proposed alternative to, the meeting
arrangements set forth in the initial notice.

 

(b)          The chief executive officers of the
Petitioner and each of the Respondents shall meet at a mutually acceptable time
and place to attempt to settle any dispute in good faith; provided, however,
that any such meeting shall be held no later than sixty (60) days after the
written notice of dispute is given pursuant to Section 7.10(a) above.  Each Party involved in the resolution of a
dispute pursuant to this Section 7.10 shall bear its own costs and
expenses with respect to preparation for, attendance at and participation in
such meeting.

 

Section 7.11.          Deadlock Resolution.

 

(a)          Deadlock.  As used in this Agreement, a “Deadlock” shall mean, prior to the
Initial Public Offering, the failure by the Company to obtain the required vote
by the holders of securities of the Company, or the Board, after complying with
Section 7.10 hereof, that is necessary:

 

(i)        to approve the Initial Public Offering at any
time after June 27, 2004 in accordance with Section 5.08 hereof; or

 

(ii)       to approve the authorization of additional
equity financing in accordance with Section 5.09 hereof.

 

(b)          Actions in the Event of a Deadlock.

 

(i)        In the event of the occurrence of a Deadlock
prior to the Initial Public Offering and notwithstanding any provision hereof
to the contrary, either PCLN SUB or TH may, no sooner than sixty (60) days
after the meeting of chief executive officers contemplated by
Section 7.10(b),  request (the
“Market Value Request”) that the Company engage the Independent Bank to
determine the fair market value of all Shares and other equity securities of
the Company, together with securities of the Company that are exercisable or
exchangeable for, or convertible into, Shares or such other equity securities
(collectively, “Company Securities”), owned or held, whether directly or
indirectly, by PCLN SUB and TH, including Shares that PCLN SUB would have
owned, or would have been entitled to receive, upon or by reason of any
exercise, exchange or conversion of any other security into Ordinary Shares on
the date of the Market Value Request (the “Request Date”).  The Independent Bank shall be selected by
the Board in the reasonable exercise of its good faith judgment within sixty
(60) days

 

41

 

after receipt of the Market Value Request, which selection shall be
approved by at least one TH Director and the PCLN Director.  In the event that the Board is unable to so
select the Independent Bank within such sixty-day period, then the Board shall
promptly petition the International Chamber of Commerce’s International Centre
for Expertise to promptly select the Independent Bank.  Upon selection of the Independent Bank, the
Board shall immediately notify the Independent Bank of such selection (the
“Option Selection Notice”) and require that the Independent Bank determine the
value of such Company Securities giving effect to the Sale Assumption (the
“Market Value Determination”), and report such Market Value Determination in
writing to the Board, within sixty (60) days after its receipt of the Option
Selection Notice.  The Board shall
promptly deliver the Market Value Determination of the Independent Bank to PCLN
SUB and TH, which determination shall be final, binding and conclusive as to
the Company, PCLN SUB and TH.  All fees,
costs and expenses incurred by the Independent Bank and the International Chamber
of Commerce’s International Centre for Expertise in connection with the Market
Value Determination shall be borne by the Company.

 

(ii)       Within thirty (30) days after receiving the
Market Value Determination from the Board (the “Exercise Period”), (A) PCLN SUB
may offer to purchase all Company Securities owned or held, whether directly or
indirectly, by TH and all Permitted Transferees of TH in exchange, at the
option of PCLN SUB, for cash or common stock of Priceline equal in value to the
Market Value Determination of such Company Securities and (B) TH may offer to
purchase all Company Securities owned or held, whether directly or indirectly,
by PCLN SUB and all Permitted Transferees of PCLN SUB in exchange, for cash
equal in value to the Market Value Determination of such Company Securities
(for each of PCLN SUB and TH, a “Purchase Option”).  The number of shares of Priceline common stock, if any, to be
issued will be equal to (x) the Market Value Determination of  Company Securities purchased by PCLN SUB
divided by (y) the Priceline Market Price. 
Notwithstanding any provisions hereof to the contrary, no Party shall
have an obligation to purchase any Company Securities of any other Party
pursuant to this Section 7.11(b)(ii).

 

(iii)      In the event that neither PCLN SUB nor TH
exercises its Purchase Option or each of PCLN SUB and TH exercises its Purchase
Option in accordance with the terms of this Section 7.11 prior to the
expiration of the Exercise Period, then PCLN SUB and TH shall engage the Independent
Bank to attempt to sell the Company in a single, private transaction,
negotiated at arm’s-length, to a third party that is not an

 

42

 

Affiliate of Priceline, PCLN SUB, Hutchison, A.S. Watson or TH (a “Third-
Party Sale”).   The aggregate proceeds
from the Third-Party Sale shall be distributed among Securityholders in
proportion to the percentage of Ordinary Shares owned or held by such
Securityholders on the closing date of the Third-Party Sale.

 

(iv)      If no Third-Party Sale occurs in accordance with
the terms of this Section 7.11 prior to the first anniversary of the
expiration of the Exercise Period, then either PCLN SUB or TH may, upon written
notice to the Company and each other Securityholder require that the Company
liquidate, and the Company and each Party shall take reasonable actions to
effect such liquidation within a commercially reasonable period that would
allow for an orderly winding-up of the affairs of the Company and disposal of
the Company’s assets, such liquidation to be conducted in accordance with
applicable law.

 

(c)          Closing of Purchase Option.

 

(i)        Any purchase of Company Securities by PCLN SUB
or TH pursuant to Section 7.11(b)(ii) shall take place at a closing to be
held at the location and on the date mutually agreed upon by TH and PCLN SUB,
which date shall be not less than thirty (30) days nor more than sixty (60)
days after the date on which PCLN SUB or TH exercises its Purchase Option and,
failing agreement, such closing shall take place simultaneously at the offices
of Baker & McKenzie located at Hutchison House, 14th Floor, 10
Harcourt Road, Hong Kong, and at the offices of Blank Rome LLP located at One
Logan Square, Philadelphia, Pennsylvania, United States of America, at 8:00 a.m.,
Hong Kong time, on the date which is sixty (60) days after the date on which
PCLN SUB or TH exercises its Purchase Option.

 

(ii)       At such closing, the transferee of Company
Securities shall (A) deliver any cash consideration therefor by wire transfer
of immediately available funds to the account or accounts to be designated at
least two (2) Business Days prior to such closing by the transferor and its
respective Permitted Transferees as may be required or as may determine to
Transfer such Company Securities or (B) in the event PCLN SUB determines to
acquire such Company Securities in exchange for shares of Priceline common
stock, cause to be delivered a certificate or certificates for such shares of
Priceline common stock, in each case, against delivery of a certificate or
certificates representing such Company Securities so purchased, together with a
duly signed share transfer form or other appropriate instruments of transfer in
respect of all such Company Securities, and the Company Securities are to be Transferred
free and clear

 

43

 

of any and all liens, claims, charges, security interests or other
encumbrances of any nature whatsoever.

 

(d)          Procedures for Third-Party Sale.  The Independent Bank shall attempt to effect
a Third-Party Sale of the Company during a period of not less than three (3)
nor more than twelve (12) months (the “Sale Period”).  Any contract, agreement or other arrangement relating to the
Third-Party Sale shall be approved in advance by the Board, which approval
shall include the affirmative vote of at least one TH Director and the PCLN
Director. All fees, costs and expenses incurred by the Independent Bank and the
International Chamber of Commerce’s International Centre for Expertise in
connection with the Third-Party Sale shall be borne by the Company.

 

Section 7.12.          Governing Law; Forum;
Service of Process.  This Agreement
shall be governed by and construed in accordance with the laws of England and
Wales (without giving effect to conflicts of law principles) as to all matters,
including validity, construction, effect, performance and remedies of and under
this Agreement.  Venue in any and all
suits, actions and proceedings  between
or among any of the parties hereto and relating to the subject matter of this
Agreement shall be in the courts located in and for England and Wales (the
“Courts”), which shall have exclusive jurisdiction for such purpose, and each
of the Parties hereby irrevocably submits to the exclusive jurisdiction of such
Courts and irrevocably waives the defense of an inconvenient forum to the
maintenance of any such suit, action or proceeding.  Service of process may be made in any manner recognized by such
Courts.  Each Party hereby irrevocably
waives its right to a jury trial arising out of any dispute in connection with
this Agreement or the transactions contemplated hereby.

 

Section 7.13.          Severability.  The invalidity, illegality or
unenforceability of one or more of the clauses or provisions of this Agreement
in any jurisdiction shall not affect the validity, legality or enforceability
of the remainder of this Agreement in such jurisdiction or the validity,
legality or enforceability of this Agreement, including any such clause or
provision in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest extent
permitted by law.

 

Section 7.14.          Successors; Assigns;
Third-Party Beneficiaries.  This
Agreement is intended solely for the benefit of the Parties hereto and their
successors and permitted assigns, and does not confer any rights or remedies,
whether legal or equitable, on any other third person or entity, and no person
or entity that is not a party to this Agreement shall have any right under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
Agreement; provided, however, that no Party may assign any of its rights,
duties or obligations hereunder

 

44

 

without the prior written
consent of the other Party, other than (a) in the case of PCLN SUB, to any of
its wholly owned subsidiaries, provided that no such assignment shall relieve
PCLN SUB of any of its duties or obligations hereunder; and (b) in the case of
TH, to any wholly owned subsidiary of Hutchison, provided that no such
assignment shall relieve TH of its duties or obligations hereunder.

 

Section 7.15.          Amendments.  This Agreement may not be amended, modified
or supplemented unless such modification is in writing and signed by the
Company, PCLN SUB, TH and Securityholders owning at least 80% of the
outstanding Ordinary Shares; provided, however, that no such amendment or
modification that materially and adversely affects any Party shall be effective
against such Party without such Party’s express written consent.

 

Section 7.16.          Waiver.  Any waiver (whether express or implied) of
any default or breach of or by any Party to this Agreement shall be effective
unless evidenced by a writing signed by the Party against which such waiver is
sought to be enforced.  No such waiver
for any purpose shall constitute a waiver of any other or subsequent default or
breach, or for any other purpose.

 

Section 7.17.          Counterparts.  This Agreement may be executed in
counterparts, which may be delivered by facsimile transmission, each of which
shall be deemed an original, but all of which together shall constitute one and
the same Agreement.

 

Section 7.18.          Discrepancies.  If any discrepancy is found between this
Agreement and the Company’s Memorandum of Association or Articles of
Association, the provisions of this Agreement shall prevail and the Parties
shall procure that the Company shall, and shall take all actions and do all
things necessary to, amend the Memorandum of Association or Articles of
Association in accordance with this Agreement to the extent permitted by the
applicable laws of the Cayman Islands.

 

-
SIGNATURE PAGE FOLLOWS -

 

45

 

IN WITNESS WHEREOF, the Parties have caused this Amended and Restated
Securityholders’ Agreement to be duly executed and delivered by their
respective authorized signatories as of the date first written above.

 

	
   

  	
  HUTCHISON-PRICELINE LIMITED

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ian Wade

  	
   

  
	
   

  	
   

  	
  Name:  Ian Wade

  
	
   

  	
   

  	
  Title:  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PCLN ASIA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mitch Truwit

  	
   

  
	
   

  	
   

  	
  Name:  Mitch Truwit

  
	
   

  	
   

  	
  Title:  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRIO HAPPINESS LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Martin So

  	
   

  
	
   

  	
   

  	
  Name:  Martin So

  
	
   

  	
   

  	
  Title:  Director

  
									

 

46

 

ANNEX I

 

	
  Securityholder

  	
   

  	
  Number of
  Ordinary Shares Held

  
	
   

  	
   

  	
   

  
	
  Trio Happiness Limited

  	
   

  	
  92,176,963

  
	
   

  	
   

  	
   

  
	
  PCLN Asia, Inc.

  	
   

  	
  17,308,585

  

 

47

 

SCHEDULE I

 

DEED OF ADHERENCE

 

DATE:

 

By this Deed we

 

having our registered office at

 

intending to become a shareholder of Hutchison-Priceline Limited (the
“Company”) hereby agree with the Company and each of its shareholders to comply
with and to be bound by all of the provisions of an Amended and Restated
Securityholders’ Agreement dated as of [  
], 2003 (the “Agreement”) among the Company, PCLN Asia, Inc. and Trio
Happiness Limited (a copy of which has been delivered to us and which we have
initialed and attached hereto for identification) in all respects as a Party (as
defined therein) to the Agreement and as a Securityholder (as defined therein)
as and on the basis that references therein to each Party and each
Securityholder include a separate reference to us.

 

Our address and telecopier number to which notices under the Agreement
shall be sent are as follows:

 

	
  [Address]

  	
   

  
	
   

  	
   

  	
   

  
	
  Telecopy:

  	
  [

  	
  ]

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
  [

  	
  ]

  
	
   

  	
   

  	
   

  
	
  EXECUTED AS A DEED

  	
   

  
	
  by  [

  	
  ]

  	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Director/SecretaryExhibit
10.79

 

(Multicurrency — Cross Border)

 

 

MASTER
AGREEMENT

 

dated as of November 20, 2003

 

 

Credit Suisse First Boston International  and
        Priceline.com
Incorporated      

 

have entered and/or
anticipate entering into one or more transactions (each a “Transaction”) that
are or will be governed by this Master Agreement, which includes the schedule
(the “Schedule”), and the documents and other confirming evidence (each a
“Confirmation”) exchanged between the parties confirming those Transactions.

 

Accordingly, the parties
agree as follows: —

 

1.                                      Interpretation

 

(a)                                  Definitions. The terms defined in Section 14 and in the
Schedule will have the meanings therein specified for the purpose of this
Master Agreement.

 

(b)                                 Inconsistency.  In
the event of any inconsistency between the provisions of the Schedule and the
other provisions of this Master Agreement, the Schedule will prevail. In the
event of any inconsistency between the provisions of any Confirmation and this
Master Agreement (including the Schedule), such Confirmation will prevail for
the purpose of the relevant Transaction.

 

(c)                                  Single
Agreement.  All Transactions are entered into in
reliance on the fact that this Master Agreement and all Confirmations form a
single agreement between the parties (collectively referred to as this
“Agreement”), and the parties would not otherwise enter into any Transactions.

 

2.                                      Obligations

 

(a)                                  General
Conditions.

 

(i)             Each party will make each payment or delivery
specified in each Confirmation to be made by it, subject to the other
provisions of this Agreement.

 

(ii)          Payments under this Agreement will be made on
the due date for value on that date in the place of the account specified in
the relevant Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the required
currency. Where settlement is by delivery (that is, other than by payment),
such delivery will be made for receipt on the due date in the manner customary
for the relevant obligation unless otherwise specified in the relevant
Confirmation or elsewhere in this Agreement.

 

(iii)       Each obligation of each party under Section
2(a)(i) is subject to (1) the condition precedent that no Event of Default or
Potential Event of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date in
respect of the relevant Transaction has occurred or been effectively designated
and (3) each other applicable condition precedent specified in this Agreement.

 

 

(b)           Change
of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.

 

(c)           Netting.
If on any date amounts would otherwise be payable:—

 

(i)             in the same currency; and

 

(ii)          in respect of the same Transaction,

 

by each party to the other,
then, on such date, each party’s obligation to make payment of any such amount
will be automatically satisfied and discharged and, if the aggregate amount
that would otherwise have been payable by one party exceeds the aggregate amount
that would otherwise have been payable by the other party, replaced by an
obligation upon the party by whom the larger aggregate amount would have been
payable to pay to the other party the excess of the larger aggregate amount
over the smaller aggregate amount.

 

The parties may elect in
respect of two or more Transactions that a net amount will be determined in
respect of all amounts payable on the same date in the same currency in respect
of such Transactions, regardless of whether such amounts are payable in respect
of the same Transaction. The election may be made in the Schedule or a
Confirmation by specifying that subparagraph (ii) above will not apply to the
Transactions identified as being subject to the election, together with the
starting date (in which case subparagraph (ii) above will not, or will cease
to, apply to such Transactions from such date). This election may be made
separately for different groups of Transactions and will apply separately to
each pairing of Offices through which the parties make and receive payments or
deliveries.

 

(d)                                 Deduction
or Withholding for Tax.

 

(i)             Gross-Up. All payments under this Agreement will be
made without any deduction or withholding for or on account of any Tax unless
such deduction or withholding is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, then in effect. If
a party is so required to deduct or withhold, then that party (“X”) will:—

 

(1)  promptly notify the other
party (“Y”) of such requirement;

 

(2)  pay to the relevant
authorities the full amount required to be deducted or withheld (including the
full amount required to be deducted or withheld from any additional amount paid
by X to Y under this Section 2(d)) promptly upon the earlier of determining
that such deduction or withholding is required or receiving notice that such
amount has been assessed against Y;

 

(3)  promptly forward to Y an
official receipt (or a certified copy), or other documentation reasonably
acceptable to Y, evidencing such payment to such authorities; and

 

(4)  if such Tax is an
Indemnifiable Tax, pay to Y, in addition to the payment to which Y is otherwise
entitled under this Agreement, such additional amount as is necessary to ensure
that the net amount actually received by Y (free and clear of Indemnifiable
Taxes, whether assessed against X or Y) will equal the full amount Y would have
received had no such deduction or withholding been required. However, X will
not be required to pay any additional amount to Y to the extent that it would
not be required to be paid but for:—

 

(A)  the failure by Y to comply with or perform
any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

 

(B)  the failure of a representation made by Y
pursuant to Section 3(f) to be accurate and true unless such failure would not
have occurred but for (I) any action taken by a taxing authority, or brought in
a court of competent jurisdiction, on or after the date on which a Transaction
is entered into (regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (II) a Change in Tax Law.

 

2

 

(ii)          Liability. If: —

 

(1)  X is required by any
applicable law, as modified by the practice of any relevant governmental
revenue authority, to make any deduction or withholding in respect of which X
would not be required to pay an additional amount to Y under Section
2(d)(i)(4);

 

(2)  X does not so deduct or
withhold; and

 

(3)  a liability resulting from
such Tax is assessed directly against X,

 

then,
except to the extent Y has satisfied or then satisfies the liability resulting
from such Tax, Y will promptly pay to X the amount of such liability (including
any related liability for interest, but including any related liability for
penalties only if Y has failed to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

 

(e)                                  Default
Interest; Other Amounts. Prior
to the occurrence or effective designation of an Early Termination Date in
respect of the relevant Transaction, a party that defaults in the performance
of any payment obligation will, to the extent permitted by law and subject to
Section 6(c), be required to pay interest (before as well as after judgment) on
the overdue amount to the other party on demand in the same currency as such
overdue amount, for the period from (and including) the original due date for
payment to (but excluding) the date of actual payment, at the Default Rate.
Such interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. If, prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party defaults in the performance of any obligation required to
be settled by delivery, it will compensate the other party on demand if and to
the extent provided for in the relevant Confirmation or elsewhere in this
Agreement.

 

3.                                      Representations

 

Each party represents to the
other party (which representations will be deemed to be repeated by each party
on each date on which a Transaction is entered into and, in the case of the
representations in Section 3(f), at all times until the termination of this
Agreement) that:—

 

(a)                                  Basic
Representations.

 

(i)             Status. It is duly organised and validly existing
under the laws of the jurisdiction of its organisation or incorporation and, if
relevant under such laws, in good standing;

 

(ii)          Powers.  It
has the power to execute this Agreement and any other documentation relating to
this Agreement to which it is a party, to deliver this Agreement and any other
documentation relating to this Agreement that it is required by this Agreement
to deliver and to perform its obligations under this Agreement and any
obligations it has under any Credit Support Document to which it is a party and
has taken all necessary action to authorise such execution, delivery and
performance;

 

(iii)       No
Violation or Conflict.
Such execution, delivery and performance do not violate or conflict with any
law applicable to it, any provision of its constitutional documents, any order
or judgment of any court or other agency of government applicable to it or any
of its assets or any contractual restriction binding on or affecting it or any
of its assets;

 

(iv)      Consents. All governmental and other consents that
are required to have been obtained by it with respect to this Agreement or any
Credit Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and

 

(v)         Obligations
Binding. Its obligations
under this Agreement and any Credit Support Document to which it is a party
constitute its legal, valid and binding obligations, enforceable in accordance
with their respective terms (subject to applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors’ rights generally
and subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding in
equity or at law)).

 

3

 

(b)                                 Absence of
Certain Events. No Event
of Default or Potential Event of Default or, to its knowledge, Termination
Event with respect to it has occurred and is continuing and no such event or
circumstance would occur as a result of its entering into or performing its
obligations under this Agreement or any Credit Support Document to which it is
a party.

 

(c)                                  Absence of
Litigation. There is not
pending or, to its knowledge, threatened against it or any of its Affiliates
any action, suit or proceeding at law or in equity or before any court,
tribunal, governmental body, agency or official or any arbitrator that is
likely to affect the legality, validity or enforceability against it of this
Agreement or any Credit Support Document to which it is a party or its ability
to perform its obligations under this Agreement or such Credit Support
Document.

 

(d)           Accuracy
of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.

 

(e)                                  Payer Tax
Representation. Each
representation specified in the Schedule as being made by it for the purpose of
this Section 3(e) is accurate and true.

 

(f)                                    Payee Tax
Representations. Each
representation specified in the Schedule as being made by it for the purpose of
this Section 3(f) is accurate and true.

 

4.                                      Agreements

 

Each party agrees with the
other that, so long as either party has or may have any obligation under this
Agreement or under any Credit Support Document to which it is a party:—

 

(a)                                  Furnish
Specified Information.
It will deliver to the other party or, in certain cases under subparagraph
(iii) below, to such government or taxing authority as the other party
reasonably directs:—

 

(i)             any forms, documents or certificates relating
to taxation specified in the Schedule or any Confirmation;

 

(ii)          any other documents specified in the Schedule
or any Confirmation; and

 

(iii)       upon reasonable demand by such other party,
any form or document that may be required or reasonably requested in writing in
order to allow such other party or its Credit Support Provider to make a
payment under this Agreement or any applicable Credit Support Document without
any deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially prejudice
the legal or commercial position of the party in receipt of such demand), with
any such form or document to be accurate and completed in a manner reasonably satisfactory
to such other party and to be executed and to be delivered with any reasonably
required certification,

 

in each case by the date
specified in the Schedule or such Confirmation or, if none is specified, as
soon as reasonably practicable.

 

(b)                                 Maintain
Authorisations. It will
use all reasonable efforts to maintain in full force and effect all consents of
any governmental or other authority that are required to be obtained by it with
respect to this Agreement or any Credit Support Document to which it is a party
and will use all reasonable efforts to obtain any that may become necessary in
the future.

 

(c)                                  Comply
with Laws. It will
comply in all material respects with all applicable laws and orders to which it
may be subject if failure so to comply would materially impair its ability to
perform its obligations under this Agreement or any Credit Support Document to
which it is a party.

 

(d)                                 Tax
Agreement. It will give
notice of any failure of a representation made by it under Section 3(f) to be
accurate and true promptly upon learning of such failure.

 

(e)                                  Payment of
Stamp Tax. Subject to
Section 11, it will pay any Stamp Tax levied or imposed upon it or in respect
of its execution or performance of this Agreement by a jurisdiction in which it
is incorporated,

 

4

 

organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located (“Stamp
Tax Jurisdiction”) and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party’s
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.

 

5.                                      Events of Default and
Termination Events

 

(a)                                  Events of
Default. The occurrence
at any time with respect to a party or, if applicable, any Credit Support
Provider of such party or any Specified Entity of such party of any of the
following events constitutes an event of default (an “Event of Default”) with
respect to such party:—

 

(i)             Failure to
Pay or Deliver. Failure
by the party to make, when due, any payment under this Agreement or delivery
under Section 2(a)(i) or 2(e) required to be made by it if such failure is not
remedied on or before the third Local Business Day after notice of such failure
is given to the party;

 

(ii)          Breach of
Agreement. Failure by
the party to comply with or perform any agreement or obligation (other than an
obligation to make any payment under this Agreement or delivery under Section
2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or
performed by the party in accordance with this Agreement if such failure is not
remedied on or before the thirtieth day after notice of such failure is given
to the party;

 

(iii)       Credit
Support Default.

 

(1)  Failure by the party or any Credit Support
Provider of such party to comply with or perform any agreement or obligation to
be complied with or performed by it in accordance with any Credit Support
Document if such failure is continuing after any applicable grace period has
elapsed;

 

(2)  the expiration or termination of such Credit
Support Document or the failing or ceasing of such Credit Support Document to
be in full force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction of all obligations
of such party under each Transaction to which such Credit Support Document
relates without the written consent of the other party; or

 

(3)  the party or such Credit Support Provider
disaffirms, disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;

 

(iv)      Misrepresentation. A representation (other than a
representation under Section 3(e) or (f)) made or repeated or deemed to have
been made or repeated by the party or any Credit Support Provider of such party
in this Agreement or any Credit Support Document proves to have been incorrect
or misleading in any material respect when made or repeated or deemed to have
been made or repeated;

 

(v)         Default
under Specified Transaction.
The party, any Credit Support Provider of such party or any applicable
Specified Entity of such party (1) defaults under a Specified Transaction and,
after giving effect to any applicable notice requirement or grace period, there
occurs a liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving effect
to any applicable notice requirement or grace period, in making any payment or
delivery due on the last payment, delivery or exchange date of, or any payment
on early termination of, a Specified Transaction (or such default continues for
at least three Local Business Days if there is no applicable notice requirement
or grace period) or (3) disaffirms, disclaims, repudiates or rejects, in whole
or in part, a Specified Transaction (or such action is taken by any person or
entity appointed or empowered to operate it or act on its behalf);

 

(vi)      Cross
Default. If “Cross
Default” is specified in the Schedule as applying to the party, the occurrence
or existence of (1) a default, event of default or other similar condition or
event (however

 

5

 

described)
in respect of such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them (individually or
collectively) in an aggregate amount of not less than the applicable Threshold
Amount (as specified in the Schedule) which has resulted in such Specified
Indebtedness becoming, or becoming capable at such time of being declared, due
and payable under such agreements or instruments, before it would otherwise
have been due and payable or (2) a default by such party, such Credit Support Provider
or such Specified Entity (individually or collectively) in making one or more
payments on the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after giving
effect to any applicable notice requirement or grace period);

 

(vii)
Bankruptcy.
The party, any Credit Support Provider of such party or any applicable
Specified Entity of such party: —

 

(1) is dissolved (other than pursuant to a consolidation, amalgamation
or merger); (2) becomes insolvent or is unable to pay its debts or fails or
admits in writing its inability generally to pay its debts as they become due;
(3) makes a general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy or insolvency law or other similar law affecting
creditors’ rights, or a petition is presented for its winding-up or liquidation,
and, in the case of any such proceeding or petition instituted or presented
against it, such proceeding or petition (A) results in a judgment of insolvency
or bankruptcy or the entry of an order for relief or the making of an order for
its winding-up or liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or presentation
thereof; (5) has a resolution passed for its winding-up, official management or
liquidation (other than pursuant to a consolidation, amalgamation or merger);
(6) seeks or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets; (7) has a
secured party take possession of all or substantially all its assets or has a
distress, execution, attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its assets and such
secured party maintains possession, or any such process is not dismissed,
discharged, stayed or restrained, in each case within 30 days thereafter; (8)
causes or is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect to any of the
events specified in clauses (1) to (7) (inclusive); or (9) takes any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the foregoing acts; or

 

(viii)
Merger Without
Assumption. The party or any Credit Support Provider of such
party consolidates or amalgamates with, or merges with or into, or transfers
all or substantially all its assets to, another entity and, at the time of such
consolidation, amalgamation, merger or transfer: —

 

(1)  the resulting, surviving or
transferee entity fails to assume all the obligations of such party or such
Credit Support Provider under this Agreement or any Credit Support Document to
which it or its predecessor was a party by operation of law or pursuant to an agreement
reasonably satisfactory to the other party to this Agreement; or

 

(2)  the benefits of any Credit
Support Document fail to extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee entity of its
obligations under this Agreement.

 

(b)                                 Termination
Events. The occurrence
at any time with respect to a party or, if applicable, any Credit Support
Provider of such party or any Specified Entity of such party of any event
specified below constitutes an Illegality if the event is specified in (i)
below, a Tax Event if the event is specified in (ii) below or a Tax Event Upon
Merger if the event is specified in (iii) below, and, if specified to be
applicable, a Credit Event

 

6

 

Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the
event is specified pursuant to (v) below:—

 

(i)             Illegality. Due to the adoption of, or any change in,
any applicable law after the date on which a Transaction is entered into, or
due to the promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any applicable
law after such date, it becomes unlawful (other than as a result of a breach by
the party of Section 4(b)) for such party (which will be the Affected Party): —

 

(1)  to perform any absolute or
contingent obligation to make a payment or delivery or to receive a payment or
delivery in respect of such Transaction or to comply with any other material
provision of this Agreement relating to such Transaction; or

 

(2)  to perform, or for any
Credit Support Provider of such party to perform, any contingent or other
obligation which the party (or such Credit Support Provider) has under any
Credit Support Document relating to such Transaction;

 

(ii)          Tax Event. Due to (x) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on or after the
date on which a Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement) or (y) a Change
in Tax Law, the party (which will be the Affected Party) will, or there is a
substantial likelihood that it will, on the next succeeding Scheduled Payment
Date (1) be required to pay to the other party an additional amount in respect
of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest
under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an
amount is required to be deducted or withheld for or on account of a Tax
(except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no
additional amount is required to be paid in respect of such Tax under Section
2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B));

 

(iii)       Tax Event
Upon Merger. The party
(the “Burdened Party”) on the next succeeding Scheduled Payment Date will
either (1) be required to pay an additional amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under
Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount
has been deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional amount
(other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a
result of a party consolidating or amalgamating with, or merging with or into,
or transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);

 

(iv)      Credit
Event Upon Merger. If
“Credit Event Upon Merger” is specified in the Schedule as applying to the
party, such party (“X”), any Credit Support Provider of X or any applicable
Specified Entity of X consolidates or amalgamates with, or merges with or into,
or transfers all or substantially all its assets to, another entity and such
action does not constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is materially
weaker than that of X, such Credit Support Provider or such Specified Entity,
as the case may be, immediately prior to such action (and, in such event, X or
its successor or transferee, as appropriate, will be the Affected Party); or

 

(v)         Additional
Termination Event. If
any “Additional Termination Event” is specified in the Schedule or any
Confirmation as applying, the occurrence of such event (and, in such event, the
Affected Party or Affected Parties shall be as specified for such Additional
Termination Event in the Schedule or such Confirmation).

 

(c)                                 Event of
Default and Illegality.
If an event or circumstance which would otherwise constitute or give rise to an
Event of Default also constitutes an Illegality, it will be treated as an
Illegality and will not constitute an Event of Default.

 

7

 

6.                                      Early Termination

 

(a)                                  Right to
Terminate Following Event of Default. If at any time an Event of Default with respect to a party (the
“Defaulting Party”) has occurred and is then continuing, the other party (the
“Non-defaulting Party”) may, by not more than 20 days notice to the Defaulting
Party specifying the relevant Event of Default, designate a day not earlier
than the day such notice is effective as an Early Termination Date in respect
of all outstanding Transactions. If, however, “Automatic Early Termination” is
specified in the Schedule as applying to a party, then an Early Termination
Date in respect of all outstanding Transactions will occur immediately upon the
occurrence with respect to such party of an Event of Default specified in
Section 5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto, (8),
and as of the time immediately preceding the institution of the relevant
proceeding or the presentation of the relevant petition upon the occurrence
with respect to such party of an Event of Default specified in Section
5(a)(vii)(4) or, to the extent analogous thereto, (8).

 

(b)                                 Right to
Terminate Following Termination Event.

 

(i)             Notice. If a Termination Event occurs, an Affected
Party will, promptly upon becoming aware of it, notify the other party,
specifying the nature of that Termination Event and each Affected Transaction
and will also give such other information about that Termination Event as the
other party may reasonably require.

 

(ii)          Transfer
to Avoid Termination Event.
If either an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and
there is only one Affected Party, or if a Tax Event Upon Merger occurs and the
Burdened Party is the Affected Party, the Affected Party will, as a condition
to its right to designate an Early Termination Date under Section 6(b)(iv), use
all reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days after it
gives notice under Section 6(b)(i) all its rights and obligations under this
Agreement in respect of the Affected Transactions to another of its Offices or
Affiliates so that such Termination Event ceases to exist.

 

If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period, whereupon
the other party may effect such a transfer within 30 days after the notice is
given under Section 6(b)(i).

 

Any such transfer by a party under this Section 6(b)(ii) will be
subject to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party’s policies in effect at
such time would permit it to enter into transactions with the transferee on the
terms proposed.

 

(iii)       Two
Affected Parties. If an
Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there are two
Affected Parties, each party will use all reasonable efforts to reach agreement
within 30 days after notice thereof is given under Section 6(b)(i) on action to
avoid that Termination Event.

 

(iv)      Right to
Terminate. If: —

 

(1)  a transfer under Section
6(b)(ii) or an agreement under Section 6(b)(iii), as the case may be, has not
been effected with respect to all Affected Transactions within 30 days after an
Affected Party gives notice under Section 6(b)(i); or

 

(2)  an Illegality under Section 5(b)(i)(2), a
Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax
Event Upon Merger occurs and the Burdened Party is not the Affected Party,

 

either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected Party, or
the party which is not the Affected Party in the case of a Credit Event Upon
Merger or an Additional Termination Event if there is only one Affected Party
may, by not more than 20 days notice to the other party and provided that the
relevant Termination Event is then

 

8

 

continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected Transactions.

 

(c)                                  Effect of
Designation.

 

(i)             If notice designating an Early Termination
Date is given under Section 6(a) or (b), the Early Termination Date will occur
on the date so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.

 

(ii)          Upon the occurrence or effective designation
of an Early Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be required to
be made, but without prejudice to the other provisions of this Agreement. The
amount, if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).

 

(d)                                 Calculations.

 

(i)             Statement. On or as soon as reasonably practicable
following the occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will provide
to the other party a statement (1) showing, in reasonable detail, such
calculations (including all relevant quotations and specifying any amount
payable under Section 6(e)) and (2) giving details of the relevant account to
which any amount payable to it is to be paid. In the absence of written
confirmation from the source of a quotation obtained in determining a Market
Quotation, the records of the party obtaining such quotation will be conclusive
evidence of the existence and accuracy of such quotation.

 

(ii)          Payment
Date. An amount
calculated as being due in respect of any Early Termination Date under Section
6(e) will be payable on the day that notice of the amount payable is effective
(in the case of an Early Termination Date which is designated or occurs as a
result of an Event of Default) and on the day which is two Local Business Days
after the day on which notice of the amount payable is effective (in the case
of an Early Termination Date which is designated as a result of a Termination
Event). Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early Termination Date
to (but excluding) the date such amount is paid, at the Applicable Rate. Such
interest will be calculated on the basis of daily compounding and the actual
number of days elapsed.

 

(e)                                  Payments
on Early Termination. If
an Early Termination Date occurs, the following provisions shall apply based on
the parties’ election in the Schedule of a payment measure, either “Market
Quotation” or “Loss”, and a payment method, either the “First Method” or the
“Second Method”. If the parties fail to designate a payment measure or payment
method in the Schedule, it will be deemed that “Market Quotation” or the
“Second Method”, as the case may be, shall apply. The amount, if any, payable
in respect of an Early Termination Date and determined pursuant to this Section
will be subject to any Set-off.

 

(i)             Events of
Default. If the Early
Termination Date results from an Event of Default: —

 

(1)  First
Method and Market Quotation. If the First Method and Market
Quotation apply, the Defaulting Party will pay to the Non-defaulting Party the
excess, if a positive number, of (A) the sum of the Settlement Amount (determined
by the Non-defaulting Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent of the Unpaid
Amounts owing to the Defaulting Party.

 

(2)  First
Method and Loss. If the First Method and Loss apply, the Defaulting
Party will pay to the Non-defaulting Party, if a positive number, the
Non-defaulting Party’s Loss in respect of this Agreement.

 

(3)  Second
Method and Market Quotation. If the Second Method and Market
Quotation apply, an amount will be payable equal to (A) the sum of the
Settlement Amount (determined by the

 

9

 

Non-defaulting
Party) in respect of the Terminated Transactions and the Termination Currency
Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting
Party. If that amount is a positive number, the Defaulting Party will pay it to
the Non-defaulting Party; if it is a negative number, the Non-defaulting Party
will pay the absolute value of that amount to the Defaulting Party.

 

(4)  Second
Method and Loss. If the Second Method and Loss apply, an amount will
be payable equal to the Non-defaulting Party’s Loss in respect of this
Agreement. If that amount is a positive number, the Defaulting Party will pay
it to the Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting Party.

 

(ii)          Termination
Events.  If the Early Termination Date results from a
Termination Event: —

 

(1)  One
Affected Party. If there is one Affected Party, the amount payable
will be determined in accordance with Section 6(e)(i)(3), if Market Quotation
applies, or Section 6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non-defaulting Party will be
deemed to be references to the Affected Party and the party which is not the
Affected Party, respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in respect of all
Terminated Transactions.

 

(2)  Two
Affected Parties. If
there are two Affected Parties: —

 

(A)
if Market Quotation applies, each party will determine a Settlement Amount in
respect of the Terminated Transactions, and an amount will be payable equal to
(I) the sum of (a) one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount (“X”) and the Settlement Amount of
the party with the lower Settlement Amount (“Y”) and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and

 

(B)
if Loss applies, each party will determine its Loss in respect of this
Agreement (or, if fewer than all the Transactions are being terminated, in
respect of all Terminated Transactions) and an amount will be payable equal to
one-half of the difference between the Loss of the party with the higher Loss
(“X”) and the Loss of the party with the lower Loss (“Y”).

 

If
the amount payable is a positive number, Y will pay it to X; if it is a
negative number, X will pay the absolute value of that amount to Y.

 

(iii)       Adjustment
for Bankruptcy. In
circumstances where an Early Termination Date occurs because “Automatic Early
Termination” applies in respect of a party, the amount determined under this
Section 6(e) will be subject to such adjustments as are appropriate and
permitted by law to reflect any payments or deliveries made by one party to the
other under this Agreement (and retained by such other party) during the period
from the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).

 

(iv) Pre-Estimate.
The parties agree that if Market Quotation applies an amount recoverable under
this Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such
amount is payable for the loss of bargain and the loss of protection against
future risks and except as otherwise provided in this Agreement neither party
will be entitled to recover any additional damages as a consequence of such
losses.

 

10

 

7.                                      Transfer

 

Subject to Section 6(b)(ii),
neither this Agreement nor any interest or obligation in or under this
Agreement may be transferred (whether by way of security or otherwise) by
either party without the prior written consent of the other party, except that:
—

 

(a)                                  a party may make such a transfer of this
Agreement pursuant to a consolidation or amalgamation with, or merger with or
into, or transfer of all or substantially all its assets to, another entity
(but without prejudice to any other right or remedy under this Agreement); and

 

(b)                                 a party may make such a transfer of all or
any part of its interest in any amount payable to it from a Defaulting Party
under Section 6(e).

 

Any purported transfer that
is not in compliance with this Section will be void.

 

8.                                      Contractual Currency

 

(a)                                  Payment in
the Contractual Currency.
Each payment under this Agreement will be made in the relevant currency
specified in this Agreement for that payment (the “Contractual Currency”). To
the extent permitted by applicable law, any obligation to make payments under
this Agreement in the Contractual Currency will not be discharged or satisfied
by any tender in any currency other than the Contractual Currency, except to
the extent such tender results in the actual receipt by the party to which payment
is owed, acting in a reasonable manner and in good faith in converting the
currency so tendered into the Contractual Currency, of the full amount in the
Contractual Currency of all amounts payable in respect of this Agreement. If
for any reason the amount in the Contractual Currency so received falls short
of the amount in the Contractual Currency payable in respect of this Agreement,
the party required to make the payment will, to the extent permitted by
applicable law, immediately pay such additional amount in the Contractual
Currency as may be necessary to compensate for the shortfall. If for any reason
the amount in the Contractual Currency so received exceeds the amount in the
Contractual Currency payable in respect of this Agreement, the party receiving
the payment will refund promptly the amount of such excess.

 

(b)                                 Judgments. To the extent permitted by applicable law,
if any judgment or order expressed in a currency other than the Contractual
Currency is rendered (i) for the payment of any amount owing in respect of this
Agreement, (ii) for the payment of any amount relating to any early termination
in respect of this Agreement or (iii) in respect of a judgment or order of
another court for the payment of any amount described in (i) or (ii) above, the
party seeking recovery, after recovery in full of the aggregate amount to which
such party is entitled pursuant to the judgment or order, will be entitled to
receive immediately from the other party the amount of any shortfall of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency and will refund promptly to the other party any excess of
the Contractual Currency received by such party as a consequence of sums paid
in such other currency if such shortfall or such excess arises or results from
any variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term “rate of exchange” includes, without limitation, any premiums and
costs of exchange payable in connection with the purchase of or conversion into
the Contractual Currency.

 

(c)                                  Separate
Indemnities. To the
extent permitted by applicable law, these indemnities constitute separate and
independent obligations from the other obligations in this Agreement, will be
enforceable as separate and independent causes of action, will apply
notwithstanding any indulgence granted by the party to which any payment is
owed and will not be affected by judgment being obtained or claim or proof
being made for any other sums payable in respect of this Agreement.

 

(d)                                 Evidence
of Loss. For tbe purpose
of this Section 8, it will be sufficient for a party to demonstrate that it
would have suffered a loss had an actual exchange or purchase been made.

 

11

 

9.                                      Miscellaneous

 

(a)                                  Entire
Agreement. This
Agreement constitutes the entire agreement and understanding of the parties with
respect to its subject matter and supersedes all oral communication and prior
writings with respect thereto.

 

(b)                                 Amendments. No amendment, modification or waiver in
respect of this Agreement will be effective unless in writing (including a
writing evidenced by a facsimile transmission) and executed by each of the
parties or confirmed by an exchange of telexes or electronic messages on an
electronic messaging system.

 

(c)                                  Survival
of Obligations. Without
prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties
under this Agreement will survive the termination of any Transaction.

 

(d)                                 Remedies
Cumulative. Except as
provided in this Agreement, the rights, powers, remedies and privileges
provided in this Agreement are cumulative and not exclusive of any rights,
powers, remedies and privileges provided by law.

 

(e)                                  Counterparts
and Confirmations.

 

(i)
This Agreement (and each amendment, modification and waiver in respect of it)
may be executed and delivered in counterparts (including by facsimile
transmission), each of which will be deemed an original.

 

(ii)
The parties intend that they are legally bound by the terms of each Transaction
from the moment they agree to those terms (whether orally or otherwise). A
Confirmation shall he entered into as soon as practicable and may he executed
and delivered in counterparts (including by facsimile transmission) or be
created by an exchange of telexes or by an exchange of electronic messages on
an electronic messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The parties will
specify therein or through another effective means that any such counterpart,
telex or electronic message constitutes a Confirmation.

 

(f)                                    No Waiver
of Rights. A failure or
delay in exercising any right, power or privilege in respect of this Agreement
will not be presumed to operate as a waiver, and a single or partial exercise
of any right, power or privilege will not be presumed to preclude any
subsequent or further exercise, of that right, power or privilege or the
exercise of any other right, power or privilege.

 

(g)                                 Headings. The headings used in this Agreement are for
convenience of reference only and are not to affect the construction of or to
be taken into consideration in interpreting this Agreement.

 

10.                               Offices; Multibranch Parties

 

(a)                                  If Section 10(a) is specified in the Schedule
as applying, each party that enters into a Transaction through an Office other
than its head or home office represents to the other party that,
notwithstanding the place of booking office or jurisdiction of incorporation or
organisation of such party, the obligations of such party are the same as if it
had entered into the Transaction through its head or home office. This representation
will be deemed to be repeated by such party on each date on which a Transaction
is entered into.

 

(b)                                 Neither party may change the Office through
which it makes and receives payments or deliveries for the purpose of a
Transaction without the prior written consent of the other party.

 

(c)                                  If a party is specified as a Multibranch
Party in the Schedule, such Multibranch Party may make and receive payments or
deliveries under any Transaction through any Office listed in the Schedule, and
the Office through which it makes and receives payments or deliveries with
respect to a Transaction will be specified in the relevant Confirmation.

 

11.                               Expenses

 

A Defaulting Party will, on
demand, indemnify and hold harmless the other party for and against all reasonable
out-of-pocket expenses, including legal fees and Stamp Tax, incurred by such
other party by reason of the enforcement and protection of its rights under
this Agreement or any Credit Support Document

 

12

 

to which the Defaulting
Party is a party or by reason of the early termination of any Transaction,
including, but not limited to, costs of collection.

 

12.                               Notices

 

(a)                                  Effectiveness. Any notice or other communication in
respect of this Agreement may be given in any manner set forth below (except
that a notice or other communication under Section 5 or 6 may not be given by
facsimile transmission or electronic messaging system) to the address or number
or in accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:—

 

(i)             if in writing and delivered in person or by
courier, on the date it is delivered;

 

(ii)          if sent by telex, on the date the recipient’s
answerback is received;

 

(iii)       if sent by facsimile transmission, on the
date that transmission is received by a responsible employee of the recipient
in legible form (it being agreed that the burden of proving receipt will be on
the sender and will not be met by a transmission report generated by the
sender’s facsimile machine);

 

(iv)      if sent by certified or registered mail
(airmail, if overseas) or the equivalent (return receipt requested), on the
date that mail is delivered or its delivery is attempted; or

 

(v)         if sent by electronic messaging system, on
the date that electronic message is received,

 

unless the date of that
delivery (or attempted delivery) or that receipt, as applicable, is not a Local
Business Day or that communication is delivered (or attempted) or received, as
applicable, after the close of business on a Local Business Day, in which case
that communication shall be deemed given and effective on the first following
day that is a Local Business Day.

 

(b)                                 Change of
Addresses. Either party
may by notice to the other change the address, telex or facsimile number or
electronic messaging system details at which notices or other communications
are to be given to it.

 

13.                               Governing Law and
Jurisdiction

 

(a)                                  Governing
Law. This Agreement will
be governed by and construed in accordance with the law specified in the
Schedule.

 

(b)                                 Jurisdiction. With respect to any suit, action or
proceedings relating to this Agreement (“Proceedings”), each party
irrevocably:—

 

(i)             submits to the jurisdiction of the English
courts, if this Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New York and the
United States District Court located in the Borough of Manhattan in New York
City, if this Agreement is expressed to be governed by the laws of the State of
New York; and

 

(ii)          waives any objection which it may have at any
time to the laying of venue of any Proceedings brought in any such court,
waives any claim that such Proceedings have been brought in an inconvenient
forum and further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction over such party.

 

Nothing in this Agreement
precludes either party from bringing Proceedings in any other jurisdiction
(outside, if this Agreement is expressed to be governed by English law, the
Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and
Judgments Act 1982 or any modification, extension or re-enactment thereof for
the time being in force) nor will the bringing of Proceedings in any one or
more jurisdictions preclude the bringing of Proceedings in any other
jurisdiction.

 

(c)                                  Service of
Process. Each party
irrevocably appoints the Process Agent (if any) specified opposite its name in
the Schedule to receive, for it and on its behalf, service of process in any
Proceedings.  If for any

 

13

 

reason any party’s Process
Agent is unable to act as such, such party will promptly notify the other party
and within 30 days appoint a substitute process agent acceptable to the other
party. The parties irrevocably consent to service of process given in the
manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.

 

(d)                                 Waiver of
Immunities. Each party
irrevocably waives, to the fullest extent permitted by applicable law, with
respect to itself and its revenues and assets (irrespective of their use or
intended use), all immunity on the grounds of sovereignty or other similar
grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of
injunction, order for specific performance or for recovery of property, (iv)
attachment of its assets (whether before or after judgment) and (v) execution
or enforcement of any judgment to which it or its revenues or assets might
otherwise be entitled in any Proceedings in the courts of any jurisdiction and
irrevocably agrees, to the extent permitted by applicable law, that it will not
claim any such immunity in any Proceedings.

 

14.                               Definitions

 

As used in this Agreement:—

 

“Additional Termination Event” has the meaning specified in Section 5(b).

 

“Affected Party” has the meaning specified in Section 5(b).

 

“Affected Transactions” means (a) with respect to any Termination Event consisting of an
Illegality, Tax Event or Tax Event Upon Merger, all Transactions affected by
the occurrence of such Termination Event and (b) with respect to any other
Termination Event, all Transactions.

 

“Affiliate”
means, subject to the Schedule, in relation to any person, any entity
controlled, directly or indirectly, by the person, any entity that controls,
directly or indirectly, the person or any entity directly or indirectly under
common control with the person. For this purpose, “control” of any entity or
person means ownership of a majority of the voting power of the entity or
person.

 

“Applicable Rate” means:—

 

(a)                                  in respect of obligations payable or
deliverable (or which would have been but for Section 2(a)(iii)) by a
Defaulting Party, the Default Rate;

 

(b)                                 in respect of an obligation to pay an amount
under Section 6(e) of either party from and after the date (determined in
accordance with Section 6(d)(ii)) on which that amount is payable, the Default
Rate;

 

(c)                                  in respect of all other obligations payable
or deliverable (or which would have been but for Section 2(a)(iii)) by a
Non-defaulting Party, the Non-default Rate; and

 

(d)                                 in all other cases, the Termination Rate.

 

“Burdened Party” has the meaning specified in Section 5(b).

 

“Change in Tax Law” means the enactment, promulgation, execution or ratification of, or
any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.

 

“consent”
includes a consent, approval, action, authorisation, exemption, notice, filing,
registration or exchange control consent.

 

“Credit Event Upon Merger” has the meaning specified in Section 5(b).

 

“Credit Support Document” means any agreement or instrument that is specified as such in this
Agreement.

 

“Credit Support Provider” has the meaning specified in the Schedule.

 

“Default Rate” means a rate per annum equal to the cost (without proof or evidence of
any actual cost) to the relevant payee (as certified by it) if it were to fund
or of funding the relevant amount plus 1% per annum.

 

14

 

“Defaulting Party” has the meaning specified in Section 6(a).

 

“Early Termination Date” means the date determined in accordance with Section 6(a) or 6(b)(iv).

 

“Event of Default” has the meaning specified in Section 5(a) and, if applicable, in the
Schedule.

 

“Illegality”
has the meaning specified in Section 5(b).

 

“Indemnifiable Tax” means any Tax other than a Tax that would not be imposed in respect of
a payment under this Agreement but for a present or former connection between
the jurisdiction of the government or taxation authority imposing such Tax and
the recipient of such payment or a person related to such recipient (including,
without limitation, a connection arising from such recipient or related person
being or having been a citizen or resident of such jurisdiction, or being or
having been organised, present or engaged in a trade or business in such
jurisdiction, or having or having had a permanent establishment or fixed place
of business in such jurisdiction, but excluding a connection arising solely
from such recipient or related person having executed, delivered, performed its
obligations or received a payment under, or enforced, this Agreement or a
Credit Support Document).

 

“law”
includes any treaty, law, rule or regulation (as modified, in the case of tax
matters, by the practice of any relevant governmental revenue authority) and “lawful” and “unlawful” will be
construed accordingly.

 

“Local Business Day” means, subject to the Schedule, a day on which commercial banks are
open for business (including dealings in foreign exchange and foreign currency
deposits) (a) in relation to any obligation under Section 2(a)(i), in the
place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for
performance with respect to such Specified Transaction.

 

“Loss”
means, with respect to this Agreement or one or more Terminated Transactions,
as the case may be, and a party, the Termination Currency Equivalent of an
amount that party reasonably determines in good faith to be its total losses
and costs (or gain, in which case expressed as a negative number) in connection
with this Agreement or that Terminated Transaction or group of Terminated
Transactions, as the case may be, including any loss of bargain, cost of
funding or, at the election of such party but without duplication, loss or cost
incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting
from any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination
Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or
(3) or 6(e)(ii)(2)(A) applies. Loss does not include a party’s legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.

 

“Market Quotation” means, with respect to one or more Terminated Transactions and a party
making the determination, an amount determined on the basis of quotations from
Reference Market-makers. Each quotation will be for an amount, if any, that
would be paid to such party (expressed as a negative number) or by such party
(expressed as a positive number) in consideration of an agreement between such
party (taking into account any existing Credit Support Document with respect to
the obligations of such party) and the quoting Reference Market-maker to enter
into a transaction (the “Replacement Transaction”) that would have the effect
of preserving for such party the economic equivalent of any payment or delivery
(whether the underlying obligation was absolute or contingent and assuming the
satisfaction of each applicable condition precedent) by the parties under
Section 2(a)(i) in respect of such Terminated Transaction or group of
Terminated Transactions that would, but for the occurrence of the relevant
Early Termination Date, have

 

15

 

been required after that
date. For this purpose, Unpaid Amounts in respect of the Terminated Transaction
or group of Terminated Transactions are to be excluded but, without limitation,
any payment or delivery that would, but for the relevant Early Termination
Date, have been required (assuming satisfaction of each applicable condition
precedent) after that Early Termination Date is to be included. The Replacement
Transaction would be subject to such documentation as such party and the
Reference Market-maker may, in good faith, agree. The party making the
determination (or its agent) will request each Reference Market-maker to
provide its quotation to the extent reasonably practicable as of the same day
and time (without regard to different time zones) on or as soon as reasonably
practicable after the relevant Early Termination Date. The day and time as of
which those quotations are to be obtained will be selected in good faith by the
party obliged to make a determination under Section 6(e), and, if each party is
so obliged, after consultation with the other. If more than three quotations
are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation
will be the quotation remaining after disregarding the highest and lowest
quotations. For this purpose, if more than one quotation has the same highest
value or lowest value, then one of such quotations shall be disregarded. If
fewer than three quotations are provided, it will be deemed that the Market
Quotation in respect of such Terminated Transaction or group of Terminated
Transactions cannot be determined.

 

“Non-default Rate” means a rate per annum equal to the cost (without proof or evidence of
any actual cost) to the Non-defaulting Party (as certified by it) if it were to
fund the relevant amount.

 

“Non-defaulting Party” has the meaning specified in Section 6(a).

 

“Office”
means a branch or office of a party, which may be such party’s head or home
office.

 

“Potential Event of Default” means any event which, with the giving of
notice or the lapse of time or both, would constitute an Event of Default.

 

“Reference Market-makers” means four leading dealers in the relevant market selected by the
party determining a Market Quotation in good faith (a) from among dealers of
the highest credit standing which satisfy all the criteria that such party
applies generally at the time in deciding whether to offer or to make an
extension of credit and (b) to the extent practicable, from among such dealers
having an office in the same city.

 

“Relevant Jurisdiction” means, with respect to a party, the jurisdictions (a) in which the
party is incorporated, organised, managed and controlled or considered to have
its seat, (b) where an Office through which the party is acting for purposes of
this Agreement is located, (c) in which the party executes this Agreement and
(d) in relation to any payment, from or through which such payment is made.

 

“Scheduled Payment Date” means a date on which a payment or delivery is to be made under
Section 2(a)(i) with respect to a Transaction.

 

“Set-off”
means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.

 

“Settlement Amount” means, with respect to a party and any Early Termination Date, the sum
of: —

 

(a)          the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and

 

(b)         such party’s Loss (whether positive or negative and without reference
to any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.

 

“Specified Entity” has the meanings specified in the Schedule.

 

16

 

“Specified Indebtedness” means, subject to the Schedule, any obligation (whether present or
future, contingent or otherwise, as principal or surety or otherwise) in
respect of borrowed money.

 

“Specified Transaction” means, subject to the Schedule, (a) any transaction (including an
agreement with respect thereto) now existing or hereafter entered into between
one party to this Agreement (or any Credit Support Provider of such party or
any applicable Specified Entity of such party) and the other party to this
Agreement (or any Credit Support Provider of such other party or any applicable
Specified Entity of such other party) which is a rate swap transaction, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction,
collar transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions), (b) any combination of these
transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.

 

“Stamp Tax”
means any stamp, registration, documentation or similar tax.

 

“Tax”
means any present or future tax, levy, impost, duty, charge, assessment or fee
of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.

 

“Tax Event”
has the meaning specified in Section 5(b).

 

“Tax Event Upon Merger” has the meaning specified in Section 5(b).

 

“Terminated Transactions” means with respect to any Early Termination Date (a) if resulting from
a Termination Event, all Affected Transactions and (b) if resulting from an
Event of Default, all Transactions (in either case) in effect immediately
before the effectiveness of the notice designating that Early Termination Date
(or, if “Automatic Early Termination” applies, immediately before that Early
Termination Date).

 

“Termination Currency” has the meaning specified in the Schedule.

 

“Termination Currency Equivalent” means, in respect of any amount denominated
in the Termination Currency, such Termination Currency amount and, in respect
of any amount denominated in a currency other than the Termination Currency
(the “Other Currency”), the amount in the Termination Currency determined by
the party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a
rate for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.

 

“Termination Event” means an Illegality, a Tax Event or a Tax Event Upon Merger or, if
specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.

 

“Termination Rate” means a rate per annum equal to the arithmetic mean of the cost
(without proof or evidence of any actual cost) to each party (as certified by
such party) if it were to fund or of funding such amounts.

 

“Unpaid Amounts” owing to any party means, with respect to an Early Termination Date,
the aggregate of (a) in respect of all Terminated Transactions, the amounts
that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under
Section 2(a)(i) which was (or would have been but for Section 2(a)(iii))
required to be settled by delivery to such party on or prior to such Early
Termination Date and which has not been so settled as at such Early Termination
Date, an amount equal to the fair market

 

17

 

value of that which was (or
would have been) required to be delivered as of the originally scheduled date
for delivery, in each case together with (to the extent permitted under
applicable law) interest, in the currency of such amounts, from (and including)
the date such amounts or obligations were or would have been required to have
been paid or performed to (but excluding) such Early Termination Date, at the
Applicable Rate. Such amounts of interest will be calculated on the basis of
daily compounding and the actual number of days elapsed. The fair market value
of any obligation referred to in clause (b) above shall be reasonably
determined by the party obliged to make the determination under Section 6(e)
or, if each party is so obliged, it shall be the average of the Termination
Currency Equivalents of the fair market values reasonably determined by both
parties.

 

IN WITNESS WHEREOF the
parties have executed this document on the respective dates specified below
with effect from the date specified on the first page of this document.

 

 

	
  Credit
  Suisse First Boston International

  	
   

  	
  Priceline.com
  Incorporated

  
	
  (Name of Party)

  	
   

  	
  (Name of Party)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Paul Chelsom

  	
   

  	
  By:

  	
  /s/ Robert J. Mylod

  
	
   

  	
  Name: Paul Chelsom

  	
   

  	
   

  	
  Name: Robert J. Mylod

  
	
   

  	
  Title: Attorney-in-Fact

  	
   

  	
   

  	
  Title: Chief
  Financial Officer

  
	
   

  	
  Date: November 3,
  2003

  	
   

  	
   

  	
  Date: November 3,
  2003

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Andrew Walton

  	
   

  	
   

  
	
   

  	
  Name: Andrew Walton

  	
   

  	
   

  
	
   

  	
  Title: Attorney-in-Fact

  	
   

  	
   

  
	
   

  	
  Date: November 3, 2003

  	
   

  	
   

  

 

18

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