-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JwM8KKtpjpCxrk4cBSswa3voArITelhrVta7dCOjgUvZdOcyFbi0OGidZ2osl3FT A9tUiqiWx81cGHs3c1pxVA== 0001005477-01-001280.txt : 20010224 0001005477-01-001280.hdr.sgml : 20010224 ACCESSION NUMBER: 0001005477-01-001280 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20010215 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010220 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRICELINE COM INC CENTRAL INDEX KEY: 0001075531 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 061528493 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-25581 FILM NUMBER: 1549547 BUSINESS ADDRESS: STREET 1: 800 CONNECTICUT AVE CITY: NORWALK STATE: CT ZIP: 06854 BUSINESS PHONE: 2037053000 8-K 1 0001.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) February 15, 2001 priceline.com Incorporated - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-25581 06-1528493 - -------------------------------------------------------------------------------- (State or other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 800 Connecticut Avenue, Norwalk, Connecticut 06854 - -------------------------------------------------------------------------------- (Address of principal office) (zip code) N/A - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 5. Other Events. Investment in priceline.com by Hutchison Whampoa Limited and Cheung Kong (Holdings) Limited On February 15, 2001, priceline.com Incorporated announced that Hutchison Whampoa Limited ("Hutchison") and Cheung Kong (Holdings) Limited ("CKH") had invested an aggregate $50.0 million in priceline.com. Hutchison and CKH invested an aggregate $50.0 million in priceline.com by purchasing approximately 24 million shares of priceline.com common stock at $2.10 per share, a price determined based on the market price of priceline.com's stock during the negotiation period. The information set forth above is qualified in its entirety by reference to the press release which is attached hereto as Exhibit 99.2 and the Stock Purchase Agreement and Registration Rights Agreement attached hereto as Exhibits 99.3 and 99.4, respectively, and incorporated herein by reference. Item 9. Registration FD Disclosure. 4th quarter and year ended December 31, 2000 earnings On February 15, 2001, priceline.com Incorporated, a Delaware corporation, announced its results for the 4th quarter and year ended December 31, 2000. Priceline.com also provided a progress report on its steps to increase operating efficiencies and strengthen its core businesses and gave guidance for the first half of 2001. The information set forth above is qualified in its entirety by reference to the press release (which includes a financial and statistical supplement issued by priceline.com on February 15, 2001), a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference. Exhibits. 99.1 Press Release issued by priceline.com Incorporated on February 15, 2001 relating to its 4th quarter and year ended December 31, 2000 earnings. 99.2 Press Release issued by priceline.com Incorporated on February 15, 2001 relating to purchase of common stock of priceline.com Incorporated by Hutchison Whampoa Limited and Cheung Kong (Holdings) Limited. 99.3 Stock Purchase Agreement, dated as of February 15, 2001, among priceline.com Incorporated, Prime Pro Group Limited and Forthcoming Era Limited. 99.4 Registration Rights Agreement, dated as of February 15, 2001, among priceline.com Incorporated, Prime Pro Group Limited and Forthcoming Era Limited. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PRICELINE.COM INCORPORATED By: /s/ Daniel Schulman ------------------------------- Name: Daniel Schulman Title: Chief Executive Officer Date: February 15, 2001 EXHIBIT INDEX Exhibit No. Description ----------- ----------- 99.1 Press Release issued by priceline.com Incorporated on February 15, 2001 relating to its 4th quarter and year ended December 31, 2000 earnings. 99.2 Press Release issued by priceline.com Incorporated on February 15, 2001 relating to purchase of common stock of priceline.com Incorporated by Hutchison Whampoa Limited and Cheung Kong (Holdings) Limited. 99.3 Stock Purchase Agreement, dated as of February 15, 2001, among priceline.com Incorporated, Prime Pro Group Limited and Forthcoming Era Limited. 99.4 Registration Rights Agreement, dated as of February 15, 2001, among priceline.com Incorporated, Prime Pro Group Limited and Forthcoming Era Limited. EX-99.1 2 0002.txt REPORTS 4TH QUARTER AND YEAR END RESULTS Exhibit 99.1 Priceline.com Reports 4th Quarter and Year End Results Gives Progress Report On Strengthening Core Businesses NORWALK, Conn., February 15, 2001 . . . Priceline.com (Nasdaq: PCLN) today reported results for the 4th quarter and year ended December 31, 2000. The Company also gave a progress report on its steps to increase operating efficiencies and strengthen its core businesses, and gave guidance for the first half of 2001. As the result of significant efficiencies realized in the Company's cost structure as part of its turnaround plan, priceline.com said that it is now targeting a pro forma operating profit (as defined below) in the 2nd quarter 2001. Separately, priceline.com also announced that it had sold $50 million in common stock to its strategic partners, Hutchison Whampoa Limited and Cheung Kong (Holdings) Limited. Revenue in the 4th quarter 2000 was $228.2 million, representing an increase of 34.8% over 4th quarter 1999 revenue of $169.2 million. Full-year 2000 revenue reached $1.24 billion, or 156.1% greater than the $482.4 million reported in 1999. Pro forma gross profit for the 4th quarter 2000 was $35.1 million, a 45.4% increase over 4th quarter 1999 gross profit of $24.1 million. Pro forma gross margin for the 4th quarter 2000 was 15.4%, compared to 14.2% in 4th quarter 1999. Pro forma gross profit and gross margin exclude supplier warrant charges. Priceline.com's customer base increased by approximately 884,000 during the 4th quarter 2000, raising the Company's total customer base to almost 9 million. 56% of all purchase offers received by priceline.com in the 4th quarter 2000 came from repeat customers. Priceline.com's pro forma net loss for the 4th quarter 2000 was $25.0 million, or $0.15 per share, before restructuring and special charges. That compares to a 4th quarter 1999 pro forma net loss of $10.0 million, or a pro forma net loss of $0.06 per share. Pro forma operating loss and net loss are stated before restructuring and special charges and exclude supplier warrant charges, option payroll taxes, stock-based compensation charges and loss on the sale of stock. During the 4th quarter 2000, priceline.com recognized a $66.8 million charge -- $37.3 million of which was non-cash -- for restructuring and special items in connection with the Company's turnaround plan. These charges pertained to asset impairment associated with the Company's decision to exit certain businesses during the 4th quarter and the closing of licensees and real estate consolidation. Other non-cash charges included an $8.6 million charge in connection with a previously announced agreement with Delta Air Lines, Inc. to amend its warrants to purchase shares of priceline.com common stock and providing for surrender of 825,000 of their 5.5 million priceline.com warrants, $381,000 in other supplier warrant charges and $2.6 million due to the loss on the sale of stock holdings in LastMinute.com and LendingTree. The 4th quarter charges also reflect expenses under severance and retention plans described below. Commenting on the results, Priceline.com President and CEO Daniel H. Schulman stated, "The 4th quarter was difficult for priceline.com. In addition to being our seasonally weakest quarter, priceline.com was adversely affected by the closing of WebHouse Club, negative news stories about customer satisfaction and the difficulties of other e-commerce businesses." Mr. Schulman continued, "Priceline.com's management never doubted the viability and promise of our business. We committed to executing a 6-point plan that would motivate and retain our employees, strategically refocus our resources on our core products, with a particular emphasis on travel, strengthen our product offerings and customer service, strengthen our international relationships, manage our business toward profitability, and strengthen our balance sheet. Over the past months, priceline.com has executed on its plan and has made significant strides in each of these areas." Significant accomplishments in priceline.com's 6-point plan include: 1) Motivate and retain employees. As previously announced, priceline.com realigned its management team for more effective direction and execution, as well as an increased focus on travel products and customer care. Priceline.com strengthened its senior management with the promotion of Jeffery Boyd to Chief Operating Officer and the addition of Robert Mylod as Chief Financial Officer. The Company also implemented an employee compensation and retention plan, comprised primarily of new equity incentives. To make options available under the Company's plan, priceline.com's top executives returned 8.9 million stock options to the general employee option pool and, in return, received 4.9 million shares of restricted stock. Certain loans to those executives, which were repayable from the proceeds of returned options, were forgiven. Other managers received one-time retention bonuses and employees generally received new option grants. The Company's 4th quarter special charges include accruals for retention payments and loan forgiveness, including the loan forgiveness to the Company's former CFO announced last quarter. 2) Refocus on its core businesses, particularly travel. Priceline.com evaluated each of its existing and planned businesses in terms of their unique customer proposition and ability to be profitable in 12 months. As a result, the Company closed its auto insurance, life insurance, business-to-business and wireless initiatives in order to focus on its promising travel business which it believes can drive the company to operating profitability on its own. 3) Strengthen priceline.com's product offerings and customer service. Since the end of the 3rd quarter, priceline.com has made significant enhancements to the functionality, clarity, speed and convenience of its website. For example, priceline.com reduced response times to customer offers from 60 minutes to an average of 4 minutes and implemented search criteria that guaranteed customers who requested it no more than 1 connection per leg of a trip with a maximum of a 3 hour stop. Through improvements in website disclosure, IVR enhancements and self-service initiatives, the number of customer service contacts per unit sold has dropped over 50% from September and October levels. In recognition of priceline.com's efforts and progress in this regard, priceline.com was reinstated to the Better Business Bureau in December. 4) Strengthen priceline.com's international relationships. During the 4th quarter, priceline.com streamlined its international initiatives to concentrate on Asia and Europe. Priceline.com's European licensee recently launched in the UK and received an additional $25 million in funding from General Atlantic Partners. Separately, priceline.com announced today a strategic investment by Hutchison-Whampoa, its co-investor in its Asian licensee. 5) Priceline.com's commitment to profitability. Priceline.com has significantly improved its cost structure by consolidating real estate, reducing headcount and driving other administrative cost reductions. In total, priceline.com has reduced its headcount from a high of 538 at the beginning of the 4th quarter 2000 to 370 as of today, including some additional reductions in headcount in the 1st quarter of 2001. The Company believes these steps have significantly reduced administrative costs. 6) Strengthen priceline.com's balance sheet. Today, in a separate release, priceline.com's strategic partners, Hutchison Whampoa Limited and Cheung Kong (Holdings) Limited, announced that they had made a $50 million investment in priceline.com. The two companies also said that they had entered into a separate agreement today to purchase approximately $24 million worth of priceline.com common stock from Jay S. Walker. Hutchison Whampoa will also receive a seat on the priceline.com board. Priceline.com's balance sheet also was favorably impacted by the restructuring of its outstanding preferred stock, announced last week. The restructuring reduced priceline.com's outstanding preferred stock by $280 million and significantly reduced the Company's ongoing dividends. Looking forward, priceline.com's Chairman, Richard S. Braddock, said "priceline.com has experienced a significant increase in revenue in the first six weeks of 2001, driven in part by seasonal factors, compared to levels toward the end of the 4th quarter. We therefore believe that we will have sequential 1st quarter revenue growth of approximately 15% to 20% and sequential 2nd quarter revenue growth of approximately 10% to 15%." Priceline.com is targeting a pro forma net loss per share in the 1st quarter of between $0.05 and $0.07 per share. Priceline.com announced that it expects it will have pro forma operating profit in the 2nd quarter. Pro forma operating profit excludes restructuring and special charges, supplier warrant charges, option payroll taxes and stock-based compensation charges. "We remain excited about the future of our business," said Mr. Braddock. "With the changes we are making, and the strong alliances we have with our supplier partners and investment partners like Hutchison Whampoa and Cheung Kong, General Atlantic and Delta, Priceline.com is in position to be not just one of the survivors, but profitable in the short-term and long-term one of the winners in the Internet space." About priceline.com Priceline.com is the Name Your Own Price(sm) Internet pricing system that provides services across four broad product categories: a travel service that offers leisure airline tickets, hotel rooms and rental cars; a personal finance service that offers home mortgages, refinancing and home equity loans through an independent licensee; an automotive service that offers new cars; and a telecommunications service that offers long distance calling services. Priceline.com licenses its business model to independent licensees, including pricelinemortgage and certain international licensees. In these arrangements, priceline.com generally receives royalties for licensing its intellectual property. Priceline.com also holds securities carrying the right to purchase a significant equity stake in the licensees under certain conditions. Unless those rights are exercised, the results of licensee operations will not be included in priceline.com's financial statements. # # # For press information, contact: priceline.com Brian Ek, 203/299-8167 brian.ek@priceline.com Information about Forward Looking Statements This press release may contain forward-looking statements. Expressions of future goals and similar expressions including, without limitation, "may," "will," "should," "could," "expects," "does not currently expect," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "targets," or "continue," reflecting something other than historical fact are intended to identify forward-looking statements. The following factors, among others, could cause the Company's actual results to differ materially from those described in the forward-looking statements: adverse changes in the Company's relationships with airlines and other product and service providers; inability to successfully expand the Company's business model both horizontally and geographically; systems-related failures; the Company's ability to protect its intellectual property rights; the effects of increased competition; losses by the Company and its licensees; any adverse impact from negative publicity and negative customer reaction relating to recent announcements concerning the Company; legal and regulatory risks and the ability to attract and retain qualified personnel. For a detailed discussion of these and other factors that could cause the Company's actual results to differ materially from those described in the forward-looking statements, please refer to the Company's most recent Form 10-Q and Form 10-K filings with the Securities and Exchange Commission. [LOGO]Priceline.com priceline.com - 2000 FOURTH QUARTER FINANCIAL DATA SUPPLEMENT - -------------------------------------------------------------------------------- Page Number ----------- priceline.com Financials Pro Forma Condensed Statement of Operations 1 Condensed Balance Sheet 2 Offer and Customer Activity 3 Product Detail Air 4 Hotels 5 Rental Cars 6 - -------------------------------------------------------------------------------- This supplement is unaudited and intended as a supplement to, and should be read in conjunction with, the Company's audited financial statements and the notes thereto filed with the SEC on Form 10-K and quarterly financial statements filed with the SEC on Form 10-Q. Certain data have been reclassified in order to conform historical information in a manner consistent with current presentation and has not been audited in this form. Certain presentations within this supplement are not consistent with Generally Accepted Accounting Principles. - -------------------------------------------------------------------------------- priceline.com Inc. - -------------------------------------------------------------------------------- Pro Forma Condensed Statement of Operations In thousands, except per share amounts (Unaudited)
Income Statement Analysis 1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 - ------------------------- ------------ ------------ ------------ ----------- ------------ ----------- Revenues $49,411 $111,564 $152,222 $169,213 $313,798 $352,095 Cost of Revenues Product costs 43,659 100,664 133,628 145,105 264,771 296,919 ------------ ------------ ------------ ----------- ------------ ----------- Total Cost of Revenues 43,659 100,664 133,628 145,105 264,771 296,919 Gross Profit $5,752 $10,900 $18,594 $24,108 $49,027 $55,176 ------------ ------------ ------------ ----------- ------------ ----------- Expenses: Advertising 11,796 8,980 9,504 10,404 20,339 13,826 Sales and Marketing 5,342 8,753 11,909 12,889 20,110 23,791 General and Administrative 3,667 5,503 6,843 9,784 12,704 15,222 Systems and Business Development 2,184 3,469 4,593 3,777 5,868 6,695 ------------ ------------ ------------ ----------- ------------ ----------- Total Operating Expenses $22,989 $26,705 $32,849 $36,854 $59,021 $59,534 Operating Loss ($17,237) ($15,805) ($14,255) ($12,746) ($9,994) ($4,358) Interest Income 458 1,929 2,356 2,758 2,715 2,725 ------------ ------------ ------------ ----------- ------------ ----------- Net Loss ($16,779) ($13,876) ($11,899) ($9,988) ($7,279) ($1,633) ============ ============ ============ =========== ============ =========== Pro Forma Net Loss per Share ($0.18) ($0.10) ($0.08) ($0.06) ($0.04) ($0.01) ============ ============ ============ =========== ============ =========== Recurring Supplier Warrant Costs (381) (381) (381) (380) (381) (381) One-Time Supplier Warrant Costs 0 0 (88,389) (1,099,443) 0 0 Restructuring charge 0 0 0 0 0 0 Special charge 0 0 0 0 0 0 Other Expense 0 0 0 (381) 0 0 Stock Based Compensation 0 0 0 0 0 0 Option Payroll Taxes 0 0 (1,547) (265) (5,907) (2,507) Preferred Stock Dividend 0 0 0 0 0 (7,191) WebHouse Club Warrants 0 0 0 189,000 0 0 Gain/(Loss) on Sale of Stock 0 0 0 0 0 0 Accretion on Preferred Stock (8,354) 0 0 0 0 0 ------------ ------------ ------------ ----------- ------------ ----------- Net Loss ($25,514) ($14,257) ($102,216) ($921,457) ($13,567) ($11,712) Net Loss Applicable to Common Shareholders ($0.27) ($0.10) ($0.71) ($5.91) ($0.08) ($0.07) Weighted average common shares 94,939 142,320 144,501 156,032 166,467 165,399 Common Shares Outstanding, end of period 142,320 142,320 146,427 163,867 170,162 166,549 - --------------------------------------------------------------------------------------------------------------------------- Gross Margin 11.6% 9.8% 12.2% 14.2% 15.6% 15.7% 4Q00 vs. 12 mos. 2000 vs. Income Statement Analysis 3Q00 4Q00 4Q99 12 mos. 1999 12 mos. 2000 12 mos. 1999 - ------------------------- ------------ ----------- ------------- ------------ ------------ ---------------- Revenues $341,334 $228,169 35% $482,410 $1,235,396 156% Cost of Revenues Product costs 286,899 193,115 33% 423,056 1,041,704 146% ------------ ----------- ------------ ------------ Total Cost of Revenues 286,899 193,115 33% 423,056 1,041,704 146% Gross Profit $54,435 $35,054 45% $59,354 $193,692 226% ------------ ----------- ------------ ------------ Expenses: Advertising 14,175 18,865 81% 40,684 67,205 65% Sales and Marketing 21,394 15,633 21% 38,893 80,928 108% General and Administrative 11,934 12,334 26% 25,797 52,194 102% Systems and Business Development 11,420 15,209 303% 14,023 39,192 179% ------------ ----------- ------------ ------------ Total Operating Expenses $58,923 $62,041 68% $119,397 $239,519 101% Operating Loss ($4,488) ($26,987) 112% ($60,043) ($45,827) -24% Interest Income 2,264 1,983 -28% 7,501 9,687 29% ------------ ----------- ------------ ------------ Net Loss ($2,224) ($25,004) 150% ($52,542) ($36,140) -31% ============ =========== ============ ============ Pro Forma Net Loss per Share ($0.01) ($0.15) 132% ($0.39) ($0.22) -45% ============ =========== ============ ============ Recurring Supplier Warrant Costs (381) (381) 0% (1,523) (1,524) 0% One-Time Supplier Warrant Costs 0 (8,595) -99% (1,187,832) (8,595) -99% Restructuring charge 0 (32,006) - - (32,006) - Special charge 0 (34,824) - - (34,824) - Other Expense 0 0 - (381) - -100% Stock Based Compensation 0 (1,711) - - (1,711) - Option Payroll Taxes (349) (25) -91% (1,812) (8,788) 385% Preferred Stock Dividend (7,191) 0 - - (14,382) - WebHouse Club Warrants (189,000) 0 - 189,000 (189,000) -200% Gain/(Loss) on Sale of Stock 32 (2,590) - - (2,558) - Accretion on Preferred Stock 0 0 - (8,354) - -100% ------------ ----------- ------------ ------------ Net Loss ($199,113) ($105,136) -89% ($1,063,444) ($329,528) -69% Net Loss Applicable to Common Shareholders ($1.19) ($0.62) -89% ($7.90) ($1.97) -75% Weighted average common shares 167,059 168,662 8% 134,622 166,952 24% Common Shares Outstanding, end of period 167,806 168,898 3% 163,867 168,898 3% - ------------------------------------------------------------------------------------------------------------------------------------ Gross Margin 15.9% 15.4% 12.3% 15.7%
Page 1 priceline.com Inc. - -------------------------------------------------------------------------------- Condensed Balance Sheet In thousands (Unaudited)
ASSETS 3/31/1999 6/30/1999 9/30/1999 12/31/1999 -------------- -------------- -------------- -------------- CURRENT ASSETS: Cash and cash equivalents $30,594 $142,803 $115,470 $133,172 Short-term investments - 9,307 77,446 38,771 Proceeds receivable from sale of common stock 149,040 - - - Accounts receivable, net of allowance for doubtful accounts 9,916 22,684 27,486 21,289 Related party receivable 1,274 1,384 3,371 508 Prepaid expenses and other current assets 6,565 7,339 10,463 17,999 -------------- -------------- -------------- -------------- Total current assets $197,389 $183,517 $234,236 $211,739 PROPERTY AND EQUIPMENT, net 10,010 15,311 20,611 28,006 RELATED PARTY RECEIVABLE - 4,375 9,113 8,838 WARRANTS TO PURCHASE COMMON STOCK OF LICENSEES - - - 189,000 OTHER ASSETS 2,340 1,592 3,105 4,303 -------------- -------------- -------------- -------------- TOTAL ASSETS $ 209,739 $ 204,795 $ 267,065 $ 441,886 ============== ============== ============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $13,052 $26,934 $32,874 $24,302 Preferred stock dividends payable - - - - Accrued expenses 8,913 6,404 10,177 13,695 Other current liabilities 135 136 651 1,253 -------------- -------------- -------------- -------------- Total current liabilities $22,100 $33,474 $43,702 $39,250 LONG-TERM DEBT - net 990 - - - Capital lease obligations 19 12 5 - -------------- -------------- -------------- -------------- Total liabilities $23,109 $33,486 $43,707 $39,250 -------------- -------------- -------------- -------------- MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK - - - - -------------- -------------- -------------- -------------- STOCKHOLDERS' EQUITY: Preferred stock - - - - Common stock 1,139 1,139 1,171 1,311 Treasury stock - - - - Additional paid-in capital 327,945 326,881 481,113 1,581,708 Deferred compensation - - - - Accumulated other comprehensive income - - - - Accumulated deficit (142,454) (156,711) (258,926) (1,180,383) -------------- -------------- -------------- -------------- Total stockholders' equity 186,630 171,309 223,358 402,636 -------------- -------------- -------------- -------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $209,739 $204,795 $267,065 $441,886 ============== ============== ============== ============== ASSETS 3/31/2000 6/30/2000 9/30/2000 12/31/2000 --------------- -------------- -------------- -------------- CURRENT ASSETS: Cash and cash equivalents $125,855 $95,434 $104,501 $90,592 Short-term investments 23,625 43,273 26,122 10,391 Proceeds receivable from sale of common stock - - - - Accounts receivable, net of allowance for doubtful accounts 52,751 38,993 24,199 13,889 Related party receivable 108 3,771 5,532 - Prepaid expenses and other current assets 15,782 27,182 20,755 15,790 --------------- -------------- -------------- -------------- Total current assets $218,121 $208,653 $181,109 $130,662 PROPERTY AND EQUIPMENT, net 37,130 41,592 46,257 37,083 RELATED PARTY RECEIVABLE 13,404 15,789 15,089 3,503 WARRANTS TO PURCHASE COMMON STOCK OF LICENSEES 189,000 192,250 3,250 3,250 OTHER ASSETS 25,062 34,554 39,868 20,580 --------------- -------------- -------------- -------------- TOTAL ASSETS $ 482,717 $ 492,838 $ 285,573 $ 195,078 =============== ============== ============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $59,411 $73,292 $59,447 $40,691 Preferred stock dividends payable - 7,191 14,382 Accrued expenses 13,766 15,998 17,324 38,280 Other current liabilities 4,280 4,454 3,739 5,434 --------------- -------------- -------------- -------------- Total current liabilities $77,457 $100,935 $94,892 $84,405 LONG-TERM DEBT - net - - - - Capital lease obligations - - - - --------------- -------------- -------------- -------------- Total liabilities $77,457 $100,935 $94,892 $84,405 --------------- -------------- -------------- -------------- MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK - 359,580 359,580 359,580 --------------- -------------- -------------- -------------- STOCKHOLDERS' EQUITY: Preferred stock - - - - Common stock 1,361 1,380 1,390 1,454 Treasury stock - (359,580) (359,580) (326,633) Additional paid-in capital 1,591,880 1,593,961 1,595,228 1,618,956 Deferred compensation - - - (13,053) Accumulated other comprehensive income 5,969 2,224 (1,162) (1,156) Accumulated deficit (1,193,950) (1,205,662) (1,404,775) (1,528,475) --------------- -------------- -------------- -------------- Total stockholders' equity 405,260 32,323 (168,899) (248,907) --------------- -------------- -------------- -------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $482,717 $492,838 $285,573 $195,078 =============== ============== ============== ==============
Page 2 priceline.com Inc. - -------------------------------------------------------------------------------- Offer and Customer Activity
Unique Offers: 1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 - -------------- ------------- --------------- ------------- ------------ ------------ ------------- ------------ New Customer Offers 500,156 748,454 908,201 892,029 1,504,685 1,509,416 1,344,025 Repeat Customer Offers 150,305 258,702 408,393 475,699 833,388 964,350 1,417,840 Total Unique Offers 650,461 1,007,156 1,316,594 1,367,728 2,338,073 2,473,766 2,761,865 Repeat customer offers/ 23.1% 25.7% 31.0% 34.8% 35.6% 39.0% 51.3% total unique offers Customers New Customers 500,156 748,454 908,201 892,029 1,504,685 1,509,416 1,344,025 Cumulative Customers 1,203,988 1,952,442 2,860,643 3,752,672 5,257,357 6,766,773 8,110,798 4Q00 vs. 12 mos. 2000 vs. Unique Offers: 4Q00 4Q99 12 mos. 1999 12 mos. 2000 12 mos. 1999 - -------------- ------------ ------------- ------------------------------------ -------------------- New Customer Offers 883,862 -1% 3,048,840 5,241,988 72% Repeat Customer Offers 1,122,766 136% 1,293,099 4,338,344 235% Total Unique Offers 2,006,628 47% 4,341,939 9,580,332 121% Repeat customer offers/ 56.0% total unique offers Customers New Customers 883,862 -1% 3,048,840 5,241,988 72% Cumulative Customers 8,994,660 140%
Page 3 priceline.com Inc. - -------------------------------------------------------------------------------- Air
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 ---------- ---------- ------------- ------------- ------------- ------------- -------------- Tickets Sold 186,521 440,339 623,848 707,343 1,250,416 1,288,592 1,290,096 Net Unique Offers 570,947 822,887 1,077,111 1,129,711 1,820,918 1,753,273 1,756,236 Offers Booked 108,917 280,471 397,355 442,089 801,204 869,408 886,135 Bind Rate 19.1% 34.1% 36.9% 39.1% 44.0% 49.6% 50.5% 4Q00 vs. 12 mos. 2000 vs. 4Q00 4Q99 12 mos. 1999 12 mos. 2000 12 mos. 1999 ------------- ------------- ----------------- ----------------- --------------------- Tickets Sold 809,327 14% 1,958,051 4,638,431 137% Net Unique Offers 1,242,967 10% 3,600,656 6,573,394 83% Offers Booked 590,088 33% 1,228,832 3,146,835 156% Bind Rate 47.5% 34.1% 47.9%
bind rate = offers booked/net unique offers Air product was launched on April 6, 1998 Page 4 priceline.com Inc. - -------------------------------------------------------------------------------- Hotels
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 ---------- ------------ ----------- ----------- ----------- ----------- ------------- Room Nights Sold 45,580 92,134 179,508 192,795 409,514 432,463 526,450 Net Unique Offers 68,740 168,543 220,613 208,991 383,708 431,249 511,396 Offers Booked 15,717 36,854 78,047 83,824 180,343 195,517 244,655 Bind Rate 22.9% 21.9% 35.4% 40.1% 47.0% 45.3% 47.8% 4Q00 vs. 12 mos. 2000 vs. 4Q00 4Q99 12 mos. 1999 12 mos. 2000 12 mos. 1999 -------------- ------------- ------------------ ------------------ ---------------------- Room Nights Sold 367,372 91% 510,017 1,735,799 240% Net Unique Offers 373,826 79% 666,887 1,700,179 155% Offers Booked 180,364 115% 214,442 800,879 273% Bind Rate 48.2% 32.2% 47.1%
bind rate = offers booked/net unique offers Hotel product was launched on October 28, 1998 Page 5 priceline.com Inc. - -------------------------------------------------------------------------------- Rental Cars
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 4Q00 ----------- ----------- ---------- ---------- ------------ ----------- ------------------------- Days Sold - - - - 229,998 429,622 579,866 522,242 Net Unique Offers - - - - 90,639 175,878 217,760 231,041 Offers Booked - - - - 37,706 70,351 107,058 93,515 Bind Rate - - - - 41.6% 40.0% 49.2% 40.5% Q400 vs. 12 mos. 2000 vs. 4Q99 12 mos. 1999 12 mos. 2000 12 mos. 1999 -------------- ------------------- ------------------- ---------------------- Days Sold - - 1,761,728 - Net Unique Offers - - 715,318 - Offers Booked - - 308,630 - Bind Rate - - 43.1% -
bind rate = offers booked/net unique offers Rental Car product was launched on February 3, 2000 EX-99.2 3 0003.txt PRESS RELEASE ISSUED BY PRICELINE.COM Exhibit 99.2 Hutchison Whampoa and Cheung Kong (Holdings) Limited Invest $50 Million In US-Based Priceline.com NORWALK, Conn., February 15, 2001 . . . Hutchison Whampoa Limited ("Hutchison") and Cheung Kong (Holdings) Limited ("CKH") today announced that they have invested an aggregate $50 million in US-based priceline.com (Nasdaq: PCLN). Hutchison, one of Asia's largest companies with a market capitalization of $53 billion, already has joined with priceline.com in an alliance to bring priceline.com's business concept to 2.6 billion consumers in Asia. Hutchison and CKH also announced at the same time that they have entered into an agreement to purchase an aggregate of 11.3 million shares of priceline.com common stock from Jay S. Walker for an aggregate purchase price of approximately $24 million. Hutchison and CKH invested an aggregate $50 million in priceline.com by purchasing approximately 24 million shares of priceline.com common stock at $2.10 per share, a price determined based on the market price of priceline.com's stock during the negotiation period. In connection with the sale, Hutchison and CKH received certain registration rights from the Company. Hutchison also will receive a seat on priceline.com's Board of Directors. That seat will be assumed by Ian F. Wade, Group Managing Director of Hutchison's A.S. Watson Group. Hutchison also reaffirmed its commitment to priceline.com's business model by increasing its interest in Hutchison-Priceline Limited ("HPL"), the companies' Asia venture. Hutchison will purchase $9.5 million worth of HPL convertible notes, increasing its HPL interest to 65%. Hutchison and Cheung Kong also will receive for a period of six months the exclusive rights to negotiate with priceline.com for the setup of a potential business in Japan. Hutchison Group Managing Director Canning Fok said, "We know priceline.com well from our venture in Asia, and are excited by its long-term growth prospects. We are impressed with the proven strength of priceline.com's business model, and the tremendous brand recognition that it has built since its inception only three years ago. We at Hutchison are therefore very pleased to participate in the future of this company as a significant investor and an active member of the Board of Directors. In the meantime, we are preparing for the launch of our Hutchison-Priceline business in Asia." "Priceline.com is delighted to welcome Hutchison and Cheung Kong as strategic investors," said priceline.com Chairman Richard S. Braddock. "We have been pleased by how well Hutchison and priceline.com have worked together to develop our Asian partnership, and now we have both Hutchison and Cheung Kong as partners in a much deeper sense. We have a shared vision in the long-term success of priceline.com, and with the considerable commercial experience and entrepreneurial skills that Hutchison and Cheung Kong bring to the table, we are now better positioned than ever to realize that vision," he added. (more) -2- Hutchison Whampoa is a conglomerate with a market capitalization of over $53 billion. Among its many businesses, it is one of Asia's largest owners and operators of Internet and telecommunications infrastructure offering a wide range of related services. These include fixed-line services, ISP and ICP services, Web hosting services, fiber optics broadband networks, mobile telephone data and internet services, paging, trunked mobile radio, VSAT and radio broadcasting services. Hutchison's telecommunications and e-commerce related operations have been growing rapidly. The Company has teamed up with Global Crossing to further expand its global connectivity and to pursue fibre optic broadband network opportunities in the Greater China Region. Cooperation with NTT DoCoMo, which owns 19% of Hutchison's mobile communications businesses in Hong Kong offers its customers advanced mobile Internet opportunities. Recently the Group has won 3G licences in Italy and Sweden with local partners and Austria respectively. Hutchison had earlier won the bid for the largest 3G licence in the UK and subsequently formed Hutchison 3G UK -- a joint venture company with NTT DoCoMo and KPN Mobile, to build and operate a national Universal Mobile Telecommunications System network. With Cheung Kong (Holdings) and other strategic partners, Hutchison is a substantial shareholder of TOM.COM Limited, the mega portal for China related "infotainment" Internet content. Hutchison and Cheung Kong together also have a substantial stake in iBusiness corporation Limited, which includes partners Hongkong and Shanghai Banking Corporation, and Hang Seng Bank. In addition to the alliance with Priceline.com, the Company has also teamed up with CSFBdirect (formerly DLJdirect) to expand online investment services in the region. A joint venture with Internet Capital Group has also been formed to pursue business to business e-commerce opportunities. Recently, Hutchison has joined forces with PetroChina, CNPC and other partners to build China's first B2B portal for the oil and gas industry. In addition, the Group has launched a number of other major portals including LINE (Logistics Information Network Enterprise), which provide transportation e-commerce services and bigboXX.com, a B2B portal focused on office supplies and business services. About priceline.com Priceline.com is the Name Your Own Pricesm Internet pricing system that provides services across four broad product categories: a travel service that offers leisure airline tickets, hotel rooms and rental cars; a personal finance service that offers home mortgages, refinancing and home equity loans through an independent licensee; an automotive service that offers new cars; and a telecommunications service that offers long distance calling services. Priceline.com licenses its business model to independent licensees, including pricelinemortgage and certain international licensees. In these arrangements, priceline.com generally receives royalties for licensing its intellectual property. Priceline.com also holds securities carrying the right to purchase a significant equity stake in the licensees under certain conditions. Unless those rights are exercised, the results of licensee operations will not be included in priceline.com's financial statements. (more) About Cheung Kong Cheung Kong (Holdings) Limited is the flagship of the Cheung Kong Group which consist of four leading Hang Seng Index constituent stocks ? Cheung Kong (Holdings) Limited, Hutchison Whampoa Limited, Cheung Kong Infrastructure Holdings Limited and Hongkong Electric Holdings Limited. Cheung Kong Holdings' major businesses include Property Development and Management; IT/Internet operations; and Investments. About Hutchison Whampoa Hutchison Whampoa is a Hong Kong-based multinational conglomerate with a market capitalisation of about US$53 billion. Hutchison's consolidated turnover in 1999 was over US$7.1 billion, and earnings after tax and exceptional items were approximately US$15.1 billion. Amongst its five core businesses, Hutchison is one of the leading owners and operators of Internet and telecommunications infrastructure, offering a wide range of related services. These include fixed-line services, internet services, fiber optics broadband networks, mobile telephony (voice and data), paging, trunked mobile radio, VSAT and radio broadcasting services. As part of its retail services, the Group recently constructed the largest shopping center in Beijing and operates about 800 retail outlets in Asia. Under its property division, Hutchison also owns and manages hotels in China, Hong Kong and the Bahamas. For more information, please visit www.hutchison-whampoa.com. ### For press information, contact: priceline.com Brian Ek, 203/299-8167 brian.ek@priceline.com Hutchison Whampoa Ltd. (Hong Kong) Laura Cheung, 852-2128-1289 laurac@hwl.com.hk Information about Forward Looking Statements This press release may contain forward-looking statements. Expressions of future goals and similar expressions including, without limitation, "may," "will," "should," "could," "expects," "does not currently expect," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "targets," or "continue," reflecting something other than historical fact are intended to identify forward-looking statements. The following factors, among others, could cause the Company's actual results to differ materially from those described in the forward-looking statements: adverse changes in the Company's relationships with airlines and other product and service providers; inability to successfully expand the Company's business model both horizontally and geographically systems-related failures; the Company's ability to protect its intellectual property rights; the effects of increased competition; losses by the Company and its licensees; any adverse impact from negative publicity and negative customer reaction relating to recent announcements concerning the Company; legal and regulatory risks and the ability to attract and retain qualified personnel. For a detailed discussion of these and other factors that could cause the Company's actual results to differ materially from those described in the forward-looking statements, please refer to the Company's most recent Form 10-Q and Form 10-K filings with the Securities and Exchange Commission. EX-99.3 4 0004.txt STOCK PURCHASE AGREEMENT Execution Copy Exhibit 99.3 ================================================================================ STOCK PURCHASE AGREEMENT by and among PRICELINE.COM INCORPORATED PRIME PRO GROUP LIMITED and FORTHCOMING ERA LIMITED ----------------------- Dated as of February 15, 2001 ----------------------- ================================================================================ TABLE OF CONTENTS (Not Part of Agreement) Page ---- ARTICLE I. DEFINITIONS.........................................................1 ARTICLE II. SALE AND PURCHASE..................................................6 Section 2.1 Sale and Issuance of Shares............................6 Section 2.2 Closing................................................6 ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................6 Section 3.1 Organization and Standing..............................6 Section 3.2 Capital Stock..........................................7 Section 3.3 Subsidiaries...........................................7 Section 3.4 Authorization; Enforceability..........................8 Section 3.5 No Violation; Consents.................................8 Section 3.6 Litigation.............................................9 Section 3.7 Registration and Listing of Common Stock..............10 Section 3.8 SEC Documents; Financial Statements...................10 Section 3.9 Change in Condition...................................11 Section 3.10 Employee Benefit Plans and Labor Matters..............11 Section 3.11 Properties............................................15 Section 3.12 Compliance with Law...................................15 Section 3.13 Tax Matters...........................................15 Section 3.14 No Real Property; Environmental Matters...............16 Section 3.15 Enforceability of Contracts; Material Contracts.......16 Section 3.16 Books and Records.....................................17 Section 3.17 Brokers...............................................17 Section 3.18 Working Capital.......................................17 Section 3.19 Outstanding Indebtedness; Liens.......................17 Section 3.20 Related-Party Transactions............................18 Section 3.21 Offering Exemption....................................18 Section 3.22 Company Status........................................18 Section 3.23 Insurance.............................................18 Section 3.24 Proprietary Rights....................................19 Section 3.25 Directed Selling Efforts..............................21 Section 3.26 No Integrated Offering................................21 ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS..................21 Section 4.1 Organization and Standing; Authorization; Enforceability; No Violations; Non-Affiliates.........21 Section 4.2 Consents..............................................22 Section 4.3 Private Placement.....................................22 Section 4.4 Directed Selling Efforts..............................23 i Page ---- ARTICLE V. COVENANTS OF THE COMPANY...........................................23 Section 5.1 Access to Books and Records...........................23 Section 5.2 Agreement to Take Necessary and Desirable Actions.....23 Section 5.3 Representation on the Board of Directors..............23 Section 5.4 Compliance with Conditions; Commercially Reasonable Efforts....................................24 Section 5.5 Consents and Approvals................................25 Section 5.6 Taxes.................................................25 Section 5.7 Use of Proceeds.......................................25 Section 5.8 Director and Officer Insurance........................25 ARTICLE VI. COVENANTS OF EACH PURCHASER.......................................25 Section 6.1 Agreement to Take Necessary and Desirable Actions.....25 Section 6.2 Compliance with Conditions; Commercially Reasonable Efforts....................................26 Section 6.3 Confidential Information..............................26 Section 6.4 Standstill............................................26 Section 6.5 Schedule 13D..........................................28 ARTICLE VII. CONDITIONS PRECEDENT TO CLOSING..................................28 Section 7.1 Conditions to the Company's Obligations...............28 Section 7.2 Conditions to The Purchasers' Obligations.............28 ARTICLE VIII. MISCELLANEOUS...................................................30 Section 8.1 Survival of Representations and Warranties............30 Section 8.2 Notices...............................................31 Section 8.3 Governing Law.........................................33 Section 8.4 Entire Agreement......................................33 Section 8.5 Modifications and Amendments..........................33 Section 8.6 Waivers and Extensions................................33 Section 8.7 Titles and Headings...................................33 Section 8.8 Exhibits and Schedules................................33 Section 8.9 Expenses; Brokers.....................................33 Section 8.10 Press Releases and Public Announcements...............34 Section 8.11 Assignment; No Third Party Beneficiaries..............34 Section 8.12 Severability..........................................34 Section 8.13 Counterparts; Facsimile...............................34 Section 8.14 Further Assurances....................................34 Section 8.15 Remedies Cumulative...................................34 ii SCHEDULES Schedule 3.2(a) Capital Stock Schedule 3.2(b) Outstanding Warrants and Options Schedule 3.3 Subsidiaries Schedule 3.5(b) Consents Schedule 3.6 Litigation Schedule 3.7(a) Registration and Listing of Common Stock Schedule 3.10(b) Employee Benefit Plans Schedule 3.10(d) Benefit Plans - Compliance with Law Schedule 3.10(h) Benefit Plans - Excise Taxes Agreement Schedule 3.10(i) Benefit Plans - No Additional Benefit Plans or Proposed Modifications Schedule 3.10(j) Benefit Plans - Taxes Schedule 3.10(k) Benefit Plans - Exceptions Schedule 3.10(k)(xi)(A) Employment Complaints Schedule 3.10(k)(xi)(B) Benefit Plans - Employment and Severance Agreements Schedule 3.10(k)(xii) Benefit Plans - Employment Losses Schedule 3.13 Tax Matters Schedule 3.15 Enforceability of Contracts; Material Contracts Schedule 3.18 Working Capital Schedule 3.19(a) Liens Schedule 3.19(b) Liens Schedule 3.20(d) Related Party Transactions Schedule 3.23 Insurance Schedule 3.24(b) Domestic Patents and Applications Schedule 3.24(c) Domestic Trademarks and Applications Schedule 3.24(d) Foreign Patents and Applications Schedule 3.24(e) Foreign Trademarks and Applications EXHIBITS Exhibit A - Schedule of Shares to be Purchased Exhibit B - Opinion of General Counsel of the Company Exhibit C - Opinion of Counsel to the Company iii STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of February 15, 2001, by and among priceline.com Incorporated, a Delaware corporation (the "Company"), Prime Pro Group Limited, a British Virgin Islands corporation ("PPG") and wholly owned subsidiary of Cheung Kong (Holdings) Limited, a Hong Kong corporation ("CK"), and Forthcoming Era Limited, a British Virgin Islands corporation ("FEL") and wholly owned subsidiary of Hutchison Whampoa Limited a Hong Kong corporation ("HW") (PPG and FEL are each a "Purchaser", and collectively the "Purchasers"). NOW, THEREFORE, the parties hereto hereby agree as follows. ARTICLE I DEFINITIONS As used in this Agreement, the following terms shall have the following meanings: "Affiliate" shall mean, with respect to any person, any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person and, in the case of a person who is an individual, shall include (i) members of such specified person's immediate family (as defined in Instruction 2 of Item 404(a) of Regulation S-K under the Securities Act) and (ii) trusts, the trustee and all beneficiaries of which are such specified person or members of such person's immediate family as determined in accordance with the foregoing clause (i). For the purposes of this definition, "control," when used with respect to any person means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "affiliated," "controlling" and "controlled" have meanings correlative to the foregoing. "Agreement" shall have the meaning set forth in the Preamble. "Applicable Law" shall mean, with respect to any person, any law, statute, rule, regulation, order, writ, injunction, judgment or decree of any Governmental Authority to which such person or any of its subsidiaries is bound or to which any of their respective properties is subject. "Benefit Plan" shall have the meaning set forth in Section 3.10. "Bylaws" with respect to any corporation shall mean the bylaws adopted by and in effect for such corporation. "Board Representative" shall have the meaning set forth in Section 5.3(b). 1 "Business Day" shall mean each day on which banking institutions in New York, NY are not authorized or required to close. "Charter" with respect to any corporation shall mean the certificate of incorporation or articles of incorporation filed by and in effect for such corporation. "Closing" shall have the meaning set forth in Section 2.2. "Closing Date" shall have the meaning set forth in Section 2.2. "Code" shall have the meaning set forth in Section 3.10. "Commission" shall mean the United States Securities and Exchange Commission. "Commitments" shall have the meaning set forth in Section 3.15. "Common Stock" shall mean the common stock, par value $.008 per share, of the Company. "Company" shall have the meaning set forth in the Preamble. "Company Insurance" shall have the meaning set forth in Section 3.23. "Company Property" shall have the meaning set forth in Section 3.25(b). "Documents" shall mean (i) this Agreement and (ii) the Registration Rights Agreement, dated as of the date hereof, by and among the Company and the Purchasers. "Domestic Patents and Applications" shall have the meaning set forth in Section 3.24(b). "Domestic Trademarks and Applications" shall have the meaning set forth in Section 3.24(c). "Eligible Person" shall have the meaning set forth in Section 5.3. "Employee" shall have the meaning set forth in Section 3.10. "Environmental Claim" shall mean any claim, action, written or oral notice or cause of action pending or any investigation or notice of violation threatened by any person alleging potential liability (including, without limitation, potential liability for investigatory costs, cleanup costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, or penalties) arising out of, based on or resulting from (a) the presence or release into the environment of any Material of Environmental Concern at any location, whether or not owned or operated by the Company or its Subsidiaries or (b) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law that, in either case, is pending or threatened against the Company or its Subsidiaries or against any person or entity whose liability for any Environmental Claim the Company or its Subsidiaries has retained or assumed either contractually or by operation of law. 2 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. "ERISA Affiliate" shall mean with respect to any person (within the meaning of section 3(9) of ERISA) any other person that would be regarded together with such person as a single employer under section 414(b), (c), (m) or (o) of the Code. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. "FEL Director" shall have the meaning set forth in Section 5.3(a). "Foreign Patents and Applications" shall have the meaning set forth in Section 3.24(d). "Foreign Trademarks and Applications" shall have the meaning set forth in Section 3.24(e). "GAAP" shall mean generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, which are in effect from time to time, consistently applied. "Governmental Authority" shall mean any foreign, Federal, state or local court or governmental or regulatory authority. "Indebtedness" shall mean, with respect to any person, the aggregate amount of, without duplication, the following: (i) all obligations for borrowed money; (ii) all obligations evidenced by bonds, debentures, notes or other similar instruments; (iii) all obligations to pay the deferred purchase price of property or services, except trade payables, accrued commissions and other similar accrued current liabilities in respect of such obligations, if such liabilities are not overdue and arise in the ordinary course of business or are being contested in good faith by appropriate proceedings and as to which adequate reserves have been made on the books of the Company; (iv) all capitalized lease obligations; (v) all obligations or liabilities of any other person or persons secured by a Lien on any asset owned by such person or persons whether or not such obligation or liability is assumed; (vi) all obligations of such person or persons, contingent or otherwise, in respect of any letters of credit or bankers' acceptances; and (vii) all guarantees; provided, however, that the term Indebtedness shall not include Taxes and other governmental charges which are not yet due and owing, or are being contested in good faith by appropriate proceedings and as to which adequate reserves have been made on the books of the Company. "Intellectual Property" shall have the meaning set forth in Section 3.24(a). 3 "Knowledge", "to the knowledge of" and any similar language shall mean, except as otherwise set forth in this Agreement, the best knowledge, after due inquiry, of the executive officers of, as the case may be, any Purchaser or the Company (including its Subsidiaries). "Lien" shall mean any pledge, lien, claim, restriction, charge or encumbrance of any kind. "Material Adverse Effect" shall mean a material adverse effect (i) on the business, operations, properties, earnings, assets, liabilities or condition (financial or other) of the Company and its Subsidiaries, taken as a whole, or (ii) on the ability of the Company or its Subsidiaries to perform its obligations hereunder or under any of the other Documents. "Materials of Environmental Concern" shall mean chemicals, pollutants, contaminants, toxic or hazardous substances or wastes, petroleum and petroleum products, asbestos or asbestos containing materials, polychlorinated biphenyls, lead or lead based paints or materials, or radon. "Multiemployer Plan" shall have the meaning set forth in Section 3.10. "Notices" shall have the meaning set forth in Section 8.2. "PBGC" shall have the meaning set forth in Section 3.10. "Permitted Liens" means: (i) liens for Taxes and other governmental charges and assessments arising in the ordinary course of business which are not yet due and payable, (ii) liens of landlords and liens of carriers, warehousemen, mechanics and materialmen and other like liens arising in the ordinary course of business for sums not yet due and payable and (iii) other liens or imperfections on property which are not material in amount, do not interfere with, and are not violated by, the consummation of the transactions contemplated by this Agreement, and do not impair the marketability of, or materially detract from the value of or materially impair the existing use of, the property affected by such lien or imperfection. "Permitted Transferee" shall mean, as to either Purchaser, (i) the other Purchaser, (ii) any wholly-owned subsidiary of CK and (iii) any wholly-owned subsidiary of HW. "person" shall mean any individual, partnership, corporation, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or agency or political subdivision thereof, or other entity. "PPG Director" shall have the meaning set forth in Section 5.3(b). "PTO" shall have the meaning set forth in Section 3.24(b). "Preferred Stock" shall mean all of the authorized preferred stock of the Company. "Purchase Agreement" shall mean this Agreement. 4 "Purchaser" shall have the meaning set forth in the Preamble. "SEC Documents" shall have the meaning set forth in Section 3.8. "Securities" shall mean the Shares, Preferred Stock and any other Common Stock of the Company. "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations thereunder. "Series B Preferred Stock" shall mean the Series B Redeemable Preferred Stock, par value $.01 per share, of the Company. "Shares" shall mean the shares of Common Stock to be issued and sold by the Company to the Purchasers under Section 2.1(b) hereof. "subsidiary" shall mean, with respect to any person, (a) a corporation a majority of whose capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such person, by a subsidiary of such person, or by such person and one or more subsidiaries of such person or (b) a partnership in which such person or a subsidiary of such person is, at the date of determination, a general partner, or any other person (other than a corporation) in which such person, a subsidiary of such person or such person and one or more subsidiaries of such person, directly or indirectly, at the date of determination thereof, has (i) at least a majority ownership interest, (ii) the power to elect or direct the election of the directors or other governing body, or (iii) the power to direct or cause the direction of the affairs or management. For purposes of this definition, a person is deemed to own any capital stock or other ownership interest if such person has the right to acquire such capital stock or other ownership interest, whether through the exercise of any purchase option, conversion privilege or similar right. "Subsidiary" shall mean a subsidiary of the Company. "Taxes" shall mean all foreign, federal, state and local taxes, including any interest, penalties or additions to tax that may become payable in respect thereof, imposed by any Governmental Authority, which taxes shall include, without limiting the generality of the foregoing, all income taxes, payroll and employee withholding taxes, unemployment insurance, social security, sales and use taxes, excise taxes, franchise taxes, gross receipts taxes, occupation taxes, real and personal property taxes, stamp taxes, transfer taxes, workmen's compensation taxes and other obligations of the same or a similar nature, whether arising before, on or after the Closing Date. "Tax Returns" shall mean all returns, declarations, statements, schedules, forms, reports, information returns or other documents (including any related or supporting information), and any amendments thereto, filed or required to be filed with any Governmental Authority in connection with the determination, assessment, collection or administration of any Taxes. 5 "WARN Act" shall mean the Worker Adjustment and Retraining Notification Act of 1988, as amended, and any applicable state or local law with regard to "plant closings" or "mass layoffs" as such terms are defined in the WARN Act or applicable state or local law. ARTICLE II SALE AND PURCHASE Section 2.1 Sale and Issuance of Shares. On the Closing Date, and upon the terms and subject to the conditions set forth in this Agreement, the Company shall issue and sell to each Purchaser, severally and not jointly, and each Purchaser shall purchase and accept from the Company, payable in immediately available funds, the number of shares of Common Stock set forth opposite each Purchaser's name on Exhibit A hereto, at a purchase price of $2.10 per share (collectively the "Shares"). Closing. (a) The closing of the purchase and sale of the Shares hereunder (the "Closing") shall take place on February 15, 2001 (the "Closing Date"), at the offices of Dewey Ballantine LLP, 1301 Avenue of the Americas, New York, NY 10019, or at such other time and place as the parties hereto shall agree in writing. (b) On the Closing Date (i) each Purchaser shall deposit into a bank account designated by the Company on such Closing Date, by wire transfer of immediately available funds, an amount equal to the purchase price of the Shares being purchased by such Purchaser from the Company pursuant to Section 2.1 and (ii) the Company shall deliver to each Purchaser, against payment of the purchase price therefor, certificates representing the Shares, being purchased by such Purchaser pursuant to Section 2.1. The Shares shall be in definitive form and registered in the name of the Purchaser or its nominee or designee and in such denominations (including fractional shares) as the Purchaser shall request not later than one business day prior to the Closing Date. ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except as disclosed in the SEC Documents, with respect to any representation or warranty in any Section of this Article III, as disclosed in writing in the schedule to such Section, which schedule shall identify the specific sections or subsections in this Agreement to which such disclosure relates, the Company represents and warrants to the Purchasers as follows: Organization and Standing Section 3.1 Organization and Standing. The Company is duly incorporated, validly existing and in good standing as a domestic corporation under the laws of the State of Delaware and has all requisite corporate power and authority to own its properties and assets and to carry on its business as it is now being conducted. The Company is duly qualified to transact business as a foreign corporation and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of its business makes such qualification necessary, except where the failure to so qualify or be in good standing could not, individually or in the aggregate, or together with such failure of its Subsidiaries referred to in Section 3.3(b) below, reasonably be expected to have a Material Adverse Effect. 6 Section 3.2 Capital Stock. Immediately following the Closing, the authorized capital stock of the Company will consist solely of (a) one billion (1,000,000,000) shares of Common Stock, of which (i) two hundred million, one hundred fifty seven thousand, four hundred ninety (200,157,490) shares shall be issued and outstanding and (ii) no shares of Common Stock will be reserved for issuance and (b) one hundred fifty million (150,000,000) shares of Preferred Stock, of which (i) eighty thousand (80,000) shares of Series B Preferred Stock will be the only shares of Preferred Stock issued and outstanding and (ii) no shares of Preferred Stock will be reserved for issuance. Immediately following the Closing, each share of capital stock of the Company that is issued and outstanding will be duly authorized, validly issued, fully paid and nonassessable. Schedule 3.2(a) sets forth a true and complete table of (i) the capitalization of the Company immediately prior to the Closing, (ii) a pro forma capitalization of the Company immediately following the Closing, (iii) the capitalization of the Company assuming the exercise of all outstanding options, warrants, agreements or instruments for the purchase of Common Stock, giving effect to, among other things, any amendments, modifications or accelerations to the terms and conditions of any of the foregoing, including any anti-dilution provisions or any provisions relating to vesting, pricing or conversion ratios and (iv) a list of all stock option, stock purchase, restricted stock and similar plans of the Company, the type and number of shares of the Company's capital stock that are authorized for issuance under each plan and the number of options or shares, as the case may be, having been granted thereunder. Except as set forth on Schedule 3.2(b) or as contemplated by this Agreement, at the date hereof there are, and immediately following the Closing there will be (a) no outstanding options, warrants, agreements, conversion rights, preemptive rights or other rights to subscribe for, purchase or acquire any issued or unissued shares of capital stock of the Company and (b) except as may arise pursuant to the provisions of any Document, no restrictions upon the voting or transfer of any shares of capital stock of the Company pursuant to its Charter, Bylaws or other governing documents or any agreement or other instruments to which it is a party or by which it is bound. Subsidiaries. Section 3.3 Subsidiaries. (a) Schedule 3.3 sets forth (i) each Subsidiary of the Company, (ii) the percentage of the fully diluted capital stock of each such Subsidiary owned, directly or indirectly, by the Company and (iii) a list of any stockholders agreement, voting rights agreement, joint venture agreement or similar instrument governing the relationship between a Subsidiary and the Company. (b) Each Subsidiary is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority to own its properties and assets and to conduct its business as now conducted. Each Subsidiary is duly qualified to do business as a foreign corporation in every jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification necessary, except where the failure to so qualify could not, individually or in the aggregate, or together with such failure of the Company referred to in Section 3.1 above, reasonably be expected to have a Material Adverse Effect. 7 (c) The outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued and are fully paid and nonassessable. Except as set forth on Schedule 3.3, (i) all of the shares of each Subsidiary are owned of record and beneficially, directly or indirectly, by the Company, free and clear of all Liens and (ii) there are no outstanding options, warrants, agreements, conversion rights, preemptive rights or other rights to subscribe for, purchase or otherwise acquire any issued or unissued shares of capital stock of any Subsidiary. Section 3.4 Authorization; Enforceability The Company has the corporate power to execute, deliver and perform its obligations under each of the Documents and has taken all necessary corporate action to authorize the execution, delivery and performance by it of each of the Documents and to consummate the transactions contemplated hereby and thereby. No other corporate proceedings on the part of the Company are necessary therefor. The Company has duly executed and delivered this Agreement. This Agreement constitutes, and each of the other Documents, when executed and delivered by the Company and, assuming due execution by the other parties hereto and thereto, will constitute legal, valid and binding obligations of the Company enforceable against it in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). Section 3.5 No Violation; Consents. (a) The execution, delivery and performance by the Company of each of the Documents and the consummation of the transactions contemplated hereby and thereby does not and will not contravene any Applicable Law, assuming the accuracy of the Purchasers' representations in Section 4.1(d) hereof and compliance by the Purchasers with the requirements of the Exchange Act, except where such contraventions could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The execution, delivery and performance by the Company of each of the Documents and the consummation of the transactions contemplated hereby and thereby (i) will not (x) violate, result in a breach of or constitute (with due notice or lapse of time or both) a default under any contract, lease, loan agreement, Benefit Plan, mortgage, security agreement, trust indenture or other agreement or instrument to which the Company or any Subsidiary is a party or by which any of them is bound or to which any of their properties or assets is subject or (y) result in the creation or imposition of any Lien (other than a Permitted Lien) upon any of the properties or assets of any of them except, with respect to clauses (x) and (y), where the failure to satisfy the foregoing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or (z) permit or cause the acceleration of the maturity of any debt or obligation of the Company or any Subsidiaries in an amount exceeding, in the aggregate, $50,000, and (ii) will not violate any provision of the Charter or the Bylaws of the Company or any Subsidiaries. 8 (b) Except as set forth on Schedule 3.5(b), no consent, authorization or order of, or filing or registration with, any Governmental Authority or other person is required to be obtained or made by the Company or any Subsidiary for the execution, delivery and performance of any of the Documents, or the consummation of any of the transactions contemplated hereby or thereby, except where the failure to obtain such consents, authorizations or orders, or make such filings or registrations, could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Section 3.6 Litigation. Except as set forth on Schedule 3.6, to the Company's Knowledge there are no pending or threatened claims, actions, suits, labor disputes, grievances, administrative or arbitration or other proceedings or investigations against the Company, any Subsidiary or their respective assets or properties before or by any Governmental Authority or before any arbitrator that would, individually or in the aggregate, have a Material Adverse Effect if determined adversely to the Company. None of the transactions contemplated by any of the Documents is restrained or enjoined (either temporarily, preliminarily or permanently), and no material adverse conditions have been imposed thereon by any Governmental Authority or arbitrator. None of the Company, any Subsidiary or any of their respective assets or properties, is subject to any order, writ, judgment, award, injunction or decree of any Governmental Authority or arbitrator, that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 9 Section 3.7 Registration and Listing of Common Stock. (a) The Company has registered its Common Stock pursuant to Section 12(b) or 12(g) of the Exchange Act and the Common Stock is currently listed or quoted on the Nasdaq National Market. Except as otherwise set forth on Schedule 3.7(a), as of the date hereof, the Company has maintained all requirements for the continued listing or quotation of its Common Stock on the Nasdaq National Market and has not received any notification that such requirements are not satisfied. (b) The Company is eligible to file a registration statement on Form S-3 under the Securities Act for resales of Shares by the Purchasers. To the Company's Knowledge, no event has occurred and no condition, circumstance or development exists, whether individually or in the aggregate, which could reasonably be expected to cause the Company to be ineligible to file a registration statement on Form S-3 for such transactions. Section 3.8. SEC Documents; Financial Statements. (a) Since December 31, 1999, the Company has filed all forms, reports and documents with the Commission (including all exhibits thereto) required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder (collectively, the "SEC Documents"), each of which complied in all material respects with all applicable requirements of the Securities Act and the Exchange Act as in effect on the dates so filed. The Company has heretofore made available to the Purchasers copies of each of the SEC Documents and any Form 3, 4 or 5 relating to the Company that was filed by, or made available to, the Company. (b) The financial statements contained in the SEC Documents: (i) comply as to form in all material respects with the published rules and regulations of the Commission applicable thereto; (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered, except as may be indicated in the notes to such financial statements and (in the case of unaudited statements) as permitted by Form 10-Q of the Commission, and except that unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end audit adjustments; and (iii) fairly present the consolidated financial position of the Company as of the respective dates thereof and the consolidated results of operations and cash flows of the Company for the periods covered thereby. (c) The unaudited balance sheet and income statement of the Company as at and for the year ended December 31, 2000 which the Company has provided to the Purchasers: (i) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered, except that such statements need not include notes or supplemental schedules and (ii) fairly present in all material respects the consolidated financial position of the Company as of the date thereof and the consolidated results of operations and cash flows of the Company for the periods covered therein. (d) No representation, warranty or statement of the Company contained in any document (including the SEC Documents (as of their respective filing dates and when read together with all exhibits included therein and financial statement schedules thereto and documents (other than exhibits) incorporated by reference therein)), certificate or written statement furnished or made available to the Purchasers by or at the direction of the Company for use in connection with the transactions contemplated by this Agreement, contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances in which the same were made. 10 Section 3.9. Change in Condition. (a) Since December 31, 2000, there has been no material adverse change in the business, operations, properties, or condition (financial or other) of the Company or any Subsidiary, whether or not arising in the ordinary course of business. (b) To the Company's Knowledge, there is no event, condition, circumstance or development which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Section 3.10. Employee Benefit Plans and Labor Matters. (a) For purposes of this Agreement: (i) "Benefit Plan" means any employee benefit plan, arrangement, policy or commitment, including, without limitation, any employment, consulting, severance or deferred compensation agreement, executive compensation, bonus, incentive, pension, profit-sharing, savings, retirement, stock option, stock purchase or severance pay plan, life, health, disability or accidental death and dismemberment insurance plan, any holiday and vacation practice or any other employee benefit plan, within the meaning of section 3(3) of ERISA, whether formal or informal, that is maintained, administered or contributed to or was maintained, administered or contributed to at any time by the Company or any of its ERISA Affiliates for the benefit of any employee, former employee, consultant, officer or director of the Company or any ERISA Affiliate; (ii) "Code" means the Internal Revenue Code of 1986, as amended; (iii) "Employee" means any individual employed by the Company or any of its ERISA Affiliates; (iv) "IRS" means the United States Internal Revenue Service; and (v) "PBGC" means the Pension Benefit Guaranty Corporation. 11 (b) Schedule 3.10(b) lists all Benefit Plans except that, with respect to any severance pay plan that is a Benefit Plan, Schedule 3.10(b) shall specifically identify the material provisions thereof and the Company's aggregate payment obligations thereunder. With respect to each such plan, the Company has delivered or made available to the Purchasers correct and complete copies of (i) all plan texts and agreements and related trust or other funding arrangements (including all amendments thereto); (ii) all summary plan descriptions and material employee communications; (iii) the annual report (including all schedules thereto) if required under ERISA or other Applicable Law, for the most recently completed plan year; (iv) the most recent annual audited financial statement; (v) if the plan is intended to qualify under Code section 401(a) or 403(a), the most recent determination letter, if any, received from the IRS; and (vi) all material communications with any Governmental Authority (including, without limitation, the PBGC and the IRS). (c) There are no Benefit Plans that (i) are subject to any liability under Code section 412, ERISA section 302 or Title IV of ERISA and no condition exists that presents a material risk to the Company or any ERISA Affiliate of incurring such liability; (ii) are intended to qualify under Code section 401(a) or 403(a) (other than a 401(k) plan); or (iii) provide benefits to current or former Employees beyond their retirement or other termination of service (other than coverage mandated by Code section 4980B and Part 6 of Title I of ERISA), or are self-insured "multiple employer welfare arrangements," as such term is defined in section 3(40) of ERISA. (d) Except as set forth on Schedule 3.10(d), each Benefit Plan conforms in all material respects to, and its administration is in all material respects in compliance with, its terms and all Applicable Law, including but not limited to ERISA and the Code, except where the failure thereof could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. (e) The consummation of the transactions contemplated by this Agreement will not (i) entitle any current or former Employee or officer of the Company or any ERISA Affiliate to severance pay, unemployment compensation or any similar payment; or (ii) accelerate the time of payment or vesting of any right or privilege, or increase the amount of any compensation due to, any current or former Employee or officer. (f) No Benefit Plan is a "multiple employer plan" or a "multiemployer plan" within the meaning of the Code or ERISA. (g) In the six years preceding the date hereof, (i) no Benefit Plan that is or was subject to Title IV of ERISA has been terminated; (ii) no reportable event within the meaning of section 4043 of ERISA has occurred; (iii) no filing of a notice of intent to terminate such a Benefit Plan has been made; (iv) the PBGC has not initiated any proceeding to terminate any such Benefit Plan and no condition exists that presents a material risk that such proceeding will be initiated; and (v) no prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) has occurred with respect to such a Benefit Plan. 12 (h) Except as set forth on Schedule 3.10(h), neither the Company nor any of its Subsidiaries has any existing arrangement with any of its Employees providing for an excise tax gross up in respect of any excise taxes imposed by section 4999 of the Code. (i) Except as set forth on Schedule 3.10(i), none of the Company, any Subsidiary nor any ERISA Affiliate has any commitment or formal plan, to create any additional employee benefit plan or modify or change any existing Benefit Plan that would affect any Employee or former Employee and materially increase such entity's benefits costs. (j) Except as set forth on Schedule 3.10(j), all contributions (including all employer contributions and employee salary reduction contributions) required to be made to any Benefit Plan by applicable law or regulation or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any Benefit Plan, have been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected on the financial statements, except where the failure thereof could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Benefit Plan that is an employee welfare benefit plan under Section 3(1) of ERISA is either (i) funded through an insurance company contract and is not a "welfare benefit fund" with the meaning of Section 419 of the Code or (ii) unfunded. (k) Except as set forth on Schedule 3.10(k), except where the failure thereof could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect: (i) there is no labor strike, dispute, slowdown, stoppage or lockout actually pending, threatened against or affecting the Company or any of its Subsidiaries and during the past five years there has not been any such action; (ii) there are no union claims to represent the employees of the Company or any of its Subsidiaries; (iii) the Company is not a party to or bound by any collective bargaining or similar agreement with any labor organization, or work rules or practices agreed to with any labor organization or employee association applicable to employees of the Company; (iv) the employees of the Company are not represented by any labor organization and the Company does not have any Knowledge of any current union organizing activities among the employees of the Company, nor does any question concerning representation exist concerning such employees; (v) true, correct and complete copies of all written personnel policies, rules and procedures applicable to employees of the Company have heretofore been delivered to the Purchasers; 13 (vi) the Company is, and has at all times been, in material compliance with all Applicable Laws respecting employment and employment practices, terms and conditions of employment, wages, hours of work and occupational safety and health, and is not engaged in any unfair labor practices as defined in the National Labor Relations Act or other Applicable Law, ordinance or regulation; (vii) there is no unfair labor practice charge or complaint against the Company pending or, to the Knowledge of the Company, threatened before the National Labor Relations Board or any similar state or foreign agency; (viii) there is no grievance or arbitration proceeding arising out of any collective bargaining agreement or other grievance procedure relating to the Company; (ix) no charges with respect to or relating to the Company are pending before the Equal Employment Opportunity Commission or any other agency responsible for the prevention of unlawful employment practices; (x) no federal, state, local or foreign agency responsible for the enforcement of labor or employment laws intends to conduct an investigation with respect to or relating to the Company and no such investigation is in progress; (xi) except as set forth on Schedule 3.10(k)(xi)(A), there are no complaints, controversies, lawsuits or other proceedings pending or any applicant for employment or classes of the foregoing alleging breach of any express or implied contract or employment, any law or regulation governing employment or the termination thereof or other discriminatory, wrongful or tortious conduct in connection with the employment relationship. Except as set forth in Schedule 3.10(k)(xi)(B), there are no employment contracts or severance agreements with any employees of the Company other than individual contracts or agreements providing for total payments of less than $100,000 each. The execution of this Agreement and the consummation of the transactions contemplated hereby shall not result in a breach or other violation of any collective bargaining agreement to which the Company is a party; and (xii) since the enactment of the WARN Act, the Company has not effectuated (i) a "plant closing" (as defined in the WARN Act) affecting any site of employment or one or more facilities or operating units within any site of employment or facility of the Company, or (ii) a "mass layoff" (as defined in the WARN Act) affecting any site of employment or facility of the Company; nor has the Company been affected by any transaction or engaged in layoffs or employment terminations sufficient in number to trigger application of any similar state or local law. Except as set forth in Schedule 3.10(k)(xii), none of the employees of the Company has suffered an "employment loss" (as defined in the WARN Act) with regard to their employment with the Company since December 31, 1999. 14 Section 3.11. Properties. The Company and its Subsidiaries have good and marketable title, free and clear of all liens, encumbrances or claims to all of its personal property, except where such liens, encumbrances and claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and the Company and its Subsidiaries have valid and enforceable leases to all of the real and personal property described in the SEC Documents as under lease to it except where such invalidity or unenforceability of such leasehold interests could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Section 3.12. Compliance with Law. To the Company's Knowledge, the operations of the Company have been conducted in accordance with all Applicable Laws, except for violations or failures so to comply, if any, that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has not received notice of any violation of or noncompliance with any Applicable Laws except for notices of violations or failures so to comply, if any, that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Section 3.13 Tax Matters. Except as set forth in Schedule 3.13: (a) The Company and each of its Subsidiaries have duly and properly filed, or will duly and properly file, on a timely basis, all material Tax Returns which were or will be required to be filed by any of them for all periods ending on or before the Closing Date. All such Tax Returns of the Company or any of its Subsidiaries were (or will be) true, correct and complete in all material respects when filed. The Company and each of its Subsidiaries have timely paid all material Taxes required to be paid by any of them for periods ending on or before the Closing Date, or with respect to any period that ends after the Closing Date, the portion of such period up to and including the Closing Date, other than those Taxes being contested in good faith, for which an adequate reserve has been established in the Financial Statements in accordance with GAAP. (b) All material Taxes that the Company or any of its Subsidiaries is or was required by law to withhold or collect through the Closing Date have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Authority. There are no Liens with respect to Taxes upon any of the properties or assets, real or personal, tangible or intangible, of the Company or any of its Subsidiaries except for statutory liens for Taxes not yet due and payable. (c) Neither the Company nor any of its Subsidiaries is currently the beneficiary of any waiver or extension with respect to any Taxes or Tax Return, no Tax deficiency has been asserted, no Tax Return of the Company or any of its Subsidiaries is or has been currently under audit or examination by any Governmental Authority and no such audit or examination is pending or has been prepared. No issue has been raised in any audit or examination of any Tax Return by any Governmental Authority that, if raised with respect to any period not so audited or examined, could be expected to result in a proposed deficiency. 15 (d) Neither the Company nor any of its Subsidiaries is party to, bound by or has an obligation under, any Tax allocation, Tax indemnity, or Tax sharing agreement or similar contract arrangement. Neither the Company nor any of its Subsidiaries (i) has been a member of an affiliated group filing a consolidated, combined or unitary Tax Return (other than a group the common parent of which was the Company) or (ii) has any liability for the Taxes of any person (other than the Company and its Subsidiaries) under Treasury Regulation section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract, agreement to indemnify or otherwise. Neither the Company nor any of its Subsidiaries has any obligation by contract, agreement, arrangement or otherwise to permit any person, other than the Company and its Subsidiaries, to use the benefit of a refund, credit or offset of Tax of any of the Company or any of its Subsidiaries. (e) No material claim has ever been made by a Tax authority in a jurisdiction where the Company or any of its Subsidiaries does not file a Tax Return that the Company or any Subsidiary is or may be subject to taxation by that jurisdiction. (f) Neither the Company nor any of its Subsidiaries has been a United States real property holding corporation within the meaning of section 897(c)(2) of the Code during the five year period preceding the Closing Date. (g) Neither the Company nor any of its Subsidiaries has filed (or will file prior to the Closing) a consent under section 341(f) of the Code. Section 3.14. No Real Property; Environmental Matters. (a) Neither the Company nor any of its Subsidiaries owns any real property. (b) Neither the Company nor any of its Subsidiaries has undertaken any actions or activities, nor, to the Company's Knowledge, are there any circumstances or conditions at or arising from any property leased by the Company or any of its Subsidiaries that, in either case, could reasonably be expected to form the basis of an Environmental Claim against the Company or its Subsidiaries or, to the Company's Knowledge, against any person or entity whose liability for any Environmental Claim either the Company or its Subsidiaries has retained or assumed either contractually or by operation of law. (c) Without in any way limiting the generality of the foregoing, there are no on-site or off-site locations where the Company or any of its Subsidiaries has (previously or currently) stored, disposed or arranged for the disposal of Materials of Environmental Concern in any manner or at levels or in quantities that could reasonably be expected to give rise to an Environmental Claim that would have a Material Adverse Effect. 16 Section 3.15. Enforceability of Contracts; Material Contracts. Except as set forth on Schedule 3.15, there are no individual contracts material to the business, operations, properties or financial condition of the Company and its Subsidiaries, taken as a whole (collectively, the "Commitments"). Neither the Company nor any of its Subsidiaries is in default in respect of any Commitment, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default, except for any such defaults that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No other party to any of the Commitments is in default in respect thereof, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default, except for any such defaults that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Section 3.16. Books and Records. The minute books and other similar records of the Company and its Subsidiaries have been made available to the Purchasers prior to the execution of this Agreement and contain a true and complete record, in all material respects, of all actions taken at all meetings and by all written consents in lieu of meetings of the stockholders, the Boards of Directors and the committees of the Boards of Directors of the Company and its Subsidiaries. Section 3.17. Brokers. Neither the Company nor any of its Subsidiaries or their respective agents and representatives has incurred any obligation or liability, contingent or otherwise, for brokerage or finders' fees, agents' commissions, investment banking fees, or other similar payment in connection with this Agreement. Section 3.18 Working Capital. Schedule 3.18 hereto identifies, as of December 31, 2000, all of the Company's "cash and cash equivalents", as determined in accordance with GAAP, that are not subject to any Lien. Section 3.19 Outstanding Indebtedness; Liens. (a) Schedule 3.19(a) sets forth and identifies in reasonable detail all individual items of outstanding short-term and long-term Indebtedness of the Company and each of its Subsidiaries in excess of $50,000 incurred after or otherwise not listed on the audited financial statements of the Company as at and for the year ended December 31, 2000 received by the Purchasers, including all notes issued by the Company or its Subsidiaries to finance the acquisition of real or personal property, prior to and after giving effect to the transactions contemplated by this Agreement. (b) Except as set forth on Schedule 3.19(b), there are no Liens outstanding on the date hereof and there will be no Liens outstanding as of the Closing on any property or asset of the Company or any of its Subsidiaries. Section 3.20 Related-Party Transactions. (a) No employee, officer, stockholder, director or consultant of the Company or member of his or her immediate family (defined as parents, spouse, siblings or lineal descendents) is indebted to the Company, and the Company is not indebted (or committed to make any loans or extend or guarantee any credit) to any of them in an amount greater than $100,000; 17 (b) To the Knowledge of the Company, no employee, officer, stockholder, director or consultant of the Company has any direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation that competes with the Company, except stock ownership by employees, officers, stockholders or directors of the Company and members of their immediate families in publicly traded companies; and (c) No officer, stockholder or director or any member of their immediate families is, directly or indirectly, interested in any contract (other than the Documents) with the Company. (d) Except for the Documents or as set forth on Schedule 3.20(d), the Company has not entered into any side letters, agreements or other arrangements with any existing or prospective stockholder. Section 3.21 Offering Exemption. Assuming the truth and accuracy of each Purchasers' representations and warranties contained in Section 4, the offer and sale of the Shares as contemplated hereby and the issuance and delivery to the Purchasers of the Shares are exempt from registration under the Securities Act and under applicable state securities and "blue sky" laws, as currently in effect. Section 3.22 Company Status. The Company is not (i) a "public utility holding company" or a "holding company" as defined in the Public Utility Holding Company Act of 1935, as amended, (ii) a "public utility" as defined in the Federal Power Act, as amended, or (iii) an "investment company" as defined in the Investment Company Act of 1940, as amended. Section 3.23 Insurance. The Company and its Subsidiaries, taken as a whole, carries insurance (the "Company Insurance") with insurers that are, to the Knowledge of the Company, solvent, in amount and types of coverage that are, in the Company's judgment, reasonable for the business, assets and potential liabilities of the Company. Schedule 3.23 sets forth a complete list of all currently effective insurance policies, binders of insurance or programs of self insurance which relate to the Company, its business and the assets or properties owned or leased by the Company. Except as set forth on Schedule 3.23, no material claims have been asserted under any of such insurance policies relating to the properties, assets or operations of the Company or any of its Subsidiaries. Except as set forth on Schedule 3.23, coverage under such insurance policies has not been denied with respect to any of the material claims referred to in the preceding sentence, and no party providing the Company Insurance has notified the Company that it intends to deny coverage for such material claims. Section 3.24 Proprietary Rights. (a) For purposes of this Section 3.24, "Intellectual Property" shall mean, collectively: (x) all U.S. and non-U.S. registered, unregistered and pending (i) trade names, trade dress, trademarks, service marks, assumed names, business names and logos, internet domain names and URLs and all registrations and applications therefor, (ii) copyrights (including without limitation those relating to computer software), and all registrations and applications therefor, (iii) utility and design patents, registered designs and invention disclosures, and all grants, registrations and applications therefor; and (y) all (i) computer software, data files, source and object codes, tools, user interfaces, manuals and other specifications and documentation and all know-how relating thereto, (ii) trade secrets, inventions, processes, formulae, know-how, concepts, ideas, research and development, designs, business plans, strategies, marketing and other information and customer lists, (iii) web sites and web pages and related items, and all intellectual property and proprietary rights incorporated therein, and (iv) other intellectual property and proprietary rights, including without limitation rights of publicity and privacy and moral rights. 18 (b) The Company or Priceline.com LLC is listed in the records of the United States Patent and Trademark Office ("PTO") as the sole assignee of record of each of the patents and applications listed on Schedule 3.24(b) (the "Domestic Patents and Applications"). In the instances in which Priceline.com LLC is listed as the assignee of record, the Company has taken reasonable efforts to record the change of name from Priceline.com LLC to priceline.com Incorporated. (c) The Company or Priceline.com LLC is listed in the records of the PTO as the sole assignee of record of each of the trademarks and applications listed on Schedule 3.24(c) (the "Domestic Trademarks and Applications"). In the instances in which Priceline.com LLC is listed as the assignee of record, the Company has taken reasonable efforts to record the change of name from Priceline.com LLC to priceline.com Incorporated. (d) The Company or Priceline.com LLC is listed in the records of the appropriate foreign patent offices as the sole assignee of record of each of the foreign patents and applications listed on Schedule 3.24(d) (the "Foreign Patents and Applications"). In the instances in which Priceline.com LLC is listed as the assignee of record, the Company has taken reasonable efforts to record the change of name from Priceline.com LLC to priceline.com Incorporated. (e) The Company or Priceline.com LLC is listed in the records of the appropriate foreign patent offices as the sole assignee of record of each of the foreign trademarks and applications listed on Schedule 3.24(e) (the "Foreign Trademarks and Applications"). In the instances in which Priceline.com LLC is listed as the assignee of record, the Company has taken reasonable efforts to record the change of name from Priceline.com LLC to priceline.com Incorporated. (f) To the Company's Knowledge, there is no reason to believe that the Domestic Patents and Applications and Foreign Patents and Applications will not eventuate in issued patents, or that any patents issued in respect of any such Applications will not be valid or will not afford the Company reasonable patent protection relative to the subject matter thereof. (g) To the Company's Knowledge, all pertinent prior art references known to the Company or its counsel during the prosecution of the Domestic Patents and Applications were disclosed to the PTO and, to the Company's Knowledge, neither such counsel nor the Company made any misrepresentation to, or concealed any material fact from, the PTO during such prosecution. 19 (h) To the Company's Knowledge, the Company is not infringing or otherwise violating any Intellectual Property of any persons. Except as set forth on Schedule 3.6 to this Agreement, the Company has not received any notice, nor have there been any proceedings, claims or actions instituted or threatened alleging that the Company has infringed or otherwise violated the Intellectual Property rights of any person. (i) To the Company's Knowledge, all of the Intellectual Property used in the conduct of the business as conducted by the Company is valid and enforceable. (j) To the Company's Knowledge, the Company owns or possesses sufficient licenses or other rights to conduct the business now being conducted by the Company. (k) To the Company's Knowledge, no person is infringing or otherwise violating any Intellectual Property rights of the Company. (l) The Company and each of its Subsidiaries have taken all actions which are reasonably necessary or advisable in order to protect the Company Property in a manner consistent with prudent commercial practice in the e-commerce and internet travel industries. Section 3.25 Directed Selling Efforts. The Company has not made any "directed selling efforts", as such term is defined in Rule 902(c) of Regulation S under the Securities Act, in connection with the sale of the Shares. Section 3.26 No Integrated Offering. Neither the Company, nor any of its Subsidiaries, nor any person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security under circumstances that would require the registration of the Shares under the Securities Act. ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS Each of the Purchasers hereby represents and warrants, each as to itself only and each severally and not jointly, to the Company as follows: Section 4.1 Organization and Standing; Authorization; Enforceability; No Violations; Non-Affiliates. (a) FEL and PPG are each duly incorporated, validly existing and in good standing under the laws of the British Virgin Islands, and each Purchaser has all requisite corporate power and authority to own its properties and assets and to carry on its business as it is now being conducted. (b) The Purchaser has the corporate power to execute, deliver and perform its obligations under each of the Documents and has taken all necessary corporate action to authorize the execution, delivery and performance by it of each of the Documents and to consummate the transactions contemplated hereby and thereby. No other corporate proceedings on the part of such Purchaser are necessary therefor. 20 (c) The Purchaser has duly executed and delivered this Agreement and, at the Closing, will have duly executed and delivered the other Documents to which it is a party. This Agreement constitutes, and each of the other Documents to which the Purchaser is a party, when executed and delivered by the Purchaser and, assuming the due execution by the other parties hereto and thereto, will constitute legal, valid and binding obligations of the Purchaser, enforceable against it in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). (d) For purposes of the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the rules promulgated thereunder, FEL and PPG are not "affiliates" (as defined therein) of each other and the purchase of the Shares by the Purchasers would not be aggregated. Section 4.2 Consents. No consent, authorization or order of, or filing or registration with, any Governmental Authority or other person is required to be obtained or made by the Purchaser for the execution, delivery and performance by the Purchaser of this Agreement or any of the other Documents or the consummation by the Purchaser of any of the transactions contemplated hereby or thereby other than those required for the Closing that will have been made or obtained on or prior to the Closing Date. Section 4.3 Private Placement. (a) The Purchaser understands that the offering and sale of the Shares by the Company to the Purchaser is intended to be exempt from registration under the Securities Act pursuant to Regulation S thereunder. (b) The Purchaser is not a "U.S. person" as such term is defined in Rule 902(k) of Regulation S under the Securities Act. (c) The Purchaser is entering into this Agreement outside the "United States" as such term is defined in Rule 902(l) of Regulation S under the Securities Act. (d) The Purchaser acknowledges that the Company and, for purposes of the opinions to be delivered to the Purchaser pursuant to Section 7.2(k) hereof, Cravath, Swaine & Moore will rely, in part, on the accuracy and truth of its representations in this Section 4.3, and the Purchaser hereby consents to such reliance. (e) The Purchaser acknowledges that, in accordance with Rule 903(b)((iii) of Regulation S under the Securities Act, "offering restrictions" (as defined in Rule 902(g) of Regulation S under the Securities Act) shall apply to the Purchaser, with the result that for a period of one year following the Closing, the Shares cannot be sold in the "United States" to a "U.S. person" unless pursuant to registration under the Securities Act or pursuant to an available exemption from registration. 21 Section 4.4 Directed Selling Efforts. The Purchaser has not made any "directed selling efforts", as such term is defined in Rule 902(c) of Regulation S under the Securities Act in connection with the sale of the Shares. ARTICLE V. COVENANTS OF THE COMPANY Section 5.1 Access to Books and Records. Upon reasonable notice, the Company shall afford, and shall cause each of its Subsidiaries to afford, to the Purchasers and their accountants, counsel and representatives full access to all the Company's and its Subsidiaries' properties, books, contracts, commitments and records (including, but not limited to, Tax Returns), and to discuss its affairs, finances and accounts with the Company's officers and its independent auditors, all at such reasonable times during normal business hours and as often as such person may reasonably request. Section 5.2 Agreement to Take Necessary and Desirable Actions. The Company shall execute and deliver the Documents and such other documents, certificates, agreements and other writings and take such other actions as may be necessary, desirable or reasonably requested by the Purchasers in order to consummate or implement as expeditiously as practicable the transactions contemplated hereby. Section 5.3 Representation on the Board of Directors. (a) The Company shall use commercially reasonable efforts to cause to be elected to the Company's Board of Directors, effective as of the Closing, one person (the "FEL Director") designated by FEL who is an Eligible Person. "Eligible Person" means an individual (i) who is reasonably acceptable to the Company's Board of Directors, (ii) whose election to the Company's Board of Directors would not, in the opinion of counsel for the Company, violate or be in conflict with, or result in any material limitation on the ownership or operation of any business or assets of the Company or any of its Subsidiaries under, any Applicable Law and (iii) who has agreed in writing with the Company to comply with Section 6.4 and to resign as a director of the Company if requested to do so pursuant to this Section 5.3. With respect to each meeting of stockholders of the Company at which the FEL Director comes up for reelection, the Company shall use reasonable efforts to cause the FEL Director (or another Eligible Person designated by FEL) to be included in the list of candidates recommended by the Company's Board of Directors for election to the Company's Board of Directors. Upon the resignation, removal or death of any FEL Director on the Company's Board of Directors, the Company shall use reasonable efforts to have the vacancy thereby created filled with an Eligible Person designated by FEL. (b) Upon either (i) FEL and any of its Affiliates ceasing to own beneficially at least seventy percent (70%) of the Shares purchased by FEL pursuant hereto, unless after such dispositions PPG, FEL and any of their Affiliates shall continue to collectively own beneficially at least five percent (5%) of the Company's outstanding voting securities, (ii) the violation in any material respect of this Article V by either FEL or (iii) 30 days' prior written notice of termination from FEL, FEL shall no longer be entitled to designate for election to the Company's Board of Directors a representative pursuant to this Section 5.3. At such time, if requested by the Company, the designee of FEL shall resign from the Company's Board of Directors. 22 (c) Upon the FEL Director ceasing to be an Eligible Person, such designee shall, if requested by the Company, resign from the Company's Board of Directors. (d) Without in any way limiting the foregoing clauses (a) through (d), the Company hereby agrees that in the event that the FEL Director is not elected to the Company's Board of Directors, FEL, PPG or their respective Permitted Transferees, if there shall be any, shall have the ability to appoint a representative (a "Board Representative") to attend all meetings of the Company's Board of Directors or any committee thereof, and such Board Representative shall be provided with notices of all meetings of the Company's Board of Directors, as well as copies of minutes, resolutions and other instruments of, or communications to, the Board of Directors; provided that neither FEL, PPG, nor their Permitted Transferees, nor the Board Representative shall have any duties, responsibilities or liability by virtue of attendance at such meetings or the failure to attend the same; provided further, this Section 5.3(d) shall not be applicable at any time when FEL shall not be entitled to designate a nominee for election as director as a result of the provisions of Section 5.3(b). Section 5.4 Compliance with Conditions; Commercially Reasonable Efforts. The Company shall use all commercially reasonable efforts to cause all of the obligations imposed upon it in this Agreement to be duly complied with and to cause all conditions precedent to the obligations of the Company and the Purchasers to be satisfied. Upon the terms and subject to the conditions of this Agreement, the Company shall use all commercially reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable consistent with Applicable Law to consummate and make effective in the most expeditious manner practicable the transactions contemplated hereby. Section 5.5 Consents and Approvals. The Company shall (a) use its commercially reasonable efforts to obtain all necessary consents, waivers, authorizations and approvals of all Governmental Authorities and of all other persons, firms or corporations required in connection with the execution, delivery and performance by them of this Agreement, any other Document or any of the transactions contemplated hereby or thereby, and (b) diligently assist and cooperate with the Purchasers in preparing and filing all documents required to be submitted by the Purchasers to any Governmental Authority in connection with such transactions and in obtaining any governmental consents, waivers, authorizations or approvals which may be required to be obtained by the Purchasers in connection with such transactions (which assistance and cooperation shall include, without limitation, timely furnishing to the Purchasers all information concerning the Company and its Subsidiaries that counsel to the Purchasers reasonably determines is required to be included in such documents or would be helpful in obtaining any such required consent, waiver, authorization or approval). Section 5.6 Taxes. The Company and each of its Subsidiaries shall prepare and timely file or cause to be prepared and timely filed in a manner consistent with past practice, all material federal, state, local, foreign and other Tax Returns required to be filed by them and shall timely pay all material Taxes due, whether or not shown (or required to be shown) on a Tax Return, including, without limitation, all Taxes which it may be obligated to withhold from amounts owing to employees, creditors and third parties, except for any Taxes which the Company or any of its Subsidiaries shall contest in good faith and for which adequate reserves (without regard to deferred Tax assets and liabilities) shall be established on the financial statements of the Company or any such Subsidiary. 23 Section 5.7 Use of Proceeds. The Company shall use the proceeds from the sale of Shares hereunder for general corporate purposes. Section 5.8 Director and Officer Insurance. The Company has provided and will maintain, and the Purchasers have received copies of current and effective liability insurance policies, which provide coverage for the directors and officers of the Company with respect to any liabilities reasonably incurred in connection with their services for or on behalf of the Company. ARTICLE VI. COVENANTS OF EACH PURCHASER Section 6.1 Agreement to Take Necessary and Desirable Actions. The Purchaser shall execute and deliver each of the Documents to which it is a party and such other documents, certificates, agreements and other writings and take such other actions as may be necessary, desirable or reasonably requested by the Company in order to consummate or implement as expeditiously as practicable the transactions contemplated hereby. Section 6.2 Compliance with Conditions; Commercially Reasonable Efforts. The Purchaser shall use all commercially reasonable efforts to cause all of the obligations imposed upon it in this Agreement to be duly complied with and to cause all conditions precedent to the obligations of the Company and the Purchasers to be satisfied. Upon the terms and subject to the conditions of this Agreement, the Purchaser shall use all commercially reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable consistent with Applicable Law to consummate and make effective in the most expeditious manner practicable the transactions contemplated hereby. Section 6.3 Confidential Information. The Purchaser acknowledges that the information being provided under Section 5.1, 5.3 or otherwise may be material non-public information and the Purchaser hereby covenants and agrees not to trade on the basis of such material non-public information and to keep, and cause its representatives to keep, confidential any information identified by the Company as confidential, in a writing delivered to the Purchaser unless (a) such information becomes generally available to the public (other than as a result of a breach of this provision by the Purchaser), (b) such information was available to the Purchaser on a non-confidential basis from a source (other than the Company or its representatives) that, to the Purchaser's Knowledge, is not and was not prohibited from disclosing such information to the Purchaser by a contractual, legal or fiduciary obligation or (c) the Purchaser is required by law to disclose such information; provided, that in an event specified in clause (c), the Purchaser shall provide the Company with prompt prior written notice of such required disclosure, the Purchaser shall disclose only that portion of the confidential information that the Purchaser is advised by counsel is legally required, where the timing and circumstances so permit, prior to any disclosure the Purchaser shall provide the Company with an opportunity to seek a protective order or other appropriate remedy, and the Purchaser shall exercise reasonable efforts to obtain assurance that confidential treatment will be accorded such information. The Purchaser agrees that it will comply, and will cause its representatives to comply, with all U.S. securities laws applicable to the receipt of material non-public information and restrictions on trading in securities when in possession of such information. The Purchaser agrees not to use any confidential information in violation of any law. Section 6.4 Standstill. Each Purchaser shall not (and shall cause its Affiliates not to), without the prior written consent of the Company's Board of Directors: 24 (a) acquire, announce an intention to acquire offer or propose to acquire or agree to acquire, directly or indirectly any voting securities of the Company as a result of which acquisition the Purchasers (and their Permitted Transferees), collectively, would beneficially own more than 25% of the voting securities of the Company, other than acquisitions by way of share dividends or other distributions pro rata to holders of such voting securities; (b) propose that the Purchaser or any Affiliate of the Purchaser enter into, directly or indirectly, any merger or other business combination involving the Company or propose to purchase, directly or indirectly, a material portion of the assets of the Company or any of its Subsidiaries; (c) make, or in any way participate in, directly or indirectly, any "solicitation" of "proxies" (as such terms are used in Regulation 14A promulgated under the Exchange Act) to vote or consent with respect to any voting securities of the Company (whether or not such solicitation is subject to regulation under Regulation 14A promulgated under the Exchange Act); (d) form, join or participate in or encourage the, formation of a "group" with any person (within the meaning of Section 13(d)(3) of the Exchange Act) other than the Purchaser's Affiliates, the other Purchaser and such other Purchaser's Affiliates, with respect to the filing of reports under the Exchange Act that aggregate the ownership of the Purchasers (or the Purchaser's Affiliates, as applicable), solely as a result of the application of the provisions of this Agreement; (e) deposit any voting securities of the Company into a voting trust or subject any such voting securities to any arrangement or agreement with respect to the voting or disposition thereof; (f) initiate, propose or otherwise solicit stockholders of the Company for the approval of one or more stockholder proposals with respect to the Company as described in Rule 14a-8 under the Exchange Act, or induce or attempt to induce any other person to initiate any such stockholder proposal with respect to the Company; (g) except in accordance with Section 5.3, seek election to or seek to place a representative on the Company's Board of Directors or seek the removal of any member of the Company's Board of Directors; (h) (i) solicit, seek to effect, negotiate with or provide non-public information to any other person with respect to, (ii) make any statement or proposal, whether written or oral, to the Company's Board of Directors or any director or officer of the Company with respect to, or (iii) otherwise make any public announcement or proposal whatsoever with respect to, any form of business combination transaction (with any person) involving a change of control of the Company or the acquisition of a substantial portion of the equity securities or assets of the Company or any of its Subsidiaries, including a merger, consolidation, tender offer, exchange offer or liquidation of the Company's assets, or any restructuring, recapitalization or similar transaction with respect to the Company or any of its Subsidiaries; provided, however, that the foregoing shall not (A) apply to discussions between or among the Purchaser, its Affiliates or any of their employees, agents or representatives or (B) in the case of clause (ii) above, limit the ability of any designee of the Purchaser on the Company's Board of Directors to make any such statement or proposal or to discuss any such proposal with any officer or director of or advisor to the Company or advisor to the Company's Board of Directors unless, in either case, it would reasonably be expected to require the Company to make a public announcement regarding such discussion, statement or proposal; 25 (i) otherwise act, alone or in concert with others, to seek to control or influence the management or policies of the Company (except for (A) voting in its full discretion as a holder of voting securities in accordance with the terms of such voting securities and (B) actions taken as a director of the Company); (j) request, or take any action to obtain, any list of holders of voting securities of the Company for the purpose of accomplishing any of the actions in Section 6.4(a)-(h) hereof; (k) publicly disclose any intention, plan or arrangement inconsistent with the foregoing, or make any such disclosure privately if it would reasonably be expected to require the Company to make a public announcement regarding such intention, plan or arrangement; or (l) advise, assist (including by knowingly providing or arranging financing for that purpose) or knowingly encourage any other person in connection with any of the foregoing. Section 6.5 Schedule 13D. The Purchasers shall provide the Company with a Schedule 13D under the Exchange Act at least one (1) business day prior to filing such Schedule 13D with the Commission in connection with the acquisition of the Shares by the Purchasers. ARTICLE VII. CONDITIONS PRECEDENT TO CLOSING Section 7.1 Conditions to the Company's Obligations. The obligations of the Company hereunder required to be performed at the Closing with respect to each Purchaser shall be subject, at its election, to the satisfaction or waiver (which waiver, if so requested by a Purchaser, shall be made in writing), at or prior to the Closing Date, of the following conditions: 26 (a) The representations and warranties of the Purchaser contained in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date. (b) The Purchaser shall have performed in all material respects all obligations and agreements, and complied in all material respects with all covenants, contained in this Agreement, to be performed and complied with by the Purchaser at or prior to the Closing Date. (c) All governmental and regulatory approvals and clearances and all third-party consents necessary for the consummation of the transactions contemplated at the Closing shall have been obtained and shall be in full force and effect and the Company shall be reasonably satisfied that the consummation of such transactions does not and will not contravene any Applicable Law, except to the extent any contravention or contraventions, individually or in the aggregate, could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Section 7.2 Conditions to The Purchasers' Obligations. The obligations of each Purchaser hereunder required to be performed at the Closing shall be subject, at its election, to the satisfaction or waiver (which waiver, if so requested by the Company, shall be made in writing), at or prior to the Closing Date of the following conditions: 27 (a) The representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects (disregarding, for purposes of such determination of materiality, all qualifications in such representations and warranties regarding "material") as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except that representations and warranties made herein that by their terms speak as of the date of this Agreement or some other date shall be true and correct only as of such date). (b) The Company shall have performed in all material respects all obligations and agreements, and complied in all material respects with all covenants, contained in this Agreement, to be performed and complied with by it at or prior to the Closing Date. (c) The Company shall provide the Purchasers with evidence satisfactory to the Purchasers that the Board of Directors of the Company (i) has approved the transactions contemplated in the Documents and in the documents and instruments arising in connection therewith and (ii) has approved the subject matter of any agreements, instruments or other documents to which any Purchaser and the Company are a party or that are executed as of the date hereof and are disclosed to the Company in writing prior to or on the date hereof. (d) All documents, instruments, agreements and arrangements relating to the transactions contemplated by the Documents shall be satisfactory to the Purchasers, shall have been executed and delivered by the parties thereto and no party to any of the foregoing (other than the Purchasers) shall have breached any of its material obligations thereunder. (e) The Company shall have provided the Purchasers with the unaudited balance sheet and income statement of the Company as at and for the year ended December 31, 2000. (f) (i) Since September 30, 2000, no change, occurrence or development shall have occurred, been threatened or become known to the Purchasers that could reasonably be expected to have a Material Adverse Effect on the business, operations, properties or condition (financial or other) of the Company and its Subsidiaries, taken as a whole and (ii) the Purchasers shall not have become aware of any information or other matter relating to the Company (x) of which the Company (but not the Purchasers) had Knowledge on or prior to the date of this Agreement, (y) that, in the Purchasers' reasonable judgment, is inconsistent with any information or other matter relating to the Company disclosed to the Purchasers by the Company or any of its representatives prior to the date of this Agreement, and (z) would have been viewed by the Purchasers, in their reasonable judgment, as having materially and adversely altered the total mix of information made available to the Purchasers prior to the date of this Agreement. For purposes of this Section 7.2(f), the Company shall be deemed to have "knowledge" of a particular fact or other matter if (i) any individual who is serving, or who has at any time served, as a director, officer or management-level employee of the Company is actually aware of such fact or other matter; or (ii) a prudent individual serving as a director, officer or management-level employee of the Company could be expected to discover or otherwise become aware of such fact or other matter in the diligent exercise of his or her duties in such capacity. 28 (g) There shall be no litigation, proceeding or other action seeking an injunction or other restraining order, damages or other relief from a Governmental Authority or other Person pending or threatened which, in the reasonable judgment of such Purchaser, would materially adversely affect the consummation of the transactions contemplated by the Documents on the terms contemplated hereby and thereby. (h) All governmental and regulatory approvals and clearances and all third-party consents necessary for the consummation of all of the transactions contemplated at such Closing shall have been obtained and shall be in full force and effect and the Purchasers shall be reasonably satisfied that the consummation of such transactions does not and will not contravene any Applicable Law, except to the extent any contravention or contraventions, individually or in the aggregate, could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. (i) Purchasers shall have completed their due diligence review of the Company and its Subsidiaries and shall have determined that the results thereof are wholly satisfactory to Purchasers in the sole exercise of their discretion. In making this determination, the Purchasers shall owe no duty or obligation to the Company and shall act solely in the best interests of the Purchasers as determined by each Purchaser. (j) The Company's General Counsel and Cravath, Swaine & Moore, counsel to the Company, shall have delivered to the Purchasers an opinion from each of them, dated as of such applicable Closing Date, addressed to the Purchasers, substantially in the forms attached hereto as Exhibit B and Exhibit C, respectively. (k) Each of the Company and the Purchasers shall have executed and delivered each of the Documents, as applicable. (l) The Company shall have provided the Purchasers with all other documents, certificates and other instruments reasonably requested by the Purchasers. ARTICLE VIII. MISCELLANEOUS Section 8.1 Survival of Representations and Warranties. The representations, warranties set forth in Sections 3.6, 3.8, 3.9, 3.18 and 3.24 contained in this Agreement shall be deemed made at the Closing as if made at such time and shall survive such Closing for a period ending on the later to occur of February 28, 2002 or fourteen (14) days following the Company's issuance of a press release or similar public announcement with respect to the Company's financial results for the year ended December 31, 2001, except that with respect to claims asserted pursuant to this Section 8.1 before the expiration of the applicable representation or warranty, such claims shall survive until the date they are finally liquidated or otherwise resolved, and (ii) Section 8.1 shall survive indefinitely. All other representations and warranties shall not survive the Closing. All covenants shall survive in accordance with their own terms. All statements as to factual matters contained in any certificate executed and delivered by the parties pursuant hereto shall be deemed to be representations, warranties and covenants by such party hereunder. No claim may be commenced under this Section 8.1 (or otherwise) following expiration of the applicable period of survival, and upon such expiration the Company shall be released from all liability with respect to claims under each such section not theretofore made by the Company. A claim shall be made or commenced hereunder by the Purchasers delivering to the Company a written notice specifying in reasonable detail the nature of the claim, the amount claimed (if known or reasonably estimable), and the factual basis for the claim. 29 Section 8.2 Notices. All notices, demands, requests, consents, approvals or other communications (collectively, "Notices") required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be personally served, delivered by a reputable air courier service with tracking capability, with charges prepaid, or transmitted by hand delivery or facsimile, addressed as set forth below, or to such other address as such party shall have specified most recently by written notice. Notice shall be deemed given on the date of service or transmission if personally served or transmitted by facsimile, provided the sender receives evidence of complete transmission without error. Notice otherwise sent as provided herein shall be deemed given on the third business day following delivery of such notice to a reputable air courier service. If to the Company, to it at: priceline.com Incorporated 800 Connecticut Avenue Norwalk, CT 06854 Attention: Office of the General Counsel Facsimile: (203) 299-8915 with a copy (which shall not constitute notice) to: Cravath, Swaine & Moore Worldwide Plaza 825 Eighth Avenue New York, N.Y. 10019 Attention: William P. Rogers, Jr., Esq. Facsimile: (212) 474-3700 If to the Purchasers, as follows: Forthcoming Era Limited Offshore Incorporations Limited P.O. Box 957 Offshore Incorporations Centre Road Town, Tortola British Virgin Islands 30 with a copy to: Hutchison Whampoa Limited 22/F Hutchison House 10 Harcourt Road Central Hong Kong Attention: Company Secretary Facsimile: (852) 2128 1778 and: Prime Pro Group Limited c/o 8/F, Cheung Kong Center 2 Queen's Road Central Hong Kong Attention: Mr. Edmond Ip Facsimile: (852) 2845 2057 Section 8.3 Governing Law. This Agreement and the rights and obligations of the parties hereunder shall be governed by, and construed in accordance with, the laws of the State of New York, and each party hereto submits to the non-exclusive jurisdiction of the state and federal courts within the County of New York in the State of New York. Section 8.4 Entire Agreement. This Agreement (including all agreements entered into pursuant hereto and all certificates and instruments delivered pursuant hereto and thereto) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the parties or their Affiliates, whether oral or written, with respect to the subject matter hereof. Section 8.5 Modifications and Amendments. No amendment, modification or termination of this Agreement shall be binding upon any other party unless executed in writing by the parties hereto intending to be bound thereby. Section 8.6 Waivers and Extensions. Any party to this Agreement may waive any right, breach or default which such party has the right to waive, provided that such waiver will not be effective against the waiving party unless it is in writing, is signed by such party, and specifically refers to this Agreement. Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may be conditional. No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained. No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts. 31 Section 8.7 Titles and Headings. Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement. Section 8.8 Exhibits and Schedules. Each of the annexes, exhibits and schedules referred to herein and attached hereto is an integral part of this Agreement and is incorporated herein by reference. Section 8.9 Expenses; Brokers. Each party shall pay its own costs and expenses in connection with the negotiation and execution of this Agreement and the transactions contemplated hereby, including without limitation, fees and disbursements of counsel, financial advisors and accountants. The Company shall pay any and all stamp, transfer and other similar Taxes payable or determined to be payable in connection with the execution and delivery of this Agreement or the issuance of the Shares, and shall save and hold each of the Purchasers harmless from and against any and all liabilities with respect to or resulting from any delay in paying, or omission to pay, such Taxes. Each of the parties represents to the others that neither it nor any of its Affiliates has used a broker or other intermediary, in connection with the transactions contemplated by this Agreement for whose fees or expenses any other party will be liable and respectively agrees to indemnify and hold the others harmless from and against any and all claims, liabilities or obligations with respect to any such fees or expenses asserted by any person on the basis of any act or statement alleged to have been made by such party or any of its Affiliates. Section 8.10 Press Releases and Public Announcements. All press releases and similar public announcements relating to the transactions contemplated by the Documents shall be made only if mutually agreed upon by the Company and each of the Purchasers, except to the extent that such disclosure is, in the opinion of counsel, required by law or by stock exchange regulation; provided that any such required disclosure shall only be made, to the extent consistent with law, after consultation with each of the Purchasers. Section 8.11 Assignment; No Third Party Beneficiaries. This Agreement and the rights, duties and obligations hereunder may not be assigned or delegated by either the Company or the Purchasers without the prior written consent of the other parties hereto; provided that each Purchaser may assign or delegate its rights, duties and obligations hereunder to a Permitted Transferee or to such other person as may be reasonably satisfactory to the Company. Except as provided in the preceding sentence, any assignment or delegation of rights, duties or obligations hereunder made without the prior written consent of the other parties hereto shall be void and of no effect. This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and their respective successors and permitted assigns. This Agreement is not intended to confer any rights or benefits on any persons that are not party hereto other than as expressly set forth in Sections 8.1 and 8.11. Section 8.12 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable. 32 Section 8.13 Counterparts; Facsimile. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument. All documents and closing deliveries for the transactions contemplated by this Agreement and the other Documents may be delivered by a party at the Closing via facsimile; provided, that, the originally executed signature pages and original documents are delivered to the appropriate parties within two (2) business days following the Closing. Section 8.14 Further Assurances. Each party hereto, upon the request of any other party hereto, shall do all such further acts and execute, acknowledge and deliver all such further instruments and documents as may be necessary or desirable to carry out the transactions contemplated by this Agreement, including, in the case of the Company, such acts, instruments and documents as may be necessary or desirable to convey and transfer to each Purchaser the Shares to be purchased by it hereunder. Section 8.15 Remedies Cumulative. The remedies provided herein shall be cumulative and shall not preclude the assertion by any party hereto of any other rights or the seeking of any remedies against the other party hereto. 33 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. PRICELINE.COM INCORPORATED a Delaware corporation By: /s/ Jeffery H. Boyd -------------------------------- Name: Jeffery H. Boyd Title: Chief Operating Officer PRIME PRO GROUP LIMITED By: /s/ Dominic Lai -------------------------------- Name: Dominic Lai Title: Authorized Signatory FORTHCOMING ERA LIMITED By: /s/ Dominic Lai -------------------------------- Name: Dominic Lai Title: Director S-1 EXHIBIT A Shares to be Purchased No. of Shares of Common Stock Price Per Share Purchase Price --------------- --------------- -------------- Prime Pro Group Limited 11,904,761 $2.10 $24,999,998.10 Forthcoming Era Limited 11,904,761 $2.10 $24,999,998.10 A-1 EXHIBIT B OPINION OF GENERAL COUNSEL B-1 EXHIBIT C OPINION OF CRAVATH, SWAINE & MOORE C-1 EX-99.4 5 0005.txt REGISTRATION RIGHTS AGREEMENT Exhibit 99.4 EXECUTION COPY REGISTRATION RIGHTS AGREEMENT among PRICELINE.COM INCORPORATED, PRIME PRO GROUP LIMITED and FORTHCOMING ERA LIMITED Dated as of February 15, 2001 TABLE OF CONTENTS Page ---- 1. Definitions............................................................1 2. General; Securities Subject to this Agreement..........................4 (a) Grant of Rights...................................................4 (b) Registrable Securities............................................4 (c) Holders of Registrable Securities.................................5 3. Demand Registration....................................................5 (a) Request for Demand Registration...................................5 (b) Incidental or "Piggy-Back" Rights with Respect to a Demand Registration.......................................5 (c) Effective Demand Registration.....................................6 (d) Expenses..........................................................6 (e) Underwriting Procedures...........................................6 (f) Selection of Underwriters.........................................7 4. Incidental or "Piggy-Back" Registration................................7 (a) Request for Incidental Registration...............................7 (b) Expenses..........................................................8 5. Form S-3 Registration..................................................8 (a) Request for a Form S-3 Registration...............................8 (b) Form S-3 Underwriting Procedures..................................8 (e) Limitations on Form S-3 Registrations............................10 (f) Expenses.........................................................10 (g) No Demand Registration...........................................10 6. Holdback Agreements...................................................10 (a) Restrictions on Public Sale by Designated Holders................10 (b) Restrictions on Public Sale by the Company.......................11 7. Registration Procedures...............................................11 (a) Obligations of the Company.......................................11 (b) Seller Information...............................................14 (c) Notice to Discontinue............................................14 (d) Registration Expenses............................................15 8. Indemnification Contribution..............................................15 (a) Indemnification by the Company...................................15 (b) Indemnification by Designated Holders............................15 (c) Conduct of Indemnification Proceedings...........................16 (d) Contribution.....................................................17 9. Rule 144..................................................................17 10. Miscellaneous............................................................17 (a) Recapitalizations, Exchanges, etc................................18 (b) No Inconsistent Agreements.......................................18 (c) Remedies.........................................................18 (d) Amendments and Waivers...........................................18 (e) Notices..........................................................18 (f) Successors and Assigns; Third-Party Beneficiaries................20 (g) Counterparts.....................................................20 (h) Headings.........................................................21 (i) Governing Law....................................................21 (j) Severability.....................................................21 (k) Entire Agreement.................................................21 (l) Further Assurances...............................................21 (m) Other Agreements.................................................21 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT, dated as of February 15, 2001, (this "Agreement"), among priceline.com Incorporated, a Delaware corporation (the "Company"), Prime Pro Group Limited, a British Virgin Islands corporation ("PPGL") and wholly owned subsidiary of Cheung Kong (Holdings) Limited, a Hong Kong corporation ("CKH"), and Forthcoming Era Limited, a British Virgin Islands corporation ("FEL" and together with PPGL, the "Investors") and wholly owned subsidiary of Hutchison Whampoa Limited, a Hong Kong corporation ("HWL"). WHEREAS, the Company intends to issue and sell to PPGL and FEL shares of common stock, par value $.008 per share, of the Company (the "Common Stock"); WHEREAS, in connection with the issuance and sale of the shares of Common Stock, the Company, PPGL and FEL desire to enter into this Agreement, all in accordance with the terms and conditions set forth herein; and WHEREAS, the Company does not intend for this Agreement to be inconsistent with, or prior in right to, the 1998 Agreement. NOW, THEREFORE, the parties hereby agree as follows: 1. Definitions. As used in this Agreement the following terms have the meanings indicated: "Affiliate" shall mean any Person who is an "affiliate" as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. "Affiliate Transferee" means, as to either of the Investors or any of their Affiliate Transferees, (i) the other Investor, (ii) any wholly owned subsidiary of HWL and (iii) any wholly owned subsidiary of CKH. "Agreement" has the meaning set forth in the recitals to this Agreement. "Approved Underwriter" has the meaning set forth in Section 3(f) of this Agreement. "Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close. "Closing Price" means, with respect to the Registrable Securities, as of the date of determination, (a) the closing price per share of a Registrable Security on such date published in the Wall Street Journal or, if no such closing price on such date is published in the Wall Street Journal, the average of the closing bid and asked prices on such date, as officially reported on the principal national securities exchange (including, without limitation, 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 approved for quotation on The Nasdaq Stock Market or another automated quotation system, 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 reasonably determined in good faith by the Company's Board of Directors or, if such determination is not reasonably satisfactory to the Designated Holder for whom such determination is being made, by a nationally recognized investment banking firm selected by the Company and such Designated Holder, the expenses for which shall be borne equally by the Company and such Designated Holder. "Common Stock" has the meaning set forth in the recitals to this Agreement. "Company" has the meaning set forth in the recitals to this Agreement. "Company Underwriter" has the meaning set forth in Section 4(a) of this Agreement. "Demand Registration" has the meaning set forth in section 3(a) of this Agreement. "Demand Stockholders" means each stockholder or group of affiliated stockholders who (i) agree to become subject to this Agreement as a Demand Stockholder by executing and delivering the instrument attached hereto as Exhibit A and (ii) are approved as a Demand Stockholder by the Board of Directors and the Investors and their Affiliate Transferees; provided, however, that the addition of Delta Air Lines, Inc. as a Demand Stockholder shall not require the approval of the Investors or their Affiliate Transferees and the addition of any purchaser of Registrable Securities referred to in clause (ii) of Section 10(f) will not require the approval of the Board of Directors. "Designated Holder" means each of PPGL, FEL, the Demand Stockholders and the Piggy-Back Stockholders and any transferee of any of them to whom Registrable Securities have been transferred in accordance with the provisions of Section 10(f) of this Agreement, other than a transferee to whom Registrable Securities have been transferred pursuant to a Registration Statement under the Securities Act or Rule 144 or Regulation S under the Securities Act (or any successor rule thereto). "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. "Holders' Counsel" has the meaning set forth in Section 7(a)(i) of this Agreement. "Incidental Registration" has the meaning set forth in Section 4(a) of this Agreement. "Indemnified Party" has the meaning set forth in Section 8(c) of this Agreement. "Indemnifying Party" has the meaning set forth in Section 8(c) of this Agreement. "Initiating Holders" has the meaning set forth in Section 3(a) of this Agreement. "Inspector" has the meaning set forth in Section 7(a)(vii) of this Agreement. "Investors" has the meaning set forth in the recitals to this Agreement. "Market Price" means, on any date of determination, the average of the daily Closing Price of the Registrable Securities for the immediately preceding 30 days on which the national securities exchange or automated quotation system on which the Registrable Securities are listed or quoted is open for trading. "NASD" has the meaning set forth in Section 7(a)(xiii) of this Agreement. "1998 Agreement" means the Amended and Restated Registration Rights Agreement dated as of December 8, 1998, among the Company and the stockholders of the Company that are named therein or that have joined therein in accordance with its terms and that continue to hold Registrable Securities as defined therein. "Person" means any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, government (or an agency or political subdivision thereof) or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity. "Piggy-Back Stockholders" means each stockholder or group of affiliated stockholders who (i) agree to become subject to this Agreement as a Piggy-Back Stockholder by executing and delivering the instrument attached hereto as Exhibit B and (ii) are approved as a Piggy-Back Stockholder by the Board of Directors. "Preferred Stock" means all of the authorized preferred stock of the Company. "Records" has the meaning set forth in Section 7(a)(vii) of this Agreement. "Registrable Securities" means each of the following: (a) any and all shares of Common Stock acquired by the Designated Holders from the Company or an Affiliate of the Company, (b) any and all shares of Common Stock the sale of which is restricted under Rule 144 because of the status of the Designated Holder as an Affiliate of the Company and (c) any and all shares of Common Stock 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 of Common Stock or voting common stock issuable upon conversion, exercise or exchange thereof. Registrable Securities will cease to be Registrable Securities in accordance with Section 2(b). "Registration Expenses" has the meaning set forth in Section 7(d) of this Agreement. "Registration Statement" means a Registration Statement filed pursuant to the Securities Act. "Rule 144" has the meaning set forth in Section 9 of this Agreement. "S-3 Initiating Holders" has the meaning set forth in Section 5(a) of this Agreement. "S-3 Registration" has the meaning set forth in Section 5(a) of this Agreement. "SEC" means the Securities and Exchange Commission, or any similar agency then having jurisdiction to enforce the Securities Act. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. "Series B Preferred Stock" means the Series B Redeemable Preferred Sock, par value $.01 per share, of the Company. "Shelf Initiating Holders" has the meaning set forth in Section 5(c) of this Agreement. "Shelf Registration" means a registration of a delayed or continuous offering of Registrable Securities under the Securities Act pursuant to Rule 415 thereunder or any successor provision. "Stock Purchase Agreement" means the Stock Purchase Agreement dated as of February 15, 2001, among the Company, PPGL and FEL. 2. General; Securities Subject to this Agreement. (a) Grant of Rights. The Company hereby grants registration rights to PPGL, FEL, the Demand Stockholders and the Piggy-Back Stockholders upon the terms and subject to the conditions set forth in this Agreement. (b) Registrable Securities. For the 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 SEC 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) as to any Designated Holder, the entire amount of Registrable Securities owned by such Designated Holder, in the opinion of counsel satisfactory to the Company and the Designated Holder, each in their reasonable judgment, may be distributed to the public without any limitation as to volume pursuant to paragraph (e) of Rule 144 (without giving effect to paragraph (k) thereof) (or any successor provision then in effect) under the Securities Act or (iv) the Registrable Securities are proposed to be sold or distributed by a Person not entitled to the registration rights granted by this Agreement. (c) Holders of Registrable Securities. A Person is deemed to be a holder of Registrable Securities whenever such Person owns of record Registrable Securities, or holds as options to purchase, or a security convertible into or exercisable or exchangeable for, Registrable Securities whether or not such acquisition or conversion has actually been effected. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company may act upon the basis of the instructions, notice or election received from the registered owner of such Registrable Securities. Registrable Securities issuable upon exercise of an option or upon conversion of another security shall be deemed outstanding for the purposes of this Agreement. 3. Demand Registration. (a) Request for Demand Registration. At any time after the date of this Agreement, each of (i) PPGL, (ii) FEL, or (iii) one or more of the Demand Stockholders, acting through its representative identified on the instrument executed by it in the form attached hereto as Exhibit A or such representative's written designee (the "Initiating Holders"), may make a written request to the Company to register, under the Securities Act on any form for which the Company then qualifies and deems appropriate (a "Demand Registration"), the number of Registrable Securities stated in such request; provided, however, that the Company shall not be obligated to effect more than one Demand Registration for PPGL, one Demand Registration for the FEL and one Demand Registration for each of the Demand Stockholders pursuant to this Section 3. For purposes of the preceding sentence, two or more Registration Statements filed in response to one demand shall be counted as one Registration Statement. If at the time of any request to register Registrable Securities pursuant to this Section 3(a), the Company is engaged in, or has fixed plans to engage in within 90 days of the time of such request, a registered public offering or is engaged in or has fixed plans to engage in any other activity which, in the good faith determination of the Board of Directors of the Company, would be adversely affected in any material respect by the requested registration, then the Company may at its option direct that such request be delayed for a reasonable period not in excess of three months from the effective date of such offering or the date of completion of such other material activity, as the case may be; provided, however, that the Company shall not exercise such right to delay a request more than three times and for more than a total of 90 days in any one-year period. In addition, the Company shall not be required to effect any registration within 90 days after the effective date of any other Registration Statement of the Company. Each request for a Demand Registration by the Initiating Holders shall state the amount of the Registrable Securities proposed to be sold and the intended method of disposition thereof. Upon a request for a Demand Registration, the Company shall promptly take such steps as are necessary or appropriate to prepare for the registration of the Registrable Securities to be registered. (b) Incidental or "Piggy-Back" Rights with Respect to a Demand Registration. Each of the Designated Holders (other than Initiating Holders which have requested the relevant registration under Section 3(a)) may offer its Registrable Securities under any Demand Registration pursuant to this Section 3(b). Within 10 days after the receipt of a request far a Demand Registration from an Initiating Holder, the Company shall (i) give written notice thereof to all of the Designated Holders (other than Initiating Holders which have requested such registration under Section 3(a)) and (ii) subject to Section 3(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 10 days of the receipt by such Designated Holders of such written notice referred to in clause (i) above. Each such request by such Designated Holders shall specify the number of Registrable Securities proposed to be registered and the intended method of disposition thereof. The failure of any Designated Holder to respond within such 10-day period referred to in clause (ii) above shall be deemed to be a waiver of such Designated Holder's rights under this Section 3 with respect to such Demand Registration; provided , however, that any Designated Holder may waive its rights under this Section 3 prior to the expiration of such 10-day period by giving written notice to the Company, with a copy to the Initiating Holders. If a Designated Holder sends the Company a written request for inclusion of part or all of such Designated Holder's Registrable Securities in a registration, such Designated Holder shall not be entitled to withdraw or revoke such request without the prior written consent of the Company in its sole discretion unless, as a result of facts or circumstances arising after the date on which such request was made relating to the Company or to market conditions, such Designated Holder reasonably determines that participation in such registration would have a material adverse effect on such Designated 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 90 days after it receives a request under Section 3(a). 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) 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 SEC 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 any Designated Holder. (d) Expenses. In any registration initiated as a Demand Registration, the Company shall pay all Registration expenses in connection therewith, whether or not such Demand Registration becomes effective. (e) Underwriting Procedures. If the Company or the Initiating Holders holding a majority of the Registrable Securities held by all of the Initiating Holders to which the requested Demand Registration relates so elect, the Company shall use 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 3(f). In connection with any Demand Registration under this Section 3 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 3(b) 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 Holders and the Approved Underwriter. If the Approved Underwriter advises the Company in writing that in its opinion the aggregate amount of such Registrable Securities requested to be included in such offering is sufficiently large to have a material adverse effect on the success of such offering, then the Company shall include in such registration only the aggregate amount of Registrable Securities that in the opinion of the Approved Underwriter may be sold without any such material adverse effect and shall reduce the amount of Registrable Securities to be included in such registration, first as to the Company and, second as to the Initiating Holders and any other Designated Holders who requested inclusion of their Registrable Securities pursuant to Section 3(b), pro rata based on the number of Registrable Securities owned by each such Initiating Holder and Designated Holder. (f) Selection of Underwriters. If any Demand Registration or S-3 Registration, as the case may be, 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"); provided, however, that the Approved Underwriter shall, in any case, also be approved by the Initiating Holders or S-3 Initiating Holders, as the case may be, such approval not to be unreasonably withheld. 4. Incidental or "Piggy-Back" Registration. (a) Request for Incidental Registration. At any time after the date of this Agreement, if the Company proposes to file a Registration Statement under the Securities Act with respect to an offering by the Company for its own account (other than a Registration Statement on Form S-4 or S-8 or any successor thereto), then the Company shall give written notice of such proposed filing to each of the Designated Holders (in addition to any notice that the Company may be required to provide to other holders of securities pursuant to other registration rights agreements, including the 1998 Agreement), at least 30 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 holder may request (an "Incidental Registration"). The Company shall, and shall use its best efforts (within 10 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 have requested in writing to participate in the Incidental Registration to include its Registrable Securities in such offering on the same terms and conditions as the securities of the Company included therein. In connection with any Incidental Registration under this Section 4(a) involving an underwritten offering, the Company shall not be required to include any Registrable Securities in such underwritten offering unless the holders thereof accept the terms of the underwritten offering as agreed upon between the Company and the Company Underwriter, and then only in such quantity as will not, in the opinion of the Company Underwriter, jeopardize the success of the offering by the Company. If in the written opinion of the Company Underwriter the registration of all or part of the Registrable Securities which the Designated Holders have requested to be included would materially adversely affect 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 causing such adverse effect, first, all of the securities to be offered for the account of the Company; second, all of the securities eligible to be offered by the parties to the 1998 Agreement; third, the Registrable Securities to be offered for the account of the Designated Holders pursuant to this Section 4, pro rata based on the number of Registrable Securities owned by each such Designated Holder; and fourth, any other securities requested to be included in such underwritten offering. (b) Expenses. The Company shall bear all Registration Expenses in connection with any Incidental Registration pursuant to this Section 4, whether or not such Incidental Registration becomes effective. 5. Form S-3 Registration. (a) Request for a Form S-3 Registration. At any time when the Company is eligible for use of Form S-3, in the event that the Company shall receive from (i) PPGL, (ii) FEL or (iii) one or more of the Demand Stockholders, acting through its representative identified on the instrument executed by it in the form attached hereto as Exhibit A or such representative's written designee (the "S-3 Initiating Holders"), a written request that the Company register, under the Securities Act, on Form S-3 (or any successor form then in effect) (an "S-3 Registration"), all or a portion of the Registrable Securities owned by such S-3 Initiating Holders, the Company shall give written notice of such request to all of the Designated Holders (other than S-3 Initiating Holders which have requested an S-3 Registration under this Section 5(a)) at least 30 days before the anticipated filing date of such Form S-3, and such notice shall describe the proposed registration and offer such Designated Holders the opportunity to register the number of Registrable Securities as each such Designated Holder may request in writing to the Company, given within 15 days after their receipt from the Company of the written notice of such registration. The Company shall (i) take such steps as are necessary or appropriate to prepare for the registration of the Registrable Securities to be registered and (ii) subject to Section 5(b), use reasonable best efforts to (x) cause such registration pursuant to this Section 5(a) to become and remain effective as soon as practicable, but in any event not later than 90 days after it receives a request therefor and (y) include in such offering the Registrable, Securities of the Designated Holders (other than S-3 Initiating Holders which have requested an S-3 Registration under this Section 5(a)) who have requested in writing to participate in such registration on the same terms and conditions as the Registrable Securities of the S-3 Initiating Holders included therein. (b) Form S-3 Underwriting Procedures. If the Company or the S-3 Initiating Holders holding a majority of the Registrable Securities held by all of the S-3 Initiating Holders to which the requested S-3 Registration relates so elect, the Company shall use reasonable best efforts to cause such S-3 Registration pursuant to this Section 5 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 3(f). In connection with any S-3 Registration under Section 5(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, the Approved Underwriter and the S-3 Initiating Holders. If in the written opinion of the Approved Underwriter the registration of all or part of the Registrable Securities which the S-3 Initiating Holders and the other Designated Holders have requested to be included would materially adversely affect the success of such public 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 causing such adverse effect, first, the Registrable Securities to be offered for the account of the S-3 Initiating Holders and the other Designated Holders who requested inclusion of their Registrable Securities pursuant to Section 5(a), pro rata based on the number of Registrable Securities owned by each such S-3 Initiating Holder and Designated Holder and second, any other securities requested to be included in such underwritten offering. (c) Request for a Shelf Registration. At any time after the date of this Agreement, (i) PPGL, (ii) FEL or (iii) one or more of the Demand Stockholders, acting through its representative identified on the instrument executed by it in the form attached hereto as Exhibit A or such representative's written designee (the "Shelf Initiating Holders") shall be entitled to request the Company to file and maintain a Shelf Registration with the SEC under which all or any portion of the shares of Common Stock that is owned by it at the time of such request may be resold at any time and from time to time until such time as all such Common Stock may be sold by the Shelf Initiating Holders in a single transaction pursuant to Rule 144 under the Securities Act in accordance with the volume limitations specified in paragraph (e) thereof (and without giving effect to paragraph (k) thereof). The Company shall use commercially reasonable efforts to cause any such Shelf Registration to become effective and to include in such Shelf Registration the Registrable Securities of the Designated Holders who have requested in writing to participate in such registration on the same terms and conditions. If the Company shall propose to file a registration statement to effect a Shelf Registration for the offer and sale of Common Stock of any stockholder of the Company, the Company shall notify the Designated Holders and the Designated Holders shall have the right to require the registration of Registrable Securities under such Shelf Registration in such amount as they may specify in writing to the Company within 15 days after receiving notice of such proposed Shelf Registration. At any time when a Shelf Registration is effective and covers sufficient shares of Common Stock to provide for the registration of a contemplated offering by a Designated Holder, such Designated Holder will not have the right to request a Demand Registration or S-3 Registration; provided, however, that such Designated Holder will still have the right to join in registered underwritten offerings under Section 3(b) and Section 4, subject to the potential limitation of the amount of Common Stock such Designated Holder may offer and sell as provided in such Sections. The Company shall not be required to effect a requested registration as a Shelf Registration if the Board of Directors of the Company shall have determined in good faith that registration in such form at the time of the request would have a material adverse effect on the Company (having regard for the interests of stockholders generally) which would not be suffered if the registration were not carried out as a Shelf Registration; provided, however, that the Company's right to defer a Shelf Registration will be exercisable on one occasion only for a period of up to 90 days. If the Board of Directors of the Company shall have made such a determination with respect to such Shelf Registration, then the Company will be required to proceed with a Demand Registration or S-3 Registration which is not a Shelf Registration in accordance with Section 3(a) or 5(a), as the case may be, and the Designated Holders may not request that any subsequent Demand Registration or S-3 Registration be a Shelf Registration until at least three months after such determination. (d) Company's Election to File a Shelf Registration. The Designated Holders agree that the Company may, at any time after the date of this Agreement, at the Company's option, file a Shelf Registration with the SEC in order to facilitate sales of Common Stock by the Designated Holders. In the event that such a Shelf Registration is declared effective by the SEC, the Company may comply with any request for registration under this Agreement by providing an appropriate prospectus supplement under such Shelf Registration. The terms and conditions of this Agreement, including without limitation, the provisions of Section 5(e), shall apply to the use and availability of such Shelf Registration as if it were the filing of a registration statement. (e) Limitations on Form S-3 Registrations. If at the time of any request to register Registrable Securities pursuant to Section 5(a) or any utilization of a Shelf Registration pursuant to Section 5(c) or 5(d), the Company is engaged in, or has fixed plans to engage in within 90 days of the time of such request, a registered public offering or is engaged or has fixed plans to engage in any other activity which, in the good faith determination of the Board of Directors of the Company, would be adversely affected in any material respect by the requested S-3 Registration then the Company may at its option direct that such request or continued availability be delayed for a reasonable period not in excess of three months from the effective date of such offering or the date of completion of such other material activity, as the case may be; provided, however, that the Company shall not exercise such right to delay a request more than three times and for more than a total of 90 days in any one-year period. In addition, the Company shall not be required to effect any registration pursuant to Section 5(a) (i) within three months after the effective date of any other Registration Statement of the Company (other than on Form S-4 or S-8), (ii) if within the 12-month period preceding the date of such request, the Company has effected two registrations on Form S-3 pursuant to Section 5(a) and all of the Registrable Securities registered therein have been sold, (iii) if Form S-3 is not available for such offering by the S-3 Initiating Holders or (iv) if the S-3 Initiating Holders, together with the Designated Holders (other than S-3 Initiating Holders which have requested an S-3 Registration under Section 5(a)) registering Registrable Securities in such registration, propose to sell their Registrable Securities at an aggregate price (calculated based upon the Market Price of the Registrable Securities on the date of filing of the Form, S-3 with respect to such Registrable Securities) to the public of less than $2,500,000. (f) Expenses. In connection with any registration pursuant to this Section 5, the Company shall pay all Registration Expenses, whether or not such registration becomes effective. (g) No Demand Registration. No registration requested by any Designated Holder pursuant to this Section 5 shall be deemed a Demand Registration pursuant to Section 3. 6. Holdback Agreements. (a) Restrictions on Public Sale by Designated Holders. If and to the extent requested by the Company, the Initiating Holders or the S-3 Initiating Holders, as the ease may be, in the case of a non-underwritten public offering or if and to the extent requested 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 (i) 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 (ii) not to make any request for a Demand Registration, S-3 Registration or Shelf Registration under this Agreement, during the 120-day period or such shorter period agreed upon by such Designated Holder and the requesting party beginning thirty days prior to the anticipated effective date of such Registration Statement (except as part of such registration). (b) Restrictions on Public Sale by the Company. The Company agrees not to effect any public sale or distribution of any of its equity securities, or any securities convertible into or exchangeable or exercisable, for such securities (except pursuant to such registrations on Form S-4 or S-8 or any successor thereto), during the period beginning on the effective date of any Registration Statement (other than a Shelf Registration) 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) 90 days after the effective date of such Registration Statement (except as part of such registration). In the case of an underwritten public offering of Registrable Securities under a Shelf Registration, if and to the extent requested by the Approved Underwriter, the Company agrees not to effect any public sale or distribution of Registrable Securities during such period not to exceed 120 days as may be agreed upon by the Company and the Approved Underwriter (i) beginning on the later of the date following the date such request is made and the date 30 days before the anticipated commencement of such public offering and (ii) ending on the earlier of the date on which the distribution of Registrable Securities in such offering is completed and 90 days after the commencement of such public offering. 7. Registration Procedures. (a) Obligations of the Company. Whenever registration of Registrable Securities has been requested pursuant to Section 3, Section 4 or Section 5 of this Agreement, the Company shall use reasonable best efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method of distribution thereof as quickly as practicable, and in connection with any such request, the Company shall, as expeditiously as possible: (i) prepare and file with the SEC 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 use its best efforts to 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 one 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 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 SEC, 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 SEC and take all reasonable action required to prevent the entry of such stop order or to remove it if entered; (ii) prepare and file with the SEC 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) 90 days and (y) such shorter period which will terminate when all Registrable Securities covered by such Registration Statement have been sold, or in the case of a Shelf Registration, until such time as the Registrable Securities covered thereby have been sold pursuant to such registration or cease to be deemed Registrable Securities, and comply with the provisions of the 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) as soon as reasonably practicable, 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 reasonably 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 7(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 not misleading in light of the circumstances under which they were made, 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 as 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 not misleading in light of the circumstances under which they were made; (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 3, Section 4 or Section 5, 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 (a) 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 reasonable 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 underwrites reasonably request; (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 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 such seller may reasonably request and are customarily included in such opinions; (x) otherwise use reasonable best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable but no later than 15 months after the effective date of the Registration Statement, an earnings statement covering a period of 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 or automated quotation system on which similar securities issued by the Company are then listed or quoted; provided, however, that the applicable listing requirements are satisfied; (xii) keep Holders' Counsel advised as to the initiation and progress of any registration under Section 3, Section 4 or Section 5 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 National Association of Securities Dealers, Inc. (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 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 7(a)(v), such Designated Holder shall forthwith discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such Designated Holder's receipt of the copies of the supplemented or amended prospectus contemplated by Section 7(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, without limitation, the period referred to in Section 7(a)(ii)) by the number of days during the period from and including the date of the giving of such notice pursuant to Section 7(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 7(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, without limitation, (i) SEC, 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 in connection with "blue sky" qualifications of the Registrable Securities), (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, without limitation, 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, in the case of a Demand Registration, the Initiating Holders and (v) any liability insurance or other premiums for insurance for the benefit of the Company or its directors and officers obtained in connection with any Demand Registration or piggy-back registration thereon, Incidental Registration or S-3 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 7(d) are referred to herein as "Registration Expenses." "Registration Expenses" shall not include, and 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 any fees and expenses of counsel to or accountants or other advisors for, such Designated Holders, all of which shall be borne by the Designated Holders; provided, however, that nothing in this Section 7(d) shall be construed to supersede the Company's obligations with respect to the payment of expenses in connection with a Demand Registration or an Incidental Registration, as described in Sections 3(d) and 4(b) above and clause (iv) above. 8. 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 Holder from and against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation) incurred by them 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 (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, except insofar as the same are made in reliance upon, caused by or contained in any information concerning such Designated Holder furnished in writing to the Company by or on behalf of such Designated Holder expressly for use therein, including, without limitation, the information furnished to the Company pursuant to Section 8(b). The Company shall also provide customary indemnities to any underwriters of the Registrable Securities and each Person who controls such underwriters (within the meaning of Section I5 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 3, Section 4 or Section 5 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 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 or on behalf of such Designated Holder expressly for use therein, including, without limitation, the information furnished to the Company pursuant to this Section 8(b); provided, however, that the total amount to be indemnified by such Designated Holder pursuant to this Section 8(b) shall be limited to the net proceeds received by such Designated Holder in the offering to which the Registration Statement or prospectus relates. (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 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 these 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 8 from the Indemnifying Party is unavailable to an Indemnified Party hereunder in respect of any losses, claims, damages, liabilities or expenses referred to therein, then the Indemnifying 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 losses, claims, damages, liabilities or expenses 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 losses, claims, damages, liabilities or expenses, 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 losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Sections 8(a), 8(b) and 8(c), any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding; provided, however, that the total amount to be indemnified 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 8(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. 9. Rule 144. The Company covenants that from and after the date of this Agreement 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), 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 ("Rule 144"), or (ii) any similar rules or regulations hereafter adopted by the SEC. 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. The Company shall, upon the request of any Designated Holder of Registrable Securities, deliver to such Designated Holder unlegended certificates in settlement of a transaction pursuant to an effective Registration Statement or Rule 144; provided, however, that such Designated Holder shall provide the Company with an opinion of counsel satisfactory to the Company (or other evidence reasonably satisfactory) that such Shares may be unlegended; provided further, however, that if at a later date for any reason such Shares require that a legend be set forth on the certificates, then such Designated Holder shall return the unlegended certificates in exchange for legended certificates. 10. Miscellaneous. (a) Recapitalizations, Exchanges, etc. The provisions of this Agreement shall apply, to the full extent set forth herein with respect to (i) the shares of Common Stock, (ii) any and all shares of voting common stock of the Company into which the shares of Common Stock are converted, exchanged or substituted in any recapitalization or other capital reorganization by the Company and (iii) any and all equity securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in conversion of, in exchange for or in substitution of, the shares of Common Stock and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof. The Company shall cause any successor or assign (whether by sale, merger or otherwise) to enter into a new registration rights agreement with the Designated Holders on terms substantially the same as this Agreement as a condition of any such transaction. (b) No Inconsistent Agreements. The Company represents and warrants that, except as provided in the forms, reports and documents the Company has filed with the SEC (including all exhibits thereto), it has not granted to any Person the right to request or require the Company to register any securities issued by the Company, other than the rights granted to the Designated Holders herein. The Company shall not enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Designated Holders in this Agreement or grant any additional registration rights to any Person or with respect to any securities which are not Registrable Securities which are prior in right to or inconsistent with the rights granted in this Agreement. The Company further agrees that it will not provide rights to a shelf registration statement to any other stockholder that are more favorable than the rights to Shelf Registration that are provided for herein. (c) Remedies. The Designated Holders, in addition to being entitled to exercise all rights granted by law, including recovery of damages, shall be entitled to specific performance of their rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive in any action for specific performance the defense that a remedy at law would be adequate. (d) Amendments and Waivers. Except as otherwise provided herein, the provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless consented to in writing by (i) the Company, (ii) PPGL, (iii) FEL, (iv) the holders holding Registrable Securities representing (after giving effect to any adjustments) at least a majority of the aggregate number of Registrable Securities owned by each Demand Stockholder and, if the amendment, supplement, modification, waiver or consent adversely affects the rights or obligations of the Piggy-Back Stockholders, then also by (v) the holders holding Registrable Securities representing (after giving effect to any adjustments) at least a majority of the aggregate number of Registrable Securities owned by each Piggy-Back Stockholder. Any such written consent shall be binding upon the Company and all of the Designated Holders. (e) Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be made by registered or certified first-class mail, return receipt requested, telecopier, courier service, overnight mail or personal delivery: (i) if to the Company: priceline.com Incorporated 800 Connecticut Avenue Norwalk, CT 06854 Telecopy: (203) 299-8915 Attention: Office of the General Counsel with a copy to: Cravath, Swaine & Moore Worldwide Plaza 825 Eighth Avenue New York, NY 10019 Telecopy: (212) 474-3700 Attention: William P. Rogers, Jr., Esq. (ii) if to FEL: Forthcoming Era Limited Offshore Incorporations Limited P.O. Box 957 Offshore Incorporations Centre Road Town, Tortola British Virgin Islands with a copy to: Hutchison Whampoa Limited 22/F Hutchison House 10 Harcourt Road Central Hong Kong Telecopy: (852) 2128 1778 Attention: Company Secretary (iii) if to PPGL: Prime Pro Group Limited c/o Cheung Kong (Holdings) Limited 8/F, Cheung Kong Center 2 Queen's Road Central Hong Kong with a copy to: Cheung Kong (Holdings) Limited 8/F, Cheung Kong Center 2 Queen's Road Central Hong Kong Telecopy: (852) 2845 2057 Attention: Mr. Edmond Ip (iv) (if to any other Designated Holder, at its address as it appears on the record books of the Company. All such notices and communications shall be deemed to have been duly given when delivered by hand, if personally delivered; when delivered by courier or overnight mail, if delivered by commercial courier service or overnight mail; 5 Business days after being deposited in the mail, postage prepaid, if mailed; and when receipt is mechanically acknowledged, if properly telecopied. (f) Successors and Assigns; Third-Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the heirs, legatees, legal representatives, successors and permitted assigns of each of the parties hereto as hereinafter provided. The rights of each Investor to require registration hereunder shall be, as to any Registrable Securities owned by such Investor, (i) automatically transferred upon any transfer of such Registrable Securities by such Investor to an Affiliate Transferee or by any Affiliate Transferee to any other Affiliate Transferee (and all Registrable Securities held by Affiliate Transferees shall continue to be Registrable Securities even if registration rights are not transferred to and exercisable by such Affiliate Transferees), (ii) automatically transferred upon any transfer of a number of Registrable Securities representing 65% or more of the Investor's holding of Common Stock purchased pursuant to the Stock Purchase Agreement to a single purchaser or a "group" of purchasers (within the meaning of Section 13(d)(3) of the Exchange Act) if in such transfer the purchaser(s) will receive "restricted securities" within the meaning of Rule 144 (and such purchaser or group will become a Demand Stockholder hereunder by executing and delivering an instrument in the form attached hereto as Exhibit A) and (iii) in all other cases, transferred only with the consent of the Company. The incidental or "piggy-back" registration rights of the Designated Holders contained in Sections 3(b) and 4 hereof and the other rights of each of the Designated Holders with respect thereto shall be, with respect to any Registrable Security, automatically transferred upon a permitted transfer of Registrable Securities by such Designated Holder to any Person who is the transferee of such Registrable Security. All of the obligations of the Company hereunder shall survive any such transfer. No Person other than the parties hereto and their heirs, legatees, legal representatives, successors and permitted assigns is intended to be a beneficiary of any of the rights granted hereunder. (g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (i) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the principles of conflicts of law of any jurisdiction. (j) Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, it being intended that all of the rights and privileges of the Designated Holders shall be enforceable to the fullest extent permitted by law. (k) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and in the Stock Purchase Agreement, and any stock purchase agreement between the Company and a Demand Stockholder or a Piggy-Back Stockholder. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. (l) Further Assurances. Each of the parties shall execute such documents and perform such further acts as may be reasonably required or necessary to carry out or to perform the provisions of this Agreement. (m) Other Agreements. Nothing contained in this Agreement shall be deemed to be a waiver of, or release from, any obligations any party hereto may have under, or any restrictions on the transfer of Registrable Securities or other securities of the Company imposed by, any other agreement including, but not limited to, the Stock Purchase Agreement or any series of preferred stock issued to a Demand Stockholder or a Piggy-Back Stockholder and any stock purchase agreement between the Company and a Demand Stockholder or a Piggy-Back Stockholder. IN WITNESS WHEREOF, the undersigned have executed, or have caused to be executed, this REGISTRATION RIGHTS AGREEMENT on the date first written above. PRICELINE.COM INCORPORATED By: /s/ Jeffery H. Boyd ---------------------------------------- Name: Jeffery H. Boyd Title:Chief Operating Officer PRIME PRO GROUP LIMITED By: /s/ Dominic Lai ---------------------------------------- Name: Dominic Lai Title: Authorized Signatory FORTHCOMING ERA LIMITED By: /s/ Dominic Lai ---------------------------------------- Name: Dominic Lai Title:Director Exhibit A ACKNOWLEDGMENT AND AGREEMENT TO THE REGISTRATION RIGHTS AGREEMENT WHEREAS, pursuant to a [ ], the undersigned [wishes] [wish] to receive from priceline.com Incorporated, a Delaware corporation (the "Company"), _____ shares, par value $0.01 per share, of [Common Stock] [Preferred Stock], or certain newly issued options, warrants or other rights to purchase _______ shares of Common Stock (the "Shares"), of the Company; and WHEREAS, the undersigned [wishes] [wish] to receive certain registration rights with respect to such Shares; and WHEREAS, the undersigned [has] [have] reviewed a copy of that certain Registration Rights Agreement dated as of February 15, 2001 (the "Agreement"), among the Company, Prime Pro Group Limited and Forthcoming Era Limited and [has] been given a copy of the Agreement and afforded ample opportunity to read and to have counsel review it, and the undersigned [is] [are] thoroughly familiar with its terms. NOW, THEREFORE, in consideration of the mutual premises contained herein and in the Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and to induce the Company to issue such Shares and to grant such registration rights, the undersigned [does] [collectively do] hereby acknowledge and agree that (i) the undersigned [has] [have] been given a copy of the Agreement and afforded ample opportunity to read and to have counsel review it, and the undersigned is thoroughly familiar with its terms, (ii) the Shares are subject to terms and conditions set forth in the Agreement, (iii) the undersigned [does] [collectively do] hereby agree fully to be bound by the Agreement collectively as a group as a "Demand Stockholder" (as therein defined), and upon the execution and delivery of this Acknowledgment and Agreement by the Company, the undersigned shall have [collectively as a group] all of the rights and obligations under the Agreement as a Demand Stockholder and (iv) the undersigned [does] [collectively do] hereby ______ name to serve as [its] [their] representative under the Agreement. This __________, day of ________________, 20__. PRICELINE.COM INCORPORATED By: -------------------------------- Name: Title: Exhibit B ACKNOWLEDGMENT AND AGREEMENT TO THE REGISTRATION RIGHTS AGREEMENT WHEREAS, pursuant to a [ ], the undersigned [wishes] [wish] to receive from priceline.com Incorporated, a Delaware corporation (the "Company"), _____ shares, par value $0.01 per share, of [Common Stock] [Preferred Stock], or certain newly issued options, warrants or other rights to purchase ______ shares of Common Stock (the "Shares"), of the Company; and WHEREAS, the undersigned [wishes] [wish] to receive certain registration rights with respect to such Shares; and WHEREAS, the undersigned [has] [have] reviewed a copy of that certain Registration Rights Agreement dated as of February 15, 2001 (the "Agreement"), among the Company, Prime Pro Group Limited and Forthcoming Era Limited and [has] [have] been given a copy of the Agreement and afforded ample opportunity to read and to have counsel review it, and the undersigned [is] [are] thoroughly familiar with its terms. NOW, THEREFORE, in consideration of the mutual premises contained herein and in the Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and to induce the Company to issue such Shares and to grant such registration rights, the undersigned [does] [collectively do] hereby acknowledge and agree that (i) the undersigned [has] [have] been given a copy of the Agreement and afforded ample opportunity to read and to have counsel review it, and the undersigned is thoroughly familiar with its terms, (ii) the Shares are subject to terms and conditions set forth in the Agreement, (iii) the undersigned [does] [collectively do] hereby agree fully to be bound by the Agreement as a Piggy-Back Stockholder (as therein defined), and upon the execution and delivery of this Acknowledgment and Agreement by the Company, the undersigned shall have [collectively as a group] all of the rights and obligations under the Agreement as a Piggy-Back Stockholder, and (iv) the undersigned [does] [collectively do] hereby name ________ to serve as [its] [their] representative under the Agreement. This _________day of __________________, 20__. PRICELINE.COM INCORPORATED By: -------------------------------- Name: Title: -----END PRIVACY-ENHANCED MESSAGE-----