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) September 21, 2006

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)

Registrant’s telephone number, including area code:  (203) 299-8000

(Exact name of registrant as specified in its charter)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.Entry into a Material Definitive Agreement.

On September 21, 2006, priceline.com Incorporated (the “Company”) entered into a purchase agreement (the “Purchase Agreement”) with Goldman Sachs & Co., as representative of itself and Merrill Lynch, Pierce, Fenner & Smith, as the initial purchasers (collectively, the “Initial Purchasers”), under which the Company agreed to sell $150 million principal amount of 0.50% Convertible Senior Notes due 2011 (plus up to an additional $22.5 million aggregate principal amount at the option of the Initial Purchasers) (the “2011 Notes”), and $150 million principal amount of 0.75% Convertible Senior Notes due 2013 (plus up to an additional $22.5 million aggregate principal amount at the option of the Initial Purchasers) (the “2013 Notes,” and along with the 2011 Notes, the “Notes”) in a private placement in reliance on Section 4(2) of the Securities Act of 1933, as amended (the “Act”). Under the Purchase Agreement, the Initial Purchasers may resell the Notes to qualified institutional buyers in reliance on Rule 144A under the Act, at a price equal to 100% of the aggregate principal amount. The Purchase Agreement is attached hereto at Exhibit 10.1, and is incorporated herein by reference.

The sale of $300 million aggregate principal amount of the Notes to the Initial Purchasers was completed on September 27, 2006. The Company’s net proceeds from the sale of the notes are estimated to be approximately $291.8 million after deducting the discount to the Initial Purchasers and estimated offering expenses.

On September 21, 2006, the Company entered into hedge transactions with respect to the Notes and the Company’s common stock, par value $0.008 per share (the “purchased call options”) with affiliates of the Initial Purchasers (the “dealers”). The Company will use a portion of the net proceeds from the sale of the Notes to pay the net cost of the purchased call options. The purchased call options increase the effective conversion price of the Notes from the Company’s perspective and are expected to reduce the potential dilution upon conversion of the Notes if the market price of the Company’s common stock is greater than $50.47 per share. If the market value per share of the Company’s common stock at the time of any exercise under the purchased call options is above such strike price, the purchased call options will entitle the Company to receive from the dealers net shares of the Company’s common stock based on the excess of the then current market price of the Company’s common stock over the strike price of the purchased call options.

The purchased call options are separate transactions entered into by the Company with the dealers, are not part of the terms of the Notes and will not affect the holders’ rights under the Notes. Holders of the Notes will not have any rights with respect to the purchased call options. Confirmations of each of the call option transactions are attached hereto as Exhibits 10.2, 10.3, 10.4 and 10.5, and are incorporated herein by reference.

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Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a
 Registrant.

The information set forth under Item 1.01 of this Report is incorporated herein by reference.

Item 3.02Unregistered Sales of Equity Securities.

The information set forth under Item 1.01 of this Report is incorporated herein by reference.

Item 9.01Financial Statements and Exhibits.

(d) Exhibits.

Exhibits
10.1	Purchase Agreement, dated as of September 21, 2006, between priceline.com Incorporated and Goldman Sachs & Co., as representative of the Initial Purchasers.
10.2	Confirmation of 5-Year Issuer Capped Share Call Option Transaction between Goldman, Sachs & Co. and priceline.com Incorporated, dated as of September 21, 2006.
10.3	Confirmation of 7-Year Issuer Capped Share Call Option Transaction between Goldman, Sachs & Co. and priceline.com Incorporated, dated as of September 21, 2006.
10.4	Confirmation of 5-Year Issuer Capped Share Call Option Transaction between Merrill Lynch, Pierce, Fenner & Smith Incorporated and priceline.com Incorporated, dated as of September 21, 2006.
10.5	Confirmation of 7-Year Issuer Capped Share Call Option Transaction between Merrill Lynch, Pierce, Fenner & Smith Incorporated and priceline.com Incorporated, dated as of September 21, 2006.

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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/ Jeffery H. Boyd
	Name:	Jeffery H. Boyd
	Title:	President and Chief Executive Officer

Date:  September 27, 2006

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EXHIBIT INDEX

Exhibits
10.1	Purchase Agreement, dated as of September 21, 2006, between priceline.com Incorporated and Goldman Sachs & Co., as representative of the Initial Purchasers.
10.2	Confirmation of 5-Year Issuer Capped Share Call Option Transaction between Goldman, Sachs & Co. and priceline.com Incorporated, dated as of September 21, 2006.
10.3	Confirmation of 7-Year Issuer Capped Share Call Option Transaction between Goldman, Sachs & Co. and priceline.com Incorporated, dated as of September 21, 2006.
10.4	Confirmation of 5-Year Issuer Capped Share Call Option Transaction between Merrill Lynch, Pierce, Fenner & Smith Incorporated and priceline.com Incorporated, dated as of September 21, 2006.
10.5	Confirmation of 7-Year Issuer Capped Share Call Option Transaction between Merrill Lynch, Pierce, Fenner & Smith Incorporated and priceline.com Incorporated, dated as of September 21, 2006.

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EX-10.1

Exhibit 10.1

priceline.com Incorporated

0.50% Convertible Senior Notes due 2011
0.75% Convertible Senior Notes due 2013

Purchase Agreement

September 21, 2006

Goldman, Sachs & Co.,

As representative of the several Purchasers
named in Schedule I hereto,

c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004.

Ladies and Gentlemen:

Priceline.com Incorporated, a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell to the Purchasers named in Schedule I hereto (the “Purchasers”) an aggregate of $150,000,000 principal amount of its 0.50% Convertible Senior Notes due September 30, 2011 (“2011 Notes”) and an aggregate of $150,000,000 principal amount of its 0.75% Convertible Senior Notes due September 30, 2013 (“2013 Notes” and, together with the 2011 Notes, the “Firm Securities”), convertible into shares of the Company’s common stock, par value $0.008 per share (“Stock”), and, at the election of the Purchasers, up to an aggregate of $22,500,000 additional principal amount of the 2011 Notes (“Optional 2011 Notes”) and up to an aggregate of $22,500,000 additional principal amount of the 2013 Notes (“Optional 2013 Notes” and, together with the Optional 2011 Notes, the “Optional Securities”) (the Firm Securities and the Optional Securities which the Purchasers elect to purchase pursuant to Section 2 hereof are herein collectively called the “Securities”).

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

(a)       A preliminary offering circular, dated September 21, 2006 (the “Preliminary Offering Circular”), and an offering circular, dated September 21, 2006 (the “Offering Circular”), have been prepared in connection with the offering of the Securities and shares of the Stock issuable upon conversion thereof.  The Preliminary Offering Circular, as amended and supplemented immediately prior to the Applicable Time (as defined in Section 1(b)), is hereinafter referred to as the “Pricing Circular”.  Any reference to the Preliminary Offering Circular, the Pricing Circular or the Offering Circular shall be deemed to refer to and include

the Company’s most recent Annual Report on Form 10-K and all subsequent documents filed with the United States Securities and Exchange Commission (the “Commission”) pursuant to Section 13(a), 13(c) or 15(d) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”) on or prior to the date of such circular, and any reference to the Preliminary Offering Circular or the Offering Circular, as the case may be, as amended or supplemented, as of any specified date, shall be deemed to include (i) any documents filed with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act after the date of the Preliminary Offering Circular or the Offering Circular, as the case may be, and prior to such specified date and (ii) any Additional Issuer Information (as defined in Section 5(f)) furnished by the Company prior to the completion of the distribution of the Securities; and all documents filed under the Exchange Act and so deemed to be included in the Preliminary Offering Circular, the Pricing Circular or the Offering Circular, as the case may be, or any amendment or supplement thereto are hereinafter called the “Exchange Act Reports.”  The Exchange Act Reports, when they were or are filed with the Commission, conformed or will conform in all material respects to the applicable requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder; and no such documents were filed with the Commission since the Commission’s close of business on the business day immediately prior to the date of this Agreement and prior to the execution of this Agreement, except as set forth on Schedule II-A(a) hereof. The Preliminary Offering Circular or the Offering Circular and any amendments or supplements thereto and the Exchange Act Reports did not and will not, as of their respective dates, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by a Purchaser through Goldman, Sachs & Co. expressly for use therein;

(b)       For the purposes of this Agreement, the “Applicable Time” is 4:15 p.m. (Eastern time) on the date of this Agreement; the Pricing Circular as supplemented by the information set forth in Schedule V hereto, taken together (collectively, the “Pricing Disclosure Package”) as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Company Supplemental Disclosure Document (as defined in Section 6(a)(ii)) listed on Schedule II-A(b) hereto does not conflict with the information contained in the Pricing Circular or the Offering Circular and each such Company Supplemental Disclosure Document, as supplemented by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements or omissions made in a Company Supplemental Disclosure Document in reliance upon and in conformity with information furnished in writing to the Company by a Purchaser through Goldman, Sachs & Co. expressly for use therein;

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

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

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

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

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

(g)       The Securities have been duly authorized and, when issued and delivered pursuant to this Agreement, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the indenture to be dated as of September 27, 2006 (the “Indenture”) between the Company and American Stock Transfer and Trust Company, as Trustee (the “Trustee”), under which they are to be issued; the Indenture, which will be substantially in the form previously delivered to you, has been duly authorized and, when executed and delivered by the Company and the Trustee, the Indenture will constitute a valid and legally binding instrument,

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

(h)       The Registration Rights Agreement to be dated as of September 27, 2006, between the Company and the Purchasers (the “Registration Rights Agreement”), which will be substantially in the form previously delivered to you, has been duly authorized by the Company and, and as of the Time of Delivery (as defined herein) will have been duly executed and delivered by the Company, and will constitute a valid and legally binding instrument enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles, except as rights to indemnification, contribution or exculpation thereunder may not be enforceable; and the Registration Rights Agreement will conform in all material respects to the descriptions thereof in the Pricing Disclosure Package and the Offering Circular;

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

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

(k)       The issue and sale of the Securities, the issuance of the Stock upon conversion of the Securities and the compliance by the Company with all of the provisions of the Securities, the Indenture, the Registration Rights Agreement and this Agreement and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will such action result in any violation of the provisions of the Amended and Restated Certificate of Incorporation, as amended, or By-laws of the Company,  or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities, the issue of the Stock upon conversion of the Securities or the consummation by the Company of the transactions contemplated by this Agreement, the Indenture or the Registration Rights Agreement except for (1) the filing of a registration statement by the Company with the Commission pursuant to the United States Securities Act of 1933, as amended (the “Act”), pursuant to the Registration Rights Agreement and (2) such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Purchasers;

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

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

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

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

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

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

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

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

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and sale of the Securities in the United States and to U.S. persons contemplated by this Agreement as transactions exempt from the registration provisions of the Securities Act;

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

(u)       Deloitte & Touche LLP, who have certified certain financial statements of the Company and its subsidiaries, and have audited the Company’s internal control over financial reporting and management’s assessment thereof is an independent registered public accounting firm as required by the Act and the rules and regulations of the Commission thereunder;

(v)       The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that complies with the requirements of the Exchange Act and has been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  The Company’s internal control over financial reporting was effective as of a December 31, 2005 evaluation thereof.  The Company is not aware of any material weaknesses in its internal control over financial reporting;

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

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

(y)  Neither the Company nor any of its consolidated or unconsolidated subsidiaries have, since December 31, 2005: (i) failed  to pay any dividend or sinking fund installment on preferred stock; or (ii) defaulted on either any installment or installments on indebtedness for borrowed money or on any rental on one or more long term leases, which defaults in the aggregate are material to the financial position of the Company and its consolidated and unconsolidated subsidiaries, taken as a whole; and

(z)  The information included in the Company’s press release dated September 21, 2006 and entitled “Priceline.com Increases 3rd Quarter 2006 Guidance; Establishes 4th Quarter 2006 and 2007 EPS Targets” has been prepared by the Company’s management in good faith based upon reasonable assumptions.

2.             Subject to the terms and conditions herein set forth, (a) the Company agrees to issue and sell to each of the Purchasers, and each of the Purchasers agrees, severally and not jointly, to purchase from the Company, at a purchase price of 97.5% of the principal amount thereof, the principal amount of Securities set forth opposite the name of such Purchaser in Schedule I hereto, and (b) in the event and to the extent that the Purchasers shall exercise the election to purchase

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

The Company hereby grants to the Purchasers the right to purchase at their election up to $22,500,000 aggregate principal amount of the Optional 2011 Notes and up to $22,500,000 aggregate principal amount of the Optional 2013 Notes, at the purchase price set forth in clause (a) of the first paragraph of this Section 2, for the sole purpose of covering sales of securities in excess of the aggregate principal amount of Firm Securities.  Any such election to purchase Optional Securities may be exercised by written notice from you to the Company, given within a period of 30 calendar days after the date of this Agreement, setting forth the series and aggregate principal amount of Optional Securities to be purchased and the date on which such Optional Securities are to be delivered, as determined by you but in no event earlier than the First Time of Delivery (as defined in Section (4) hereof) or, unless you and the Company otherwise agree in writing, earlier than three or later than ten New York Business Days after the date of such notice; provided, however, that Optional Securities may not be issued in whole or in part after the period which ends 13 days after the date hereof unless the Purchaser determines that such Optional Securities would not be treated as having been issued with more than a “de minimis” amount of “original issue discount” for purposes of Sections 1271-1275 of the Internal Revenue Code of 1986, as amended from time to time, and the applicable Treasury regulations promulgated thereunder.  As used in this Agreement, “New York Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close.

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

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

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

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

4.         (a) The Securities to be purchased by each Purchaser hereunder will be represented by one or more definitive global Securities in book-entry form which will be deposited by or on behalf of the Company with The Depository Trust Company (“DTC”) or its designated custodian.  The Company will deliver the Securities to Goldman, Sachs & Co., for the account of each Purchaser, against payment by or on behalf of such Purchaser of the purchase price therefore by wire transfer in

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immediately available funds, by causing DTC to credit the Securities to the account of the Purchasers at DTC.  The Company will cause the certificates representing the Securities to be made available to the Goldman, Sachs & Co. for checking at least 24 hours prior to the Time of Delivery (as defined below) at the office of DTC or its designated custodian (the “Designated Office”).  The time and date of such delivery and payment shall be, with respect to the Firm Securities, 9:30 a.m., New York City time, on September 27, 2006 or such other time and date as the Purchasers and the Company may agree upon in writing and, with respect to the Optional Securities, 9:30 a.m., New York City time, on the date specified by the Purchasers in the written notice given by the Purchasers of the Purchasers’ election to purchase such Optional Securities, or such other time and date as the Purchasers and the Company may agree upon in writing.  Such time and date for delivery of the Firm Securities is herein called the “First Time of Delivery,” such time and date for delivery of the Optional Securities, if not the First Time of Delivery, is herein called the “Second Time of Delivery,” and each such time and date for delivery is herein called a “Time of Delivery.”

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

5.         The Company agrees with each of the Purchasers:

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

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

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

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a supplement to the Offering Circular which will correct such statement or omission or effect such compliance;

(d)           During the period beginning from the date hereof and continuing until the date 90 days after the Time of Delivery, not to offer, sell, contract to sell or otherwise dispose of, except as provided hereunder, any securities of the Company that are substantially similar to the Securities or the Stock issuable upon conversion of the Securities, including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive, Stock or any such substantially similar securities (other than pursuant to employee equity plans, stock purchase plans existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date of this Agreement, dividends on the Company’s existing Series B Redeemable Preferred Stock (as defined in the Offering Circular) and the issuance by the Company of securities as consideration in connection with mergers, acquisitions of companies or assets, joint ventures, reclassifications, strategic relationships or other transactions not primarily for financing purposes; provided that (i) in connection with the execution of any agreement relating to any such merger, acquisition of companies or assets, joint venture, reclassification, strategic relationship or other transaction not primarily for financing purposes, all persons that are either parties to such agreement or are required to file reports under Section 16 of the Exchange Act as a result of being a director, officer or principal stockholder of a party to such agreement shall agree in writing not to hedge or make any short sale of such securities prior to the expiration of such 90 day period and (ii) all persons that are issued such securities shall agree in writing to be bound by the foregoing as if it were the Company), without your prior written consent;

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

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

(g)       To use all commercially reasonable efforts to cause such Securities to be eligible for the PORTAL trading system of the National Association of Securities Dealers, Inc.;

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

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

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accounts of the Company and its subsidiaries are consolidated in reports furnished to its stockholders generally or to the Commission);

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

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

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

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

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

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

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

7.         The Company covenants and agrees with the several Purchasers that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel and accountants in connection with the issue of the Securities and the shares of Stock issuable upon conversion of the Securities and all other expenses in connection with the preparation, printing, reproduction and filing of the Preliminary Offering Circular and the Offering Circular and any amendments and supplements thereto and the mailing and delivering of copies thereof to the Purchasers and dealers; (ii) the cost of printing or producing this Agreement, any Agreement among Purchasers, the Indenture, the Registration Rights Agreement, the Blue Sky Memorandum, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the qualification of the Securities and the shares of Stock issuable upon conversion of the Securities for offering and sale under state securities laws as provided in Section 5(b) hereof, including the fees and disbursements of counsel for the Purchasers in connection with such qualification and in connection

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with the Blue Sky and legal investment surveys; (iv) any fees charged by securities rating services for rating the Securities; (v) the cost of preparing the Securities; (vi) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities; (vii) any cost incurred in connection with the designation of the Securities for trading in PORTAL and the listing of the shares of Stock issuable upon conversion of the Securities; and (viii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section.  It is understood, however, that, except as provided in this Section, and Sections 9 and 12 hereof, the Purchasers will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities  by them, and any advertising expenses connected with any offers they may make.

8.         The obligations of the Purchasers hereunder shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company herein are, at and as of the Time of Delivery, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:

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

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

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

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

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

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

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

(vi)      The Registration Rights Agreement has been duly authorized, executed and delivered by the Company;

(vii)No consent, approval, authorization, order, registration or qualification of any United States federal or New York state governmental authority or regulatory body is required

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for the consummation of the transactions contemplated by this Agreement or the Indenture in connection with the Securities to be sold by the Company to the Purchasers hereunder and the shares of Stock issuable upon conversion of the Securities, except for such consents, approvals, authorizations, orders, registrations or qualifications as have been obtained under the Act in connection with the shares of Stock issuable upon conversion of the Securities and such as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of such Securities by the Purchasers;

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

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

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

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

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

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

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

(iii)      The Company has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, or is subject to

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no material liability or disability by reason of the failure to be so qualified in any such jurisdiction (such counsel being entitled to rely in respect of the opinion in this clause upon opinions of local counsel and in respect of matters of fact upon certificates of officers of the Company, provided that such counsel shall state that they believe that both you and they are justified in relying upon such opinions and certificates);

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

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

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

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such counsel’s knowledge and other than as set forth in the Offering Circular, no such proceedings are threatened or contemplated by governmental authorities or threatened by others;

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

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

(ix)Neither the Company nor any of the Scheduled Subsidiaries is in violation of its Certificate of Incorporation or By-laws or in default in the performance or observance of any obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound except for such defaults which would not individually or in the aggregate have a material adverse effect on the current or future consolidated financial position, stockholders’ equity or results of operations of the Company and its subsidiaries taken as a whole;

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

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

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

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

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

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

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

(g)       On or after the Applicable Time, there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange or on the Nasdaq National Market; (ii) a suspension or material limitation in trading in the Company’s securities on the Nasdaq National Market; (iii) a general moratorium on commercial banking activities declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in the judgment of Goldman, Sachs & Co. makes it impracticable or

15

inadvisable to proceed with the offering or the delivery of the Securities on the terms and in the manner contemplated in the Offering Circular;

(h)       The Securities shall have been designated for trading on PORTAL;

(i)        The shares of Stock issuable upon conversion of the Securities shall have been duly listed, subject to notice of issuance, on the Nasdaq National Market;

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

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

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

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

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

(b)       Each Purchaser will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Offering Circular, the Pricing Circular, the Offering Circular, or any amendment or supplement thereto, or any Company Supplemental Disclosure Document, or arise out of or are based upon the omission or alleged omission to state therein a material fact or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue

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statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Offering Circular, the Pricing Circular, or the Offering Circular or any such amendment or supplement, or any Company Supplemental Disclosure Document in reliance upon and in conformity with written information furnished to the Company by such Purchaser through Goldman, Sachs & Co. expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred.

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

(d)       If the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Purchasers on the other from the offering of the Securities.  If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations.  The relative benefits received by the Company on the one hand and the Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Purchasers, in each case as set forth in the Offering Circular.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged

17

untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Purchasers on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Company and the Purchasers agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this subsection (d), no Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to investors were offered to investors exceeds the amount of any damages which such Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  The Purchasers’ obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint.

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

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

(b)       If, after giving effect to any arrangements for the purchase of the Securities  of a defaulting Purchaser or Purchasers by you and the Company as provided in subsection (a) above, the aggregate principal amount of such Securities which remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Securities, then the Company shall have the right to require each non-defaulting Purchaser to purchase the principal amount of Securities which such Purchaser agreed to purchase hereunder and, in addition, to require each non-defaulting Purchaser to purchase its pro rata share (based on the principal amount of Securities which such

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Purchaser agreed to purchase hereunder) of the Securities of such defaulting Purchaser or Purchasers for which such arrangements have not been made; but nothing herein shall relieve a defaulting Purchaser from liability for its default.

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

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

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

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

All statements, requests, notices and agreements hereunder shall be in writing, and if to the Purchasers shall be delivered or sent by mail, telex or facsimile transmission to you at as the representatives in care of Goldman, Sachs & Co., One New York Plaza, 42nd Floor, New York, New York 10004, Attention: Registration Department; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Offering Circular, Attention: Secretary; provided, however, that any notice to a Purchaser pursuant to Section 8(j) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Purchaser at its address set forth in its Purchasers’ Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by you upon request.  Any such statements, requests, notices or agreements shall take effect upon receipt thereof.

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

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

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

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

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

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

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

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

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

Very truly yours,
priceline.com Incorporated
By:	/s/ Jeffery H. Boyd
	Name: Jeffery H. Boyd
	Title:   Chief Executive Officer

Accepted as of the date hereof:
Goldman, Sachs & Co.
By:	/s/ Goldman, Sachs & Co.
	(Goldman, Sachs & Co.)

EX-10.2

Exhibit 10.2

GOLDMAN, SACHS & CO. | 85 BROAD STREET | NEW YORK, NEW YORK 10004 |TEL: (212) 902-1000

Opening Transaction

To:	priceline.com Incorporated 800 Connecticut Avenue Norwalk, Connecticut 06854
A/C:	028515567
From:	Goldman, Sachs & Co.
Re:	Issuer Capped Share Call Option Transaction (5-Year)
Ref. No:	SDB1622458070
Date:	September 21, 2006

Dear Sir(s):

The purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on the Trade Date specified below (the “Transaction”) between Goldman, Sachs & Co. (“Dealer”) and priceline.com Incorporated (“Counterparty”).  This communication constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.

1.     This Confirmation is subject to, and incorporates, the definitions and provisions of the 2000 ISDA Definitions (including the Annex thereto) (the “2000 Definitions”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the 2000 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc. (“ISDA”).  In the event of any inconsistency between the 2000 Definitions and the Equity Definitions, the Equity Definitions will govern.

Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.

This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates.  This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement as if Dealer and Counterparty had executed an agreement in such form on the date hereof (but without any Schedule except for (i) the election of Loss and Second Method, New York law (without regard to the conflicts of law principles) as the governing law and US Dollars (“USD”) as the Termination Currency, (ii) the election that subparagraph (ii) of Section 2(c) will not apply to Transactions and (iii) the election that the “Cross Default” provisions of Section 5(a)(vi) will apply to Counterparty with a “Threshold Amount” of USD 50 million).  The parties hereby agree that no Transactions other than the Transaction to which this Confirmation relates and the other transaction between the parties with the same trade date regarding options on Shares expiring in 2013 (the “Other Transaction”) shall be governed by the Agreement.

All provisions contained in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein.  In the event of any inconsistency between this Confirmation and the Definitions or the Agreement, as the case may be, this Confirmation shall govern.

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2.             This Transaction constitutes a Share Option Transaction for purposes of the Equity Definitions.  The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:
Trade Date:	September 21, 2006
Components:	The Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with the Number of Options and Expiration Date set forth in this Confirmation. The payments and deliveries to be made upon settlement of the Transaction will be determined separately for each Component as if each Component were a separate Transaction under the Agreement.
Option Style:	European
Option Type:	Call
Seller:	Dealer
Buyer:	Counterparty
Shares:	Common Stock (par value $0.008 per Share) of Counterparty (Ticker: “PCLN”)
Number of Options:	For each Component, as provided in Annex A to this Confirmation.
Option Entitlement:	One Share per Option
Strike Price 1:	40.38
Strike Price 2:	50.47
Premium:	USD 11,182,500
Premium Payment Date:	September 27, 2006
Exchange:	NASDAQ Global Select Market
Related Exchange:	All Exchanges
Procedures for Exercise:
Expiration Time:	Valuation Time
Expiration Date:	As provided in Annex A to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already an Expiration Date for another Component); provided  that, notwithstanding anything to the contrary in the Equity Definitions, if that date is a Disrupted Day, the Calculation Agent may determine that the Expiration Date for such Component is a Disrupted Day in whole or in part, in which case the Calculation Agent shall, in its discretion, determine the number of Options for which such day shall be the Expiration Date and (i) allocate the remaining Options for such Expiration Date to one or more of the remaining Expiration Dates, (ii) designate the

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	first succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is not deemed to be an Expiration Date in respect of any other Component of the Transaction hereunder as the Expiration Date for such remaining Options, or (iii) a combination thereof; provided further  that if the Expiration Date for a Component (including any portion of a Component whose Expiration Date was postponed as a result of clause (ii) or (iii) above) has not occurred as of the Final Disruption Date, (a) the Final Disruption Date shall be deemed to be the Expiration Date and Valuation Date for each such Component, and (b) the Calculation Agent shall determine the VWAP Price on the basis of its good faith estimate of the trading value for the relevant Shares. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring on an Expiration Date.
Final Disruption Date:	October 28, 2011
Market Disruption Event:	Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” in clause (ii) thereof.
Automatic Exercise:	Applicable; and means that the Number of Options for the corresponding Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date if at such time such Options are In-the-Money, as determined by the Calculation Agent, unless Buyer notifies Seller (by telephone or in writing) prior to the Expiration Time on such Expiration Date that it does not wish Automatic Exercise to occur, in which case Automatic Exercise will not apply to such Expiration Date. “In-the-Money” means that the VWAP Price is greater than Strike Price 1.
Seller’s Telephone Number and Telex and/or Facsimile Number and Contact Details for purpose of Giving Notice:	To be provided by Dealer.
Settlement Terms:
In respect of any Component:
Settlement Currency:	USD
Settlement Method:	Net Share Settlement
Settlement Date:	For all Components, the Settlement Date shall be the third Scheduled Trading Day after the final Expiration Date (or, in respect of all or part of its obligation to deliver the Number of Shares to be Delivered, such other earlier date or dates (or, if Section 14 below is applicable, such later dates) as the Dealer shall determine in its sole discretion).
Net Share Settlement:	On the Settlement Date, Dealer shall deliver to Counterparty a number of Shares equal to the sum of the Number of Shares to be Delivered for all Components to the account specified by

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	Counterparty and cash in lieu of any fractional shares for any Component valued at the VWAP Price on the Expiration Date for such Component.
Number of Shares to be Delivered:	In respect of any Exercise Date for any Component, subject to the last sentence of Section 9.5 of the Equity Definitions:
	(i) if the VWAP Price for such Component exceeds Strike Price 1 but is less than Strike Price 2, a number of Shares equal to (i) the product of (A) the excess of such VWAP Price over Strike Price 1, (B) the Number of Options for such Component and (C) the Option Entitlement, divided by (ii) such VWAP Price;
	(ii) if the VWAP Price for such Component equals or exceeds Strike Price 2, a number of Shares equal to (i) the product of (A) the excess of Strike Price 2 over Strike Price 1, (B) the Number of Options for such Component and (C) the Option Entitlement, divided by (ii) such VWAP Price; or
	(iii) if the VWAP Price for such Component is less than or equal to Strike Price 1, a number of Shares equal to zero.
VWAP Price:	For any Expiration Date, as determined by the Calculation Agent based on the NASDAQ Volume Weighted Average Price per share of the Shares for the regular trading session (including any extensions thereof) of the Exchange on such Expiration Date (without regard to pre-open or after hours trading outside of such regular trading session) as published by Bloomberg at or around 4:15 p.m. New York time on such date, on Bloomberg page “PCLN.Q <Equity> AQR_SEC” (or any successor thereto).
Other Applicable Provisions:	The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be applicable, except that all references in such provisions to “Physical Settlement” shall be read as references to “Net Share Settlement”; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Buyer is the issuer of any Shares.
Share Adjustments:
Method of Adjustment:	Calculation Agent Adjustment
Extraordinary Events:
New Shares:	In the definition of “New Shares” in Section 12.1(i) of the Equity Definitions, the text in subsection (i) shall be deleted in its entirety and replaced with: “publicly quoted, traded or listed on any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or their respective successors)”.
Consequences of Merger Events:
(a) Share-for-Share:	Calculation Agent Adjustment

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(b) Share-for-Other:	Cancellation and Payment (Agreed Model) on that portion of the Other Consideration that consists of cash; Calculation Agent Adjustment on the remainder of the Other Consideration.
(c) Share-for-Combined:	Component Adjustment
Stock Loan Rate:	USD-LIBOR-BBA
Tender Offer:	Applicable; provided that (a) Section 12.1(d) of the Equity Definitions is hereby amended by adding “, or of the outstanding Shares,” before “of the Issuer” in the fourth line thereof and (b) Sections 12.1(e) and 12.1(l)(ii) of the Equity Definitions are hereby amended by adding “or Shares, as applicable,” after “voting shares”.
Consequences of Tender Offers:
(a) Share-for-Share:	Calculation Agent Adjustment
(b) Share-for-Other:	Cancellation and Payment (Agreed Model) on that portion of the Other Consideration that consists of cash; Calculation Agent Adjustment on the remainder of the Other Consideration.
(c) Share-for-Combined:	Component Adjustment
Stock Loan Rate:	USD-LIBOR-BBA
Nationalization, Insolvency or Delisting:	Cancellation and Payment (Agreed Model); provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange.
Stock Loan Rate:	USD-LIBOR-BBA
Additional Disruption Events:
(a) Change in Law:	Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by adding “other than increased cost due to Securities Act registration requirements relating to sales by Dealer of the Shares acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction” after the parenthetical in the last line thereof.
(b) Failure to Deliver:	Applicable
(c) Insolvency Filing:	Applicable
(d) Hedging Disruption:	Applicable
Hedging Party:	Dealer
Determining Party:	Dealer

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Non-Reliance:	Applicable
Agreements and Acknowledgements
Regarding Hedging Activities:	Applicable
Additional Acknowledgements:	Applicable
Dealer Payment Instructions:	To be provided by Dealer.
Counterparty Payment and Delivery Instructions:	To be provided by Counterparty.

3.	Calculation Agent: Dealer
4.	Offices:
(a)		The Office of Dealer for this Transaction is: One New York Plaza, New York, New York 10004.
(b)		The Office of Counterparty for this Transaction is: 800 Connecticut Avenue, Norwalk, Connecticut 06854.
5.	Notices: For purposes of this Confirmation:
(a)		Address for notices or communications to Counterparty:
		To:	priceline.com Incorporated
			800 Connecticut Avenue
			Norwalk, Connecticut 06854
		Attn:	Robert J. Mylod, Jr.
			Chief Financial Officer
		Telephone:	(203) 299-8301
		Facsimile:	(203) 299-8975
		With a copy to:
		Attn:	Peter J. Millones
			General Counsel
		Facsimile:	(203) 299-8915
(b)		Address for notices or communications to Dealer:
		To:	Goldman, Sachs & Co.
			One New York Plaza
			New York, NY 10004
		Attn:	Equity Operations: Options and Derivatives
		Telephone:	(212) 902-1981
		Facsimile:	(212) 428-1980/1983
		With a copy to:
		Attn:	Vijay Culas
			Equity Capital Markets
		Telephone:	(212) 357-0428
		Facsimile:	(212) 902-3000
6.	Representations, Warranties and Agreements:

(a)           In addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants to and for the benefit of, and agrees with, Dealer as follows:

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(i)            On the Trade Date, (A) none of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and (B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.

(ii)           Counterparty intends that this Transaction qualifies as an equity instrument for it for purposes of EITF Issue No. 00-19.  Notwithstanding the foregoing and without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that neither Dealer nor any of its affiliates is making any representations or warranties with respect to the treatment of the Transaction under FASB Statements 128, 133, 149 or 150, EITF Issue No. 00-19 (or any successor issue statements) or under FASB’s Liabilities & Equity Project.

(iii)          Prior to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction and such other certificate or certificates as Dealer shall reasonably request.  Any repurchases of Shares pursuant to the Transaction are pursuant to a Share repurchase program publicly announced on or before the Trade Date.

(iv)          Counterparty has not received notice that it is the subject of a tender offer made under Section 14(d)(1) of the Exchange Act.

(v)           Counterparty is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) in violation of the Exchange Act.

(vi)          Counterparty is not, and after giving effect to the transactions contemplated hereby will not be, an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(vii)         On the Trade Date (A) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty, including contingent liabilities, (B) the capital of Counterparty is adequate to conduct the business of Counterparty and (C) Counterparty has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature.

(viii)        The representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement dated as of the Trade Date between Counterparty and Dealer as representative of the several purchasers party thereto (the “Purchase Agreement”), are true and correct and are hereby deemed to be repeated to Dealer as if set forth herein.

(ix)           (A) On the Trade Date and during the period starting on the first Expiration Date and ending on the last Expiration Date (the “Settlement Period”), the Shares or securities that are convertible into, or exchangeable or exercisable for Shares, are not, and shall not be, subject to a “restricted period,” as such term is defined in Regulation M under the Exchange Act (“Regulation M”) and (B) Counterparty shall not engage in any “distribution,” as such term is defined in Regulation M, other than a distribution meeting the requirements of the exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business Day immediately following the Trade Date or the Settlement Period, as the case may be.

(x)            On the Trade Date and during the Settlement Period, neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18 under the Exchange Act (“Rule 10b-18”)) shall directly or indirectly (including, without limitation, by means of any cash-settled or other derivative instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares (or an equivalent interest, including a unit of beneficial interest in a trust or

7

limited partnership or a depository share) or any security convertible into or exchangeable or exercisable for Shares.

(xi)           Without the consent of Dealer, Counterparty agrees (i) during the Designated Period, not to purchase or agree to purchase Shares if such purchase would cause its outstanding Shares to be below 36.35 million and (ii) during the Designated Period, not to purchase or agree to purchase Shares if such purchase along with all other purchases during the Designated Period would exceed 3.85 million in the aggregate. The Share numbers in this provision shall be subject to adjustment as the Calculation Agent determines appropriate to account for any Potential Adjustment Event or Extraordinary Event. “Designated Period” means the period from and including the Trade Date to and including the date that is the 30th Prospectus Useable Day (or such longer number agreed by the parties) occurring after the 60th day following the Trade Date.  An Exchange Business Day is a Prospectus Useable Day unless on such day Dealer determines in its good faith discretion that the Registration Statement and Prospectus referred to in the Underwriting Agreement dated September 5, 2006 between, among others, Dealer, as representative of the several underwriters, and Counterparty (the “Underwriting Agreement”), is not or may not be available for use in compliance with applicable law.

(b)           Each of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended.

(c)           Each of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) thereof.  Accordingly, Counterparty represents and warrants to Dealer that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment and its investments in and liabilities in respect of the Transaction, which it understands are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account without a view to the distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws, (v) its financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction.

(d)           Each of Dealer and Counterparty agrees and acknowledges (A) that this Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7) of Title 11 of the United States Code (the “Bankruptcy Code”), with respect to which each payment and delivery hereunder is a “settlement payment,” as such term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code, and (B) that Dealer is entitled to the protections afforded by, among other sections, Section 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code.

(e)           Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement.

(f)            Each party acknowledges and agrees to be bound by the Conduct Rules of the National Association of Securities Dealers, Inc. applicable to transactions in options, and further agrees not to violate the position and exercise limits set forth therein.

(g)           In addition to the representations and warranties in the Agreement and those contained elsewhere herein, Dealer represents and warrants to and for the benefit of, and agrees with, Counterparty that on the Trade Date and during the period ending on the 60th day after the Trade Date, all Shares purchased by Dealer under the Underwriting Agreement, but not resold as of the Trade Date will reside in an investment account, and Dealer will not, and will not attempt to, directly or indirectly, sell, offer to sell, solicit offers to buy or otherwise distribute any such Shares during such period.

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7.     Repurchase Notices.  Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day if following such repurchase, the Notice Percentage as determined on such day is greater by 0.5% than the Notice Percentage included in the immediately preceding Repurchase Notice (or, in the case of the first such Repurchase Notice, greater than the Notice Percentage as of the date hereof).  In the event that Counterparty fails to provide Dealer with a Repurchase Notice on the day and in the manner specified in this Section then Counterparty agrees to indemnify and hold harmless Dealer, its affiliates and their respective directors, officers, employees, agents and controlling persons (Dealer and each such person being an “Indemnified Party”) from and against any and all losses, claims, damages and liabilities (or actions in respect thereof), joint or several, to which such Indemnified Party may become subject, under Section 16 of the Exchange Act, relating to or arising out of such failure.  If for any reason the foregoing indemnification is unavailable to any Indemnified Party or insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute, to the maximum extent permitted by law, to the amount paid or payable by the Indemnified Party as a result of such loss, claim, damage or liability.  In addition, Counterparty will reimburse any Indemnified Party for all expenses (including reasonable counsel fees and expenses) as they are incurred (after notice to Counterparty) in connection with the investigation of, preparation for or defense or settlement of any pending or threatened claim or any action, suit or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto and whether or not such claim, action, suit or proceeding is initiated or brought by or on behalf of Counterparty.  This indemnity shall survive the completion of the Transaction contemplated by this Confirmation and any assignment and delegation of the Transaction made pursuant to this Confirmation or the Agreement shall inure to the benefit of any permitted assignee of Dealer.  The “Notice Percentage” as of any day is the fraction (A) the numerator of which is the aggregate of the products of the outstanding Number of Options and the Option Entitlement under this Transaction and the Other Transaction and (B) the denominator of which is the number of Shares outstanding on such day.

8.     Transfer or Assignment.  Neither party may transfer any of its rights or obligations under this Transaction without the prior written consent of the non-transferring party; provided that Dealer may assign, transfer and set over all rights, title and interest, powers, privileges and remedies of Dealer under this Transaction, in whole or in part, to an affiliate of Dealer that is guaranteed by The Goldman Sachs Group, Inc. without the consent of Counterparty; provided further that if the Equity Percentage exceeds 7%, Dealer may immediately, in its sole discretion, transfer or assign a number of Options sufficient to reduce the Equity Percentage to 6.5% to any third party with (or with a guarantor that has) a rating for its long-term, unsecured and unsubordinated indebtedness by Standard & Poor’s Ratings Services or its successor (“S&P”) that is not lower than the rating by S&P for the long-term, unsecured and unsubordinated indebtedness of The Goldman Sachs Group, Inc. (“GS Debt”), or by Moody’s Investors Service, Inc. (“Moody’s”) that is not lower than the rating by Moody’s for GS Debt or, if either S&P or Moody’s ceases to rate such debt, at least an equivalent rating or better by a substitute agency rating mutually agreed by Counterparty and Dealer.  If, in the discretion of Dealer, Dealer is unable to effect such transfer or assignment after its commercially reasonable efforts on pricing terms reasonably acceptable to Dealer, Dealer may designate any Scheduled Trading Day as an Early Termination Date with respect to a portion (the “Terminated Portion”) of this Transaction, allocated to Components as Dealer determines in its discretion, such that the Equity Percentage following such partial termination will be equal to or less than 7%.  In the event that Dealer so designates an Early Termination Date with respect to a portion of this Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (i) an Early Termination Date had been designated in respect of a Transaction having terms identical to this Transaction and a Number of Options equal to the Terminated Portion, (ii) Counterparty shall be the Affected Party with respect to such partial termination and (iii) such portion of this Transaction shall be the only Terminated Transaction.  The “Equity Percentage” as of any day is the fraction (A) the numerator of which is the number of Shares that Dealer or any of its affiliates that are subject to aggregation with Dealer beneficially own (within the meaning of Section 13 of the Exchange Act) on such day and (B) the denominator of which is the number of Shares outstanding on such day.

9.     Beneficial Ownership.  Notwithstanding anything to the contrary in the Agreement or this Confirmation, in no event shall Dealer be entitled to receive, or shall be deemed to receive, any Shares if, upon such receipt of such Shares, the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the rules promulgated thereunder) of Shares by Dealer or any of its affiliates that are subject to aggregation with Dealer (collectively, “Dealer Group”) would be equal to or greater than 9.5% or more of the outstanding Shares.  If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Counterparty’s obligation to make such delivery shall not be extinguished and Counterparty shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Dealer gives notice to Counterparty that such delivery would not result in Dealer Group directly or indirectly so beneficially owning in excess of 9.5% of the outstanding Shares.

9

10.   Extension of Settlement.   Dealer may divide any Component into additional Components and designate the Expiration Date and the Number of Options for each such Component if Dealer determines, in its reasonable discretion, that such further division is necessary or advisable to preserve Dealer’s hedging activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be compliance with applicable legal and regulatory requirements.

11.   Intentionally Omitted.

12.   Equity Rights.  Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy.  For the avoidance of doubt, the parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim arising as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement.  For the avoidance of doubt, the parties acknowledge that this Confirmation is not secured by any collateral that would otherwise secure the obligations of Counterparty herein under or pursuant to any other agreement.

13.   Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events.  If, subject to Section 14 below, Dealer shall owe Counterparty any amount pursuant to Section 12.2 of the Equity Definitions and “Consequences of Merger Events” above, or Sections 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of a Tender Offer or a Merger Event, in each case, in which the consideration or proceeds to be paid to holders of Shares consists solely of cash) or pursuant to Section 6(d)(ii) of the Agreement (except in the event of an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party, that resulted from an event or events within Counterparty’s control) (a “Payment Obligation”), Counterparty shall have the right, in its sole discretion, to require Dealer to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, between the hours of 9:00 A.M. and 4:00 P.M. New York City time on the Merger Date, Tender Offer Date, Announcement Date, Early Termination Date or other date of termination, as applicable (“Notice of Share Termination”).  Within a commercially reasonable period of time following receipt of a Notice of Share Termination, Dealer shall deliver to Counterparty a number of Share Termination Delivery Units having a cash value equal to the amount of such Payment Obligation (such number of Share Termination Delivery Units to be delivered to be determined by the Calculation Agent as the number of whole Share Termination Delivery Units that could be purchased over a commercially reasonable period of time with the cash equivalent of such payment obligation) (the “Share Termination Alternative”).

Share Termination Delivery Unit:	In the case of a Termination Event, Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, one Share or a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization, Merger Event or Tender Offer. If such Insolvency, Nationalization, Merger Event or Tender Offer involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.
Failure to Deliver:	Applicable
Other applicable provisions:	If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be applicable, except that all references in such provisions to “Physical Settlement” shall be read as references to “Share Termination Alternative” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”; and provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of

10

the fact that Buyer is the issuer of any Share Termination Delivery Units (or any part thereof).

14.   Net Share Settlement on Early Termination and Certain Extraordinary Events.

(a)           Notwithstanding Section 6(e) of the Agreement or Sections 12.7 or 12.8 of the Equity Definitions, if, with respect to the Transaction contemplated hereunder, (A) an Early Termination Date with respect to any Event of Default or any Termination Event, (B) a Merger Date with respect to any Merger Event or Tender Offer Date with respect to a Tender Offer, (C) a Closing Date with respect to an event described in Section 12.6 of the Equity Definitions, or (D) date as of which the Transaction is, or is deemed to have been, terminated or cancelled as a result of an applicable Additional Disruption Event (any such date, the “Relevant Date”) shall occur, then in lieu of calculating any payments hereunder pursuant to Section 6(e) of the Agreement or Sections 12.7 or 12.8 of the Equity Definitions, as applicable, the Calculation Agent, in its sole discretion, shall determine the amount payable by Dealer to Counterparty on the following basis:

(i)  such Relevant Date shall be the sole Exercise Date hereunder and Automatic Exercise shall be applicable to the Number of Options in each of the Components for which an Expiration Date has not occurred (the “Unexpired Number”);

(ii)  Dealer shall deliver to the Counterparty the Net Share Settlement Amount on the Settlement Date with respect to such Relevant Date; and

(iii)  “Net Share Settlement Amount” shall mean a number of Shares equal to (A) the Number of Shares to be Delivered (as defined below) minus (B) the product of (x) the additional Shares per Option (the “Additional Shares”) determined by reference to the table attached as Annex B hereto based on the date on which such Relevant Date occurs and the VWAP Price on such date, (y) the Unexpired Number, and (z) the Option Entitlement.

(b)           Solely for purposes of this Section 14, in respect of any Exercise Date deemed to occur pursuant to paragraph (a) of this Section 14, subject to the last sentence of Section 9.5 of the Equity Definitions, “Number of Shares to be Delivered” shall mean, the product of (i) the Unexpired Number, (ii) the Option Entitlement and (iii) (A) the excess of the lower of (x) Strike Price 2 and (y) the VWAP Price on the Valuation Date occurring on such Exercise Date over Strike Price 1 divided by (B) such VWAP Price.  Notwithstanding anything to the contrary in the Equity Definitions, if there is a Market Disruption Event on any Valuation Date, then the Calculation Agent shall determine the VWAP Price for such Valuation Date on the basis of its good faith estimate, determined in a commercially reasonable manner, of the market value for the relevant Shares on such Valuation Date.

(c)           With respect to the determination of Additional Shares, if the actual VWAP Price is between two VWAP Price amounts in the table or the Relevant Date is between two Relevant Dates in the table, the Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the next higher and next lower VWAP Price amounts and the two nearest Relevant Dates, as applicable, based on a 365-day year.

(d)           With respect to any adjustment to the terms of the Transaction, the Calculation Agent, in its reasonable discretion, shall correspondingly adjust the Additional Shares and/or the VWAP Prices (each as set forth in the table in Annex B hereto) as of any date of such adjustments. For the avoidance of doubt, any adjustment made to the Additional Shares and/or the VWAP Prices (each as set forth in the table in Annex B hereto) shall be consistent with (i) the adjustments made pursuant to the provisions of this Section 14 if such adjustments were the result of an event which was outside of Counterparty’s control, and (ii) the adjustments made pursuant to the applicable provisions of this Confirmation if such adjustments were the result of an event which was within Counterparty’s control.

15.   Set-Off.  The parties agree to amend Section 6 of the Agreement by adding a new Section 6(f) thereto as follows:

“(f)  Upon the occurrence of an Event of Default or Termination Event with respect to a party who is the Defaulting Party or the Affected Party (“X”), the other party (“Y”) will have the right (but not be obliged) without prior notice to X or any other person to set-off or apply any obligation of

11

X under an Equity Contract owed to Y (or any Affiliate of Y) (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation) against any obligation of Y (or any Affiliate of Y) under an Equity Contract owed to X (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation).  Y will give notice to the other party of any set-off effected under this Section 6(f).

“Equity Contract” shall mean for purposes of this Section 6(f) any Transaction relating to Shares between X and Y (or any Affiliate of Y) that qualifies as ‘equity’ under applicable accounting rules.

Amounts (or the relevant portion of such amounts) subject to set-off may be converted by Y into the Termination Currency at the rate of exchange at which such party would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency.

If any obligation is unascertained, Y may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained.

Nothing in this Section 6(f) shall be effective to create a charge or other security interest.  This Section 6(f) shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other right to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise).”

16.   Amendments to Equity Definitions.

(a)           The following amendments shall be made to the Equity Definitions and to the Agreement:

(i)  The first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation of a Share Option Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has a material effect on the theoretical value of the relevant Shares or options on the Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’; and

(ii)   Sections 11.2(a) and (e)(vii) of the Equity Definitions are hereby amended by deleting the words “diluting or concentrative” and replacing them with “material”.

(b)  Solely for purposes of applying the Equity Definitions and for purposes of this Confirmation, any reference to a Strike Price shall be deemed to be a reference to any of the Strike Price 1 or the  Strike Price 2, or both, as appropriate.

17.   Disclosure.  Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure.

18.   Special Provisions for Counterparty Payments.  The parties hereby agree that, notwithstanding anything to the contrary herein or in the Agreement, in the event that an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to any Transaction after Counterparty has paid the Premium to Dealer and, as a result, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement (calculated as if the Transactions being terminated on such Early Termination Date were the sole Transactions under the Agreement), such amount shall be deemed to be zero.

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19.   Unwind.  In the event the sale of the $150,000,000 0.50% Convertible Senior Notes due September 30, 2011 and the $150,000,000 0.75% Convertible Senior Notes due September 30, 2013 are not consummated with the initial purchasers pursuant to the Purchase Agreement for any reason by the close of business in New York on September 27, 2006 (or such later date as agreed upon by the parties) (such date or such later date as agreed upon being the “Accelerated Unwind Date”), this Transaction shall automatically terminate (the “Accelerated Unwind”) on the Accelerated Unwind Date and (i) this Transaction and all of the respective rights and obligations of Dealer and Counterparty under this Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with this Transaction either prior to or after the Accelerated Unwind Date.  Dealer and Counterparty represent and acknowledge to the other that upon an Accelerated Unwind, all obligations with respect to this Transaction shall be deemed fully and finally discharged.

20.  Arbitration.

(a)           All parties to this Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed.

(b)           Arbitration awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.

(c)           The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings.

(d)           The arbitrators do not have to explain the reason(s) for their award.

(e)           The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless Counterparty is a member of the organization sponsoring the arbitration facility, in which case all arbitrators may be affiliated with the securities industry.

(f)            The rules of some arbitration forums may impose time limits for bringing a claim in arbitration.  In some cases, a claim that is ineligible for arbitration may be brought in court.

(g)           The rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Confirmation.

(h)           Counterparty agrees that any and all controversies that may arise between Counterparty and Dealer, including, but not limited to, those arising out of or relating to the Agreement or the Transaction hereunder, shall be determined by arbitration conducted before The New York Stock Exchange, Inc. (“NYSE”) or NASD Dispute Resolution (“NASD-DR”), or, if the NYSE and NASD-DR decline to hear the matter, before the American Arbitration Association, in accordance with their arbitration rules then in force.  The award of the arbitrator shall be final, and judgment upon the award rendered may be entered in any court, state or federal, having jurisdiction.

(i)            No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the class is decertified; or (iii) Counterparty is excluded from the class by the court.

(j)            Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Confirmation except to the extent stated herein.

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Counterparty hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Counterparty with respect to this Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, Facsimile No. 212-428-1980/83.

Yours faithfully,

GOLDMAN, SACHS & CO.

/s/ David Goldenberg

Authorized Signatory

Agreed and Accepted By:

PRICELINE.COM INCORPORATED

By:	/s/ Robert J. Mylod, Jr.
	Name: Robert J. Mylod, Jr.
	Title:  Chief Financial Officer

ANNEX A

	Component		Number of Options		Expiration Date (5-Year)
1		130,015		21-Sep-11
2		130,015		22-Sep-11
3		130,015		23-Sep-11
4		130,015		26-Sep-11
5		130,015		27-Sep-11
6		130,015		28-Sep-11
7		130,015		29-Sep-11
8		130,015		30-Sep-11
9		130,015		3-Oct-11
10		130,015		4-Oct-11
11		130,015		5-Oct-11
12		130,015		6-Oct-11
13		130,015		7-Oct-11
14		130,015		10-Oct-11
15		130,015		11-Oct-11
16		130,015		12-Oct-11
17		130,015		13-Oct-11
18		130,015		14-Oct-11
19		130,015		17-Oct-11
20		130,015		18-Oct-11

ANNEX B

	VWAP Price
	<$25.0	$25.0	$30.0	$35.0	$40.0	$45.0	$50.0	$55.0
09/26/06	0.000000	-0.084164	-0.088701	-0.090470	-0.090441	0.013402	0.105025	0.098397
03/26/07	0.000000	-0.077763	-0.084349	-0.087836	-0.089175	0.013609	0.104428	0.097198
09/26/07	0.000000	-0.072343	-0.080028	-0.084549	-0.086783	0.011875	0.102372	0.094939
03/26/08	0.000000	-0.065048	-0.075116	-0.081793	-0.085813	0.014823	0.103972	0.095473
09/26/08	0.000000	-0.036479	-0.062365	-0.085777	-0.099254	0.009935	0.104318	0.095219
03/26/09	0.000000	-0.027818	-0.054062	-0.080465	-0.098489	0.006144	0.098636	0.088630
09/26/09	0.000000	-0.018516	-0.043550	-0.072808	-0.096557	0.004191	0.095362	0.084707
03/26/10	0.000000	-0.009701	-0.030898	-0.061974	-0.092763	0.000351	0.087623	0.075012
09/26/10	0.000000	-0.002794	-0.016071	-0.045656	-0.085195	-0.001542	0.082491	0.068248
03/26/11	0.000000	-0.000102	-0.002997	-0.021420	-0.068526	-0.004492	0.064059	0.042987
09/21/11	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000

	VWAP Price
	$60.0	$65.0	$70.0	$75.0	$80.0	$85.0	$90.0	$95.0
09/26/06	0.085663	0.075391	0.066993	0.060045	0.054234	0.049328	0.045148	0.041558
03/26/07	0.084019	0.073424	0.064797	0.057691	0.051778	0.046810	0.042601	0.039005
09/26/07	0.081645	0.070999	0.062365	0.055285	0.049419	0.044513	0.040375	0.036855
03/26/08	0.081349	0.070064	0.060947	0.053505	0.047374	0.042278	0.038007	0.034402
09/26/08	0.080640	0.069017	0.059654	0.052040	0.045792	0.040624	0.036314	0.032693
03/26/09	0.073519	0.061646	0.052238	0.044723	0.038670	0.033759	0.029743	0.026434
09/26/09	0.069224	0.057188	0.047767	0.040340	0.034443	0.029726	0.025925	0.022839
03/26/10	0.058480	0.046071	0.036745	0.029716	0.024393	0.020339	0.017230	0.014826
09/26/10	0.050951	0.038405	0.029349	0.022819	0.018102	0.014680	0.012180	0.010336
03/26/11	0.024473	0.014003	0.008373	0.005438	0.003921	0.003123	0.002681	0.002416
09/21/11	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000

	VWAP Price
	$100.0	$105.0	$110.0	$115.0	$120.0	$125.0	$130 or more
09/26/06	0.038451	0.035745	0.033371	0.031278	0.029420	0.027764	0.026281
03/26/07	0.035911	0.033229	0.030891	0.028839	0.027029	0.025422	0.023991
09/26/07	0.033839	0.031237	0.028976	0.027001	0.025264	0.023728	0.022364
03/26/08	0.031335	0.028709	0.026446	0.024483	0.022771	0.021269	0.019945
09/26/08	0.029630	0.027021	0.024784	0.022855	0.021181	0.019721	0.018439
03/26/09	0.023687	0.021392	0.019459	0.017821	0.016423	0.015222	0.014183
09/26/09	0.020315	0.018234	0.016505	0.015059	0.013838	0.012801	0.011913
03/26/10	0.012951	0.011474	0.010297	0.009350	0.008578	0.007942	0.007410
09/26/10	0.008959	0.007918	0.007118	0.006493	0.005995	0.005591	0.005257
03/26/11	0.002237	0.002105	0.001997	0.001905	0.001823	0.001749	0.001681
09/21/11	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000

EX-10.3

Exhibit 10.3

GOLDMAN, SACHS & CO. | 85 BROAD STREET | NEW YORK, NEW YORK 10004 |TEL: (212) 902-1000

Opening Transaction

To:	priceline.com Incorporated
	800 Connecticut Avenue
	Norwalk, Connecticut 06854
A/C:	028515567
From:	Goldman, Sachs & Co.
Re:	Issuer Capped Share Call Option Transaction (7-Year)
Ref. No:	SDB1622458116
Date:	September 21, 2006

Dear Sir(s):

The purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on the Trade Date specified below (the “Transaction”) between Goldman, Sachs & Co. (“Dealer”) and priceline.com Incorporated (“Counterparty”).  This communication constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.

1.     This Confirmation is subject to, and incorporates, the definitions and provisions of the 2000 ISDA Definitions (including the Annex thereto) (the “2000 Definitions”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the 2000 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc. (“ISDA”).  In the event of any inconsistency between the 2000 Definitions and the Equity Definitions, the Equity Definitions will govern.

Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.

This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates.  This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement as if Dealer and Counterparty had executed an agreement in such form on the date hereof (but without any Schedule except for (i) the election of Loss and Second Method, New York law (without regard to the conflicts of law principles) as the governing law and US Dollars (“USD”) as the Termination Currency, (ii) the election that subparagraph (ii) of Section 2(c) will not apply to Transactions and (iii) the election that the “Cross Default” provisions of Section 5(a)(vi) will apply to Counterparty with a “Threshold Amount” of USD 50 million).  The parties hereby agree that no Transactions other than the Transaction to which this Confirmation relates and the other transaction between the parties with the same trade date regarding options on Shares expiring in 2011 (the “Other Transaction”) shall be governed by the Agreement.

All provisions contained in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein.  In the event of any inconsistency between this Confirmation and the Definitions or the Agreement, as the case may be, this Confirmation shall govern.

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2.     This Transaction constitutes a Share Option Transaction for purposes of the Equity Definitions.  The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:

Trade Date:	September 21, 2006
Components:	The Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with the Number of Options and Expiration Date set forth in this Confirmation. The payments and deliveries to be made upon settlement of the Transaction will be determined separately for each Component as if each Component were a separate Transaction under the Agreement.
Option Style:	European
Option Type:	Call
Seller:	Dealer
Buyer:	Counterparty
Shares:	Common Stock (par value $0.008 per Share) of Counterparty (Ticker: “PCLN”)
Number of Options:	For each Component, as provided in Annex A to this Confirmation.
Option Entitlement:	One Share per Option
Strike Price 1:	40.38
Strike Price 2:	50.47
Premium:	USD 11,581,500
Premium Payment Date:	September 27, 2006
Exchange:	NASDAQ Global Select Market
Related Exchange:	All Exchanges
Procedures for Exercise:
Expiration Time:	Valuation Time
Expiration Date:	As provided in Annex A to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already an Expiration Date for another Component); provided that, notwithstanding anything to the contrary in the Equity Definitions, if that date is a Disrupted Day, the Calculation Agent may determine that the Expiration Date for such Component is a Disrupted Day in whole or in part, in which case the Calculation Agent shall, in its discretion, determine the number of Options for which such day shall be the Expiration Date and (i) allocate the remaining Options for such Expiration Date to one or more of the remaining Expiration Dates, (ii) designate the

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	first succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is not deemed to be an Expiration Date in respect of any other Component of the Transaction hereunder as the Expiration Date for such remaining Options, or (iii) a combination thereof; provided further that if the Expiration Date for a Component (including any portion of a Component whose Expiration Date was postponed as a result of clause (ii) or (iii) above) has not occurred as of the Final Disruption Date, (a) the Final Disruption Date shall be deemed to be the Expiration Date and Valuation Date for each such Component, and (b) the Calculation Agent shall determine the VWAP Price on the basis of its good faith estimate of the trading value for the relevant Shares. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring on an Expiration Date.
Final Disruption Date:	October 30, 2013
Market Disruption Event:	Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” in clause (ii) thereof.
Automatic Exercise:	Applicable; and means that the Number of Options for the corresponding Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date if at such time such Options are In-the-Money, as determined by the Calculation Agent, unless Buyer notifies Seller (by telephone or in writing) prior to the Expiration Time on such Expiration Date that it does not wish Automatic Exercise to occur, in which case Automatic Exercise will not apply to such Expiration Date. “In-the-Money” means that the VWAP Price is greater than Strike Price 1.
Seller’s Telephone Number
and Telex and/or Facsimile Number
and Contact Details for purpose of
Giving Notice:	To be provided by Dealer.
Settlement Terms:
In respect of any Component:
Settlement Currency:	USD
Settlement Method:	Net Share Settlement
Settlement Date:	For all Components, the Settlement Date shall be the third Scheduled Trading Day after the final Expiration Date (or, in respect of all or part of its obligation to deliver the Number of Shares to be Delivered, such other earlier date or dates (or, if Section 14 below is applicable, such later dates) as the Dealer shall determine in its sole discretion).
Net Share Settlement:	On the Settlement Date, Dealer shall deliver to Counterparty a number of Shares equal to the sum of the Number of Shares to be Delivered for all Components to the account specified by

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		Counterparty and cash in lieu of any fractional shares for any Component valued at the VWAP Price on the Expiration Date for such Component.
Number of Shares to be Delivered:		In respect of any Exercise Date for any Component, subject to the last sentence of Section 9.5 of the Equity Definitions:
		(i) if the VWAP Price for such Component exceeds Strike Price 1 but is less than Strike Price 2, a number of Shares equal to (i) the product of (A) the excess of such VWAP Price over Strike Price 1, (B) the Number of Options for such Component and (C) the Option Entitlement, divided by (ii) such VWAP Price;
		(ii) if the VWAP Price for such Component equals or exceeds Strike Price 2, a number of Shares equal to (i) the product of (A) the excess of Strike Price 2 over Strike Price 1, (B) the Number of Options for such Component and (C) the Option Entitlement, divided by (ii) such VWAP Price; or
		(iii) if the VWAP Price for such Component is less than or equal to Strike Price 1, a number of Shares equal to zero.
VWAP Price:		For any Expiration Date, as determined by the Calculation Agent based on the NASDAQ Volume Weighted Average Price per share of the Shares for the regular trading session (including any extensions thereof) of the Exchange on such Expiration Date (without regard to pre-open or after hours trading outside of such regular trading session) as published by Bloomberg at or around 4:15 p.m. New York time on such date, on Bloomberg page “PCLN.Q <Equity> AQR_SEC” (or any successor thereto).
Other Applicable Provisions:		The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be applicable, except that all references in such provisions to “Physical Settlement” shall be read as references to “Net Share Settlement”; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Buyer is the issuer of any Shares.
Share Adjustments:
Method of Adjustment:		Calculation Agent Adjustment
Extraordinary Events:
New Shares:		In the definition of “New Shares” in Section 12.1(i) of the Equity Definitions, the text in subsection (i) shall be deleted in its entirety and replaced with: “publicly quoted, traded or listed on any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or their respective successors)”.
Consequences of Merger Events:
(a)	Share-for-Share:	Calculation Agent Adjustment

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(b)	Share-for-Other:	Cancellation and Payment (Agreed Model) on that portion of the Other Consideration that consists of cash; Calculation Agent Adjustment on the remainder of the Other Consideration.
(c)	Share-for-Combined:	Component Adjustment
Stock Loan Rate:		USD-LIBOR-BBA
Tender Offer:		Applicable; provided that (a) Section 12.1(d) of the Equity Definitions is hereby amended by adding “, or of the outstanding Shares,” before “of the Issuer” in the fourth line thereof and (b) Sections 12.1(e) and 12.1(l)(ii) of the Equity Definitions are hereby amended by adding “or Shares, as applicable,” after “voting shares”.
Consequences of Tender Offers:
(a)	Share-for-Share:	Calculation Agent Adjustment
(b)	Share-for-Other:	Cancellation and Payment (Agreed Model) on that portion of the Other Consideration that consists of cash; Calculation Agent Adjustment on the remainder of the Other Consideration.
(c)	Share-for-Combined:	Component Adjustment
Stock Loan Rate:		USD-LIBOR-BBA
Nationalization, Insolvency or Delisting:		Cancellation and Payment (Agreed Model); provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange.
Stock Loan Rate:		USD-LIBOR-BBA
Additional Disruption Events:
(a)	Change in Law:	Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by adding “other than increased cost due to Securities Act registration requirements relating to sales by Dealer of the Shares acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction” after the parenthetical in the last line thereof.
(b)	Failure to Deliver:	Applicable
(c)	Insolvency Filing:	Applicable
(d)	Hedging Disruption:	Applicable
	Hedging Party:	Dealer
Determining Party:		Dealer

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Non-Reliance:	Applicable
Agreements and Acknowledgements
Regarding Hedging Activities:	Applicable
Additional Acknowledgements:	Applicable
Dealer Payment Instructions:	To be provided by Dealer.
Counterparty Payment and Delivery Instructions:	To be provided by Counterparty.

3.     Calculation Agent:  Dealer

4.     Offices:

(a)           The Office of Dealer for this Transaction is: One New York Plaza, New York, New York 10004.

(b)The Office of Counterparty for this Transaction is: 800 Connecticut Avenue, Norwalk, Connecticut 06854.

5.     Notices:  For purposes of this Confirmation:

(a)           Address for notices or communications to Counterparty:

To:	priceline.com Incorporated
	800 Connecticut Avenue
	Norwalk, Connecticut 06854
Attn:	Robert J. Mylod, Jr.
	Chief Financial Officer
Telephone:	(203) 299-8301
Facsimile:	(203) 299-8975
With a copy to:
Attn:	Peter J. Millones
	General Counsel
Facsimile:	(203) 299-8915

(b)           Address for notices or communications to Dealer:

To:	Goldman, Sachs & Co.
	One New York Plaza
	New York, NY 10004
Attn:	Equity Operations: Options and Derivatives
Telephone:	(212) 902-1981
Facsimile:	(212) 428-1980/1983
With a copy to:
Attn:	Vijay Culas
	Equity Capital Markets
Telephone:	(212) 357-0428
Facsimile:	(212) 902-3000

6.     Representations, Warranties and Agreements:

(a)           In addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants to and for the benefit of, and agrees with, Dealer as follows:

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(i)           On the Trade Date, (A) none of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and (B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.

(ii)          Counterparty intends that this Transaction qualifies as an equity instrument for it for purposes of EITF Issue No. 00-19.  Notwithstanding the foregoing and without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that neither Dealer nor any of its affiliates is making any representations or warranties with respect to the treatment of the Transaction under FASB Statements 128, 133, 149 or 150, EITF Issue No. 00-19 (or any successor issue statements) or under FASB’s Liabilities & Equity Project.

(iii)         Prior to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction and such other certificate or certificates as Dealer shall reasonably request.  Any repurchases of Shares pursuant to the Transaction are pursuant to a Share repurchase program publicly announced on or before the Trade Date.

(iv)         Counterparty has not received notice that it is the subject of a tender offer made under Section 14(d)(1) of the Exchange Act.

(v)          Counterparty is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) in violation of the Exchange Act.

(vi)         Counterparty is not, and after giving effect to the transactions contemplated hereby will not be, an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(vii)        On the Trade Date (A) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty, including contingent liabilities, (B) the capital of Counterparty is adequate to conduct the business of Counterparty and (C) Counterparty has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature.

(viii)       The representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement dated as of the Trade Date between Counterparty and Dealer as representative of the several purchasers party thereto (the “Purchase Agreement”), are true and correct and are hereby deemed to be repeated to Dealer as if set forth herein.

(ix)         (A) On the Trade Date and during the period starting on the first Expiration Date and ending on the last Expiration Date (the “Settlement Period”), the Shares or securities that are convertible into, or exchangeable or exercisable for Shares, are not, and shall not be, subject to a “restricted period,” as such term is defined in Regulation M under the Exchange Act (“Regulation M”) and (B) Counterparty shall not engage in any “distribution,” as such term is defined in Regulation M, other than a distribution meeting the requirements of the exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business Day immediately following the Trade Date or the Settlement Period, as the case may be.

(x)          On the Trade Date and during the Settlement Period, neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18 under the Exchange Act (“Rule 10b-18”)) shall directly or indirectly (including, without limitation, by means of any cash-settled or other derivative instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares (or an equivalent interest, including a unit of beneficial interest in a trust or

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limited partnership or a depository share) or any security convertible into or exchangeable or exercisable for Shares.

(xi)         Without the consent of Dealer, Counterparty agrees (i) during the Designated Period, not to purchase or agree to purchase Shares if such purchase would cause its outstanding Shares to be below 36.35 million and (ii) during the Designated Period, not to purchase or agree to purchase Shares if such purchase along with all other purchases during the Designated Period would exceed 3.85 million in the aggregate. The Share numbers in this provision shall be subject to adjustment as the Calculation Agent determines appropriate to account for any Potential Adjustment Event or Extraordinary Event. “Designated Period” means the period from and including the Trade Date to and including the date that is the 30th Prospectus Useable Day (or such longer number agreed by the parties) occurring after the 60th day following the Trade Date.  An Exchange Business Day is a Prospectus Useable Day unless on such day Dealer determines in its good faith discretion that the Registration Statement and Prospectus referred to in the Underwriting Agreement dated September 5, 2006 between, among others, Dealer, as representative of the several underwriters, and Counterparty (the “Underwriting Agreement”), is not or may not be available for use in compliance with applicable law.

(b)      Each of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended.

(c)      Each of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) thereof.  Accordingly, Counterparty represents and warrants to Dealer that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment and its investments in and liabilities in respect of the Transaction, which it understands are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account without a view to the distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws, (v) its financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction.

(d)      Each of Dealer and Counterparty agrees and acknowledges (A) that this Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7) of Title 11 of the United States Code (the “Bankruptcy Code”), with respect to which each payment and delivery hereunder is a “settlement payment,” as such term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code, and (B) that Dealer is entitled to the protections afforded by, among other sections, Section 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code.

(e)      Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement.

(f)       Each party acknowledges and agrees to be bound by the Conduct Rules of the National Association of Securities Dealers, Inc. applicable to transactions in options, and further agrees not to violate the position and exercise limits set forth therein.

(g)      In addition to the representations and warranties in the Agreement and those contained elsewhere herein, Dealer represents and warrants to and for the benefit of, and agrees with, Counterparty that on the Trade Date and during the period ending on the 60th day after the Trade Date, all Shares purchased by Dealer under the Underwriting Agreement, but not resold as of the Trade Date will reside in an investment account, and Dealer will not, and will not attempt to, directly or indirectly, sell, offer to sell, solicit offers to buy or otherwise distribute any such Shares during such period.

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7.        Repurchase Notices.  Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day if following such repurchase, the Notice Percentage as determined on such day is greater by 0.5% than the Notice Percentage included in the immediately preceding Repurchase Notice (or, in the case of the first such Repurchase Notice, greater than the Notice Percentage as of the date hereof).  In the event that Counterparty fails to provide Dealer with a Repurchase Notice on the day and in the manner specified in this Section then Counterparty agrees to indemnify and hold harmless Dealer, its affiliates and their respective directors, officers, employees, agents and controlling persons (Dealer and each such person being an “Indemnified Party”) from and against any and all losses, claims, damages and liabilities (or actions in respect thereof), joint or several, to which such Indemnified Party may become subject, under Section 16 of the Exchange Act, relating to or arising out of such failure.  If for any reason the foregoing indemnification is unavailable to any Indemnified Party or insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute, to the maximum extent permitted by law, to the amount paid or payable by the Indemnified Party as a result of such loss, claim, damage or liability.  In addition, Counterparty will reimburse any Indemnified Party for all expenses (including reasonable counsel fees and expenses) as they are incurred (after notice to Counterparty) in connection with the investigation of, preparation for or defense or settlement of any pending or threatened claim or any action, suit or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto and whether or not such claim, action, suit or proceeding is initiated or brought by or on behalf of Counterparty.  This indemnity shall survive the completion of the Transaction contemplated by this Confirmation and any assignment and delegation of the Transaction made pursuant to this Confirmation or the Agreement shall inure to the benefit of any permitted assignee of Dealer.  The “Notice Percentage” as of any day is the fraction (A) the numerator of which is the aggregate of the products of the outstanding Number of Options and the Option Entitlement under this Transaction and the Other Transaction and (B) the denominator of which is the number of Shares outstanding on such day.

8.        Transfer or Assignment.  Neither party may transfer any of its rights or obligations under this Transaction without the prior written consent of the non-transferring party; provided that Dealer may assign, transfer and set over all rights, title and interest, powers, privileges and remedies of Dealer under this Transaction, in whole or in part, to an affiliate of Dealer that is guaranteed by The Goldman Sachs Group, Inc. without the consent of Counterparty; provided further that if the Equity Percentage exceeds 7%, Dealer may immediately, in its sole discretion, transfer or assign a number of Options sufficient to reduce the Equity Percentage to 6.5% to any third party with (or with a guarantor that has) a rating for its long-term, unsecured and unsubordinated indebtedness by Standard & Poor’s Ratings Services or its successor (“S&P”) that is not lower than the rating by S&P for the long-term, unsecured and unsubordinated indebtedness of The Goldman Sachs Group, Inc. (“GS Debt”), or by Moody’s Investors Service, Inc. (“Moody’s”) that is not lower than the rating by Moody’s for GS Debt or, if either S&P or Moody’s ceases to rate such debt, at least an equivalent rating or better by a substitute agency rating mutually agreed by Counterparty and Dealer.  If, in the discretion of Dealer, Dealer is unable to effect such transfer or assignment after its commercially reasonable efforts on pricing terms reasonably acceptable to Dealer, Dealer may designate any Scheduled Trading Day as an Early Termination Date with respect to a portion (the “Terminated Portion”) of this Transaction, allocated to Components as Dealer determines in its discretion, such that the Equity Percentage following such partial termination will be equal to or less than 7%.  In the event that Dealer so designates an Early Termination Date with respect to a portion of this Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (i) an Early Termination Date had been designated in respect of a Transaction having terms identical to this Transaction and a Number of Options equal to the Terminated Portion, (ii) Counterparty shall be the Affected Party with respect to such partial termination and (iii) such portion of this Transaction shall be the only Terminated Transaction.  The “Equity Percentage” as of any day is the fraction (A) the numerator of which is the number of Shares that Dealer or any of its affiliates that are subject to aggregation with Dealer beneficially own (within the meaning of Section 13 of the Exchange Act) on such day and (B) the denominator of which is the number of Shares outstanding on such day.

9.        Beneficial Ownership.  Notwithstanding anything to the contrary in the Agreement or this Confirmation, in no event shall Dealer be entitled to receive, or shall be deemed to receive, any Shares if, upon such receipt of such Shares, the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the rules promulgated thereunder) of Shares by Dealer or any of its affiliates that are subject to aggregation with Dealer (collectively, “Dealer Group”) would be equal to or greater than 9.5% or more of the outstanding Shares.  If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Counterparty’s obligation to make such delivery shall not be extinguished and Counterparty shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Dealer gives notice to Counterparty that such delivery would not result in Dealer Group directly or indirectly so beneficially owning in excess of 9.5% of the outstanding Shares.

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10.      Extension of Settlement.   Dealer may divide any Component into additional Components and designate the Expiration Date and the Number of Options for each such Component if Dealer determines, in its reasonable discretion, that such further division is necessary or advisable to preserve Dealer’s hedging activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be compliance with applicable legal and regulatory requirements.

11.      Intentionally Omitted.

12.      Equity Rights.  Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy.  For the avoidance of doubt, the parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim arising as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement.  For the avoidance of doubt, the parties acknowledge that this Confirmation is not secured by any collateral that would otherwise secure the obligations of Counterparty herein under or pursuant to any other agreement.

13.      Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events.  If, subject to Section 14 below, Dealer shall owe Counterparty any amount pursuant to Section 12.2 of the Equity Definitions and “Consequences of Merger Events” above, or Sections 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of a Tender Offer or a Merger Event, in each case, in which the consideration or proceeds to be paid to holders of Shares consists solely of cash) or pursuant to Section 6(d)(ii) of the Agreement (except in the event of an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party, that resulted from an event or events within Counterparty’s control) (a “Payment Obligation”), Counterparty shall have the right, in its sole discretion, to require Dealer to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, between the hours of 9:00 A.M. and 4:00 P.M. New York City time on the Merger Date, Tender Offer Date, Announcement Date, Early Termination Date or other date of termination, as applicable (“Notice of Share Termination”).  Within a commercially reasonable period of time following receipt of a Notice of Share Termination, Dealer shall deliver to Counterparty a number of Share Termination Delivery Units having a cash value equal to the amount of such Payment Obligation (such number of Share Termination Delivery Units to be delivered to be determined by the Calculation Agent as the number of whole Share Termination Delivery Units that could be purchased over a commercially reasonable period of time with the cash equivalent of such payment obligation) (the “Share Termination Alternative”).

Share Termination Delivery Unit:	In the case of a Termination Event, Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, one Share or a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization, Merger Event or Tender Offer. If such Insolvency, Nationalization, Merger Event or Tender Offer involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.
Failure to Deliver:	Applicable
Other applicable provisions:	If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be applicable, except that all references in such provisions to “Physical Settlement” shall be read as references to “Share Termination Alternative” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”; and provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of

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the fact that Buyer is the issuer of any Share Termination Delivery Units (or any part thereof).

14.   Net Share Settlement on Early Termination and Certain Extraordinary Events.

(a)      Notwithstanding Section 6(e) of the Agreement or Sections 12.7 or 12.8 of the Equity Definitions, if, with respect to the Transaction contemplated hereunder, (A) an Early Termination Date with respect to any Event of Default or any Termination Event, (B) a Merger Date with respect to any Merger Event or Tender Offer Date with respect to a Tender Offer, (C) a Closing Date with respect to an event described in Section 12.6 of the Equity Definitions, or (D) date as of which the Transaction is, or is deemed to have been, terminated or cancelled as a result of an applicable Additional Disruption Event (any such date, the “Relevant Date”) shall occur, then in lieu of calculating any payments hereunder pursuant to Section 6(e) of the Agreement or Sections 12.7 or 12.8 of the Equity Definitions, as applicable, the Calculation Agent, in its sole discretion, shall determine the amount payable by Dealer to Counterparty on the following basis:

(i)       such Relevant Date shall be the sole Exercise Date hereunder and Automatic Exercise shall be applicable to the Number of Options in each of the Components for which an Expiration Date has not occurred (the “Unexpired Number”);

(ii)      Dealer shall deliver to the Counterparty the Net Share Settlement Amount on the Settlement Date with respect to such Relevant Date; and

(iii)     “Net Share Settlement Amount” shall mean a number of Shares equal to (A) the Number of Shares to be Delivered (as defined below) minus (B) the product of (x) the additional Shares per Option (the “Additional Shares”) determined by reference to the table attached as Annex B hereto based on the date on which such Relevant Date occurs and the VWAP Price on such date, (y) the Unexpired Number, and (z) the Option Entitlement.

(b)      Solely for purposes of this Section 14, in respect of any Exercise Date deemed to occur pursuant to paragraph (a) of this Section 14, subject to the last sentence of Section 9.5 of the Equity Definitions, “Number of Shares to be Delivered” shall mean, the product of (i) the Unexpired Number, (ii) the Option Entitlement and (iii) (A) the excess of the lower of (x) Strike Price 2 and (y) the VWAP Price on the Valuation Date occurring on such Exercise Date over Strike Price 1 divided by (B) such VWAP Price.  Notwithstanding anything to the contrary in the Equity Definitions, if there is a Market Disruption Event on any Valuation Date, then the Calculation Agent shall determine the VWAP Price for such Valuation Date on the basis of its good faith estimate, determined in a commercially reasonable manner, of the market value for the relevant Shares on such Valuation Date.

(c)      With respect to the determination of Additional Shares, if the actual VWAP Price is between two VWAP Price amounts in the table or the Relevant Date is between two Relevant Dates in the table, the Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the next higher and next lower VWAP Price amounts and the two nearest Relevant Dates, as applicable, based on a 365-day year.

(d)      With respect to any adjustment to the terms of the Transaction, the Calculation Agent, in its reasonable discretion, shall correspondingly adjust the Additional Shares and/or the VWAP Prices (each as set forth in the table in Annex B hereto) as of any date of such adjustments. For the avoidance of doubt, any adjustment made to the Additional Shares and/or the VWAP Prices (each as set forth in the table in Annex B hereto) shall be consistent with (i) the adjustments made pursuant to the provisions of this Section 14 if such adjustments were the result of an event which was outside of Counterparty’s control, and (ii) the adjustments made pursuant to the applicable provisions of this Confirmation if such adjustments were the result of an event which was within Counterparty’s control.

15.   Set-Off.  The parties agree to amend Section 6 of the Agreement by adding a new Section 6(f) thereto as follows:

“(f)  Upon the occurrence of an Event of Default or Termination Event with respect to a party who is the Defaulting Party or the Affected Party (“X”), the other party (“Y”) will have the right (but not be obliged) without prior notice to X or any other person to set-off or apply any obligation of

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X under an Equity Contract owed to Y (or any Affiliate of Y) (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation) against any obligation of Y (or any Affiliate of Y) under an Equity Contract owed to X (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation).  Y will give notice to the other party of any set-off effected under this Section 6(f).

“Equity Contract” shall mean for purposes of this Section 6(f) any Transaction relating to Shares between X and Y (or any Affiliate of Y) that qualifies as ‘equity’ under applicable accounting rules.

Amounts (or the relevant portion of such amounts) subject to set-off may be converted by Y into the Termination Currency at the rate of exchange at which such party would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency.

If any obligation is unascertained, Y may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained.

Nothing in this Section 6(f) shall be effective to create a charge or other security interest.  This Section 6(f) shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other right to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise).”

16.   Amendments to Equity Definitions.

(a)    The following amendments shall be made to the Equity Definitions and to the Agreement:

(i)  The first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation of a Share Option Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has a material effect on the theoretical value of the relevant Shares or options on the Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’; and

(ii)   Sections 11.2(a) and (e)(vii) of the Equity Definitions are hereby amended by deleting the words “diluting or concentrative” and replacing them with “material”.

(b)  Solely for purposes of applying the Equity Definitions and for purposes of this Confirmation, any reference to a Strike Price shall be deemed to be a reference to any of the Strike Price 1 or the  Strike Price 2, or both, as appropriate.

17.   Disclosure.  Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure.

18.   Special Provisions for Counterparty Payments.  The parties hereby agree that, notwithstanding anything to the contrary herein or in the Agreement, in the event that an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to any Transaction after Counterparty has paid the Premium to Dealer and, as a result, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement (calculated as if the Transactions being terminated on such Early Termination Date were the sole Transactions under the Agreement), such amount shall be deemed to be zero.

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19.   Unwind.  In the event the sale of the $150,000,000 0.50% Convertible Senior Notes due September 30, 2011 and the $150,000,000 0.75% Convertible Senior Notes due September 30, 2013 are not consummated with the initial purchasers pursuant to the Purchase Agreement for any reason by the close of business in New York on September 27, 2006 (or such later date as agreed upon by the parties) (such date or such later date as agreed upon being the “Accelerated Unwind Date”), this Transaction shall automatically terminate (the “Accelerated Unwind”) on the Accelerated Unwind Date and (i) this Transaction and all of the respective rights and obligations of Dealer and Counterparty under this Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with this Transaction either prior to or after the Accelerated Unwind Date.  Dealer and Counterparty represent and acknowledge to the other that upon an Accelerated Unwind, all obligations with respect to this Transaction shall be deemed fully and finally discharged.

20.  Arbitration.

(a)      All parties to this Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed.

(b)      Arbitration awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.

(c)      The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings.

(d)      The arbitrators do not have to explain the reason(s) for their award.

(e)      The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless Counterparty is a member of the organization sponsoring the arbitration facility, in which case all arbitrators may be affiliated with the securities industry.

(f)       The rules of some arbitration forums may impose time limits for bringing a claim in arbitration.  In some cases, a claim that is ineligible for arbitration may be brought in court.

(g)      The rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Confirmation.

(h)      Counterparty agrees that any and all controversies that may arise between Counterparty and Dealer, including, but not limited to, those arising out of or relating to the Agreement or the Transaction hereunder, shall be determined by arbitration conducted before The New York Stock Exchange, Inc. (“NYSE”) or NASD Dispute Resolution (“NASD-DR”), or, if the NYSE and NASD-DR decline to hear the matter, before the American Arbitration Association, in accordance with their arbitration rules then in force.  The award of the arbitrator shall be final, and judgment upon the award rendered may be entered in any court, state or federal, having jurisdiction.

(i)       No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the class is decertified; or (iii) Counterparty is excluded from the class by the court.

(j)       Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Confirmation except to the extent stated herein.

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Counterparty hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Counterparty with respect to this Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, Facsimile No. 212-428-1980/83.

Yours faithfully,

GOLDMAN, SACHS & CO.

/s/ David Goldenberg

Authorized Signatory

Agreed and Accepted By:
PRICELINE.COM INCORPORATED
By:	/s/ Robert J. Mylod, Jr.
	Name: Robert Mylod, Jr.
	Title:  Chief Financial Officer

ANNEX A

	Component		Number of Options		Expiration Date (7-Year)
1		130,015		23-Sep-13
2		130,015		24-Sep-13
3		130,015		25-Sep-13
4		130,015		26-Sep-13
5		130,015		27-Sep-13
6		130,015		30-Sep-13
7		130,015		1-Oct-13
8		130,015		2-Oct-13
9		130,015		3-Oct-13
10		130,015		4-Oct-13
11		130,015		7-Oct-13
12		130,015		8-Oct-13
13		130,015		9-Oct-13
14		130,015		10-Oct-13
15		130,015		11-Oct-13
16		130,015		14-Oct-13
17		130,015		15-Oct-13
18		130,015		16-Oct-13
19		130,015		17-Oct-13
20		130,015		18-Oct-13

ANNEX B

	VWAP Price
	<$25.0	$25.0	$30.0	$35.0	$40.0	$45.0	$50.0	$55.0	$60.0
09/26/06	0.000000	-0.085498	-0.085784	-0.084541	-0.082454	0.022744	0.115215	0.109070	0.096561
03/26/07	0.000000	-0.080741	-0.082133	-0.081798	-0.080441	0.024171	0.116174	0.109654	0.096844
09/26/07	0.000000	-0.078798	-0.083422	-0.085315	-0.085424	0.025448	0.116954	0.110037	0.096911
03/26/08	0.000000	-0.077842	-0.083718	-0.086550	-0.087327	0.026604	0.117583	0.110247	0.096789
09/26/08	0.000000	-0.067480	-0.074824	-0.079170	-0.081344	0.027542	0.117952	0.110166	0.096353
03/26/09	0.000000	-0.065926	-0.074709	-0.080227	-0.083284	0.024828	0.114907	0.106912	0.092981
09/26/09	0.000000	-0.063630	-0.074083	-0.081019	-0.085172	0.021956	0.111607	0.103336	0.089246
03/26/10	0.000000	-0.060473	-0.072794	-0.081405	-0.086894	0.019016	0.108120	0.099495	0.085196
09/26/10	0.000000	-0.056080	-0.070541	-0.081220	-0.088422	0.015902	0.104274	0.095169	0.080586
03/26/11	0.000000	-0.050234	-0.067013	-0.080189	-0.089568	0.012710	0.100102	0.090356	0.075395
09/27/11	0.000000	-0.042194	-0.061417	-0.077757	-0.090118	0.009306	0.095278	0.084605	0.069112
03/26/12	0.000000	-0.031702	-0.052911	-0.073078	-0.089542	0.005833	0.089693	0.077666	0.061433
09/26/12	0.000000	-0.017999	-0.039156	-0.063774	-0.086547	0.002168	0.082349	0.068057	0.050739
03/26/13	0.000000	-0.003869	-0.017369	-0.043749	-0.076748	-0.001452	0.070662	0.052003	0.033408
09/23/13	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000

	VWAP Price
	$65.0	$70.0	$75.0	$80.0	$85.0	$90.0	$95.0	$100.0	$105.0
09/26/06	0.086331	0.077848	0.070727	0.064686	0.059511	0.055040	0.051147	0.047733	0.044720
03/26/07	0.086372	0.077695	0.070418	0.064250	0.058974	0.054421	0.050462	0.046996	0.043942
09/26/07	0.086188	0.077310	0.069874	0.063580	0.058203	0.053572	0.049552	0.046039	0.042949
03/26/08	0.085802	0.076717	0.069117	0.062696	0.057221	0.052514	0.048437	0.044881	0.041761
09/26/08	0.085090	0.075790	0.068026	0.061479	0.055910	0.051134	0.047008	0.043420	0.040280
03/26/09	0.081667	0.072365	0.064634	0.058145	0.052651	0.047962	0.043929	0.040439	0.037398
09/26/09	0.077858	0.068545	0.060848	0.054426	0.049020	0.044433	0.040512	0.037138	0.034215
03/26/10	0.073708	0.064375	0.056715	0.050369	0.045068	0.040603	0.036815	0.033578	0.030795
09/26/10	0.068962	0.059599	0.051985	0.045739	0.040572	0.036264	0.032645	0.029584	0.026977
03/26/11	0.063592	0.054194	0.046648	0.040538	0.035551	0.031451	0.028053	0.025217	0.022834
09/27/11	0.057071	0.047650	0.040226	0.034333	0.029622	0.025827	0.022748	0.020230	0.018154
03/26/12	0.049115	0.039737	0.032566	0.027054	0.022791	0.019469	0.016861	0.014796	0.013146
09/26/12	0.038192	0.029146	0.022634	0.017937	0.014535	0.012053	0.010225	0.008862	0.007833
03/26/13	0.021587	0.014286	0.009856	0.007185	0.005568	0.004573	0.003940	0.003521	0.003228
09/23/13	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000

	VWAP Price
	$110.0	$115.0	$120.0	$125.0	$130.0	$140.0	$150.0	$200.0	$250 or more
09/26/06	0.042045	0.039656	0.037514	0.035583	0.033835	0.030797	0.028252	0.019990	0.015503
03/26/07	0.041235	0.038822	0.036661	0.034717	0.032959	0.029913	0.027369	0.019179	0.014790
09/26/07	0.040215	0.037784	0.035611	0.033659	0.031899	0.028856	0.026325	0.018255	0.013992
03/26/08	0.039008	0.036564	0.034385	0.032432	0.030676	0.027649	0.025143	0.017237	0.013132
09/26/08	0.037516	0.035071	0.032896	0.030954	0.029211	0.026220	0.023757	0.016087	0.012180
03/26/09	0.034734	0.032386	0.030307	0.028457	0.026804	0.023982	0.021673	0.014587	0.011038
09/26/09	0.031668	0.029437	0.027471	0.025730	0.024182	0.021557	0.019427	0.013002	0.009845
03/26/10	0.028387	0.026291	0.024457	0.022843	0.021416	0.019017	0.017090	0.011391	0.008646
09/26/10	0.024743	0.022816	0.021144	0.019685	0.018405	0.016277	0.014589	0.009714	0.007412
03/26/11	0.020817	0.019099	0.017625	0.016353	0.015249	0.013438	0.012024	0.008046	0.006194
09/27/11	0.016431	0.014990	0.013774	0.012741	0.011857	0.010433	0.009344	0.006354	0.004954
03/26/12	0.011816	0.010732	0.009840	0.009098	0.008475	0.007492	0.006756	0.004741	0.003749
09/26/12	0.007043	0.006425	0.005934	0.005536	0.005207	0.004692	0.004304	0.003154	0.002519
03/26/13	0.003010	0.002839	0.002698	0.002577	0.002471	0.002288	0.002133	0.001599	0.001279
09/23/13	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000

EX-10.4

Exhibit 10.4

                    

Opening Transaction

To:	priceline.com Incorporated
	800 Connecticut Avenue
	Norwalk, Connecticut 06854
A/C:	066213118
From:	Merrill Lynch International
Re:	Issuer Capped Share Call Option Transaction (5-Year)
Ref. No:	06818735
Date:	September 21, 2006

Dear Sir(s):

The purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on the Trade Date specified below (the “Transaction”) between Merrill Lynch International (“Dealer”), Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Agent”) and priceline.com Incorporated (“Counterparty”).  This communication constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.

1.     This Confirmation is subject to, and incorporates, the definitions and provisions of the 2000 ISDA Definitions (including the Annex thereto) (the “2000 Definitions”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the 2000 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc. (“ISDA”).  In the event of any inconsistency between the 2000 Definitions and the Equity Definitions, the Equity Definitions will govern.

Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.

This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates.  This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement as if Dealer and Counterparty had executed an agreement in such form on the date hereof (but without any Schedule except for (i) the election of Loss and Second Method, New York law (without regard to the conflicts of law principles) as the governing law and US Dollars (“USD”) as the Termination Currency, (ii) the election that subparagraph (ii) of Section 2(c) will not apply to Transactions and (iii) the election that the “Cross Default” provisions of Section 5(a)(vi) will apply to Counterparty with a “Threshold Amount” of USD 50 million).  The parties hereby agree that no Transactions other than the Transaction to which this Confirmation relates and the other transaction between the parties with the same trade date regarding options on Shares expiring in 2013 (the “Other Transaction”) shall be governed by the Agreement.

All provisions contained in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein.  In the event of any inconsistency between this Confirmation and the Definitions or the Agreement, as the case may be, this Confirmation shall govern.

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2.     This Transaction constitutes a Share Option Transaction for purposes of the Equity Definitions.  The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:

	Trade Date:	September 21, 2006
	Components:	The Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with the Number of Options and Expiration Date set forth in this Confirmation. The payments and deliveries to be made upon settlement of the Transaction will be determined separately for each Component as if each Component were a separate Transaction under the Agreement.
	Option Style:	European
	Option Type:	Call
	Seller:	Dealer
	Buyer:	Counterparty
	Shares:	Common Stock (par value $0.008 per Share) of Counterparty (Ticker: “PCLN”)
	Number of Options:	For each Component, as provided in Annex A to this Confirmation.
	Option Entitlement:	One Share per Option
	Strike Price 1:	40.38
	Strike Price 2:	50.47
	Premium:	USD 4,792,500
	Premium Payment Date:	September 27, 2006
	Exchange:	NASDAQ Global Select Market
	Related Exchange	All Exchanges
Procedures for Exercise:
	Expiration Time:	Valuation Time
	Expiration Date:	As provided in Annex A to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already an Expiration Date for another Component); provided that, notwithstanding anything to the contrary in the Equity Definitions, if that date is a Disrupted Day, the Calculation Agent may determine that the Expiration Date for such Component is a Disrupted Day in whole or in part, in which case the Calculation Agent shall, in its discretion, determine the number of Options for which such day shall be the Expiration Date and (i) allocate the remaining Options for such Expiration Date to one or more of the remaining Expiration Dates, (ii) designate the

2

		first succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is not deemed to be an Expiration Date in respect of any other Component of the Transaction hereunder as the Expiration Date for such remaining Options, or (iii) a combination thereof; provided further  that if the Expiration Date for a Component (including any portion of a Component whose Expiration Date was postponed as a result of clause (ii) or (iii) above) has not occurred as of the Final Disruption Date, (a) the Final Disruption Date shall be deemed to be the Expiration Date and Valuation Date for each such Component, and (b) the Calculation Agent shall determine the VWAP Price on the basis of its good faith estimate of the trading value for the relevant Shares. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring on an Expiration Date.
	Final Disruption Date:	October 28, 2011
	Market Disruption Event:	Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” in clause (ii) thereof.
	Automatic Exercise:	Applicable; and means that the Number of Options for the corresponding Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date if at such time such Options are In-the-Money, as determined by the Calculation Agent, unless Buyer notifies Seller (by telephone or in writing) prior to the Expiration Time on such Expiration Date that it does not wish Automatic Exercise to occur, in which case Automatic Exercise will not apply to such Expiration Date. “In-the-Money” means that the VWAP Price is greater than Strike Price 1.
	Seller’s Telephone Number
	and Telex and/or Facsimile Number
	and Contact Details for purpose of
	Giving Notice:	To be provided by Dealer.
Settlement Terms:
In respect of any Component:
	Settlement Currency:	USD
	Settlement Method:	Net Share Settlement
	Settlement Date:	For all Components, the Settlement Date shall be the third Scheduled Trading Day after the final Expiration Date (or, in respect of all or part of its obligation to deliver the Number of Shares to be Delivered, such other earlier date or dates (or, if Section 14 below is applicable, such later dates) as the Dealer shall determine in its sole discretion).
	Net Share Settlement:	On the Settlement Date, Dealer shall deliver to Counterparty a number of Shares equal to the sum of the Number of Shares to be Delivered for all Components to the account specified by

3

			Counterparty and cash in lieu of any fractional shares for any Component valued at the VWAP Price on the Expiration Date for such Component.
	Number of Shares to be Delivered:		In respect of any Exercise Date for any Component, subject to the last sentence of Section 9.5 of the Equity Definitions:
			(i) if the VWAP Price for such Component exceeds Strike Price 1 but is less than Strike Price 2, a number of Shares equal to (i) the product of (A) the excess of such VWAP Price over Strike Price 1, (B) the Number of Options for such Component and (C) the Option Entitlement, divided by (ii) such VWAP Price;
			(ii) if the VWAP Price for such Component equals or exceeds Strike Price 2, a number of Shares equal to (i) the product of (A) the excess of Strike Price 2 over Strike Price 1, (B) the Number of Options for such Component and (C) the Option Entitlement, divided by (ii) such VWAP Price; or
			(iii) if the VWAP Price for such Component is less than or equal to Strike Price 1, a number of Shares equal to zero.
	VWAP Price:		For any Expiration Date, as determined by the Calculation Agent based on the NASDAQ Volume Weighted Average Price per share of the Shares for the regular trading session (including any extensions thereof) of the Exchange on such Expiration Date (without regard to pre-open or after hours trading outside of such regular trading session) as published by Bloomberg at or around 4:15 p.m. New York time on such date, on Bloomberg page “PCLN.Q <Equity> AQR_SEC” (or any successor thereto).
	Other Applicable Provisions:		The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be applicable, except that all references in such provisions to “Physical Settlement” shall be read as references to “Net Share Settlement”; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Buyer is the issuer of any Shares.
Share Adjustments:
	Method of Adjustment:		Calculation Agent Adjustment
Extraordinary Events:
	New Shares:		In the definition of “New Shares” in Section 12.1(i) of the Equity Definitions, the text in subsection (i) shall be deleted in its entirety and replaced with: “publicly quoted, traded or listed on any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or their respective successors)”.
Consequences of Merger Events:
	(a)	Share-for-Share:	Calculation Agent Adjustment

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	(b)	Share-for-Other:	Cancellation and Payment (Agreed Model) on that portion of the Other Consideration that consists of cash; Calculation Agent Adjustment on the remainder of the Other Consideration.
	(c)	Share-for-Combined:	Component Adjustment
	Stock Loan Rate:		USD-LIBOR-BBA
Tender Offer:			Applicable; provided that (a) Section 12.1(d) of the Equity Definitions is hereby amended by adding “, or of the outstanding Shares,” before “of the Issuer” in the fourth line thereof and (b) Sections 12.1(e) and 12.1(l)(ii) of the Equity Definitions are hereby amended by adding “or Shares, as applicable,” after “voting shares”.
Consequences of Tender Offers:
	(a)	Share-for-Share:	Calculation Agent Adjustment
	(b)	Share-for-Other:	Cancellation and Payment (Agreed Model) on that portion of the Other Consideration that consists of cash; Calculation Agent Adjustment on the remainder of the Other Consideration.
	(c)	Share-for-Combined:	Component Adjustment
	Stock Loan Rate:		USD-LIBOR-BBA
Nationalization, Insolvency or Delisting:			Cancellation and Payment (Agreed Model); provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange.
	Stock Loan Rate:		USD-LIBOR-BBA
	Additional Disruption Events:
	(a)	Change in Law:	Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by adding “other than increased cost due to Securities Act registration requirements relating to sales by Dealer of the Shares acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction” after the parenthetical in the last line thereof.
	(b)	Failure to Deliver:	Applicable
	(c)	Insolvency Filing:	Applicable
	(d)	Hedging Disruption:	Applicable
		Hedging Party:	Dealer
	Determining Party:		Dealer

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Non-Reliance:	Applicable
Agreements and Acknowledgements
Regarding Hedging Activities:	Applicable
Additional Acknowledgements:	Applicable
Dealer Payment Instructions:	To be provided by Dealer.
Counterparty Payment and Delivery Instructions:	To be provided by Counterparty.

3.        Calculation Agent:  Dealer

4.        Offices:

(a)The Office of Dealer for this Transaction is: Merrill Lynch Financial Centre, 2 King Edward Street London EC1A 1HQ.

(b)The Office of Counterparty for this Transaction is: 800 Connecticut Avenue, Norwalk, Connecticut 06854.

5.        Notices:  For purposes of this Confirmation:

(a)	Address for notices or communications to Counterparty:
	To:	priceline.com Incorporated
		800 Connecticut Avenue
		Norwalk, Connecticut 06854
	Attn:	Robert J. Mylod, Jr.
		Chief Financial Officer
	Telephone:	(203) 299-8301
	Facsimile:	(203) 299-8975
	With a copy to:
	Attn:	Peter J. Millones
		General Counsel
	Facsimile:	(203) 299-8915
(b)	Address for notices or communications to Dealer:
	To:	Merrill Lynch International
		Merrill Lynch Financial Centre
		2 King Edward Street
		London EC1A 1HQ
	Attn:	Manager, Fixed Income Settlements
	Telephone:	44 207 995 2004
	Facsimile:	44 207 995 3769

6.        Representations, Warranties and Agreements:

(a)      In addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants to and for the benefit of, and agrees with, Dealer as follows:

(i)            On the Trade Date, (A) none of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and (B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities Exchange Act of

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1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.

(ii)           Counterparty intends that this Transaction qualifies as an equity instrument for it for purposes of EITF Issue No. 00-19.  Notwithstanding the foregoing and without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that neither Dealer nor any of its affiliates is making any representations or warranties with respect to the treatment of the Transaction under FASB Statements 128, 133, 149 or 150, EITF Issue No. 00-19 (or any successor issue statements) or under FASB’s Liabilities & Equity Project.

(iii)          Prior to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction and such other certificate or certificates as Dealer shall reasonably request.  Any repurchases of Shares pursuant to the Transaction are pursuant to a Share repurchase program publicly announced on or before the Trade Date.

(iv)          Counterparty has not received notice that it is the subject of a tender offer made under Section 14(d)(1) of the Exchange Act.

(v)           Counterparty is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) in violation of the Exchange Act.

(vi)          Counterparty is not, and after giving effect to the transactions contemplated hereby will not be, an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(vii)         On the Trade Date (A) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty, including contingent liabilities, (B) the capital of Counterparty is adequate to conduct the business of Counterparty and (C) Counterparty has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature.

(viii)        The representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement dated as of the Trade Date between Counterparty and Dealer as representative of the several purchasers party thereto (the “Purchase Agreement”), are true and correct and are hereby deemed to be repeated to Dealer as if set forth herein.

(ix)           (A) On the Trade Date and during the period starting on the first Expiration Date and ending on the last Expiration Date (the “Settlement Period”), the Shares or securities that are convertible into, or exchangeable or exercisable for Shares, are not, and shall not be, subject to a “restricted period,” as such term is defined in Regulation M under the Exchange Act (“Regulation M”) and (B) Counterparty shall not engage in any “distribution,” as such term is defined in Regulation M, other than a distribution meeting the requirements of the exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business Day immediately following the Trade Date or the Settlement Period, as the case may be.

(x)            On the Trade Date and during the Settlement Period, neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18 under the Exchange Act (“Rule 10b-18”)) shall directly or indirectly (including, without limitation, by means of any cash-settled or other derivative instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares (or an equivalent interest, including a unit of beneficial interest in a trust or limited partnership or a depository share) or any security convertible into or exchangeable or exercisable for Shares.

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(xi)           Without the consent of Dealer, Counterparty agrees (i) during the Designated Period, not to purchase or agree to purchase Shares if such purchase would cause its outstanding Shares to be below 36.35 million and (ii) during the Designated Period, not to purchase or agree to purchase Shares if such purchase along with all other purchases during the Designated Period would exceed 3.85 million in the aggregate. The Share numbers in this provision shall be subject to adjustment as the Calculation Agent determines appropriate to account for any Potential Adjustment Event or Extraordinary Event. “Designated Period” means the period from and including the Trade Date to and including the date that is the 30th Prospectus Useable Day (or such longer number agreed by the parties) occurring after the 60th day following the Trade Date.  An Exchange Business Day is a Prospectus Useable Day unless on such day Dealer determines in its good faith discretion that the Registration Statement and Prospectus referred to in the Underwriting Agreement dated September 5, 2006 between, among others, Dealer, as representative of the several underwriters, and Counterparty (the “Underwriting Agreement”), is not or may not be available for use in compliance with applicable law.

(b)           Each of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended.

(c)           Each of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) thereof.  Accordingly, Counterparty represents and warrants to Dealer that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment and its investments in and liabilities in respect of the Transaction, which it understands are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account without a view to the distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws, (v) its financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction.

(d)           Each of Dealer and Counterparty agrees and acknowledges (A) that this Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7) of Title 11 of the United States Code (the “Bankruptcy Code”), with respect to which each payment and delivery hereunder is a “settlement payment,” as such term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code, and (B) that Dealer is entitled to the protections afforded by, among other sections, Section 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code.

(e)           Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement.

(f)            Each party acknowledges and agrees to be bound by the Conduct Rules of the National Association of Securities Dealers, Inc. applicable to transactions in options, and further agrees not to violate the position and exercise limits set forth therein.

7.     Repurchase Notices.  Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day if following such repurchase, the Notice Percentage as determined on such day is greater by 0.5% than the Notice Percentage included in the immediately preceding Repurchase Notice (or, in the case of the first such Repurchase Notice, greater than the Notice Percentage as of the date hereof).  In the event that Counterparty fails to provide Dealer with a Repurchase Notice on the day and in the manner specified in this Section then Counterparty agrees to indemnify and hold harmless Dealer, its affiliates and their respective directors, officers, employees, agents and controlling persons (Dealer and each such person being an “Indemnified Party”) from and against any and all losses, claims, damages and liabilities (or actions in respect thereof), joint or several, to which such Indemnified Party may become subject, under Section 16 of the Exchange Act, relating to or arising out of such failure.  If for any reason the foregoing indemnification is unavailable to any

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Indemnified Party or insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute, to the maximum extent permitted by law, to the amount paid or payable by the Indemnified Party as a result of such loss, claim, damage or liability.  In addition, Counterparty will reimburse any Indemnified Party for all expenses (including reasonable counsel fees and expenses) as they are incurred (after notice to Counterparty) in connection with the investigation of, preparation for or defense or settlement of any pending or threatened claim or any action, suit or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto and whether or not such claim, action, suit or proceeding is initiated or brought by or on behalf of Counterparty.  This indemnity shall survive the completion of the Transaction contemplated by this Confirmation and any assignment and delegation of the Transaction made pursuant to this Confirmation or the Agreement shall inure to the benefit of any permitted assignee of Dealer.  The “Notice Percentage” as of any day is the fraction (A) the numerator of which is the aggregate of the products of the outstanding Number of Options and the Option Entitlement under this Transaction and the Other Transaction and (B) the denominator of which is the number of Shares outstanding on such day.

8.     Transfer or Assignment.  Neither party may transfer any of its rights or obligations under this Transaction without the prior written consent of the non-transferring party; provided that Dealer may assign, transfer and set over all rights, title and interest, powers, privileges and remedies of Dealer under this Transaction, in whole or in part, to an affiliate of Dealer that is guaranteed by Merrill Lynch & Co., Inc. without the consent of Counterparty; provided further that if the Equity Percentage exceeds 7%, Dealer may immediately, in its sole discretion, transfer or assign a number of Options sufficient to reduce the Equity Percentage to 6.5% to any third party with (or with a guarantor that has) a rating for its long-term, unsecured and unsubordinated indebtedness by Standard & Poor’s Ratings Services or its successor (“S&P”) that is not lower than the rating by S&P for the long-term, unsecured and unsubordinated indebtedness of Merrill Lynch & Co., Inc. (“ML Debt”), or by Moody’s Investors Service, Inc. (“Moody’s”) that is not lower than the rating by Moody’s for ML Debt or, if either S&P or Moody’s ceases to rate such debt, at least an equivalent rating or better by a substitute agency rating mutually agreed by Counterparty and Dealer.  If, in the discretion of Dealer, Dealer is unable to effect such transfer or assignment after its commercially reasonable efforts on pricing terms reasonably acceptable to Dealer, Dealer may designate any Scheduled Trading Day as an Early Termination Date with respect to a portion (the “Terminated Portion”) of this Transaction, allocated to Components as Dealer determines in its discretion, such that the Equity Percentage following such partial termination will be equal to or less than 7%.  In the event that Dealer so designates an Early Termination Date with respect to a portion of this Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (i) an Early Termination Date had been designated in respect of a Transaction having terms identical to this Transaction and a Number of Options equal to the Terminated Portion, (ii) Counterparty shall be the Affected Party with respect to such partial termination and (iii) such portion of this Transaction shall be the only Terminated Transaction.  The “Equity Percentage” as of any day is the fraction (A) the numerator of which is the number of Shares that Dealer or any of its affiliates that are subject to aggregation with Dealer beneficially own (within the meaning of Section 13 of the Exchange Act) on such day and (B) the denominator of which is the number of Shares outstanding on such day.

9.     Beneficial Ownership.  Notwithstanding anything to the contrary in the Agreement or this Confirmation, in no event shall Dealer be entitled to receive, or shall be deemed to receive, any Shares if, upon such receipt of such Shares, the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the rules promulgated thereunder) of Shares by Dealer or any of its affiliates that are subject to aggregation with Dealer (collectively, “Dealer Group”) would be equal to or greater than 9.5% or more of the outstanding Shares.  If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Counterparty’s obligation to make such delivery shall not be extinguished and Counterparty shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Dealer gives notice to Counterparty that such delivery would not result in Dealer Group directly or indirectly so beneficially owning in excess of 9.5% of the outstanding Shares.

10.   Extension of Settlement.   Dealer may divide any Component into additional Components and designate the Expiration Date and the Number of Options for each such Component if Dealer determines, in its reasonable discretion, that such further division is necessary or advisable to preserve Dealer’s hedging activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be compliance with applicable legal and regulatory requirements.

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11.   Matters Relating to Agent.

(a)           Agent will be responsible for the operational aspects of the Transactions effected through it, such as record keeping, reporting, and confirming Transactions to Counterparty and Dealer.

(b)           Unless Counterparty is a “major U.S. institutional investor,” as defined in Rule 15a-6 under the Exchange Act, neither Counterparty nor Dealer will contact the other without the direct involvement of Agent.

(c)           Agent’s sole role under this Agreement and with respect to any Transaction is as an agent of Counterparty and Dealer on a disclosed basis and Agent shall have no responsibility or liability to Counterparty or Dealer hereunder except for gross negligence or willful misconduct in the performance of its duties as agent.  Agent is authorized to act as agent for Dealer, but only to the extent expressly required to satisfy the requirements of Rule 15a-6 under the Exchange Act in respect of the Transaction described hereunder.  Agent shall have no authority to act as agent for Counterparty generally or with respect to transactions or other matters governed by this Agreement, except to the extent expressly required to satisfy the requirements of Rule 15a-6 or in accordance with express instructions from Counterparty.

12.   Equity Rights.  Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy.  For the avoidance of doubt, the parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim arising as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement.  For the avoidance of doubt, the parties acknowledge that this Confirmation is not secured by any collateral that would otherwise secure the obligations of Counterparty herein under or pursuant to any other agreement.

13.   Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events.  If, subject to Section 14 below, Dealer shall owe Counterparty any amount pursuant to Section 12.2 of the Equity Definitions and “Consequences of Merger Events” above, or Sections 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of a Tender Offer or a Merger Event, in each case, in which the consideration or proceeds to be paid to holders of Shares consists solely of cash) or pursuant to Section 6(d)(ii) of the Agreement (except in the event of an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party, that resulted from an event or events within Counterparty’s control) (a “Payment Obligation”), Counterparty shall have the right, in its sole discretion, to require Dealer to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, between the hours of 9:00 A.M. and 4:00 P.M. New York City time on the Merger Date, Tender Offer Date, Announcement Date, Early Termination Date or other date of termination, as applicable (“Notice of Share Termination”).  Within a commercially reasonable period of time following receipt of a Notice of Share Termination, Dealer shall deliver to Counterparty a number of Share Termination Delivery Units having a cash value equal to the amount of such Payment Obligation (such number of Share Termination Delivery Units to be delivered to be determined by the Calculation Agent as the number of whole Share Termination Delivery Units that could be purchased over a commercially reasonable period of time with the cash equivalent of such payment obligation) (the “Share Termination Alternative”).

Share Termination Delivery Unit: In the case of a Termination Event, Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, one Share or a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization, Merger Event or Tender Offer. If such Insolvency, Nationalization, Merger Event or Tender Offer involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.

Failure to Deliver:                                                                                                    Applicable

Other applicable provisions: If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be applicable, except that all

10

references in such provisions to “Physical Settlement” shall be read as references to “Share Termination Alternative” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”; and provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Buyer is the issuer of any Share Termination Delivery Units (or any part thereof).

14.   Net Share Settlement on Early Termination and Certain Extraordinary Events.

(a)           Notwithstanding Section 6(e) of the Agreement or Sections 12.7 or 12.8 of the Equity Definitions, if, with respect to the Transaction contemplated hereunder, (A) an Early Termination Date with respect to any Event of Default or any Termination Event, (B) a Merger Date with respect to any Merger Event or Tender Offer Date with respect to a Tender Offer, (C) a Closing Date with respect to an event described in Section 12.6 of the Equity Definitions, or (D) date as of which the Transaction is, or is deemed to have been, terminated or cancelled as a result of an applicable Additional Disruption Event (any such date, the “Relevant Date”) shall occur, then in lieu of calculating any payments hereunder pursuant to Section 6(e) of the Agreement or Sections 12.7 or 12.8 of the Equity Definitions, as applicable, the Calculation Agent, in its sole discretion, shall determine the amount payable by Dealer to Counterparty on the following basis:

(i)  such Relevant Date shall be the sole Exercise Date hereunder and Automatic Exercise shall be applicable to the Number of Options in each of the Components for which an Expiration Date has not occurred (the “Unexpired Number”);

(ii)  Dealer shall deliver to the Counterparty the Net Share Settlement Amount on the Settlement Date with respect to such Relevant Date; and

(iii)  “Net Share Settlement Amount” shall mean a number of Shares equal to (A) the Number of Shares to be Delivered (as defined below) minus (B) the product of (x) the additional Shares per Option (the “Additional Shares”) determined by reference to the table attached as Annex B hereto based on the date on which such Relevant Date occurs and the VWAP Price on such date, (y) the Unexpired Number, and (z) the Option Entitlement.

(b)           Solely for purposes of this Section 14, in respect of any Exercise Date deemed to occur pursuant to paragraph (a) of this Section 14, subject to the last sentence of Section 9.5 of the Equity Definitions, “Number of Shares to be Delivered” shall mean, the product of (i) the Unexpired Number, (ii) the Option Entitlement and (iii) (A) the excess of the lower of (x) Strike Price 2 and (y) the VWAP Price on the Valuation Date occurring on such Exercise Date over Strike Price 1 divided by (B) such VWAP Price.  Notwithstanding anything to the contrary in the Equity Definitions, if there is a Market Disruption Event on any Valuation Date, then the Calculation Agent shall determine the VWAP Price for such Valuation Date on the basis of its good faith estimate, determined in a commercially reasonable manner, of the market value for the relevant Shares on such Valuation Date.

(c)           With respect to the determination of Additional Shares, if the actual VWAP Price is between two VWAP Price amounts in the table or the Relevant Date is between two Relevant Dates in the table, the Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the next higher and next lower VWAP Price amounts and the two nearest Relevant Dates, as applicable, based on a 365-day year.

(d)           With respect to any adjustment to the terms of the Transaction, the Calculation Agent, in its reasonable discretion, shall correspondingly adjust the Additional Shares and/or the VWAP Prices (each as set forth in the table in Annex B hereto) as of any date of such adjustments. For the avoidance of doubt, any adjustment made to the Additional Shares and/or the VWAP Prices (each as set forth in the table in Annex B hereto) shall be consistent with (i) the adjustments made pursuant to the provisions of this Section 14 if such adjustments were the result of an event which was outside of Counterparty’s control, and (ii) the adjustments made pursuant to the applicable provisions of this Confirmation if such adjustments were the result of an event which was within Counterparty’s control.

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15.   Set-Off.  The parties agree to amend Section 6 of the Agreement by adding a new Section 6(f) thereto as follows:

“(f)  Upon the occurrence of an Event of Default or Termination Event with respect to a party who is the Defaulting Party or the Affected Party (“X”), the other party (“Y”) will have the right (but not be obliged) without prior notice to X or any other person to set-off or apply any obligation of X under an Equity Contract owed to Y (or any Affiliate of Y) (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation) against any obligation of Y (or any Affiliate of Y) under an Equity Contract owed to X (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation).  Y will give notice to the other party of any set-off effected under this Section 6(f).

“Equity Contract” shall mean for purposes of this Section 6(f) any Transaction relating to Shares between X and Y (or any Affiliate of Y) that qualifies as ‘equity’ under applicable accounting rules.

Amounts (or the relevant portion of such amounts) subject to set-off may be converted by Y into the Termination Currency at the rate of exchange at which such party would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency.

If any obligation is unascertained, Y may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained.

Nothing in this Section 6(f) shall be effective to create a charge or other security interest.  This Section 6(f) shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other right to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise).”

16.   Amendments to Equity Definitions.

(a)           The following amendments shall be made to the Equity Definitions and to the Agreement:

(i)  The first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation of a Share Option Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has a material effect on the theoretical value of the relevant Shares or options on the Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’; and

(ii)   Sections 11.2(a) and (e)(vii) of the Equity Definitions are hereby amended by deleting the words “diluting or concentrative” and replacing them with “material”.

(b)  Solely for purposes of applying the Equity Definitions and for purposes of this Confirmation, any reference to a Strike Price shall be deemed to be a reference to any of the Strike Price 1 or the  Strike Price 2, or both, as appropriate.

17.   Disclosure.  Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure.

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18.   Special Provisions for Counterparty Payments.  The parties hereby agree that, notwithstanding anything to the contrary herein or in the Agreement, in the event that an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to any Transaction after Counterparty has paid the Premium to Dealer and, as a result, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement (calculated as if the Transactions being terminated on such Early Termination Date were the sole Transactions under the Agreement), such amount shall be deemed to be zero.

19.   Unwind.  In the event the sale of the $150,000,000 0.50% Convertible Senior Notes due September 30, 2011 and the $150,000,000 0.75% Convertible Senior Notes due September 30, 2013 are not consummated with the initial purchasers pursuant to the Purchase Agreement for any reason by the close of business in New York on September 27, 2006 (or such later date as agreed upon by the parties) (such date or such later date as agreed upon being the “Accelerated Unwind Date”), this Transaction shall automatically terminate (the “Accelerated Unwind”) on the Accelerated Unwind Date and (i) this Transaction and all of the respective rights and obligations of Dealer and Counterparty under this Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with this Transaction either prior to or after the Accelerated Unwind Date.  Dealer and Counterparty represent and acknowledge to the other that upon an Accelerated Unwind, all obligations with respect to this Transaction shall be deemed fully and finally discharged.

20.   Additional Provisions.

Regulation:                                            MLI is regulated by The Financial Services Authority.

21.  Arbitration.

(a)           All parties to this Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed.

(b)           Arbitration awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.

(c)           The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings.

(d)           The arbitrators do not have to explain the reason(s) for their award.

(e)           The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless Counterparty is a member of the organization sponsoring the arbitration facility, in which case all arbitrators may be affiliated with the securities industry.

(f)            The rules of some arbitration forums may impose time limits for bringing a claim in arbitration.  In some cases, a claim that is ineligible for arbitration may be brought in court.

(g)           The rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Confirmation.

(h)           Counterparty agrees that any and all controversies that may arise between Counterparty and Dealer, including, but not limited to, those arising out of or relating to the Agreement or the Transaction hereunder, shall be determined by arbitration conducted before The New York Stock Exchange, Inc. (“NYSE”) or NASD Dispute Resolution (“NASD-DR”), or, if the NYSE and NASD-DR decline to hear the matter, before the American Arbitration Association, in accordance with their arbitration rules then in force.  The award of the arbitrator shall be final, and judgment upon the award rendered may be entered in any court, state or federal, having jurisdiction.

(i)            No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action or who is a

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member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the class is decertified; or (iii) Counterparty is excluded from the class by the court.

(j)            Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Confirmation except to the extent stated herein.

14

Counterparty hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Counterparty with respect to this Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to us.

Yours faithfully,
Very truly yours,
MERRILL LYNCH INTERNATIONAL
By:	/s/ Angelina Lopes
	Name:	Angelina Lopes
	Title:

	Agreed and Accepted By:
	PRICELINE.COM INCORPORATED
By:	/s/ Robert J. Mylod, Jr.
	Name:	Robert J. Mylod, Jr.
	Title:	Chief Financial Officer
Acknowledged and agreed as to matters to the Agent: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, Solely in its capacity as Agent hereunder
By:	/s/ Rhonda Garguilo
	Name:	Rhonda Garguilo
	Title:	Authorized Signatory

15

ANNEX A

Component	Number of Options	Expiration Date (5-Year)
1	55,720	21-Sep-11
2	55,720	22-Sep-11
3	55,720	23-Sep-11
4	55,720	26-Sep-11
5	55,720	27-Sep-11
6	55,720	28-Sep-11
7	55,720	29-Sep-11
8	55,720	30-Sep-11
9	55,720	3-Oct-11
10	55,720	4-Oct-11
11	55,720	5-Oct-11
12	55,720	6-Oct-11
13	55,720	7-Oct-11
14	55,720	10-Oct-11
15	55,720	11-Oct-11
16	55,720	12-Oct-11
17	55,720	13-Oct-11
18	55,720	14-Oct-11
19	55,720	17-Oct-11
20	55,720	18-Oct-11

16

ANNEX B

	VWAP Price
	<$25.0	$25.0	$30.0	$35.0	$40.0	$45.0	$50.0	$55.0
09/26/06	0.000000	-0.084164	-0.088701	-0.090470	-0.090441	0.013402	0.105025	0.098397
03/26/07	0.000000	-0.077763	-0.084349	-0.087836	-0.089175	0.013609	0.104428	0.097198
09/26/07	0.000000	-0.072343	-0.080028	-0.084549	-0.086783	0.011875	0.102372	0.094939
03/26/08	0.000000	-0.065048	-0.075116	-0.081793	-0.085813	0.014823	0.103972	0.095473
09/26/08	0.000000	-0.036479	-0.062365	-0.085777	-0.099254	0.009935	0.104318	0.095219
03/26/09	0.000000	-0.027818	-0.054062	-0.080465	-0.098489	0.006144	0.098636	0.088630
09/26/09	0.000000	-0.018516	-0.043550	-0.072808	-0.096557	0.004191	0.095362	0.084707
03/26/10	0.000000	-0.009701	-0.030898	-0.061974	-0.092763	0.000351	0.087623	0.075012
09/26/10	0.000000	-0.002794	-0.016071	-0.045656	-0.085195	-0.001542	0.082491	0.068248
03/26/11	0.000000	-0.000102	-0.002997	-0.021420	-0.068526	-0.004492	0.064059	0.042987
09/21/11	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000

	VWAP Price
	$60.0	$65.0	$70.0	$75.0	$80.0	$85.0	$90.0	$95.0
09/26/06	0.085663	0.075391	0.066993	0.060045	0.054234	0.049328	0.045148	0.041558
03/26/07	0.084019	0.073424	0.064797	0.057691	0.051778	0.046810	0.042601	0.039005
09/26/07	0.081645	0.070999	0.062365	0.055285	0.049419	0.044513	0.040375	0.036855
03/26/08	0.081349	0.070064	0.060947	0.053505	0.047374	0.042278	0.038007	0.034402
09/26/08	0.080640	0.069017	0.059654	0.052040	0.045792	0.040624	0.036314	0.032693
03/26/09	0.073519	0.061646	0.052238	0.044723	0.038670	0.033759	0.029743	0.026434
09/26/09	0.069224	0.057188	0.047767	0.040340	0.034443	0.029726	0.025925	0.022839
03/26/10	0.058480	0.046071	0.036745	0.029716	0.024393	0.020339	0.017230	0.014826
09/26/10	0.050951	0.038405	0.029349	0.022819	0.018102	0.014680	0.012180	0.010336
03/26/11	0.024473	0.014003	0.008373	0.005438	0.003921	0.003123	0.002681	0.002416
09/21/11	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000

	VWAP Price
	$100.0	$105.0	$110.0	$115.0	$120.0	$125.0	$130 or more
09/26/06	0.038451	0.035745	0.033371	0.031278	0.029420	0.027764	0.026281
03/26/07	0.035911	0.033229	0.030891	0.028839	0.027029	0.025422	0.023991
09/26/07	0.033839	0.031237	0.028976	0.027001	0.025264	0.023728	0.022364
03/26/08	0.031335	0.028709	0.026446	0.024483	0.022771	0.021269	0.019945
09/26/08	0.029630	0.027021	0.024784	0.022855	0.021181	0.019721	0.018439
03/26/09	0.023687	0.021392	0.019459	0.017821	0.016423	0.015222	0.014183
09/26/09	0.020315	0.018234	0.016505	0.015059	0.013838	0.012801	0.011913
03/26/10	0.012951	0.011474	0.010297	0.009350	0.008578	0.007942	0.007410
09/26/10	0.008959	0.007918	0.007118	0.006493	0.005995	0.005591	0.005257
03/26/11	0.002237	0.002105	0.001997	0.001905	0.001823	0.001749	0.001681
09/21/11	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000

17

EX-10.5

Exhibit 10.5

                    

Opening Transaction

To:	priceline.com Incorporated 800 Connecticut Avenue Norwalk, Connecticut 06854
A/C:	066213118
From:	Merrill Lynch International
Re:	Issuer Capped Share Call Option Transaction (7-Year)
Ref. No:	06818736
Date:	September 21, 2006

Dear Sir(s):

The purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on the Trade Date specified below (the “Transaction”) between Merrill Lynch International (“Dealer”), Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Agent”) and priceline.com Incorporated (“Counterparty”).  This communication constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.

1.     This Confirmation is subject to, and incorporates, the definitions and provisions of the 2000 ISDA Definitions (including the Annex thereto) (the “2000 Definitions”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the 2000 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc. (“ISDA”).  In the event of any inconsistency between the 2000 Definitions and the Equity Definitions, the Equity Definitions will govern.

Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.

This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates.  This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement as if Dealer and Counterparty had executed an agreement in such form on the date hereof (but without any Schedule except for (i) the election of Loss and Second Method, New York law (without regard to the conflicts of law principles) as the governing law and US Dollars (“USD”) as the Termination Currency, (ii) the election that subparagraph (ii) of Section 2(c) will not apply to Transactions and (iii) the election that the “Cross Default” provisions of Section 5(a)(vi) will apply to Counterparty with a “Threshold Amount” of USD 50 million).  The parties hereby agree that no Transactions other than the Transaction to which this Confirmation relates and the other transaction between the parties with the same trade date regarding options on Shares expiring in 2011 (the “Other Transaction”) shall be governed by the Agreement.

All provisions contained in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein.  In the event of any inconsistency between this Confirmation and the Definitions or the Agreement, as the case may be, this Confirmation shall govern.

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2.     This Transaction constitutes a Share Option Transaction for purposes of the Equity Definitions.  The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:
Trade Date:	September 21, 2006
Components:	The Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with the Number of Options and Expiration Date set forth in this Confirmation. The payments and deliveries to be made upon settlement of the Transaction will be determined separately for each Component as if each Component were a separate Transaction under the Agreement.
Option Style:	European
Option Type:	Call
Seller:	Dealer
Buyer:	Counterparty
Shares:	Common Stock (par value $0.008 per Share) of Counterparty (Ticker: “PCLN”)
Number of Options:	For each Component, as provided in Annex A to this Confirmation.
Option Entitlement:	One Share per Option
Strike Price 1:	40.38
Strike Price 2:	50.47
Premium:	USD 4,963,500
Premium Payment Date:	September 27, 2006
Exchange:	NASDAQ Global Select Market
Related Exchange:	All Exchanges
Procedures for Exercise:
Expiration Time:	Valuation Time
Expiration Date:	As provided in Annex A to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already an Expiration Date for another Component); providedthat, notwithstanding anything to the contrary in the Equity Definitions, if that date is a Disrupted Day, the Calculation Agent may determine that the Expiration Date for such Component is a Disrupted Day in whole or in part, in which case the Calculation Agent shall, in its discretion, determine the number of Options for which such day shall be the Expiration Date and (i) allocate the remaining Options for such Expiration Date to one or more of the remaining Expiration Dates, (ii) designate the

2

	first succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is not deemed to be an Expiration Date in respect of any other Component of the Transaction hereunder as the Expiration Date for such remaining Options, or (iii) a combination thereof; provided further that if the Expiration Date for a Component (including any portion of a Component whose Expiration Date was postponed as a result of clause (ii) or (iii) above) has not occurred as of the Final Disruption Date, (a) the Final Disruption Date shall be deemed to be the Expiration Date and Valuation Date for each such Component, and (b) the Calculation Agent shall determine the VWAP Price on the basis of its good faith estimate of the trading value for the relevant Shares. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring on an Expiration Date.
Final Disruption Date:	October 30, 2013
Market Disruption Event:	Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” in clause (ii) thereof.
Automatic Exercise:	Applicable; and means that the Number of Options for the corresponding Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date if at such time such Options are In-the-Money, as determined by the Calculation Agent, unless Buyer notifies Seller (by telephone or in writing) prior to the Expiration Time on such Expiration Date that it does not wish Automatic Exercise to occur, in which case Automatic Exercise will not apply to such Expiration Date. “In-the-Money” means that the VWAP Price is greater than Strike Price 1.
Seller’s Telephone Number
and Telex and/or Facsimile Number
and Contact Details for purpose of
Giving Notice:	To be provided by Dealer.
Settlement Terms:
In respect of any Component:
Settlement Currency:	USD
Settlement Method:	Net Share Settlement
Settlement Date:	For all Components, the Settlement Date shall be the third Scheduled Trading Day after the final Expiration Date (or, in respect of all or part of its obligation to deliver the Number of Shares to be Delivered, such other earlier date or dates (or, if Section 14 below is applicable, such later dates) as the Dealer shall determine in its sole discretion).
Net Share Settlement:	On the Settlement Date, Dealer shall deliver to Counterparty a number of Shares equal to the sum of the Number of Shares to be Delivered for all Components to the account specified by

3

		Counterparty and cash in lieu of any fractional shares for any Component valued at the VWAP Price on the Expiration Date for such Component.
Number of Shares to be Delivered:		In respect of any Exercise Date for any Component, subject to the last sentence of Section 9.5 of the Equity Definitions:
		(i) if the VWAP Price for such Component exceeds Strike Price 1 but is less than Strike Price 2, a number of Shares equal to (i) the product of (A) the excess of such VWAP Price over Strike Price 1, (B) the Number of Options for such Component and (C) the Option Entitlement, divided by (ii) such VWAP Price;
		(ii) if the VWAP Price for such Component equals or exceeds Strike Price 2, a number of Shares equal to (i) the product of (A) the excess of Strike Price 2 over Strike Price 1, (B) the Number of Options for such Component and (C) the Option Entitlement, divided by (ii) such VWAP Price; or
		(iii) if the VWAP Price for such Component is less than or equal to Strike Price 1, a number of Shares equal to zero.
VWAP Price:		For any Expiration Date, as determined by the Calculation Agent based on the NASDAQ Volume Weighted Average Price per share of the Shares for the regular trading session (including any extensions thereof) of the Exchange on such Expiration Date (without regard to pre-open or after hours trading outside of such regular trading session) as published by Bloomberg at or around 4:15 p.m. New York time on such date, on Bloomberg page “PCLN.Q <Equity> AQR_SEC” (or any successor thereto).
Other Applicable Provisions:		The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be applicable, except that all references in such provisions to “Physical Settlement” shall be read as references to “Net Share Settlement”; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Buyer is the issuer of any Shares.
Share Adjustments:
Method of Adjustment:		Calculation Agent Adjustment
Extraordinary Events:
New Shares:		In the definition of “New Shares” in Section 12.1(i) of the Equity Definitions, the text in subsection (i) shall be deleted in its entirety and replaced with: “publicly quoted, traded or listed on any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or their respective successors)”.
Consequences of Merger Events:
(a)	Share-for-Share:	Calculation Agent Adjustment

4

(b)	Share-for-Other:	Cancellation and Payment (Agreed Model) on that portion of the Other Consideration that consists of cash; Calculation Agent Adjustment on the remainder of the Other Consideration.
(c)	Share-for-Combined:	Component Adjustment
Stock Loan Rate:		USD-LIBOR-BBA
Tender Offer:		Applicable; provided that (a) Section 12.1(d) of the Equity Definitions is hereby amended by adding “, or of the outstanding Shares,” before “of the Issuer” in the fourth line thereof and (b) Sections 12.1(e) and 12.1(l)(ii) of the Equity Definitions are hereby amended by adding “or Shares, as applicable,” after “voting shares”.
Consequences of Tender Offers:
(a)	Share-for-Share:	Calculation Agent Adjustment
(b)	Share-for-Other:	Cancellation and Payment (Agreed Model) on that portion of the Other Consideration that consists of cash; Calculation Agent Adjustment on the remainder of the Other Consideration.
(c)	Share-for-Combined:	Component Adjustment
Stock Loan Rate:		USD-LIBOR-BBA
Nationalization, Insolvency or Delisting:		Cancellation and Payment (Agreed Model);provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange.
Stock Loan Rate:		USD-LIBOR-BBA
Additional Disruption Events:
(a)	Change in Law:	Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by adding “other than increased cost due to Securities Act registration requirements relating to sales by Dealer of the Shares acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction” after the parenthetical in the last line thereof.
(b)	Failure to Deliver:	Applicable
(c)	Insolvency Filing:	Applicable
(d)	Hedging Disruption:	Applicable
	Hedging Party:	Dealer
Determining Party:		Dealer

5

Non-Reliance:	Applicable
Agreements and Acknowledgements Regarding Hedging Activities:	Applicable
Additional Acknowledgements:	Applicable
Dealer Payment Instructions:	To be provided by Dealer.
Counterparty Payment and Delivery Instructions:	To be provided by Counterparty.

3.	Calculation Agent: Dealer
4.	Offices:
(a)	The Office of Dealer for this Transaction is: Merrill Lynch Financial Centre, 2 King Edward Street London EC1A 1HQ.
(b)	The Office of Counterparty for this Transaction is: 800 Connecticut Avenue, Norwalk, Connecticut 06854.
5.	Notices: For purposes of this Confirmation:
(a)	Address for notices or communications to Counterparty:
	To:	priceline.com Incorporated
		800 Connecticut Avenue
		Norwalk, Connecticut 06854
	Attn:	Robert J. Mylod, Jr.
		Chief Financial Officer
	Telephone:	(203) 299-8301
	Facsimile:	(203) 299-8975
	With a copy to:
	Attn:	Peter J. Millones
		General Counsel
	Facsimile:	(203) 299-8915
(b)	Address for notices or communications to Dealer:
	To:	Merrill Lynch International
		Merrill Lynch Financial Centre
		2 King Edward Street
		London EC1A 1HQ
	Attn:	Manager, Fixed Income Settlements
	Telephone:	44 207 995 2004
	Facsimile:	44 207 995 3769

6.     Representations, Warranties and Agreements:

(a)           In addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants to and for the benefit of, and agrees with, Dealer as follows:

(i)            On the Trade Date, (A) none of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and (B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities Exchange Act of

6

1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.

(ii)           Counterparty intends that this Transaction qualifies as an equity instrument for it for purposes of EITF Issue No. 00-19.  Notwithstanding the foregoing and without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that neither Dealer nor any of its affiliates is making any representations or warranties with respect to the treatment of the Transaction under FASB Statements 128, 133, 149 or 150, EITF Issue No. 00-19 (or any successor issue statements) or under FASB’s Liabilities & Equity Project.

(iii)          Prior to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction and such other certificate or certificates as Dealer shall reasonably request.  Any repurchases of Shares pursuant to the Transaction are pursuant to a Share repurchase program publicly announced on or before the Trade Date.

(iv)          Counterparty has not received notice that it is the subject of a tender offer made under Section 14(d)(1) of the Exchange Act.

(v)           Counterparty is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) in violation of the Exchange Act.

(vi)          Counterparty is not, and after giving effect to the transactions contemplated hereby will not be, an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(vii)         On the Trade Date (A) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty, including contingent liabilities, (B) the capital of Counterparty is adequate to conduct the business of Counterparty and (C) Counterparty has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature.

(viii)        The representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement dated as of the Trade Date between Counterparty and Dealer as representative of the several purchasers party thereto (the “Purchase Agreement”), are true and correct and are hereby deemed to be repeated to Dealer as if set forth herein.

(ix)           (A) On the Trade Date and during the period starting on the first Expiration Date and ending on the last Expiration Date (the “Settlement Period”), the Shares or securities that are convertible into, or exchangeable or exercisable for Shares, are not, and shall not be, subject to a “restricted period,” as such term is defined in Regulation M under the Exchange Act (“Regulation M”) and (B) Counterparty shall not engage in any “distribution,” as such term is defined in Regulation M, other than a distribution meeting the requirements of the exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business Day immediately following the Trade Date or the Settlement Period, as the case may be.

(x)            On the Trade Date and during the Settlement Period, neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18 under the Exchange Act (“Rule 10b-18”)) shall directly or indirectly (including, without limitation, by means of any cash-settled or other derivative instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares (or an equivalent interest, including a unit of beneficial interest in a trust or limited partnership or a depository share) or any security convertible into or exchangeable or exercisable for Shares.

7

(xi)           Without the consent of Dealer, Counterparty agrees (i) during the Designated Period, not to purchase or agree to purchase Shares if such purchase would cause its outstanding Shares to be below 36.35 million and (ii) during the Designated Period, not to purchase or agree to purchase Shares if such purchase along with all other purchases during the Designated Period would exceed 3.85 million in the aggregate. The Share numbers in this provision shall be subject to adjustment as the Calculation Agent determines appropriate to account for any Potential Adjustment Event or Extraordinary Event. “Designated Period” means the period from and including the Trade Date to and including the date that is the 30th Prospectus Useable Day (or such longer number agreed by the parties) occurring after the 60th day following the Trade Date.  An Exchange Business Day is a Prospectus Useable Day unless on such day Dealer determines in its good faith discretion that the Registration Statement and Prospectus referred to in the Underwriting Agreement dated September 5, 2006 between, among others, Dealer, as representative of the several underwriters, and Counterparty (the “Underwriting Agreement”), is not or may not be available for use in compliance with applicable law.

(b)           Each of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended.

(c)           Each of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) thereof.  Accordingly, Counterparty represents and warrants to Dealer that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment and its investments in and liabilities in respect of the Transaction, which it understands are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account without a view to the distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws, (v) its financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction.

(d)           Each of Dealer and Counterparty agrees and acknowledges (A) that this Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7) of Title 11 of the United States Code (the “Bankruptcy Code”), with respect to which each payment and delivery hereunder is a “settlement payment,” as such term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code, and (B) that Dealer is entitled to the protections afforded by, among other sections, Section 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code.

(e)           Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement.

(f)            Each party acknowledges and agrees to be bound by the Conduct Rules of the National Association of Securities Dealers, Inc. applicable to transactions in options, and further agrees not to violate the position and exercise limits set forth therein.

7.     Repurchase Notices.  Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day if following such repurchase, the Notice Percentage as determined on such day is greater by 0.5% than the Notice Percentage included in the immediately preceding Repurchase Notice (or, in the case of the first such Repurchase Notice, greater than the Notice Percentage as of the date hereof).  In the event that Counterparty fails to provide Dealer with a Repurchase Notice on the day and in the manner specified in this Section then Counterparty agrees to indemnify and hold harmless Dealer, its affiliates and their respective directors, officers, employees, agents and controlling persons (Dealer and each such person being an “Indemnified Party”) from and against any and all losses, claims, damages and liabilities (or actions in respect thereof), joint or several, to which such Indemnified Party may become subject, under Section 16 of the Exchange Act, relating to or arising out of such failure.  If for any reason the foregoing indemnification is unavailable to any

8

Indemnified Party or insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute, to the maximum extent permitted by law, to the amount paid or payable by the Indemnified Party as a result of such loss, claim, damage or liability.  In addition, Counterparty will reimburse any Indemnified Party for all expenses (including reasonable counsel fees and expenses) as they are incurred (after notice to Counterparty) in connection with the investigation of, preparation for or defense or settlement of any pending or threatened claim or any action, suit or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto and whether or not such claim, action, suit or proceeding is initiated or brought by or on behalf of Counterparty.  This indemnity shall survive the completion of the Transaction contemplated by this Confirmation and any assignment and delegation of the Transaction made pursuant to this Confirmation or the Agreement shall inure to the benefit of any permitted assignee of Dealer.  The “Notice Percentage” as of any day is the fraction (A) the numerator of which is the aggregate of the products of the outstanding Number of Options and the Option Entitlement under this Transaction and the Other Transaction and (B) the denominator of which is the number of Shares outstanding on such day.

8.     Transfer or Assignment.  Neither party may transfer any of its rights or obligations under this Transaction without the prior written consent of the non-transferring party; provided that Dealer may assign, transfer and set over all rights, title and interest, powers, privileges and remedies of Dealer under this Transaction, in whole or in part, to an affiliate of Dealer that is guaranteed by Merrill Lynch & Co., Inc. without the consent of Counterparty; provided further that if the Equity Percentage exceeds 7%, Dealer may immediately, in its sole discretion, transfer or assign a number of Options sufficient to reduce the Equity Percentage to 6.5% to any third party with (or with a guarantor that has) a rating for its long-term, unsecured and unsubordinated indebtedness by Standard & Poor’s Ratings Services or its successor (“S&P”) that is not lower than the rating by S&P for the long-term, unsecured and unsubordinated indebtedness of Merrill Lynch & Co., Inc. (“ML Debt”), or by Moody’s Investors Service, Inc. (“Moody’s”) that is not lower than the rating by Moody’s for ML Debt or, if either S&P or Moody’s ceases to rate such debt, at least an equivalent rating or better by a substitute agency rating mutually agreed by Counterparty and Dealer.  If, in the discretion of Dealer, Dealer is unable to effect such transfer or assignment after its commercially reasonable efforts on pricing terms reasonably acceptable to Dealer, Dealer may designate any Scheduled Trading Day as an Early Termination Date with respect to a portion (the “Terminated Portion”) of this Transaction, allocated to Components as Dealer determines in its discretion, such that the Equity Percentage following such partial termination will be equal to or less than 7%.  In the event that Dealer so designates an Early Termination Date with respect to a portion of this Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (i) an Early Termination Date had been designated in respect of a Transaction having terms identical to this Transaction and a Number of Options equal to the Terminated Portion, (ii) Counterparty shall be the Affected Party with respect to such partial termination and (iii) such portion of this Transaction shall be the only Terminated Transaction.  The “Equity Percentage” as of any day is the fraction (A) the numerator of which is the number of Shares that Dealer or any of its affiliates that are subject to aggregation with Dealer beneficially own (within the meaning of Section 13 of the Exchange Act) on such day and (B) the denominator of which is the number of Shares outstanding on such day.

9.     Beneficial Ownership.  Notwithstanding anything to the contrary in the Agreement or this Confirmation, in no event shall Dealer be entitled to receive, or shall be deemed to receive, any Shares if, upon such receipt of such Shares, the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the rules promulgated thereunder) of Shares by Dealer or any of its affiliates that are subject to aggregation with Dealer (collectively, “Dealer Group”) would be equal to or greater than 9.5% or more of the outstanding Shares.  If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Counterparty’s obligation to make such delivery shall not be extinguished and Counterparty shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Dealer gives notice to Counterparty that such delivery would not result in Dealer Group directly or indirectly so beneficially owning in excess of 9.5% of the outstanding Shares.

10.   Extension of Settlement.   Dealer may divide any Component into additional Components and designate the Expiration Date and the Number of Options for each such Component if Dealer determines, in its reasonable discretion, that such further division is necessary or advisable to preserve Dealer’s hedging activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be compliance with applicable legal and regulatory requirements.

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11.   Matters Relating to Agent.

(a)           Agent will be responsible for the operational aspects of the Transactions effected through it, such as record keeping, reporting, and confirming Transactions to Counterparty and Dealer.

(b)           Unless Counterparty is a “major U.S. institutional investor,” as defined in Rule 15a-6 under the Exchange Act, neither Counterparty nor Dealer will contact the other without the direct involvement of Agent.

(c)           Agent’s sole role under this Agreement and with respect to any Transaction is as an agent of Counterparty and Dealer on a disclosed basis and Agent shall have no responsibility or liability to Counterparty or Dealer hereunder except for gross negligence or willful misconduct in the performance of its duties as agent.  Agent is authorized to act as agent for Dealer, but only to the extent expressly required to satisfy the requirements of Rule 15a-6 under the Exchange Act in respect of the Transaction described hereunder.  Agent shall have no authority to act as agent for Counterparty generally or with respect to transactions or other matters governed by this Agreement, except to the extent expressly required to satisfy the requirements of Rule 15a-6 or in accordance with express instructions from Counterparty.

12.   Equity Rights.  Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy.  For the avoidance of doubt, the parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim arising as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement.  For the avoidance of doubt, the parties acknowledge that this Confirmation is not secured by any collateral that would otherwise secure the obligations of Counterparty herein under or pursuant to any other agreement.

13.   Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events.  If, subject to Section 14 below, Dealer shall owe Counterparty any amount pursuant to Section 12.2 of the Equity Definitions and “Consequences of Merger Events” above, or Sections 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of a Tender Offer or a Merger Event, in each case, in which the consideration or proceeds to be paid to holders of Shares consists solely of cash) or pursuant to Section 6(d)(ii) of the Agreement (except in the event of an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party, that resulted from an event or events within Counterparty’s control) (a “Payment Obligation”), Counterparty shall have the right, in its sole discretion, to require Dealer to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, between the hours of 9:00 A.M. and 4:00 P.M. New York City time on the Merger Date, Tender Offer Date, Announcement Date, Early Termination Date or other date of termination, as applicable (“Notice of Share Termination”).  Within a commercially reasonable period of time following receipt of a Notice of Share Termination, Dealer shall deliver to Counterparty a number of Share Termination Delivery Units having a cash value equal to the amount of such Payment Obligation (such number of Share Termination Delivery Units to be delivered to be determined by the Calculation Agent as the number of whole Share Termination Delivery Units that could be purchased over a commercially reasonable period of time with the cash equivalent of such payment obligation) (the “Share Termination Alternative”).

Share Termination Delivery Unit:	In the case of a Termination Event, Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, one Share or a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization, Merger Event or Tender Offer. If such Insolvency, Nationalization, Merger Event or Tender Offer involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.
Failure to Deliver:	Applicable
Other applicable provisions:	If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be applicable, except that all

10

references in such provisions to “Physical Settlement” shall be read as references to “Share Termination Alternative” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”; and provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Buyer is the issuer of any Share Termination Delivery Units (or any part thereof).

14.   Net Share Settlement on Early Termination and Certain Extraordinary Events.

(a)           Notwithstanding Section 6(e) of the Agreement or Sections 12.7 or 12.8 of the Equity Definitions, if, with respect to the Transaction contemplated hereunder, (A) an Early Termination Date with respect to any Event of Default or any Termination Event, (B) a Merger Date with respect to any Merger Event or Tender Offer Date with respect to a Tender Offer, (C) a Closing Date with respect to an event described in Section 12.6 of the Equity Definitions, or (D) date as of which the Transaction is, or is deemed to have been, terminated or cancelled as a result of an applicable Additional Disruption Event (any such date, the “Relevant Date”) shall occur, then in lieu of calculating any payments hereunder pursuant to Section 6(e) of the Agreement or Sections 12.7 or 12.8 of the Equity Definitions, as applicable, the Calculation Agent, in its sole discretion, shall determine the amount payable by Dealer to Counterparty on the following basis:

(i)  such Relevant Date shall be the sole Exercise Date hereunder and Automatic Exercise shall be applicable to the Number of Options in each of the Components for which an Expiration Date has not occurred (the “Unexpired Number”);

(ii)  Dealer shall deliver to the Counterparty the Net Share Settlement Amount on the Settlement Date with respect to such Relevant Date; and

(iii)  “Net Share Settlement Amount” shall mean a number of Shares equal to (A) the Number of Shares to be Delivered (as defined below) minus (B) the product of (x) the additional Shares per Option (the “Additional Shares”) determined by reference to the table attached as Annex B hereto based on the date on which such Relevant Date occurs and the VWAP Price on such date, (y) the Unexpired Number, and (z) the Option Entitlement.

(b)           Solely for purposes of this Section 14, in respect of any Exercise Date deemed to occur pursuant to paragraph (a) of this Section 14, subject to the last sentence of Section 9.5 of the Equity Definitions, “Number of Shares to be Delivered” shall mean, the product of (i) the Unexpired Number, (ii) the Option Entitlement and (iii) (A) the excess of the lower of (x) Strike Price 2 and (y) the VWAP Price on the Valuation Date occurring on such Exercise Date over Strike Price 1 divided by (B) such VWAP Price.  Notwithstanding anything to the contrary in the Equity Definitions, if there is a Market Disruption Event on any Valuation Date, then the Calculation Agent shall determine the VWAP Price for such Valuation Date on the basis of its good faith estimate, determined in a commercially reasonable manner, of the market value for the relevant Shares on such Valuation Date.

(c)           With respect to the determination of Additional Shares, if the actual VWAP Price is between two VWAP Price amounts in the table or the Relevant Date is between two Relevant Dates in the table, the Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the next higher and next lower VWAP Price amounts and the two nearest Relevant Dates, as applicable, based on a 365-day year.

(d)           With respect to any adjustment to the terms of the Transaction, the Calculation Agent, in its reasonable discretion, shall correspondingly adjust the Additional Shares and/or the VWAP Prices (each as set forth in the table in Annex B hereto) as of any date of such adjustments. For the avoidance of doubt, any adjustment made to the Additional Shares and/or the VWAP Prices (each as set forth in the table in Annex B hereto) shall be consistent with (i) the adjustments made pursuant to the provisions of this Section 14 if such adjustments were the result of an event which was outside of Counterparty’s control, and (ii) the adjustments made pursuant to the applicable provisions of this Confirmation if such adjustments were the result of an event which was within Counterparty’s control.

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15.   Set-Off.  The parties agree to amend Section 6 of the Agreement by adding a new Section 6(f) thereto as follows:

“(f)  Upon the occurrence of an Event of Default or Termination Event with respect to a party who is the Defaulting Party or the Affected Party (“X”), the other party (“Y”) will have the right (but not be obliged) without prior notice to X or any other person to set-off or apply any obligation of X under an Equity Contract owed to Y (or any Affiliate of Y) (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation) against any obligation of Y (or any Affiliate of Y) under an Equity Contract owed to X (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation).  Y will give notice to the other party of any set-off effected under this Section 6(f).

“Equity Contract” shall mean for purposes of this Section 6(f) any Transaction relating to Shares between X and Y (or any Affiliate of Y) that qualifies as ‘equity’ under applicable accounting rules.

Amounts (or the relevant portion of such amounts) subject to set-off may be converted by Y into the Termination Currency at the rate of exchange at which such party would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency.

If any obligation is unascertained, Y may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained.

Nothing in this Section 6(f) shall be effective to create a charge or other security interest.  This Section 6(f) shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other right to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise).”

16.   Amendments to Equity Definitions.

(a)           The following amendments shall be made to the Equity Definitions and to the Agreement:

(i)  The first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation of a Share Option Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has a material effect on the theoretical value of the relevant Shares or options on the Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’; and

(ii)   Sections 11.2(a) and (e)(vii) of the Equity Definitions are hereby amended by deleting the words “diluting or concentrative” and replacing them with “material”.

(b)  Solely for purposes of applying the Equity Definitions and for purposes of this Confirmation, any reference to a Strike Price shall be deemed to be a reference to any of the Strike Price 1 or the  Strike Price 2, or both, as appropriate.

17.   Disclosure.  Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure.

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18.   Special Provisions for Counterparty Payments.  The parties hereby agree that, notwithstanding anything to the contrary herein or in the Agreement, in the event that an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to any Transaction after Counterparty has paid the Premium to Dealer and, as a result, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement (calculated as if the Transactions being terminated on such Early Termination Date were the sole Transactions under the Agreement), such amount shall be deemed to be zero.

19.   Unwind.  In the event the sale of the $150,000,000 0.50% Convertible Senior Notes due September 30, 2011 and the $150,000,000 0.75% Convertible Senior Notes due September 30, 2013 are not consummated with the initial purchasers pursuant to the Purchase Agreement for any reason by the close of business in New York on September 27, 2006 (or such later date as agreed upon by the parties) (such date or such later date as agreed upon being the “Accelerated Unwind Date”), this Transaction shall automatically terminate (the “Accelerated Unwind”) on the Accelerated Unwind Date and (i) this Transaction and all of the respective rights and obligations of Dealer and Counterparty under this Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with this Transaction either prior to or after the Accelerated Unwind Date.  Dealer and Counterparty represent and acknowledge to the other that upon an Accelerated Unwind, all obligations with respect to this Transaction shall be deemed fully and finally discharged.

20.   Additional Provisions.

Regulation:            MLI is regulated by The Financial Services Authority.

21.  Arbitration.

(a)           All parties to this Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed.

(b)           Arbitration awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.

(c)           The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings.

(d)           The arbitrators do not have to explain the reason(s) for their award.

(e)           The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless Counterparty is a member of the organization sponsoring the arbitration facility, in which case all arbitrators may be affiliated with the securities industry.

(f)            The rules of some arbitration forums may impose time limits for bringing a claim in arbitration.  In some cases, a claim that is ineligible for arbitration may be brought in court.

(g)           The rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Confirmation.

(h)           Counterparty agrees that any and all controversies that may arise between Counterparty and Dealer, including, but not limited to, those arising out of or relating to the Agreement or the Transaction hereunder, shall be determined by arbitration conducted before The New York Stock Exchange, Inc. (“NYSE”) or NASD Dispute Resolution (“NASD-DR”), or, if the NYSE and NASD-DR decline to hear the matter, before the American Arbitration Association, in accordance with their arbitration rules then in force.  The award of the arbitrator shall be final, and judgment upon the award rendered may be entered in any court, state or federal, having jurisdiction.

(i)            No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action or who is a

13

member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the class is decertified; or (iii) Counterparty is excluded from the class by the court.

(j)            Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Confirmation except to the extent stated herein.

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Counterparty hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Counterparty with respect to this Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to us.

Yours faithfully,
	Very truly yours,
	MERRILL LYNCH INTERNATIONAL
	By:	/s/ Angelina Lopes
		Name: Angelina Lopes
		Title:

Agreed and Accepted By:

PRICELINE.COM INCORPORATED

By:	/s/ Robert J. Mylod, Jr.
	Name: Robert J. Mylod, Jr.
	Title: Chief Financial Officer

Acknowledged and agreed as to matters to the Agent:

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

Solely in its capacity as Agent hereunder

By:	/s/ Rhonda Garguilo
	Name: Rhonda Garguilo
	Title: Authorized Signatory

15

ANNEX A

	Component		Number of Options		Expiration Date (7-Year)
1		55,720		23-Sep-13
2		55,720		24-Sep-13
3		55,720		25-Sep-13
4		55,720		26-Sep-13
5		55,720		27-Sep-13
6		55,720		30-Sep-13
7		55,720		1-Oct-13
8		55,720		2-Oct-13
9		55,720		3-Oct-13
10		55,720		4-Oct-13
11		55,720		7-Oct-13
12		55,720		8-Oct-13
13		55,720		9-Oct-13
14		55,720		10-Oct-13
15		55,720		11-Oct-13
16		55,720		14-Oct-13
17		55,720		15-Oct-13
18		55,720		16-Oct-13
19		55,720		17-Oct-13
20		55,720		18-Oct-13

16

ANNEX B

	VWAP Price
	<$25.0	$25.0	$30.0	$35.0	$40.0	$45.0	$50.0	$55.0	$60.0
09/26/06	0.000000	-0.085498	-0.085784	-0.084541	-0.082454	0.022744	0.115215	0.109070	0.096561
03/26/07	0.000000	-0.080741	-0.082133	-0.081798	-0.080441	0.024171	0.116174	0.109654	0.096844
09/26/07	0.000000	-0.078798	-0.083422	-0.085315	-0.085424	0.025448	0.116954	0.110037	0.096911
03/26/08	0.000000	-0.077842	-0.083718	-0.086550	-0.087327	0.026604	0.117583	0.110247	0.096789
09/26/08	0.000000	-0.067480	-0.074824	-0.079170	-0.081344	0.027542	0.117952	0.110166	0.096353
03/26/09	0.000000	-0.065926	-0.074709	-0.080227	-0.083284	0.024828	0.114907	0.106912	0.092981
09/26/09	0.000000	-0.063630	-0.074083	-0.081019	-0.085172	0.021956	0.111607	0.103336	0.089246
03/26/10	0.000000	-0.060473	-0.072794	-0.081405	-0.086894	0.019016	0.108120	0.099495	0.085196
09/26/10	0.000000	-0.056080	-0.070541	-0.081220	-0.088422	0.015902	0.104274	0.095169	0.080586
03/26/11	0.000000	-0.050234	-0.067013	-0.080189	-0.089568	0.012710	0.100102	0.090356	0.075395
09/27/11	0.000000	-0.042194	-0.061417	-0.077757	-0.090118	0.009306	0.095278	0.084605	0.069112
03/26/12	0.000000	-0.031702	-0.052911	-0.073078	-0.089542	0.005833	0.089693	0.077666	0.061433
09/26/12	0.000000	-0.017999	-0.039156	-0.063774	-0.086547	0.002168	0.082349	0.068057	0.050739
03/26/13	0.000000	-0.003869	-0.017369	-0.043749	-0.076748	-0.001452	0.070662	0.052003	0.033408
09/23/13	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000

	VWAP Price
	$65.0	$70.0	$75.0	$80.0	$85.0	$90.0	$95.0	$100.0	$105.0
09/26/06	0.086331	0.077848	0.070727	0.064686	0.059511	0.055040	0.051147	0.047733	0.044720
03/26/07	0.086372	0.077695	0.070418	0.064250	0.058974	0.054421	0.050462	0.046996	0.043942
09/26/07	0.086188	0.077310	0.069874	0.063580	0.058203	0.053572	0.049552	0.046039	0.042949
03/26/08	0.085802	0.076717	0.069117	0.062696	0.057221	0.052514	0.048437	0.044881	0.041761
09/26/08	0.085090	0.075790	0.068026	0.061479	0.055910	0.051134	0.047008	0.043420	0.040280
03/26/09	0.081667	0.072365	0.064634	0.058145	0.052651	0.047962	0.043929	0.040439	0.037398
09/26/09	0.077858	0.068545	0.060848	0.054426	0.049020	0.044433	0.040512	0.037138	0.034215
03/26/10	0.073708	0.064375	0.056715	0.050369	0.045068	0.040603	0.036815	0.033578	0.030795
09/26/10	0.068962	0.059599	0.051985	0.045739	0.040572	0.036264	0.032645	0.029584	0.026977
03/26/11	0.063592	0.054194	0.046648	0.040538	0.035551	0.031451	0.028053	0.025217	0.022834
09/27/11	0.057071	0.047650	0.040226	0.034333	0.029622	0.025827	0.022748	0.020230	0.018154
03/26/12	0.049115	0.039737	0.032566	0.027054	0.022791	0.019469	0.016861	0.014796	0.013146
09/26/12	0.038192	0.029146	0.022634	0.017937	0.014535	0.012053	0.010225	0.008862	0.007833
03/26/13	0.021587	0.014286	0.009856	0.007185	0.005568	0.004573	0.003940	0.003521	0.003228
09/23/13	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000

	VWAP Price
	$110.0	$115.0	$120.0	$125.0	$130.0	$140.0	$150.0	$200.0	$250 or more
09/26/06	0.042045	0.039656	0.037514	0.035583	0.033835	0.030797	0.028252	0.019990	0.015503
03/26/07	0.041235	0.038822	0.036661	0.034717	0.032959	0.029913	0.027369	0.019179	0.014790
09/26/07	0.040215	0.037784	0.035611	0.033659	0.031899	0.028856	0.026325	0.018255	0.013992
03/26/08	0.039008	0.036564	0.034385	0.032432	0.030676	0.027649	0.025143	0.017237	0.013132
09/26/08	0.037516	0.035071	0.032896	0.030954	0.029211	0.026220	0.023757	0.016087	0.012180
03/26/09	0.034734	0.032386	0.030307	0.028457	0.026804	0.023982	0.021673	0.014587	0.011038
09/26/09	0.031668	0.029437	0.027471	0.025730	0.024182	0.021557	0.019427	0.013002	0.009845
03/26/10	0.028387	0.026291	0.024457	0.022843	0.021416	0.019017	0.017090	0.011391	0.008646
09/26/10	0.024743	0.022816	0.021144	0.019685	0.018405	0.016277	0.014589	0.009714	0.007412
03/26/11	0.020817	0.019099	0.017625	0.016353	0.015249	0.013438	0.012024	0.008046	0.006194
09/27/11	0.016431	0.014990	0.013774	0.012741	0.011857	0.010433	0.009344	0.006354	0.004954
03/26/12	0.011816	0.010732	0.009840	0.009098	0.008475	0.007492	0.006756	0.004741	0.003749
09/26/12	0.007043	0.006425	0.005934	0.005536	0.005207	0.004692	0.004304	0.003154	0.002519
03/26/13	0.003010	0.002839	0.002698	0.002577	0.002471	0.002288	0.002133	0.001599	0.001279
09/23/13	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000	0.000000

17