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 3 rd Quarter 2006 Guidance; Establishes
4 th 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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