Stockholder Agreement - priceline.com Inc. and Delta Air Lines Inc.
STOCKHOLDER AGREEMENT dated as of February 6, 2001
(the "AGREEMENT"), between priceline.com Incorporated, a
Delaware corporation (the "COMPANY"), and Delta Air
Lines, Inc., a Delaware corporation (the "STOCKHOLDER").
The Stockholder is concurrently herewith exchanging (the "Exchange")
six (6) million shares (the "A Preferred Shares") of the Company's Series A
Convertible Preferred Stock (the "Series A Preferred Stock") that it currently
holds for 80,000 shares (the "B Preferred Shares") of a newly created class of
preferred stock of the Company (the "Series B Preferred Stock"), and Warrants
(the "Warrants") to purchase 26,947,368 shares of the Company's Common Stock.
The Stockholder and the Company are executing this Agreement in
addition to the Warrant Agreement dated as of February 6, 2001 (the "Warrant
Agreement").
All capitalized terms that are not defined in this Agreement shall
have the meaning given to them in the Certificate of Designation, Preferences
and Rights of Series B Redeemable Preferred Stock of the Company, dated February
6, 2001 (the "Certificate of Designation").
Accordingly, in consideration of the Exchange and of the execution
and delivery by the Company and the Stockholder of the Warrant Agreement and the
mutual covenants, conditions and agreements contained therein and herein, the
parties hereto agree as follows:
1. REGISTRATION RIGHTS. (A) Within a reasonable period of time after the
date hereof (and in any event no later than April 1, 2001), the Company and the
Stockholder agree to enter into a registration rights agreement under which the
Stockholder and its successors and permitted assigns shall have registration
rights for the Registerable Securities (as defined in paragraph B below). Such
registration rights agreement shall contain indemnities, blackout periods and
other customary terms and provisions that do not conflict with the Amended and
Restated Registration Rights Agreement dated as of December 8, 1998,
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among the Company and the stockholders party thereto, and shall provide for the
registration rights set forth in paragraph B of this Section 1.
(B) The Company shall maintain a shelf registration statement under
which (i) all or any portion of the shares of Common Stock received as dividends
on the Series B Preferred Stock, upon exercise of the Warrants or otherwise with
respect to the transactions contemplated by the Certificate of Designation and
the Warrant Agreement and (ii) all other Common Stock of the Company that is
owned by the Stockholder (including any shares of Common Stock underlying any
existing unexercised warrant or any other warrant received with respect thereto)
on the date hereof (collectively, the "Registerable Securities") may be resold
by the Stockholder at any time and from time to time (subject to the blackout
periods referred to above) until such time as all such Common Stock of the
Company may (assuming full issuance, conversion and exercise) at such time may
be sold by the Stockholder in a single transaction pursuant to Rule 144 under
the Securities Act of 1933, as amended, in accordance with the volume
limitations specified in paragraph (e) thereof (and without giving effect to
paragraph (k) thereof). The Company shall not enter into any agreement with
respect to its securities that is inconsistent with the registration rights
granted (or to be granted) to the Stockholder or grant any additional
registration rights to any person or with respect to any securities which are
not Registerable Securities which are prior in right to, more favorable than or
inconsistent with the rights granted (or to be granted) to the Stockholder.
2. ISSUANCE OF ADDITIONAL SECURITIES. Until the date that is twenty one
months after the date hereof, the Company shall not issue any Junior or Parity
Securities or any indebtedness for borrowed money including obligations
evidenced by notes, bonds, debentures and like instruments (other than
indebtedness for borrowed money to a bank, thrift, savings and loan or similar
institution) that provides for a mandatory or optional redemption or maturity at
any time prior to the Mandatory Redemption Date.
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3. EXCHANGE, TRANSFER, ASSIGNMENT. The Series B Preferred Stock and the
Warrants may not be sold or otherwise transferred by the Stockholder other than
to a Subsidiary of the Stockholder or pursuant to operation of law to the
Stockholder's successors. The Stockholder shall not sell, hedge or transfer,
directly or indirectly (whether through establishment of an offsetting
derivative position, or otherwise), the Series B Preferred Stock, the Warrants
or any interest therein. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of the parties hereto. No
person, other than the parties hereto and their successors and permitted
assigns, is intended to be a beneficiary of this Agreement. The Company shall
not be permitted to assign any of its rights, or delegate any of its duties
hereunder other than by operation of law to its successors. Any transfer of
Warrants permitted hereunder shall be accompanied by a pro rata transfer of B
Preferred Shares (and vice versa).
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY:
(A) EXISTENCE AND POWER. The Company (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and (ii) has the corporate power and authority
to execute, deliver and perform its obligations under this Agreement and to
issue and deliver the Series B Preferred Shares and the Warrant.
(B) AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by the Company of this Agreement and the transactions contemplated
hereby, including the issuance and delivery of the B Preferred Shares and the
Warrant (i) have been duly authorized by all necessary corporate and stockholder
action of the Company, (ii) do not contravene the terms of the Certificate of
Incorporation or By-laws of the Company, each as amended as of and through the
date hereof and (iii) will not conflict with or result in a violation under any
material agreement, instrument, order, writ, judgment or decree to which the
Company is subject. This Agreement and the Warrant Agreement are binding
obligations of the Company,
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enforceable against the Company in accordance with their terms.
(C) GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS. No approval,
consent, compliance, exemption or authorization of any governmental authority or
agency, or of any other person or entity, is necessary or required in connection
with the execution, delivery or performance by, or enforcement against, the
Company of this Agreement or the transactions contemplated hereby, including the
issuance and delivery of the B Preferred Shares and the Warrant.
(D) CAPITALIZATION. The information with respect to the
capitalization of the Company set forth in the Company's most recently filed
Form 10-Q is materially accurate as of the date hereof. The B Preferred Shares
and the Warrants are duly authorized, and when delivered to the Stockholder in
exchange for the A Preferred Shares, will be validly issued, fully paid,
non-assessable and not subject to any preemptive or similar rights. The shares
of the Company's common stock, par value $.008 per share, issuable as dividends
on the B Preferred Shares and upon exercise of the Warrants are duly authorized
and, when issued in compliance with the provisions of the Certificate of
Designations or the Warrant, as applicable, will be validly issued, fully paid,
non-assessable and not subject to any preemptive or similar rights.
5. MISCELLANEOUS.
(a) NOTICES. All notices, demands and other communications provided
for or permitted hereunder shall be made in writing and shall be by registered
or certified first-class mail, return receipt requested, telecopier, courier
service or personal delivery:
(i) if to the Company, to:
priceline.com Incorporated
800 Connecticut Avenue
Norwalk, CT 06854
Telecopy: (203) 299-8915
Attention: Peter J. Millones, Esq.
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and to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York
Telecopy: (212) 474-3700
Attention: William P. Rogers, Jr., Esq.
(ii) if to the Warrant Holder, to:
Delta Air Lines, Inc.
1030 Delta Boulevard
Hartfield Atlanta International Airport
Atlanta, GA 30320
Telecopy: (404) 715-2233
Attention: Executive Vice President -
Chief Financial Officer
and to:
Delta Air Lines, Inc.
1030 Delta Boulevard
Hartfield Atlanta International Airport
Telecopy: (404) 715-2233
Attention: Senior Vice President -
General Counsel
All such notices and communications shall be deemed to have been
duly given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial courier service; five (5) business days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is mechanically acknowledged, if telecopied.
(b) AMENDMENT AND WAIVER.
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(i) No failure or delay on the part of the Company, or the
Stockholder in exercising any right, power or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
Company and the Stockholder at law, in equity or otherwise.
(ii) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by the Company or the Stockholder from the terms of
any provision of this Agreement, shall be effective only if it is made or given
in writing and signed by the Company and the Stockholder.
(c) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(d) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(e) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW OF ANY JURISDICTION.
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(f) SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
(g) ENTIRE AGREEMENT. This Agreement, the Warrant Agreement and the
Certificate of Designation is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement, the Warrant Agreement and the
Certificate of Designation supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
(h) FURTHER ASSURANCES. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any governmental authority or
any other person, and otherwise fulfilling, or causing the fulfillment of, the
various obligations made herein), as may be reasonably required or desirable to
carry out or to perform the provisions of this Agreement and to consummate and
make effective as promptly as possible the transactions contemplated by this
Agreement.
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IN WITNESS WHEREOF, the Company and the Stockholder have caused this
Agreement to be duly executed and delivered as of the date first written above.
PRICELINE.COM INCORPORATED
By: /s/ DANIEL H. SCHULMAN
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Daniel H. Schulman
Chief Executive Officer
DELTA AIR LINES, INC.
By: /s/ M. MICHELE BURNS
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Name: M. Michele Burns
Title:Executive Vice President & CFO
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