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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
priceline.com Incorporated
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(Name of Issuer)
common stock, par value $.008 per share
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(Title of Class of Securities)
741503106
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(CUSIP Number)
Robert S. Harkey, Esquire
Senior Vice President - General Counsel
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
(404) 715-2387
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
November 12, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box.[ ]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7(b) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following pages)
(Page 1 of 11 pages)
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SCHEDULE 13D
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CUSIP NO. 741503106 Page 2 of 11 Pages
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<TABLE>
<S> <C> <C>
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Delta Air Lines, Inc.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
NUMBER OF 14,440,067
SHARES -----------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 0
REPORTING -----------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
14,440,067
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,440,067
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.8%
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14 TYPE OF REPORTING PERSON*
CO
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</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP NO. 741503106 Page 3 of 11 Pages
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ITEM 1 SECURITY AND ISSUER
This Amendment No. 3 to Schedule 13D relating to the common stock of
priceline.com Incorporated, a Delaware corporation ("priceline"), is being filed
on behalf of the undersigned to amend the Schedule 13D which was originally
filed with the Securities and Exchange Commission ("SEC") on July 21, 1999 and
which was amended on July 30, 1999 and August 19, 1999 (the "Schedule 13D").
Unless otherwise indicated, all capitalized terms used herein but not defined
herein shall have the meaning as set forth in the Schedule 13D.
ITEM 2 IDENTITY AND BACKGROUND
This statement is being filed by Delta Air Lines, Inc., a Delaware
corporation ("Delta"). The principal executive offices of Delta are located at
Hartsfield Atlanta International Airport, Atlanta, Georgia 30320.
Delta provides scheduled air transportation over an extensive route
network. Based on calendar 1998 data, Delta is the largest U.S. airline in terms
of aircraft departures and passengers enplaned, and the third largest U.S.
airline as measured by operating revenues and revenue passenger miles flown. As
of July 21, 1999, Delta provided scheduled air service to 142 cities in 41
states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, and
to 42 international cities in 28 countries. In addition to scheduled passenger
service, Delta provides air freight, mail and related aviation services.
The name, principal occupation and business address of each of the
directors and executive officers of Delta are set forth on Schedule A to the
Schedule 13D. Each director and executive officer of Delta is a citizen of the
United States of America. Neither Delta nor, to the best of its knowledge, any
of its directors or officers has during the last five years been (i) convicted
in a criminal proceeding (excluding minor traffic violations or similar
misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
ITEM 3 SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Priceline offers tickets for sale on Delta pursuant to an Airline
Participation Agreement between Delta and priceline dated August 31, 1998. In
connection with its agreement to enter into the Airline Participation Agreement
and a related General Agreement, Delta acquired a warrant (the "Warrant") to
purchase 18,619,402 shares of priceline's common stock at an exercise price of
$0.9254896 per share. The terms of the Airline Participation Agreement and the
related agreement are described generally in Item 4 below.
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CUSIP NO. 741503106 Page 4 of 11 Pages
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The Warrant acquired by Delta was evidenced by a Participation
Warrant Agreement dated as of August 31, 1998 that was amended on two occasions.
The first amendment was set forth in the First Amendment and Waiver to
Participation Warrant Agreement dated December 31, 1998, and the second
amendment was set forth in the Replacement Participation Warrant Agreement dated
as of November 12, 1999. As reported in Amendment No. 1 to the Schedule 13D
filed with the SEC on July 30, 1999, Delta initially could exercise the warrant
only by paying the exercise price in cash. The Replacement Participation Warrant
Agreement provided Delta with the right to exercise the warrant without the
payment of cash. This form of exercise permitted Delta to pay the exercise price
by surrendering to priceline shares of priceline common stock having a value
equal to the exercise price, based on the closing sale price on Nasdaq of
priceline common stock on the trading day immediately preceding the date of
exercise.
As reported in Amendment No. 2 to the Schedule 13D filed with the
SEC by Delta on August 19, 1999, Delta partially exercised its Warrant on August
17, 1999 and acquired 1,817,114 shares of priceline common stock. Delta
immediately resold the shares in a registered public offering on August 17,
1999. The sale price of the priceline common stock was $67 per share before
taking into account underwriters' discounts and commissions. In connection with
the registered offering, Delta entered into a lock-up agreement (the "Lock-Up
Agreement") with the underwriters as part of the underwriting agreement for the
offering on August 11, 1999. Pursuant to the Lock-Up Agreement, Delta agreed not
to sell until February 7, 2000 any other priceline shares held by it without
first obtaining permission from the managing underwriter to do so. Previously,
on February 22, 1999, in connection with priceline's initial public offering of
common stock, Delta entered into a similar lock-up agreement pursuant to which
it agreed not to engage in sales, transfers or similar transactions involving
priceline common stock without the prior written consent of the managing
underwriter for the offering during the 180 days immediately following March 29,
1999.
On November 12, 1999, Delta exercised its Warrant with respect to
the remaining 16,802,288 shares of priceline common stock subject to the
Warrant. In lieu of delivering cash in payment of the exercise price, Delta
elected, pursuant to the terms of the Replacement Participation Warrant
Agreement, to pay the exercise price by surrendering 276,454 of the shares it
was entitled to acquire upon exercise. After the exercise was completed, Delta
was the beneficial owner under Rule 13d-3(d)(1) of 16,525,834 shares of
priceline common stock.
On November 16 and 17, 1999, following efforts by priceline
described in Item 4 below, the managing underwriter for the August 17, 1999
registered offering (Morgan Stanley Dean Witter) granted releases from the
Lock-Up Agreement for sales of up to 2,100,000 shares and 8,440,067 shares of
priceline common stock, respectively, held by Delta. Subsequently, on November
16, 1999, Delta entered into an agreement to sell in a private transaction to
priceline's founder and Vice Chairman, Jay S. Walker, or his assignees, a total
of 2,085,767
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CUSIP NO. 741503106 Page 5 of 11 Pages
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shares of priceline common stock at $59.93 per share (or an aggregate sale price
of $125,000,000). In connection with negotiations described below and in Item 4
to amend certain agreements between priceline and Delta and to take certain
other actions that would be reflected in a Master Agreement between the parties,
Mr. Walker, along with three other priceline executives, agreed to provide Delta
with a lock-up agreement under which the four executives would not dispose of
priceline securities, except in certain limited circumstances, during the period
ending on the earlier of February 7, 2000 or the sale by Delta of 8,440,067
shares of priceline common stock.
In the negotiations mentioned above, Delta and priceline agreed to
an exchange of 6,000,000 shares of priceline common stock held by Delta for
6,000,000 shares of newly issued priceline convertible preferred stock. The
parties have agreed in principle that the convertible preferred stock will (i)
have a par value of $59.93 per share, (ii) be convertible into shares of
priceline common stock on a one-for-one basis, (iii) bear a dividend of 8% per
annum payable-in-kind, (iv) be subject to mandatory redemption on the tenth
anniversary of the date of issuance, and (v) be callable by priceline at the par
value after three years.
Delta also has been engaged in negotiations with priceline (as
discussed in Item 4 below) with respect to the issuance by priceline of a new
warrant to Delta under which Delta could acquire 5,500,000 shares of priceline
common stock at a price of $56.625 per share. The parties have agreed that the
warrant will be issued by priceline as part of a new warrant structure being
created by priceline for the major domestic airline carriers participating in
priceline's airline ticket program. It is anticipated that the new warrant
generally will not be exercisable until November 17, 2004, although a portion of
the warrant may be exercisable as early as March 16, 2000 if priceline receives
a specified amount of net revenue from tickets sold for travel on Delta. It also
is expected that the new warrant will contain antidilution, cashless exercise,
and registration rights provisions similar to those contained in the amended
Warrant for 18,619,402 shares of priceline common stock issued to Delta as of
August 31, 1998.
ITEM 4 PURPOSE OF TRANSACTION
As discussed in Item 3 above, Delta acquired its Warrant in
connection with its entering into an Airline Participation Agreement with
priceline on August 31, 1998. The Airline Participation Agreement nominally has
a ten-year term but is subject to termination by Delta after August 31, 2001
upon 180 days' notice to priceline. The Airline Participation Agreement does not
impose any material obligations on Delta. Delta is not obligated to supply
airline tickets to priceline and may supply airline tickets to priceline's
competitors at any time and at any price, without offering any airline tickets
to priceline.
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CUSIP NO. 741503106 Page 6 of 11 Pages
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In addition to the Airline Participation Agreement, priceline and
Delta are parties to the related General Agreement which provides, among other
things, certain incentives designed to encourage Delta to increase its
participation in priceline's buying service. Under the General Agreement, Delta
is entitled to share in revenue generated from airline ticket sales on Delta if
priceline's gross margin on those sales exceeds approximately 12% in any
calendar quarter. In addition, priceline is required to use the highest
qualifying fare to fulfill ticket requests allocable to Delta, subject to an
agreed minimum ticket sale margin to priceline. The agreement also requires
priceline, subject to various exceptions, to obtain Delta's approval of the
addition of new carriers to the priceline service and restricts the routes for
which tickets may be offered by specified carriers through the priceline
service. Priceline also is required to license its buyer-driven commerce system
to Delta on a non-exclusive basis and on commercially reasonable terms under
specified conditions. In addition, priceline's ability to transfer or license
its intellectual property to other travel providers is limited in the manner set
forth in the agreement.
Delta has been engaged in negotiations with priceline regarding a
proposed amendment to the General Agreement that would result in United
Airlines, American Airlines, US Airways and certain foreign-based carriers
becoming participants in priceline's services. The amendment has been agreed to
in principle by the parties and is to be set forth in a Master Agreement that
would modify sections of the General Agreement relating to market restrictions,
the allocation methodology, and reporting and audit rights. In exchange for
Delta's agreeing to the amendment, priceline has agreed to provide financial
consideration to Delta consisting of (i) actions designed to secure the managing
underwriter's agreement to release from the Lock-Up Agreement 8,440,067 shares
of priceline common stock held by Delta (which release actually was received, as
described in Item 3 above, thereby enabling Delta to sell or otherwise dispose
of such shares immediately, if desired), and (ii) the exchange of 6,000,000
shares of newly issued convertible preferred stock for 6,000,000 shares of
priceline common stock held by Delta (as described in Item 3 above). In
addition, priceline has agreed to issue to Delta a new warrant to acquire
5,500,000 shares of priceline common stock at $56.625 per share (as described in
Item 3 above).
Delta intends to sell a substantial portion, and possibly all, of
the 8,440,067 shares of priceline common stock currently held by it that are not
committed to be sold to Mr. Walker or exchanged for convertible preferred stock.
Any such sales may occur immediately or over a period of time, and may be made
in the open market or in private transactions.
Except as described in this statement, neither Delta nor, to the
best of its knowledge, any of the persons named in Schedule A to the Schedule
13D presently has any plans or proposals which relate to or would result in any
of the following:
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CUSIP NO. 741503106 Page 7 of 11 Pages
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(a) The acquisition by any person of additional securities of
priceline, or the disposition of securities of priceline;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving priceline or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of priceline
or any of its subsidiaries;
(d) Any change in the present board of directors or management of
priceline, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend
policy of priceline;
(f) Any other material change in priceline's business or corporate
structure;
(g) Changes in priceline's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of priceline by any person;
(h) Causing a class of securities of priceline to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) A class of equity securities of priceline becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Act; or
(j) Any action similar to any of those enumerated above.
Delta is a party to a Registration Rights Agreement, dated as of
December 8, 1998, among priceline and some of priceline's stockholders and
warrantholders, pursuant to which the stockholders and warrantholders have the
right in certain circumstances to require priceline to register their shares of
common stock for resale under the Securities Act of 1933. Except in limited
circumstances, priceline is obligated to pay all expenses in connection with
such a registration. A copy of the Registration Rights Agreement and the
agreement pursuant to which Delta became a party to the Registration Rights
Agreement has been filed with the SEC as an exhibit to the Schedule 13D.
Priceline has agreed that in the event Delta converts into common stock any of
the 6,000,000 shares of convertible preferred stock to be acquired by it, such
shares shall have demand and piggyback registration rights under the
Registration Rights Agreement.
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CUSIP NO. 741503106 Page 8 of 11 Pages
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In connection with the public offering of priceline common stock in
August 1999, certain stockholders of priceline assigned to Delta their rights
to sell shares in the offering. A copy of the assignment was filed as an
exhibit to the Schedule 13D.
ITEM 5 INTEREST IN SECURITIES OF PRICELINE.COM
(a) Delta is the beneficial owner, pursuant to Rule 13d-3(d)(1), of
14,440,067 shares of priceline's common stock. The shares beneficially owned by
Delta represent approximately 8.8% of the 163,217,026 shares of priceline's
common stock which priceline indicated to Delta were outstanding on November 16,
1999.
Mary Johnston Evans, a director of Delta, holds 100 shares of
priceline common stock. To the best of Delta's knowledge, none of the other
directors or executive officers of Delta beneficially owns shares of priceline's
common stock.
(b) Delta has sole voting and dispositive power over all of the
shares of priceline's common stock beneficially owned by Delta and, to the best
of Delta's knowledge, Mary Johnston Evans has sole voting and dispositive power
over all of the shares of priceline's common stock she holds.
(c) Except as otherwise set forth in this statement, neither Delta
nor, to the best of Delta's knowledge, any of Delta's directors or executive
officers has effected any transactions in priceline's common stock during the
past 60 days.
(d) No person other than Delta has the right to receive or the power
to direct the receipt of dividends from, or the proceeds from the sale of, the
shares of priceline's common stock beneficially owned by Delta or, to the best
of Delta's knowledge, Mary Johnston Evans.
(e) Delta has not ceased being the beneficial owner of more than
5% of priceline's outstanding common stock.
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CUSIP NO. 741503106 Page 9 of 11 Pages
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ITEM 6 CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF PRICELINE.COM
As described in Item 3 above:
- - On August 31,1998, Delta acquired the Warrant, which entitled Delta to
purchase 18,619,402 shares of priceline's common stock at an exercise price
of $0.9254896 per share;
- - On December 31, 1998 and November 12, 1999, the Warrant was amended;
- - On February 22, 1999, in connection with priceline's initial public
offering of common stock, Delta entered into a lock-up agreement that
expired 180 days after March 29, 1999;
- - On August 11, 1999, in connection with a registered public offering by
priceline, Delta entered into the Lock-Up Agreement that is scheduled to
expire on February 7, 2000;
- - On August 17, 1999, Delta partially exercised the Warrant and acquired
1,817,114 shares of priceline common stock that it immediately resold in a
registered public offering on that date for $67 per share;
- - On November 12, 1999, Delta exercised the remaining portion of the Warrant
not previously exercised and acquired for $0.9254896 per share 16,525,834
shares of priceline common stock;
- - On November 16, 1999, the managing underwriter for the August 17, 1999
registered public offering granted Delta a release from the Lock-Up
Agreement for 2,100,000 shares of priceline common stock held by it;
- - On November 16, 1999, Delta entered into an agreement to sell in a private
transaction to Mr. Jay S.Walker or his assignees 2,087,767 shares of
priceline common stock for $59.93 per share;
- - On November 17, 1999, Mr. Walker and three other executives of priceline
agreed to a lock-up arrangement with respect to their holdings of priceline
securities until the earlier of February 7, 2000 or the sale by Delta of
8,440,067 shares of priceline common stock held by it;
- - On November 17, 1999, the managing underwriter for the August 17, 1999
registered public offering granted Delta a release from the Lock-Up
Agreement for 8,440,067 shares of priceline common stock held by it;
<PAGE> 10
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CUSIP NO. 741503106 Page 10 of 11 Pages
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- - On November 17, 1999, Delta agreed in principle with priceline to
exchange 6,000,000 shares of priceline common stock for 6,000,000 shares of
priceline convertible preferred stock; and
- - On November 17, 1999, priceline agreed in principle to issue to Delta a
new warrant to acquire 5,500,000 shares of priceline common stock for
$56.625 per share.
As described in Item 4 above:
- - On November 17, 1999, priceline agreed, in exchange for Delta's agreeing
to an amendment to the General Agreement, to provide financial
consideration to Delta consisting of (i) actions designed to secure the
managing underwriter's agreement to release from the Lock-Up Agreement
8,440,067 shares of priceline common stock held by Delta, and (ii) the
exchange of 6,000,000 shares of newly issued convertible preferred stock
for 6,000,000 shares of priceline common stock held by Delta.
- - Delta is a party to and an assignee of certain rights under a Registration
Rights Agreement with respect to priceline's common stock.
ITEM 7 MATERIALS FILED AS EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
1 Participation Warrant Agreement, dated August 31, 1998, between
priceline.com and Delta.*
2 First Amendment and Waiver to Participation Warrant Agreement, dated
December 31, 1998, between priceline.com and Delta.*
3 Replacement Participation Warrant Agreement, dated November 12, 1999,
between priceline.com and Delta.
4 Amended and Restated Registration Rights Agreement, dated as of December
8, 1998, among priceline.com and certain stockholders and warrantholders
of priceline.com.*
5 Acknowledgment and Agreement to the Amended and Restated Registration
Rights Agreement, dated July 16, 1999, between Delta and priceline.com.*
6 Assignment of Certain Registration Rights, dated as of July 16, 1999, by
and among Delta and the assignors named therein.*
7 Airline Participation Agreement, dated August 31, 1998, by and among
Delta, priceline.com and Priceline Travel, Inc.*
</TABLE>
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CUSIP NO. 741503106 Page 11 of 11 Pages
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<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
8 General Agreement, dated August 31, 1998, by and among Delta,
priceline.com and Priceline Travel, Inc.*
9 Amendment to the Airline Participation Agreement and the General
Agreement, dated December 31, 1998, between and among priceline.com,
Priceline Travel, Inc. and Delta.*
10 Lock-up Agreement, dated February 22, 1999.*
11 Release from August 11, 1999 Lock-Up Agreement dated November 16, 1999
relating to 2.1 million shares of priceless common stock
12 Release from August 11, 1999 Lock-Up Agreement dated November 17, 1999
relating to 8,440,067 shares of priceless common stock
13 Stock Purchase Agreement for 2,085,767 shares dated November 16, 1999
</TABLE>
- --------------------
* Previously filed
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: November 17, 1999 Delta Air Lines, Inc.
By: /s/ M. MICHELE BURNS
----------------------------------
M. Michele Burns
Vice President and Treasurer
<PAGE> 1
EXHIBIT 3
THE WARRANT ISSUED PURSUANT TO THIS REPLACEMENT PARTICIPATION WARRANT AGREEMENT
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
LAWS. IT MAY NOT BE SOLD OR OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT
AND APPLICABLE STATE SECURITIES LAWS UNLESS THE COMPANY HAS RECEIVED AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED TO
EFFECTUATE SUCH TRANSACTION.
WHEREAS, this Replacement Participation Warrant Agreement is being
issued in connection with the exercise by Warrant Holder on August 17, 1999 of
Warrants (the "Exercised Warrants") to purchase 1,817,114 shares of common stock
of priceline.com Incorporated issued to Warrant Holder under the original
Warrant Agreement dated August 31, 1998 (the "Initial Warrant"), and amended by
First Amendment and Waiver to Participation Warrant Agreement dated December 31,
1999 (the "Warrant Amendment" and collectively with the Initial Warrant, the
"Original Warrant Agreement"); and
WHEREAS, in connection with the exercise of the Exercised Warrants, and
in accordance with the terms of the Original Warrant Agreement, Warrant Holder
surrendered the Original Warrant Agreement in exchange for this Replacement
Participation Warrant Agreement; and
WHEREAS, the Initial Warrant included references to the percentage of
Fully Diluted Equity which the Shares represented and the Warrant Amendment
proportionally decreased such percentages; and
WHEREAS, the Exercised Warrants have further proportionally decreased
the percentage of Fully Diluted Equity which the remaining Shares represent and
this Replacement Participation Warrant Agreement, while reflecting the
percentage of Fully Diluted Equity which the Shares represented in the Initial
Warrant, shall, in the event of Vesting Section 4 of this Replacement
Participation Warrant Agreement, automatically proportionally decrease the
percentage of Fully Diluted Equity which the Shares shall then represent; and
WHEREAS, this Replacement Participation Warrant Agreement is also being
issued to reflect an amendment to the Original Warrant Agreement by the addition
of Section 6(c), which section entitles the Warrant Holder to surrender Warrants
in lieu of delivering cash in payment of the exercise price payable upon
exercise of the Warrants.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
undertakings contained herein, and intending to be legally bound hereby, the
parties hereto agree as follows:
<PAGE> 2
REPLACEMENT
PARTICIPATION WARRANT AGREEMENT
To Purchase Shares of Common Stock
Dated as of November 12, 1999
PRICELINE.COM INCORPORATED
a Delaware Corporation
(After giving effect to the 1.25 for 1 Common Stock split effected on
March 26, 1999)
Original Issue Date: August 31, 1998
Replacement Date: November 12, 1999
THIS CERTIFIES THAT, Delta Air Lines, Inc. (the "Warrant Holder"),
with a place of business at 1030 Delta Boulevard, Hartsfield Atlanta
International Airport, Atlanta, Georgia 30320, for value received, is entitled,
upon the terms and subject to the conditions of this Replacement Participation
Warrant Agreement (this "Warrant Agreement"), to subscribe for and purchase
fully-paid and non-assessable shares of common stock, par value $.008 per share
(the "Common Stock"), of priceline.com Incorporated, a Delaware corporation (the
"Company").
1. Issuance of Warrants. On the Replacement Date, Warrant Holder holds
warrants (the "Warrants") hereunder to acquire Sixteen Million Eight Hundred Two
Thousand Two Hundred and Eighty-Eight (16,802,288) shares of the Common Stock
(the "Shares"), subject to adjustment as hereinafter provided pursuant to
Section 10 herein, which Shares, when issued on a proforma basis, represented
12.5% of the Fully Diluted Equity (as defined below) of the Company as of the
Original Issue Date defined above. As used in this Warrant Agreement, the term
"Fully Diluted Equity" of the Company shall mean the sum of (i) the number of
shares of Common Stock issued and outstanding as of the date of this Warrant
Agreement, (ii) assuming the full conversion of all Series A Convertible
Preferred Stock, par value $.01 per share (the "Convertible Preferred"), issued
and outstanding as of the date of this Warrant Agreement, the number of shares
of Common Stock issuable upon conversion of such Convertible Preferred, and
(iii) assuming the full vesting and exercise of all options and warrants granted
or issued by the Company outstanding as of the date of this Warrant Agreement to
acquire shares of its Common Stock, the number of shares of Common Stock
issuable upon such vesting and exercise.
2. Exercise Price. The Warrants have an exercise price of $.9254896 per
share of Common Stock, as adjusted pursuant to the provisions of Section 10 of
this Warrant Agreement (the "Exercise Price").
3. Term. Except as otherwise provided for herein, the term of the
Warrants and the right to purchase Shares as granted herein shall be
exercisable, at any time and from time to time beginning after December 31, 1998
and terminating at 5:00 p.m. New York City local time on December 31, 2005;
provided, however, that if the Warrants vest on December 31, 2005, the Warrant
Holder will have an additional six (6) months
-2-
<PAGE> 3
thereafter to exercise its purchase rights in respect of the Warrants (such
seven (7) year period and additional six (6) months, if applicable, being
referred to herein as the "Termination Date"). In the event that the
Termination Date falls on a date other than a business day in New York City,
then the Termination Date shall be deemed to be the next succeeding business
day thereafter.
4. Vesting.
(a) Vesting of the First 5% of Equity. The Warrants will begin to
vest when the Company has sold at least $30 million (the "Base Amount") of
tickets issued for travel on the Warrant Holder and/or on the Warrant Holder's
code share partners (such amount being measured by the amount paid by the
Company to the Warrant Holder and its code share partners net of federal excise
taxes on such amount) ("Net Fares") during the period beginning the date hereof
and ending on December 31, 1999 or during calendar years 2000 or 2001 (each, a
"Measuring Period"). The Warrant Holder will earn the right to exercise Warrants
to acquire 1,511,408.25 Shares, subject to adjustment as hereinafter provided
pursuant to Section 10 herein (which Shares, when issued on a proforma basis,
represent approximately 1.25% of the Fully Diluted Equity of the Company as of
the date hereof), for each $5 million in Net Fares over the Base Amount during
each applicable Measuring Period up to a maximum of $50 million in Net Fares, at
which point the Warrant Holder will have earned the right to exercise Warrants
to acquire 6,045,633 Shares (which Shares, when issued on a proforma basis,
represent approximately 5% of the Fully Diluted Equity of the Company as of the
date hereof).
(b) Vesting of Next 1.25% of Equity. After the Warrant Holder has
achieved $50 million in Net Fares during any applicable Measuring Period, the
Warrant Holder will earn the right to exercise Warrants to acquire up to an
additional 1,511,409 Shares, subject to adjustment as hereinafter provided
pursuant to Section 10 herein (which Shares, when issued on a proforma basis,
represent approximately 1.25% of the Fully Diluted Equity of the Company as of
the date hereof), for the next $22.5 million in Net Fares during such Measuring
Period. The actual number of Shares the Warrant Holder will earn shall be a
number equal to the product of (a) 1,511,409 Shares, multiplied by (b) a
fraction, the numerator of which shall be Net Fares during a Measuring Period
over $50 million (up to a maximum of $22.5 million) and the denominator of which
shall be $22.5 million.
(c) Vesting of Remaining 6.25% of Equity. After the Warrant
Holder has achieved $72.5 million in Net Fares during any applicable Measuring
Period, the Warrant Holder will earn the right to exercise Warrants to acquire
up to an additional 7,338,480 Shares, subject to adjustment as hereinafter
provided pursuant to Section 10 herein (which Shares, when issued on a proforma
basis, represent approximately 6.25% of the Fully Diluted Equity of the Company
as of the date hereof), based on the Qualified Ticket Volume (as defined below)
of sales thereafter achieved. The actual number of Shares the Warrant Holder
will earn shall be a number equal to the product of (a) 7,338,480 Shares
(subject to adjustment as set forth in Section 10 herein) multiplied by (a)
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<PAGE> 4
a fraction the numerator of which shall be the actual Qualified Ticket Volume so
achieved during the applicable Measurement Period and the denominator of which
shall be $112.5 million. As used herein, the term "Qualifying Ticket Volume"
shall mean the Net Fares derived from ticket sales on the Warrant Holder and/or
its code share partners on which the Company earns a Gross Margin (as defined
below) of at least 3%; provided, however, that if the Company's total Gross
Margin on such ticket sales during such applicable Measuring Period is greater
than or equal to 12%, then all such ticket sales during such Measuring Period
will be deemed to be Qualifying Ticket Volume. As used herein, the term "Gross
Margin" on a ticket sale shall mean the number equal to (for each ticket sale)
100 times the quotient of (a) the price paid by the customer to the Company for
the ticket, less credit card charges incurred by the Company and less the Net
Fares paid by the Company to the Warrant Holder, divided by (b) the price paid
by the customer to the Company for the ticket.
(d) Adjustment of Thresholds. The $22.5 million and $72.5 million
thresholds used in the calculations set forth in Sections 4(b) and 4(c) above
(the "Thresholds") for any Measuring Period will be adjusted for such applicable
Measuring Period and for subsequent Measuring Periods, if any, in the event that
an airline, not presently participating in the Company' airline service,
commences participation at any time during such applicable Measuring Period, and
such additional carrier has a domestic market share of at least 5% at the time
of its initial participation (an "Adjustment Event"). Upon the occurrence of an
Adjustment Event, each of the Thresholds will be adjusted by multiplying each
such number by a fraction, the denominator of which shall be the sum of the
Warrant Holder's domestic market share and the aggregate domestic market share
of the new additional carrier and all other carriers participating in the
Company's airline service, and the numerator of which shall be Warrant Holder's
domestic market share. All market share data required by this Section 4(d) shall
be based on U.S. domestic revenue passenger miles as reported by the Department
of Transportation on Form 41 for the twelve (12) month period immediately prior
to the time of the Adjustment Event. The resulting numbers shall be the adjusted
Thresholds. The Thresholds as set forth herein shall be adjusted each time, if
any, that an additional carrier meeting the 5% domestic market share criteria
commences participation in the Company's airline service.
(e) Measuring Periods Separate not Cumulative. Net Fares and
Qualifying Ticket Volume during each Measuring Period will be measured
separately, not cumulatively. For example, if the Warrant Holder has Net Fares
of $40 million during the first Measuring Period and Net Fares of $45 million
during the second Measuring Period, then the Warrant Holder will earn the right
to exercise Warrants for 2.5% of the Fully Diluted Equity at the end of the
First Measuring Period and the right to exercise Warrants for an additional
1.25% of the Fully Diluted Equity at the end of the second Measuring Period. As
a further example, if the Warrant Holder has Net Fares of $72.5 million during
the first Measuring Period, Qualifying Ticket Volume of $36 million during the
second Measuring Period (so that the sum of Net Fares and Qualifying Ticket
Volume during the second Measuring Period is $108.5 million) and Qualifying
Ticket Volume of $54 million during the third Measuring Period (so that the sum
of Net Fares and Qualifying Ticket
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<PAGE> 5
Volume during the third Measuring Period is $126.5 million), then the Warrant
Holder will have earned the right to exercise Warrants covering 6.25% of the
Fully Diluted Equity at the end of the first Measuring Period an additional 2%
of the Fully Diluted Equity at the end of the second Measuring Period and an
additional 1% of the Fully Diluted Equity at the end of the third Measuring
Period, for an aggregate of 9.25% of the Fully Diluted Equity. For purposes of
these examples, it is assumed that neither an Adjustment Event nor any
adjustment pursuant to Section 10 hereof has occurred.
(f) Full Vesting. Notwithstanding anything to the contrary
contained herein, the Warrants shall vest, to the extent not previously vested
pursuant to Sections 4(a), 4(b) or 4(c) above, on December 31, 2005.
5. RESERVED
6. Exercise of Purchase Rights.
(a) Exercise. Subject to the provisions of Section 4 of this
Warrant Agreement, the purchase rights represented by this Warrant Agreement are
exercisable by the Warrant Holder, in whole or in part, at any time, or from
time to time during the period set forth in Section 3 above, by tendering to the
Company at its principal office: a duly completed and executed notice of
exercise in the form attached hereto as Exhibit A (the "Notice of Exercise"),
the Participation Warrant Agreement and the Exercise Price. Upon receipt of such
items in accordance with the terms set forth below, the Company shall issue to
the Warrant Holder a certificate for the number of shares of Common Stock
purchased. The Warrant Holder, upon exercise of the Warrants, shall be deemed to
have become the holder of the Shares represented thereby (and such Shares shall
be deemed to have been issued) immediately prior to the close of business on the
date or dates upon which the Warrants are exercised. In the event of any
exercise of the rights represented by the Warrants, certificates for the Shares
so purchased shall be delivered to the Warrant Holder or its designee as soon as
practical and in any event within ten (10) business days after receipt of such
notice and, unless the Warrants have been fully exercised or expired, a new
participation warrant agreement representing the remaining portion of the
Warrants and the underlying Shares, if any, with respect to which this Warrant
Agreement shall not then have been exercised shall also be issued to the Warrant
Holder as soon as possible and in any event within such ten-day period.
(b) Method of Exercise. The purchase rights hereby represented
may be exercised, at the election of the Warrant Holder, by the tender of the
Notice of Exercise and the surrender of this Warrant Agreement at the principal
office of the Company and by the payment to the Company, by check, cancellation
of indebtedness or other form of payment acceptable to the Company, of an amount
equal to the then applicable Exercise Price per share multiplied by the number
of Shares then being purchased.
(c) Net Issue Exercise. Notwithstanding any provisions herein to
the
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<PAGE> 6
contrary, if the fair market value of one share of the Company's Common
Stock is greater than the Exercise Price (at the date of calculation as set
forth below), in lieu of exercising the Warrants for cash, the Warrant Holder
may elect to receive shares of Common Stock equal to the value (as determined
below) of the Warrants (or portion thereof being exercised) by surrender of the
Participation Warrant Agreement at the principal office of the Company together
with the duly executed Notice of Exercise in which event the Company shall issue
to the Warrant Holder a number of shares of Common Stock computed using the
following formula: X=Y(A-B)/ A WHERE X= the number of shares of Common Stock to
be issued to the Warrant Holder; Y= the number of shares of the Common Stock
purchasable under the Warrants or, if only a portion of the Warrants is being
exercised, the portion of the Warrants being exercised; A= the fair market value
of one share of the Company's Common Stock (at the date of such calculation);
and B= Exercise Price (at the date of such calculation). For purposes of this
Section 6(c), the calculations contemplated by this Section 6(c) shall be made
as of the close of business on the trading day immediately preceding the date of
the delivery of this Warrant Agreement and the related Notice of Exercise and
the fair market value of one share of the Common Stock shall be equal to the
sales price, regular way, as reported on Nasdaq or if no such reported sale
takes place, the average of the closing bid and asked prices, regular way, as
reported on Nasdaq or if no such bid or ask prices are reported, the average of
the bid and ask prices of a New York Stock Exchange member. The Company shall
deliver, or cause to be delivered, the shares of Common Stock issuable upon a
net issue exercise pursuant this Section 6(c) within two business days of the
surrender of this Warrant Agreement and related Exercise Notice.
(d) The Corporation acknowledges and agrees that if the Warrant
Holder exercises a Warrant pursuant to Section 6(c), the "holding period" of the
Common Stock received by the Warrant Holder in exchange for the Warrant (the
"Cashless Exercise Common Stock") will, for purposes of Rule 144 under the
Securities Act of 1933, as amended, have commenced on August 31, 1998; that,
upon delivery of the Cashless Exercise Common Stock for registration of transfer
accompanied by broker's and seller's representation letters in customary form,
the Company, without any further documentation, will instruct the transfer agent
to remove the restrictive legend on the Cashless Exercise Common Stock; that the
Company will cause the Cashless Exercise Common Stock to be delivered without
restrictive legend within two business days of the date such Cashless Exercise
Common Stock is surrendered with the broker's and seller's representation
letters; and that the Company will take all actions and execute all documents
and instructions necessary or appropriate to facilitate the sale of the Cashless
Exercise Common Stock.
7. Reservation of Shares. The Company will at all times have authorized
and reserved a sufficient number of shares of Common Stock to provide for the
exercise of the rights to purchase the Shares as provided in this Warrant
Agreement. All of the Shares shall be duly authorized and, when issued upon such
exercise, shall be validly issued, fully paid and nonassessable, and free and
clear of all preemptive rights.
8. No fractional Shares. No fractional shares or scrip representing
fractional
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<PAGE> 7
shares shall be issued upon the exercise of the Warrant Holder's rights to
purchase the Shares.
9. No Rights as Shareholder. This Warrant Agreement does not entitle the
Warrant Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise of the Warrant Holder's rights to purchase the
Shares as provided for herein.
10. Adjustment Rights. The Exercise Price and the number of shares of
Common Stock purchasable hereunder are subject to adjustment from time to time,
as follows:
(a) Merger. If at any time there shall be a merger or
consolidation of the Company with or into another corporation when the Company
is not the surviving corporation, then, as part of such merger or consolidation,
lawful provision shall be made so that the holder of the Warrants evidenced
hereby shall thereafter be entitled to receive upon exercise of rights herein
granted, during the period specified herein and upon payment of the aggregate
Exercise Price, the number of shares of stock or other securities or property of
the successor corporation resulting from such merger or consolidation, to which
a holder of the stock deliverable upon exercise of the rights granted in this
Warrant Agreement would have been entitled in such merger or consolidation if
such rights had been exercised immediately before such merger or consolidation.
In any such case, appropriate adjustment shall be made in the application of the
provisions of this Warrant Agreement with respect to the rights and interests of
the holder after the merger or consolidation.
(b) Reclassification, Etc. If the Company at any time shall, by
subdivision, combination or reclassification of securities or otherwise, change
any of the securities as to which purchase rights under this Warrant Agreement
exist into the same or a different number of securities of any other class or
classes, this Warrant Agreement shall thereafter represent the right to acquire
such number and kind of securities as would have been issuable as the result of
such change with respect to the securities which were subject to the purchase
rights under this Warrant Agreement immediately prior to such subdivision,
combination, reclassification or other change.
(c) Split, Subdivision or Combination of Shares. If the Company
at any time shall split or subdivide its Common Stock, the Exercise Price shall
be proportionately decreased and the number of Shares issuable pursuant to this
Warrant Agreement shall be proportionately increased. If the Company at any time
shall combine or reverse split its Common Stock, the Exercise Price shall be
proportionately increased and the number of Shares issuable pursuant to this
Warrant Agreement shall be proportionately decreased.
(d) Stock Dividends. If the Company at any time shall pay a
dividend payable in Common Stock, then the Exercise Price shall be adjusted,
from and after the date of determination of stockholders entitled to receive
such dividend, to that price determined by multiplying the Exercise Price in
effect immediately prior to such date of
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<PAGE> 8
determination by a fraction (i) the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to such dividend and
(ii) the denominator of which shall be the total number of shares of Common
Stock outstanding immediately after such dividend. The Warrant Holder shall
thereafter be entitled to purchase, at the Exercise Price resulting from such
adjustment, the number of shares of Common Stock (calculated to the nearest
whole share) obtained by multiplying (i) the Exercise Price in effect
immediately prior to such adjustment by (ii) the number of shares of Common
Stock issuable upon the exercise hereof immediately prior to such adjustment and
dividing the product thereof by the Exercise Price resulting from such
adjustment.
(e) Issue of Additional Stock. For so long as the term of this
Warrant Agreement has not expired, upon each issuance or sale (or deemed
issuance or sale) by the Company of any additional shares of Common Stock (or
securities convertible or exercisable into Common Stock) which results or would
have resulted in a reduction in the Conversion Price of the Convertible
Preferred (as each such term is defined in the Company's Certificate of the
Powers, Designations, Preferences and Rights of the Series A Convertible
Preferred Stock (the "Certificate of Designation")) under Section 7(d)(ii) of
the Company's Certificate of Designation, then the Exercise Price in effect
immediately prior to each such issuance or sale shall, upon such issue or sale,
be reduced by a percentage equal to the same percentage that the applicable
Conversion Price has been reduced (or would have been reduced) as a result of
such issuance or sale.
(f) Excess Option Adjustment. If General Atlantic Partners 48,
L.P., a Delaware limited partnership, and GAP Coinvestment Partners, L.P., a New
York limited partnership (together, the "Purchasers") receive additional shares
of Convertible Preferred in payment of Reimbursement Amounts (as such term is
defined in that certain Stock Purchase Agreement, dated July 31, 1998 among the
Company and the Purchasers (the "Stock Purchase Agreement")) owed to such
Purchasers under Section 2.4 of the Stock Purchase Agreement, then Warrant
Holder shall simultaneously receive that number of additional Warrants with an
exercise price of zero dollars equal to the product of (x) 0.874218 and (y) the
number of shares of Convertible Preferred received by the Purchasers pursuant to
such Section 2.4. Such Warrants will vest proportionally to the other Warrants
issued to Warrant Holder. The Company agrees that the provisions of Section 2.4
of the Stock Purchase Agreement will not be amended or changed in any way
without the express consent of the Warrant Holder.
(g) Notice of Adjustments; Notices. Whenever the Exercise Price
or number of shares purchasable hereunder shall be adjusted pursuant to Section
6 hereof, the Company shall issue a certificate signed by its Chief Executive
Officer or Chief Financial Officer setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated and the Exercise Price and number of shares
purchasable hereunder after giving effect to such adjustment, and shall cause a
copy of such certificate to be mailed (by first class mail, postage prepaid) to
the holder of this Warrant.
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<PAGE> 9
(h) No Change of Warrant Necessary. Irrespective of any adjustment
in the Exercise Price or in the number or kind of securities issuable upon
exercise of the Warrant, unless the Warrant Holder otherwise requests, this
Warrant Agreement may continue to express the same price and number and kind of
shares of Common Stock as are stated in this Warrant Agreement as initially
executed.
11. Redemption. Subject to the Company's repurchase rights prescribed in
Section 5 hereof, the Warrants represented by this Warrant Agreement are not
redeemable by the Company.
12. Compliance with Securities Act; Transferability of Warrant or Shares
of Common Stock.
(a) Compliance with Securities Act. The Warrant Holder, by
acceptance hereof, agrees that the Warrants, and the shares of Common Stock to
be issued upon exercise of the Warrants, are being acquired for investment and
that such Warrant Holder will not offer, sell or otherwise dispose of the
Warrants, or any shares of Common Stock to be issued upon exercise of the
Warrants except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended (the "Securities Act"), or any applicable
state securities laws. The Warrants and all shares of Common Stock issued upon
exercise of the Warrants (unless registered under the Securities Act and any
applicable state securities laws) shall be stamped or imprinted with a legend in
substantially the following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAW. THEY MAY NOT BE SOLD OR OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE
WITH SAID ACT.
(b) Exchange, Transfer, Assignment or Loss of Warrants. Upon
surrender of the Warrants to the Company with the Assignment Form annexed hereto
as Exhibit B duly executed, and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant Agreement in
the name of the heir, devisee or assignee named in such instrument of assignment
and this Warrant Agreement shall promptly be canceled.
13. Representations and Warranties of the Company.
The Company hereby incorporates herein the representations and
warranties made by the Company to the Purchasers in the Stock Purchase Agreement
and extends such representations and warranties to the Warrant Holder. The
Company expressly confirms to the Warrant Holder that such representations and
warranties are true and correct at and on
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<PAGE> 10
the date hereof as if made at and on such date as modified by this Warrant
Agreement.
14. Representations and Warranties of the Warrant Holder.
The Warrant Holder hereby represents and warrants to the Company as
follows:
(a) Existence and Power. The Warrant Holder is a (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 Warrant
Agreement.
(b) Authorization; No Contravention. The execution, delivery and
performance by the Warrant Holder of this Warrant Agreement and the transactions
contemplated hereby (i) have been duly authorized by all necessary corporate
action of the Warrant Holder and (ii) do not contravene the terms of the
Certificate of Incorporation or By-laws of the Warrant Holder, each as amended
as of and through the Issue Date.
(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 Warrant Holder of this Warrant Agreement or the transactions
contemplated hereby.
(d) Binding Effect. This Warrant Agreement has been duly executed
and delivered by the Warrant Holder and constitutes the valid and binding
obligations of the Warrant Holder, enforceable against it in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
(e) Purchase for Own Account. The Warrants issued to the Warrant
Holder pursuant to this Warrant Agreement, and the Shares to be issued upon
vesting and exercise thereof, are being or will be acquired for the Warrant
Holder's own account and with no intention of distributing or reselling such
securities or any part thereof in any transaction that would be in violation of
the securities laws of the United States of America, or any state.
(f) Restricted Securities. The Warrant Holder understands that
the Warrants and the Shares issuable upon vesting and exercise of the Warrants,
will not be registered at the time of their issuance under the Securities Act
for the reason that the sale provided for in this Agreement is exempt pursuant
to Section 4(2) of the Securities Act and that reliance of the Company on such
exemption is predicated in part on such Warrant Holder's representations set
forth herein. The Warrant Holder represents that it is experienced in evaluating
companies such as the Company, has such knowledge and
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<PAGE> 11
experience in financial and business matters as to be capable of evaluating the
merits and risks of its investment and has the ability to suffer the total loss
of the investment. The Warrant Holder further represents that it has had the
opportunity to ask questions of and receive answers from the Company concerning
the terms and conditions of the Warrants, the business of the Company, and to
obtain additional information to such Warrant Holder's satisfaction.
(g) Accredited Investor. The Warrant Holder is an "Accredited
Investor" within the meaning of Rule 501 of Regulation D under the Securities
Act, as presently in effect.
15. Affirmative Covenants.
In addition to the following affirmative covenants, until the effective
date of an IPO, or earlier, as applicable, the Company hereby makes to Warrant
Holder the affirmative covenants made by the Company to the Purchasers in
Sections 8.1, 8.2, 8.3(a), 8.3(b) (beginning with the third quarter of the
fiscal year ending 1999) and 8.5 through 8.9 of the Stock Purchase Agreement. In
addition, the Company will provide Warrant Holder with reports each calendar
quarter during the term hereof regarding any changes in stock ownership in the
Company, including changes in shares, options, warrants or other equity
holdings.
(a) Board Representation. Promptly after the execution hereof,
the Company agrees to obtain an amendment to the Stockholders Agreement in form
and substance satisfactory to Warrant Holder, requiring that each Stockholder
(as therein defined) shall vote its Shares at any Stockholder's meeting called
for the purpose to elect directors to the Board of Directors and to take all
other actions necessary to ensure the election to the Board of Directors of one
(1) individual designated by Warrant Holder if the Company by the third
anniversary of the execution of this Warrant Agreement shall not have had
declared effective by the Securities and Exchange Commission an initial
registration statement covering the Common Stock and Warrant Holder owns Shares
equal to or exceeding 5% of the Fully Diluted Equity. The Company shall do
everything reasonably in its power to ensure that Warrant Holder is provided
with such representation on the Board of Directors including, without
limitation, including at least one (1) designee of Warrant Holder in any
nominees of the Board of Directors of the Company as Warrant Holder is entitled
to.
(b) MFN Status. If the Company enters into any transaction with
another airline, hotel, rental car or other travel provider (the "Travel
Provider") with provisions, taken as a whole, which are more favorable to the
Travel Provider than the provisions available to Warrant Holder in the
transaction of which this Warrant Agreement is a part, then Warrant Holder shall
be entitled to the benefit of such more favorable provisions and the applicable
documents between Company and Warrant Holder shall be appropriately amended.
Provisions as used in this paragraph, include, without limitation, the
percentage of the equity of the Company which can be earned or acquired, the
method,
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<PAGE> 12
rate and manner of earning equity or the right to acquire equity of the Company
including vesting and exercise price, antidilution adjustments, covenants, board
representation, registration rights, or the provisions of the Airline
Participation Agreement and side letter.
(c) No Equity Preference to Travel Providers. The Company will
not enter into any transaction with a Travel Provider in which the Company
issues, or agrees to issue, equity or rights to acquire equity where the
provisions in such transaction, including, without limitation, the percentage of
the equity of the Company which can be earned or acquired, the method, rate and
manner of earning equity or the right to acquire equity of the Company including
vesting and exercise price, antidilution adjustments, covenants, board
representation or registration rights, are more favorable to the Travel Provider
than the provisions available to Warrant Holder in the transaction of which this
Warrant Agreement is a part.
16. Miscellaneous.
(a) Survival of Representations and Warranties. All of the
representations and warranties made (or confirmed) herein shall survive the
execution and delivery of this Agreement, any investigation by or on behalf of
the Warrant Holder or acceptance of the Warrants, until 60 days after receipt of
the Company's financial statements for the year ended December 31, 1999, and at
the end of such period, such representations and warranties and related
indemnification rights and obligations with respect thereto shall expire;
provided, however, that the representations and warranties set forth in Sections
3.1, 3.2, 3.4, 3.7(a) and 3.9 of the Stock Purchase Agreement and confirmed
herein shall survive without any expiration and the representation and
warranties set forth in Section 3.12 of the Stock Purchase Agreement and
confirmed herein shall survive until the expiration of the applicable statute of
limitations.
(b) No Consequential Damages. No Party hereto shall be entitled
to consequential damages as a result of any breach of a covenant, representation
or warranty contained herein.
(c) 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
5 High Ridge Park
Stamford, CT 06905
Telecopy: (203) 595-8344
Attention: Mr. Paul E. Francis
with a copy to:
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<PAGE> 13
priceline.com Incorporated
5 High Ridge Park
Stamford, CT 06905
Telecopy: (203) 595-8345
Attention: Melissa M. Taub, General Counsel
and to:
Skadden, Arps, Slate, Meagher, & Flom, L.L.P.
One Rodney Square
Wilmington, DE 19801
Telecopy: (302) 651-3001
Attention: Patricia Moran Chuff, Esq.
(ii) if to the Warrant Holder, to:
Delta Air Lines, Inc.
1030 Delta Boulevard
Hartsfield International Airport
Atlanta, Georgia 30354-1987
Telecopy: (404) 715-2233
Attention: Executive Vice President -
Chief Financial Officer
with a copy to:
Delta Air Lines, Inc.
1030 Delta Boulevard
Hartsfield International Airport
Atlanta, Georgia 30354-1987
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.
(d) Successors and Assigns; Third Party Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties hereto. Subject to applicable securities laws,
the Warrant Holder may assign any of its rights under any of the Transaction
Documents to any of its Affiliates. The
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<PAGE> 14
Company may not assign any of its rights under this Agreement without the
written consent of the Warrant Holders. Except as provided in the
indemnification provisions governing the transactions contemplated herein and
set forth in a letter between the Company and the Warrant Holder, dated the date
hereof, no Person other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement. The rights
of Warrant Holder with respect to representation on the Company's board set
forth in Section 15(a) hereof shall not be assignable and any attempt to do so
shall be void and of no further consequence.
(e) Amendment and Waiver.
(i) No failure or delay on the part of the Company, or
the Warrant Holder 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 Warrant Holder 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 Warrant Holder 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 Warrant Holder.
(f) 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.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) 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.
(i) 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.
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<PAGE> 15
(j) Entire Agreement. This Agreement, together with the
exhibits and schedules hereto, the letter dated the date hereof between the
Company and Warrant Holder containing, among other things, the indemnification
provisions governing the transactions contemplated herein, the Airline
Participation Agreement, dated as of August 31, 1998 between the Company and the
Warrant Holder (together, the "Transaction Documents"), 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 and therein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or therein. This Agreement, together with the exhibits and
schedules hereto and the other Transaction Documents, supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
(k) Publicity. Except as may be required by applicable
Requirement of Law, none of the parties hereto shall issue a publicity release
or public announcement or otherwise make any disclosure concerning this
Agreement or the transactions contemplated hereby, without prior approval by the
other parties hereto (which approval shall not be unreasonably withheld);
provided, however, that nothing in this Agreement shall restrict the Warrant
Holder from disclosing information (a) that is already publicly available and
(b) to its attorneys, accountants, consultants and other advisors to the extent
necessary to obtain their services in connection with the Warrant Holder's
investment or participation in the Company. If any announcement is required by
law to be made by any party hereto concerning this Agreement or the transactions
contemplated hereby, prior to making such announcement such party will deliver a
draft of such announcement to the other parties and shall give the other parties
an opportunity to comment thereon.
(l) Charges; Taxes and Expenses. Issuance of certificates for
shares upon the exercise of this Warrant Agreement shall be made without charge
to the Warrant Holder for any issue or transfer tax or other incidental expense
in respect of the issuance of such certificates, all of which taxes and expenses
shall be paid by the Company.
(m) Saturdays, Sundays, Holidays, Etc. If the last or appointed
day for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday, Sunday or a legal holiday, then such action
may be taken or such right may be exercised on the next succeeding day not a
Saturday, Sunday or a legal holiday.
(n) Lost Warrants. The Company covenants to the Warrant Holder
that, upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant Agreement and, in the
case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation,
upon surrender and cancellation of this Warrant Agreement, the Company will make
and deliver a new Warrant Agreement of like tenor, in lieu of the lost, stolen,
destroyed or mutilated document.
(o) Further Assurances. Each of the parties shall execute such
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<PAGE> 16
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.
IN WITNESS WHEREOF, this Warrant Agreement has been duly executed
and delivered by the authorized officers of each of the undersigned.
PRICELINE.COM INCORPORATED
By: /s/ PAUL FRANCIS
------------------------------
Paul Francis
Title: Chief Financial Officer
DELTA AIR LINES, INC.
By: /s/ M. MICHELE BURNS
------------------------------
M. Michele Burns
Title: Vice President and Treasurer
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<PAGE> 17
EXHIBIT A
NOTICE OF EXERCISE
To: priceline.com Incorporated
1. The undersigned hereby elects to purchase _______ shares of
the Common Stock of priceline.com Incorporated pursuant to the terms of the
Replacement Participation Warrant Agreement, dated as of November 12, 1999, by
and between priceline.com Incorporated and the undersigned, and tenders herewith
payment of the purchase price of such shares in full or has surrendered Warrants
covered by the Participation Warrant Agreement in accordance with Section 6(c)
of the Participation Warrant Agreement.
2. Please issue a certificate or certificates representing said
shares in the name of the undersigned.
DELTA AIR LINES, INC.
By:
--------------------------------
-----------------------------------
(Print Name of Signatory)
----------------------------------
(Title of Signatory)
Date:
---------------------
<PAGE> 18
EXHIBIT B
ASSIGNMENT FORM
TO: priceline.com Incorporated
The undersigned hereby assigns and transfers unto _____________________________
of _________________________________________________________________
(Please typewrite or print in block letters)
the right to purchase ____________ shares of the common stock of priceline.com
Incorporated subject to the Replacement Participation Warrant Agreement, dated
as of November 12, 1999, by and between priceline.com Incorporated and the
undersigned (the "Warrant Agreement").
This assignment complies with the provisions of Section 12(b) of the Warrant
Agreement and is accompanied by funds sufficient to pay all applicable transfer
taxes.
DELTA AIR LINES, INC.
By:
--------------------------------
-----------------------------------
(Print Name of Signatory)
----------------------------------
(Title of Signatory)
Date:
---------------------
<PAGE> 1
EXHIBIT 11
November 16, 1999
Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, GA 30320
Ladies and Gentlemen:
In connection with the public offering of the common stock of
priceline.com Incorporated ("priceline.com"), you agreed in the Underwriting
Agreement dated August 11, 1999 among priceline.com, the selling stockholders
and the underwriters named therein to restrict your right to sell, dispose and
engage in certain other transactions in the common stock and common stock
equivalents of priceline.com. We are writing to release you from the
restrictions set forth in that letter with respect to up to 2.1 million shares
of priceline.com common stock that you hold for the purpose of selling such
shares of common stock to Mr. Jay S. Walker or his assignees. This release shall
be effective as of November 16, 1999.
Very truly yours,
/s/ WILLIAM SANDERS
William Sanders
Principal
<PAGE> 1
EXHIBIT 12
November 17, 1999
Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, GA 30320
Ladies and Gentlemen:
In connection with the public offering of the common stock of
priceline.com Incorporated ("priceline.com"), you agreed in the Underwriting
Agreement dated August 11, 1999 among priceline.com, the selling stockholders
and the underwriters named therein (the "UNDERWRITING AGREEMENT") to restrict
your right to sell, dispose and engage in certain other transactions in the
common stock and common stock equivalents of priceline.com. We are writing to
release you from the restrictions set forth in the Underwriting Agreement with
respect to 8,440,067 shares of priceline.com common stock that you hold for the
purpose of selling such shares of common stock in compliance with Rule 144 under
the Securities Act of 1933. This release shall be effective as of November 17,
1999. .
Very truly yours,
/s/ WILLIAM SANDERS
William Sanders
Principal
<PAGE> 1
EXHIBIT 13
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into as of November
16, 1999 by and between Delta Air Lines, Inc., a Delaware corporation ("Seller")
and Jay S. Walker, an individual residing in the State of Connecticut
("Purchaser").
WHEREAS, Seller owns of record 16,525,834 shares of the Common Stock, par
value $.008 per share (the "Common Stock"), of priceline.com Incorporated, a
Delaware corporation (the "Company");
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, 2,085,767 shares of the Common Stock of the Company (the
"Shares") at the price and upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. Sale and Purchase of Stock.
1.1 Sale and Purchase. Subject to the terms and conditions of this
Agreement, Seller agrees to sell to Purchaser and Purchaser agrees to purchase
from Seller the Shares at a purchase price of $59.93 per share, for an aggregate
purchase price for the Shares of $125,000,000 (the "Purchase Price").
1.2 Delivery of Shares. Within ten (10) business days following the
execution and delivery of this Agreement, Seller shall surrender to the Company
a stock certificate representing the Shares and showing Seller as the record
owner thereof, accompanied by a stock power duly executed by Seller in blank and
reasonably acceptable to Purchaser for transfer on the books of the Company, and
shall request that the Company issue to Purchaser a certificate representing the
Shares (the "Certificate") registered in the name of Purchaser.
1.3 Payment of Purchase Price. Upon delivery by Seller of the stock
certificate and stock power pursuant to Section 1.2 hereof, Purchaser shall
deliver to Seller the Purchase Price by wire transfer to an account designated
by Seller in exchange for and in full payment of the Shares.
2. Representations and Warranties of Seller. Seller hereby represents and
warrants to Purchaser as follows:
2.1 Title to Shares. Seller is the lawful owner of and has good and
marketable title to the Shares. Upon payment of the Purchase Price and delivery
of the Shares, Purchaser will acquire good, valid and marketable title to the
Shares free and clear of all mortgages, liens, pledges, charges, claims,
security interests, agreements and encumbrances whatsoever.
<PAGE> 2
2.2 Authority and Capacity. Seller has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby, and, to the best of its knowledge, all
authorizations, consents and approvals required on the part of Seller by any
law, regulation, charter, bylaw, agreement or instrument of any kind or
character to permit Seller to enter into this Agreement and transfer the Shares
to Purchaser have been obtained.
2.3 Binding Obligation. This Agreement constitutes a valid and binding
obligation of Seller, enforceable in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, or similar laws affecting the enforcement of creditors' rights
generally, and subject to principles of equity and public policy.
2.4 Broker. Seller has not retained or agreed to pay any broker or finder
with respect to this Agreement and the transactions contemplated hereby.
3. Representations and Warranties of Purchaser. Purchaser hereby represents
and warrants to Seller as follows:
3.1 Authority and Capacity. Purchaser has full legal right, capacity,
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby, and, to the best of his knowledge, all
authorizations, consents and approvals required on the part of Purchaser by any
law, regulation, charter, bylaw, agreement or instrument of any kind or
character to permit Purchaser to enter into this Agreement and to purchase the
Shares have been obtained.
3.2 Binding Obligation. This Agreement constitutes a valid and binding
obligation of Purchaser, enforceable in accordance with its terms, subject to
the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, or similar laws affecting the enforcement of creditors' rights
generally, and subject to principles of equity and public policy.
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<PAGE> 3
3.3 Purchase for Investment.
(a) Purchaser understands that the Shares have not been registered
under the Securities Act of 1933, as amended (the "Act"), or under
applicable state securities laws, in reliance upon exemptions contained in
the Act and such laws and any applicable regulations promulgated
thereunder or interpretations thereof, and cannot be offered for sale,
sold or otherwise transferred unless all or any portion of the Shares
subsequently are so registered or qualify for exemption from registration
under the Act and such laws and unless such offer, sale or transfer is
made in compliance with the terms of this Agreement. Purchaser further
understands that the Seller's certificate for the Shares bears the
following legends:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAW. THEY MAY NOT BE SOLD OR OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE
WITH SAID ACT."
(b) The Shares are being acquired under this Agreement by Purchaser
in good faith solely for his own account, for investment and not with a
view toward resale or other distribution within the meaning of the Act;
and such Shares will not be offered for sale, sold or otherwise
transferred without either registration or exemption from registration
under the Act.
(c) Purchaser is an "Accredited Investor" within the meaning of rule
501 of Regulation D under the Act, as presently in effect. Purchaser has
such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of his investment in the
Shares; and understands and is able to bear any economic risks associated
with such investment.
(d) Purchaser understands that the Shares will be considered
"restricted securities" within the meaning of Rule 144 under the Act; that
Rule 144 may not be available to exempt from the registration requirements
of the Act sales of such restricted securities; that if Rule 144 is
available, sales may be made in reliance upon Rule 144 only in accordance
with the terms and conditions of Rule 144, which among other things
generally requires that the securities be held for at least one year and
that sales be made in limited amounts (which amounts are subject to
certain exceptions depending upon whether the seller is an "affiliate"
within the meaning of Rule 144 and how long the securities have been
held); and that, if the exemption for such sales is not available,
registration of the Shares under the Act and state securities laws may be
required.
4. Miscellaneous.
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<PAGE> 4
4.1 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given (a) when delivered by hand or
certified mail, return receipt requested, postage prepaid, (b) when transmitted
by telecopier or (c) when received if sent by overnight courier, to the
addressee at the following addresses or telecopier numbers (or to such other
address or telecopier number as a party may specify from time to time by notice
hereunder):
(i) If to Seller:
Delta Air Lines, Inc.
1030 Delta Boulevard
Hartsfield International Airport
Atlanta, Georgia 30354-1987
Telecopy: (404) 715-2233
Attention: Executive Vice President -
Chief Financial Officer
with a copy to:
Delta Air Lines, Inc.
1030 Delta Boulevard
Hartsfield International Airport
Atlanta, Georgia 30354-1987
Telecopy: (404) 715-2233
Attention: Senior Vice President -
General Counsel
(ii) If to Purchaser:
Jay S. Walker
C/O priceline.com Incorporated
5 High Ridge Park
Stamford, CT 06905
Telecopy: (203) 595-8344
4.2 Binding Effect: Third-Party Beneficiary. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, devisees, executors, administrators, legal representatives,
successors and permitted assigns.
4.3 Assignment. Prior to the consummation of the sale and purchase of the
Shares under Section 1 hereof, Purchaser may not assign his rights to purchase
the Shares under this Agreement without the prior written consent of Seller;
provided, however, that Purchaser shall be
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<PAGE> 5
permitted to assign his rights to purchase some or all of the Shares under this
Agreement to the Company or Richard S. Braddock, without the prior written
consent of Seller, at any time prior to Purchaser's acquisition of the Shares
pursuant to the terms hereof and, upon such assignment, with respect to the
right to purchase the number of Shares so assigned, the Company or Richard S.
Braddock, as the case may be, shall be deemed to be the "Purchaser" for all
purposes of this Agreement, and Purchaser shall be relieved of all of his
obligations hereunder. Any such assignment contrary to the terms hereof shall be
null and void and of no force and effect.
4.4 Amendment. No amendment, modification or discharge of this Agreement
shall be valid or binding unless set forth in writing and duly executed and
delivered by the party against whom enforcement of the amendment, modification,
or discharge is sought.
4.5 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the transactions contemplated herein,
and it supersedes all prior oral or written agreements, commitments or
understandings with respect to the matters provided for herein.
4.6 Headings. Article, section and subsection headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
4.7 Governing Law. The interpretation and construction of this Agreement
and all amendments hereof and waivers and consents hereunder shall, to the
extent the particular subject matter is controlled by state law, be governed by
and be construed in accordance with the substantive law of the State of
Delaware, without regard to the conflicts of laws principles thereof.
4.8 Counterparts; Facsimile Signatures. This Agreement may be executed and
delivered in two or more counterparts, by facsimile or otherwise, none of which
needs to contain the signatures of all parties hereto and each of which shall be
deemed an original, but together which shall constitute one and the same
instrument.
4.9 Expenses. Each party shall bear its own expenses incident to the
execution and delivery of this Agreement and the performance of its obligations
hereunder.
4.10 Waiver of Compliance. No delay or failure on the part of any party
hereto in exercising any right, power or privilege under this Agreement or under
any other documents furnished in connection with or pursuant to this Agreement
shall impair any such right, power or privilege or be construed as a waiver of
any default or any acquiescence therein. No single or partial exercise of any
such right, power or privilege shall preclude the further exercise of such
right, power or privilege, or the exercise of any other right, power or
privilege. No waiver shall be valid against any party hereto unless made in
writing and signed by the party against whom enforcement of such waiver is
sought and then only to the extent expressly specified therein.
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<PAGE> 6
4.11 Further Assurances. From time to time hereafter, each party shall,
using reasonable business efforts, execute and deliver such other instruments of
transfer and assumption and take such further action including providing access
to necessary books and records as the other may reasonably request to carry out
the sale of the Shares and as otherwise may be reasonably required in connection
with effecting or carrying out the provisions of this Agreement.
4.12 Severability. If any provisions hereof shall be held invalid or
unenforceable by any court of competent jurisdiction or as a result of future
legislative action, such holding or action shall be strictly construed and,
subject to applicable law, shall not affect the validity or effect of any other
provisions hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 7
IN WITNESS WHEREOF, each of the undersigned has executed and delivered this
Agreement as of the date first hereinabove set forth.
SELLER: PURCHASER:
DELTA AIR LINES, INC.
/s/ M. MICHELE BURNS /s/ JAY S. WALKER
- --------------------------- ------------------------------
M. Michele Burns Jay S. Walker
Vice President and Treasurer
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