Underwriting Agreement

690,000,000


AMAZON.COM, INC.


6.875% CONVERTIBLE SUBORDINATED NOTES DUE 2010


UNDERWRITING AGREEMENT


February 11, 2000 2
February 11, 2000


Morgan Stanley & Co. International Limited Credit Suisse First Boston (Europe) Limited Donaldson, Lufkin & Jenrette International


c Morgan Stanley & Co. International Limited 25 Cabot Square Canary Wharf London E14 4QA


Dear Sirs and Mesdames:


Amazon.com, Inc., a Delaware corporation (the "Company"), proposes to issue and sell to the several purchasers named in Schedule I hereto (the "Underwriters") _690,000,000 principal amount at maturity of its 6.875% Convertible Subordinated Notes due 2010 (the "Securities") to be issued pursuant to the provisions of an Indenture dated as of February 16, 2000 (the "Indenture") between the Company and The Bank of New York as Trustee (the "Trustee"). The Securities will be convertible into shares of common stock of the Company, par value $0.01 per share (the "Underlying Securities").


The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement (registration no. 333-78797), including a prospectus, relating to certain securities and has filed with, or transmitted for filing to, or shall promptly hereafter file with or transmit for filing to, the Commission a preliminary prospectus supplement and a final prospectus supplement (with the preliminary prospectus supplement, each a "Prospectus Supplement") specifically relating to the Securities pursuant to Rule 424 under the Securities Act of 1933, as amended (the "Securities Act"). The term "Registration Statement" means the registration statement, including the exhibits thereto, as amended to the date of this Agreement. The term "Basic Prospectus" means the prospectus included in the Registration Statement. The term "Prospectus" means the Basic Prospectus together with the Prospectus Supplement. The term "preliminary prospectus" means a preliminary prospectus supplement specifically relating to the Securities, together with the Basic Prospectus. As used herein, the terms "Basic Prospectus," "Prospectus" and "preliminary prospectus" shall include in each case the documents, if any, incorporated by reference therein. The terms "supplement," "amendment" and "amend" as used herein shall include all documents deemed to be incorporated by reference in the Prospectus that are filed subsequent to the date of the Basic Prospectus by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act").


1. Representations and Warranties. The Company represents and warrants to, and agrees with, you that:


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(a) The Registration Statement has become effective; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or, to the knowledge of the Company or its counsel, threatened by the Commission.


(b) (i) Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in the Prospectus complied or will comply when so filed in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder, (ii) each part of the Registration Statement, when such part became effective, did not contain, and each such part, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) the Registration Statement and the Prospectus comply, and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder and (iv) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply (A) to statements or omissions in the Registration Statement or the Prospectus based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter expressly for use therein or (B) to that part of the Registration Statement that constitutes the Statement of Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the Trustee.


(c) The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole.


(d) The Company's material subsidiaries consist of Amazon.com. Holdings, Inc. and Amazon.com LLC. Each such subsidiary has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as currently conducted and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as whole; all of the issued shares of capital stock of each such subsidiary have been duly and validly authorized and issued, are fully paid and non-assessable, and are owned of record directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims; except to the extent that the failure of such issued shares and capital stock to be so duly and validly authorized and issued,


2 4 fully paid and non-assessable and owned of record directly or indirectly by the Company would not have a material adverse effect on the Company and its subsidiaries, taken as a whole.


(e) This Agreement has been duly authorized, executed and delivered by the Company.


(f) The shares of Common Stock outstanding on the date hereof have been duly authorized and are validly issued, fully paid and non-assessable.


(g) The authorized capital stock of the Company was, as of the date so indicated, as set forth in the Prospectus under the caption "Capitalization" and conforms as to legal matters to the description thereof contained in the Prospectus.


(h) The Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be valid and binding obligations of the Company, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors' rights generally and general principles of equity, and will be entitled to the benefits of the Indenture.


(i) The Underlying Securities reserved for issuance upon conversion of the Securities have been duly authorized and reserved and, when issued upon conversion of the Securities in accordance with the terms of the Securities, will be validly issued, fully paid and non-assessable, and the issuance of the Underlying Securities will not be subject to any preemptive or similar rights.


(j) The Indenture has been duly authorized and, on the Closing Date, will be duly qualified under the Trust Indenture Act and will be duly executed and delivered by the Company, and be a valid and binding agreement of the Company, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors' rights generally and general principles of equity.


(k) The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Indenture and the Securities will not (a) contravene any provision of applicable law or the Company's Restated Certificate of Incorporation or Bylaws, (b) contravene any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its subsidiaries, taken as a whole, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any subsidiary, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Indenture or the Securities, except such as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Securities.


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(l) There has not occurred any material adverse change (including, without limitation, a change in management resulting from the resignation or termination of employment of Jeff Bezos), or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Prospectus.


(m) There are no (A) legal or governmental proceedings pending or, to the Company's knowledge, threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject that (i) are required to be described in the Registration Statement or the Prospectus and that are not so described, or (ii) limit the power or ability of the Company to perform its obligations under this Agreement, the Indenture or the Securities or to consummate the transactions contemplated by the Prospectus; or (B) statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed or incorporated by reference as exhibits to the Registration Statement that are not described, filed or incorporated as required.


(n) Each preliminary prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder.


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


(p) The Company and its subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals, would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole.


(q) The Company and each of its subsidiaries has good and marketable title to all personal property owned by it, in each case free and clear of any security interests, liens, encumbrances, equities, claims and other defects, except such as do not materially and adversely affect the value of such property and do not interfere with the use made or proposed to be made of such property by the Company or its subsidiaries, and any real property and buildings held under lease by the Company are held under valid, subsisting and enforceable leases, with such


4 6 exceptions as are not material to the Company and its subsidiaries, taken as a whole, and do not materially or adversely interfere with the use made or proposed to be made of such property and buildings by the Company or its subsidiaries.


(r) To the Company's knowledge, each of the Company and its subsidiaries owns or possesses, or can acquire on reasonable terms, all material patents, patent applications, trademarks, service marks, trade names, licenses, know-how, copyrights, trade secrets and proprietary or other confidential information necessary to operate the business now operated by it. Neither the Company nor any of its subsidiaries has received any notice of infringement of or conflict with asserted rights of any third party with respect to any of the foregoing which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse effect on the Company and its subsidiaries, taken as a whole, except as disclosed in the Prospectus.


(s) Each of the Company and its subsidiaries possesses all material consents, licenses, certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse effect on the Company and its subsidiaries, taken as a whole, except as described in the Prospectus.


(t) Ernst & Young, who have certified certain financial statements of the Company and each of its subsidiaries and delivered their report with respect to the audited financial statements incorporated by reference in the Prospectus, are independent public accountants within the meaning of such term for purposes of the Securities Act and the applicable rules and regulations thereunder.


(u) The financial statements of the Company included in (or incorporated by reference in) the Prospectus were prepared in accordance with generally accepted accounting principles ("GAAP") consistently applied throughout the periods involved (except as otherwise noted therein) and they present fairly the financial condition of the Company as of the dates at which they were prepared and the results of operations of the Company in respect of the periods for which they were prepared.


(v) The Company and each of its subsidiaries has filed all foreign, federal, state and local tax returns that are required to be filed or has requested extensions thereof and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for (i) any such assessment, fine or penalty that is currently being contested in good faith, (ii) in any case in which the failure so to file or pay would not have a material adverse effect on the Company and its subsidiaries, taken as a whole, or (iii) as described in or contemplated by the Prospectus.


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(w) Except as disclosed in the Prospectus, the Company and each of its subsidiaries is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which it is engaged; and, to the knowledge of the Company, neither the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for.


(x) (i) The Company and each of its subsidiaries is in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations of general applicability thereunder ("ERISA"); (ii) no "reportable event" (as defined in Section 4043(c) of ERISA) for which the 30-day notice requirement of Section 4043 of ERISA has not been waived by statute, regulation or otherwise has occurred with respect to any "pension plan" (as defined in Section 3(2) of ERISA) that is covered by Title IV of ERISA for which the Company and its subsidiaries would have any liability; (iii) neither the Company nor any of its subsidiaries has incurred or expects to incur any liability under (A) Title IV of ERISA with respect to termination of, or withdrawal from, any "pension plan" or (B) Section 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations of general application thereunder (the "Code");in each case of (ii) and (iii), such that individually or in the aggregate, would have a material adverse effect on the Company and its subsidiaries, taken as a whole; and (iv) each "pension plan" for which the Company or any of its subsidiaries would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has oc ...