Promissory Note - priceline.com Inc. and Daniel H. Schulman
PROMISSORY NOTE
July 2, 1999
$1,500,000 Norwalk, Connecticut
FOR VALUE RECEIVED, the undersigned, DANIEL H. SCHULMAN (the "Borrower"),
hereby promises to pay to the order of PRICELINE.COM INCORPORATED, a Delaware
corporation with an office located at Five High Ridge Park, Stamford,
Connecticut 06905 (the "Company"), the aggregate principal amount of ONE MILLION
FIVE HUNDRED THOUSAND and 00/100 DOLLARS ($1,500,000), together with interest on
the unpaid principal balance amount hereunder accruing annually at 5.82%.
Subject to any prepayment obligations hereunder, interest shall be payable in
full on the Maturity Date (as defined below). The unpaid principal amount
hereunder, together with all accrued but unpaid interest, shall be due and
payable in full on July 2, 2004 (the "Maturity Date"). Payment of principal and
interest shall be made to the Company at the address indicated above, or at such
other address as the Company may specify in writing to the Borrower.
The Borrower shall pay to the Company a mandatory prepayment of accrued
interest hereunder and principal upon the exercise, at any time on or prior to
June 14, 2004, of one or more Company stock options granted to the Borrower
under the Company's 1999 Omnibus Plan (including any amendments thereto), or
other equity plan, or any options granted in exchange, replacement or
substitution therefor, in an amount equal to twenty-five percent (25%) of
Borrower's pretax profits in excess of ten million dollars ($10,000,000.00) (the
"Profits Threshold"). Within ten (10) Business Days (as hereinafter defined)
following each date that the Borrower shall exercise options referred to above
in excess of the Profits Threshold, Borrower shall deliver a mandatory
prepayment in reduction of the accrued interest and outstanding principal
balance of this Note in an amount required by the first sentence of this
paragraph. Each prepayment, as provided herein, shall be applied first against
accrued but unpaid interest under this Note and then in reduction of the
outstanding principal amount hereof until the indebtedness of this Note is paid
in full. "Business Day" shall mean any day on which NASDAQ is not authorized or
required to close and trading of securities is permitted.
The Borrower shall have the right to prepay this Note in whole or in part
at any time, without premium or penalty, but with interest accrued on the
principal being paid to the date of such prepayment.
Notwithstanding anything contained herein to the contrary, the Borrower
shall be released of the outstanding debt evidenced by this Note, including all
accrued but unpaid interest, and the same shall be forgiven and extinguished
upon a "Change in Control", or the death, "Termination for Disability",
"Termination without Cause", or "Termination for Good Reason" of the Borrower
(each such term being used as defined and used in the Employment Agreement), or
immediately following expiration of the Maturity Date provided that the
Borrower's employment with the Company has not been terminated for "Cause" or by
the Borrower without "Good Reason" prior thereto (each such term being used as
defined and used in the Employment Agreement).
The Borrower shall be obligated to prepay this Note in whole, plus accrued
interest, on the date thirty (30) days following termination of Borrower's
employment by the Company for "Cause" or by the Borrower voluntarily without
"Good Reason".
In the event of the default in the payment of principal or interest due
hereunder when the same shall be due and payable and such default shall continue
for thirty (30) days after receipt by
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the Borrower of written notice thereof (a "Default"), then, the Company or any
subsequent holder of this Note, at its option, may, by written notice to the
Borrower, declare the entire then unpaid principal amount of this Note and the
interest accrued and unpaid thereon to be immediately due and payable.
If a Default occurs, the Company or any subsequent holder of this Note,
may proceed to protect and enforce its rights either by suit in equity and/or by
action at law, or by other appropriate proceedings. Notwithstanding anything to
the contrary set forth in the Employment Agreement and provided that no issue is
present as to the basis of any termination of employment by the Borrower with
the Company, the Borrower promises to pay the Company's reasonable attorneys'
fees and other costs of collection of this Note or any portion thereof,
including the costs of suit if a suit shall be instituted upon this Note and the
Company shall prevail in such suite.
No delay or omission of the Company or any subsequent holder of this Note,
to exercise any right hereunder, whether before or after the happening of a
Default, shall impair any such right or shall operate as a waiver thereof or of
a Default hereunder not shall any single or partial exercise thereof preclude
any other or further exercise thereof, or the exercise of any other right.
The Borrower hereby waives presentment, demand, notice, protest and all
other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement hereof and consents that no indulgence, and
no substitution, release or surrender of collateral, and no discharge or release
of any other party primarily or secondarily liable hereon, shall discharge or
otherwise affect the liability of the Borrower.
Anything herein contained to the contrary notwithstanding, the maximum
rate of interest payable with respect to the unpaid principal amount hereof
shall not exceed the maximum rate allowable under such provisions of applicable
law.
The rights and benefits of the Company hereunder shall inure to the
benefit of its successors and assigns. This Note shall be construed and
interpreted in accordance with the laws of the State of Delaware. Except as
otherwise provided in this Note, any dispute arising under this Note shall be
resolved in accordance with the terms and procedures set forth in Section 14 of
the Employment Agreement.
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Daniel H. Schulman