EXHIBIT 10.19
PROMISSORY NOTE AND STOCK PLEDGE AGREEMENT
$244,200.00 August 31, 2001
FOR VALUE RECEIVED, the undersigned, Xxxxxxx X. Xxxx, an individual
("Maker") promises to pay to the order of Orbitz, Inc. ("Payee") the principal
sum of Two Hundred Forty-Four Thousand Two Hundred Dollars ($244,200.00) plus
interest at the rate specified below. The unpaid principal balance outstanding
shall bear interest at an annual rate equal to the applicable Federal Rate,
which interest shall be: (a) adjusted and compounded on a semi-annual basis and
(b) due and payable as provided below.
Maker agrees to pay the entire principal amount hereunder, together with any
then accrued but unpaid interest thereon, within ten (10) days following the
earlier of (a) the date on which Maker ceases, for any reason, to be employed by
Payee or (b) the date on which Maker sells all, or any portion, of the Shares
(as defined below), which for purposes hereof shall include, but not be limited
to, a Change of Control (as defined in that certain Employment Agreement by and
between Maker and Payee. Interest hereon shall be calculated on the basis of a
365 day year and shall be due and payable on each anniversary of the date hereof
until the unpaid principal amount is paid in full.
The entire unpaid balance of the principal amount, together with interest
accrued thereon, immediately shall become due and payable in full, without
notice or demand, upon the occurrence of any of the following events: (i) the
filing of a petition in bankruptcy or reorganization (A) by Maker under any law
of the United States or any state for the relief of debtors, or (B) against
Maker by any creditor of Maker, (ii) the application for, or appointment of, a
receiver for the property of, or the offering of a composition or extension to
creditors by, or the making or attempted making of an assignment for the benefit
of creditors by, Maker, or (iii) the failure of Maker to make any principal or
interest payment required hereunder within ten (10) calendar days after such
payment is due.
Maker's payment obligations hereunder shall be secured by a pledge of two
hundred and fifty thousand (250,000) shares of the common stock of Payee (the
"Shares"). Maker hereby grants a first priority security interest in, and
pledges, the Shares and all proceeds thereon (the pledged Shares, together with
the property described in the next paragraph of this Promissory Note and Stock
Pledge Agreement, and all proceeds of the foregoing, being referred to as the
"Pledged Collateral") to Payee to secure the satisfaction by Maker of all its
obligations to Payee under this Promissory Note and Stock Pledge Agreement;
provided, however, that unless and until Maker defaults on an obligation
hereunder, Maker shall be entitled to all cash dividends and cash distributions
with respect to the pledged Shares, free and clear of the security interest
granted hereby. This pledge shall be governed by all applicable provisions of,
and Payee shall have all rights and remedies with respect to the Pledged
Collateral of a secured party under, the Uniform Commercial Code as in effect in
the State of Illinois. Concurrently with the delivery of this Promissory Note
and Stock Pledge Agreement to Payee, Maker has delivered to Payee
the certificates representing the Shares pledged hereby, together with a stock
power therefore duly executed by Maker in blank. Maker agrees to deliver to
Payee such other documents of transfer as Payee may from time to time request to
enable Payee to transfer the pledged Shares into its name or the name of its
nominee and to perfect Payee's security interest in the Pledged Collateral under
applicable laws. Maker agrees that he will not (i) sell or otherwise dispose of,
or grant any option with respect to, any of the Pledged Collateral without the
prior written consent of Payee or (ii) create or permit to exist any lien upon
or with respect to any of the Pledged Collateral, except for the security
interest granted hereby. Notwithstanding the foregoing, Maker shall be entitled
to arrange with Payee for a sale by Maker of pledged Shares, free of the
security interest granted hereby, provided that (A) such sale is permitted
pursuant to the Restricted Stock Agreement between Maker and Payee which covers
the pledged Shares and (B) Maker directs that the proceeds of such sale first be
used to satisfy his obligations pursuant to the first paragraph of this
Promissory Note and Stock Pledge Agreement and makes such additional agreements
to satisfy such obligations in full as may be required by Payee.
In the event that, during the term of this Promissory Note and Stock Pledge
Agreement, any stock dividend, reclassification, readjustment or other change is
declared or made in the capital structure of Payee, then Payee shall have a
security interest in all securities (whether shares of Common Stock or other
securities) issued to or acquired by Maker by reason of such event, and such
securities shall become part of the Pledged Collateral.
During the term of this Promissory Note and Stock Pledge Agreement and so long
as the Pledged Collateral is owned by Maker, Maker shall have the right to vote
the pledged Shares and exercise any voting rights pertaining to such Pledged
Collateral, and to give consents, ratifications and waivers with respect
thereto, for all purposes.
Maker hereby acknowledges that Payee's right to recover amounts payable
hereunder shall not be limited to the Pledged Collateral and that Payee shall
have full recourse against any other assets of Maker. If for any reason Maker
fails to pay the full amount due hereunder, Maker's maximum personal liability
shall be an amount equal to 100% of the principal amount, together with accrued
interest thereon.
All or any portion of the principal amount evidenced by this Promissory Note and
Stock Pledge Agreement may be prepaid at any time without premium or penalty.
The obligations of Maker, and the rights of Payee, under this Promissory Note
and Stock Pledge Agreement shall be absolute and shall not be subject to any
counterclaim, set-off, deduction or defense.
Maker hereby waives presentment, notice of dishonor and protest in respect
hereof.
In the event of default under this Promissory Note and Stock Pledge Agreement,
Payee shall have all rights and remedies provided at law and in equity. All
costs and expenses of collection, including attorneys' fees, shall be added to
and become part of the principal
amount of this Promissory Note and Stock Pledge Agreement and shall be
collectible as part of such principal amount.
No interest or other amount shall be payable in excess of the maximum
permissible rate under applicable law, and any interest or other amount which is
paid in excess of such maximum rate shall be deemed to be a payment of principal
hereunder.
This Promissory Note and Stock Pledge Agreement may not be changed, modified or
terminated, except by an agreement in writing signed by the party sought to be
charged.
This Promissory Note and Stock Pledge Agreement shall be governed by, and
construed in accordance with, the laws of the State of Illinois, without giving
effect to the principles of conflict of laws thereof. If any term or provision
of the Promissory Note and Stock Pledge Agreement shall be held invalid, illegal
or unenforceable, the validity of all other terms and provisions hereof shall in
no way be affected thereby.
This Promissory Note and Stock Pledge Agreement shall be binding upon the
successors and assigns of Maker and shall inure to the benefit of Payee and its
successors and assigns.
Maker:
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
Witnesses:
/s/ Xxxx Xxxxxxxxxxx
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Xxxx Xxxxxxxxxxx
/s/ Xxxx Xxxx
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Xxxx Xxxx
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer
to ____________________, 250,000 shares of the Common Stock $0.001 par value per
share, of Orbitz, Inc., a Delaware corporation, represented in book entry form,
standing in the name of the undersigned on the books of said corporation. The
undersigned does hereby irrevocably constitute and appoint _____________________
attorney to transfer the shares of said corporation, with full power of
substitution in the premises.
Dated:_______________________
/s/ Xxxxxxx X. Xxxx
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Print Name:
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