Exhibit 2.1
Execution Copy
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of October 3, 1999 (this
"Agreement"), by and among Sabre Inc., a Delaware corporation ("Sabre"),
Travelocity Holdings, Inc., a Delaware corporation ("Travelocity Holdings")
and a wholly owned subsidiary of Sabre, Xxxxxxxxxxx.xxx Inc., a Delaware
corporation and a wholly owned subsidiary of Travelocity Holdings
("Xxxxxxxxxxx.xxx"), and Preview Travel, Inc., a Delaware corporation
("Preview"). Sabre, Travelocity Holdings, Xxxxxxxxxxx.xxx and Preview are
sometimes referred to herein individually as a "Party," and collectively as
the "Parties."
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Sabre and Preview have
determined to combine Sabre's business of providing consumer-direct travel
content and travel reservation services through an internet web site or web
sites, online, wireless, cable or other consumer-direct services as existing
on the date hereof and reflected in the Sabre Contribution Agreements (the
"Travelocity Business") and Preview's business pursuant to a series of
transactions outlined in this Agreement into a new entity, Xxxxxxxxxxx.xxx
LP, a Delaware limited partnership ("Xxxxxxxxxxx.xxx LP"); WHEREAS, in
connection with the foregoing combination, the Parties intend that Preview
shall merge with and into Xxxxxxxxxxx.xxx;
WHEREAS, concurrently with the execution and delivery of this Agreement
and as an inducement to the willingness of Sabre, Travelocity Holdings and
Xxxxxxxxxxx.xxx to enter into this Agreement, certain holders of shares of
common stock, par value $.001, of Preview ("Preview Common Stock") have each
entered into Voting Agreements dated as of the date hereof pursuant to which
such holders have agreed to vote their shares of Preview Common Stock in the
manner set forth therein;
WHEREAS, the Boards of Directors of Preview and Xxxxxxxxxxx.xxx have
each approved this Agreement and deem it advisable and in the best interests
of their respective stockholders to consummate the Merger on the terms and
conditions set forth in this Agreement in accordance with the Delaware
General Corporation Law, as amended (the "DGCL"); and
WHEREAS, it is intended that, for federal income tax purposes, the
Merger will qualify as a reorganization under Section 368 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the rules and regulations
promulgated thereunder.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained in this Agreement, and intending to be
legally bound hereby, the Parties agree as follows:
ARTICLE I
THE TRANSACTIONS
Section 1.1 The Merger. At the Effective Time and subject to and
upon the terms and conditions of this Agreement and in accordance with the
DGCL, Preview shall be merged with and into Xxxxxxxxxxx.xxx and the separate
corporate existence of Preview shall cease. Xxxxxxxxxxx.xxx shall continue
as the surviving corporation (sometimes referred to herein as the "Surviving
Corporation") in the Merger, and shall continue to be governed by the laws of
the State of Delaware. The Merger shall have the effects specified in the
DGCL.
Section 1.2 Assignments to New Travelocity and Xxxxxxxxxxx.xxx.
(a) Immediately prior to the Effective Time, each of Sabre and Travelocity
Holdings shall take such action or actions as is necessary to cause, effect
and consummate the transfers, contributions, assignments, conveyances and
other transactions that may be required to be accomplished, effected or
consummated by Sabre and Travelocity Holdings or any of their respective
Subsidiaries or affiliates in order to separate and divide the existing
business of Sabre so that the Travelocity Business is owned directly by
Xxxxxxxxxxx.xxx LP (the "Sabre Assignments"), including, without limitation,
pursuant to the Xxxx of Contribution, Assignment and Assumption Agreement by
and between Sabre and Xxxxxxxxxxx.xxx LP, substantially in the form of
Exhibit 1.2(a)(i), and pursuant to the Xxxx of Contribution, Assignment and
Assumption Agreement by and between TSGL Holding, Inc., an affiliate of
Sabre, and Xxxxxxxxxxx.xxx LP, substantially in the form of Exhibit
1.2(a)(ii) (collectively, the "Sabre Contribution Agreements"). The Parties
agree that any one or more of the Sabre Assignments may be modified,
supplemented or eliminated; provided that such modification, supplement or
elimination is necessary or appropriate to divide the existing business of
Sabre so that the Travelocity Business shall be owned directly by
Xxxxxxxxxxx.xxx LP and does not individually and in the aggregate affect the
business of Xxxxxxxxxxx.xxx LP (other than to a de minimis extent).
(b) Immediately after the Effective Time, the Surviving
Corporation shall take such action or actions as is necessary to cause,
effect and consummate the transfers, contributions, assignments, conveyances
and other transactions that may be required to be accomplished, effected or
consummated by the Surviving Corporation or its Subsidiaries or affiliates so
that Preview's business is owned directly by Xxxxxxxxxxx.xxx LP (the "Preview
Assignments"), including without limitation, pursuant to the Xxxx of
Contribution, Assignment and Assumption Agreement by and between
Xxxxxxxxxxx.xxx and Xxxxxxxxxxx.xxx LP substantially in the form of Exhibit
1.2(b) (the "Preview Contribution Agreement").
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(c) Immediately after the Effective Time, Travelocity Holdings,
Sabre, Xxxxxxxxxxx.xxx and certain of their affiliates shall enter into the
Amended and Restated Agreement of Limited Partnership of Xxxxxxxxxxx.xxx LP,
substantially in the form of Exhibit 1.2(c)(i) (the "Limited Partnership
Agreement") and Travelocity Holdings and Xxxxxxxxxxx.xxx LP shall enter into
the Management Services Agreement, substantially in the form of
Exhibit 1.2(c)(ii) (the "Management Services Agreement").
(d) Immediately prior to the Effective Time, Sabre shall enter
into the following intercompany agreements with Xxxxxxxxxxx.xxx LP or
Xxxxxxxxxxx.xxx, as the case may be: (i) an Access Agreement, substantially
in accordance with the terms set forth on Exhibit 1.2(d)(i), (ii) a
Technology Services Agreement, substantially in accordance with the terms set
forth on Exhibit 1.2(d)(ii), (iii) an Intellectual Property Agreement,
substantially in accordance with the terms set forth on Exhibit 1.2(d)(iii),
(iv) an Administrative Services Agreement, substantially in accordance with
the terms set forth in Exhibit 1.2(d)(iv), (v) a Facility/Leasing Agreement,
substantially in accordance with the terms set forth in Exhibit 1.2(d)(v),
(vi) a Cash and Short-Term Investments Agreement, substantially in accordance
with the terms set forth in Exhibit 1.2(d)(vi), (vii) a Non-Competition
Agreement, substantially in accordance with the terms set forth on Exhibit
1.2(d)(vii), (viii) an Option Agreement substantially in the form of Exhibit
1.2(d)(viii), and (ix) a Registration Rights Agreement substantially in the
form of Exhibit 1.2(d)(ix) (collectively, and together with the Sabre
Contribution Agreements, the Preview Contribution Agreement, the Management
Services Agreement and the Limited Partnership Agreement, the "Ancillary
Agreements").
Section 1.3 The Closing; Effective Time. (a) The closing of the
Merger (the "Closing") shall take place (i) at the offices of Fried, Frank,
Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, at
10:00 A.M. local time, on the second Business Day following the date on which
the last to be satisfied or waived of the conditions set forth in Article VII
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the satisfaction or, where permitted, waiver of those
conditions) shall be satisfied or waived in accordance with this Agreement or
(ii) at such other place, time and/or date as Sabre and Preview shall agree
(the date of the Closing, the "Closing Date").
(b) On the Closing Date, Xxxxxxxxxxx.xxx and Preview shall cause a
certificate of merger (the "Certificate of Merger") in respect of the Merger
to be properly executed and filed with the Secretary of State of the State of
Delaware. The Merger shall become effective at the time at which the
Certificate of Merger shall have been duly filed with the Secretary of State
of the State of Delaware or at such later time reflected in the Certificate
of Merger as shall have been agreed by Sabre and Preview in accordance with
the DGCL (the time that the Merger becomes effective, the "Effective Time").
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Section 1.4 Certificate of Incorporation; Bylaws; Listing Symbol.
Unless otherwise agreed by Sabre and Preview prior to the Closing, at the
Effective Time:
(a) The certificate of incorporation of Xxxxxxxxxxx.xxx shall be
amended to read in its entirety as set forth in Exhibit 1.4(a) and, as so
amended, shall be the certificate of incorporation of the Surviving
Corporation, until duly amended in accordance with applicable law (the
"Xxxxxxxxxxx.xxx Certificate").
(b) The bylaws of Xxxxxxxxxxx.xxx shall be substantially in the
form set forth in Exhibit 1.4(b) and shall be the Bylaws of the Surviving
Corporation, until duly amended in accordance with applicable law.
(c) Xxxxxxxxxxx.xxx shall use its reasonable best efforts to
obtain TVLY as its listing symbol on the Nasdaq.
ARTICLE II
THE MERGER
Section 2.1 Conversion of Common Stock of Preview and Exchange of
Certificates. (a) At the Effective Time, by virtue of the Merger and
without any action on the part of any Person:
(i) each share of Preview Common Stock issued and held in
Preview's treasury at the Effective Time shall cease to be outstanding and
shall be canceled and retired without payment of any consideration therefore;
(ii) each share of Preview Common Stock issued and outstanding
immediately prior to the Effective Time, and all rights in respect thereof,
shall be converted into one share of Common Stock, $.001 par value, of
Xxxxxxxxxxx.xxx (the "Xxxxxxxxxxx.xxx Common Stock");
(iii) each share of Class A Common Stock, $.001 par value, of
Xxxxxxxxxxx.xxx ("Xxxxxxxxxxx.xxx Class A Common Stock") issued and
outstanding immediately prior to the Effective Time, and all rights in
respect thereof, shall be converted into the number of shares of Series A
Preferred Stock, $.001 par value, of Xxxxxxxxxxx.xxx (the "Xxxxxxxxxxx.xxx
Series A Preferred Stock") equal to (x) 33,000,000, divided by (y) the number
of shares of Xxxxxxxxxxx.xxx Class A Common Stock issued and outstanding
immediately prior to the Effective Time; and
(iv) each share of Class B Common Stock, $.001 par value, of
Xxxxxxxxxxx.xxx ("Xxxxxxxxxxx.xxx Class B Common Stock") issued and
outstanding immediately prior to the Effective Time, and all rights in
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respect thereof, shall be converted into one share of Xxxxxxxxxxx.xxx Common
Stock.
(b) As a result of the Merger and without any action on the part
of the holder thereof, all shares of Preview Common Stock shall cease to be
outstanding and shall be canceled and retired and shall cease to exist, and
each holder of a certificate (a "Certificate") representing any shares of
Preview Common Stock shall thereafter cease to have any rights with respect
thereto, except the right to receive, without interest, Xxxxxxxxxxx.xxx
Common Stock in accordance with Section 2.2(a) upon the surrender of such
certificates.
Section 2.2 Exchange of Certificates Representing Preview Common
Stock. (a) As of the Effective Time, Xxxxxxxxxxx.xxx shall deposit, or
shall cause to be deposited, with an exchange agent mutually acceptable to
Preview and Sabre (the "Exchange Agent"), for the benefit of the holders of
shares of Preview Common Stock, for exchange in accordance with this Article
II, certificates representing the shares of Xxxxxxxxxxx.xxx Common Stock
(such certificates for shares of Xxxxxxxxxxx.xxx Common Stock, together with
any dividends or distributions with respect thereto, being hereinafter
referred to as the "Exchange Fund") to be issued pursuant to Section 2.2 in
exchange for outstanding shares of Preview Common Stock.
(b) Promptly after the Effective Time, Xxxxxxxxxxx.xxx shall cause
the Exchange Agent to mail to each Preview holder of record of a Certificate
or Certificates (i) a letter of transmittal which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall be in
such form and have such other provisions as Xxxxxxxxxxx.xxx may reasonably
specify and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for certificates representing shares of
Xxxxxxxxxxx.xxx Common Stock. Upon surrender of a Certificate for
cancellation to the Exchange Agent together with such letter of transmittal,
duly executed and completed in accordance with the instructions thereto, the
holder of such Certificate shall be entitled to receive in exchange therefor
(x) a certificate representing the number of shares of Xxxxxxxxxxx.xxx Common
Stock equal to the number of shares of Preview Common Stock represented by
such Certificate and (y) a check representing the amount of unpaid dividends
and distributions, if any, which such holder has the right to receive in
respect of the Certificate surrendered pursuant to the provisions of this
Article II and the Certificate so surrendered shall forthwith be canceled.
No interest will be paid or accrued on the unpaid dividends and
distributions, if any, payable to holders of Certificates. In the event of a
transfer of ownership of Preview Common Stock which is not registered in the
transfer records of Preview, a certificate representing the proper number of
shares of Xxxxxxxxxxx.xxx Common Stock may be issued to such a transferee if
the Certificate representing such Preview Common Stock is presented to the
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Exchange Agent, accompanied by all documents required to evidence and effect
such transfer and to evidence that any applicable stock transfer taxes have
been paid. Until delivered and exchanged for Xxxxxxxxxxx.xxx Common Stock as
contemplated by this Section 2.2, each Certificate representing Preview
Common Stock shall be deemed at any time after the Effective Time to
represent only the right to receive upon such delivery the Certificate
representing shares of Xxxxxxxxxxx.xxx Common Stock as contemplated by
Section 2.2.
(c) Notwithstanding any other provisions of this Agreement, no
dividends or other distributions on Xxxxxxxxxxx.xxx Common Stock shall be
paid with respect to any shares of Preview Common Stock represented by a
Certificate until such Certificate is surrendered for exchange as provided
herein. Subject to the effect of applicable laws, following surrender of any
such Certificate, there shall be paid to the holder of the certificates
representing whole shares of Xxxxxxxxxxx.xxx Common Stock issued in exchange
therefor, without interest, (i) at the time of such surrender, the amount of
dividends or other distributions with a record date after the Effective Time
theretofore payable with respect to such Xxxxxxxxxxx.xxx Common Stock and not
paid, and (ii) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Effective Time but prior to
surrender and a payment date subsequent to surrender payable with respect to
such Xxxxxxxxxxx.xxx Common Stock.
(d) After the Effective Time, there shall be no transfers on the
stock transfer books of Preview of the shares of Preview Common Stock which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates representing Preview Common Stock are presented
to Xxxxxxxxxxx.xxx, they shall be canceled and exchanged for certificates for
shares of Xxxxxxxxxxx.xxx Common Stock pursuant to this Agreement in
accordance with the procedures set forth in this Article II.
(e) Any portion of the Exchange Fund that remains unclaimed by the
former stockholders of Preview one year after the Effective Time shall be
delivered to Xxxxxxxxxxx.xxx. Any former stockholders of Preview who have
not theretofore complied with this Article II shall thereafter look only to
Xxxxxxxxxxx.xxx for payment of their shares of Xxxxxxxxxxx.xxx Common Stock,
and unpaid dividends and distributions on the Xxxxxxxxxxx.xxx Common Stock
deliverable in respect of each share of Preview Common Stock such stockholder
holds as determined pursuant to this Agreement, in each case, without any
interest thereon.
(f) None of Xxxxxxxxxxx.xxx, Preview, the Exchange Agent or any
other person shall be liable to any former holder of shares of Preview Common
Stock for any amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
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(g) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
Xxxxxxxxxxx.xxx, the posting by such person of a bond in such reasonable
amount as Xxxxxxxxxxx.xxx may direct as indemnity against any claim that may
be made against it with respect to such Certificate, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed Certificate the shares
of Xxxxxxxxxxx.xxx Common Stock and unpaid dividends and distributions on
shares of Xxxxxxxxxxx.xxx Common Stock deliverable in respect thereof
pursuant to this Agreement.
Section 2.3 Stock Options and Equity Awards. (a) At the Effective
Time, each outstanding employee, director or consultant option to purchase
shares of Preview Common Stock (a "Preview Stock Option") granted under
Preview's Stock Option Plans or otherwise, whether vested or not vested,
shall be assumed by Xxxxxxxxxxx.xxx. As of and after the Effective Time
(i) each Preview Stock Option then outstanding shall be converted into a
stock option to acquire the number of shares of Xxxxxxxxxxx.xxx Common Stock
equal to the number of shares of Preview Common Stock subject to such Preview
Stock Option immediately prior to the Effective Time, and (ii) the exercise
price per share of Xxxxxxxxxxx.xxx Common Stock subject to any such converted
Preview Stock Option shall be an amount equal to the exercise price per share
of Preview Common Stock subject to the underlying Preview Stock Option
immediately prior to the Effective Time. Other than as provided above, as of
and after the Effective Time, each Xxxxxxxxxxx.xxx stock option that had been
a Preview Stock Option immediately prior to the Effective Time shall be
subject to the same terms and conditions as in effect immediately prior to
the Effective Time, including the timing of the vesting of such options.
(b) At the Effective Time, each outstanding employee, director or
consultant option to purchase shares of Sabre Class A Common Stock $.01 par
value, (a "Sabre Stock Option") granted under Sabre's Stock Option Plans or
otherwise and set forth on Schedule 2.3(b), whether vested or not vested,
shall be assumed by Xxxxxxxxxxx.xxx as provided in this Section 2.3(b). As
of and after the Effective Time (i) each Sabre Stock Option then outstanding,
the holder of which has consented to such conversion, shall be converted into
a stock option to acquire the number (rounded down to the nearest whole
number) of shares of Xxxxxxxxxxx.xxx Common Stock determined by multiplying
(x) the number of shares of Sabre Class A Common Stock subject to such Sabre
Stock Option immediately prior to the Effective Time by (y) the Option
Exchange Ratio, and (ii) the exercise price per share of Xxxxxxxxxxx.xxx
Common Stock subject to any such converted Sabre Stock Option shall be an
amount (rounded down to the nearest one-hundredth of a cent) equal to (x) the
exercise price per share of Sabre Class A Common Stock subject to the
underlying Sabre Stock Option immediately prior to the Effective Time,
divided by (y) the Option Exchange Ratio. Other than as provided above, as
of and after the Effective Time, each Xxxxxxxxxxx.xxx stock option that had
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been a Sabre Stock Option immediately prior to the Effective Time shall be
subject to the same terms and conditions as in effect immediately prior to
the Effective Time. For purposes of this Section 2.3(b), the "Option
Exchange Ratio" shall equal (x) the average closing price per share of the
Sabre Class A Common Stock for the ten (10) trading days ending on the
trading day immediately prior to the date hereof, divided by (y) the average
closing price per share of the Preview Common Stock for the ten (10) trading
days ending on the trading day immediately prior to the date hereof.
(c) At the Effective Time, each outstanding option to purchase
shares of Xxxxxxxxxxx.xxx Class B Common Stock shall be converted into an
option to acquire an equal number of shares of Xxxxxxxxxxx.xxx Common Stock,
subject to the same terms and conditions as in effect immediately prior to
the Effective Time. (d) Xxxxxxxxxxx.xxx shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of
Xxxxxxxxxxx.xxx Common Stock for delivery upon exercise of Preview Stock
Options and Sabre Stock Options and settlement of other stock-based awards of
Preview at and after the Effective Time.
(e) On or as soon as practicable after the Effective Time,
Xxxxxxxxxxx.xxx shall file with the SEC a registration statement on an
appropriate form under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Xxxxxxxxxxx.xxx Common Stock subject
to Preview Stock Options and Sabre Stock Options and other stock-based awards
of Preview, and shall use its reasonable best efforts to maintain the current
status of the prospectus contained therein, as well as comply with any
applicable Blue Sky Laws, for so long as such options or other stock-based
awards remain outstanding.
Section 2.4 Adjustments. If at any time during the period between
the date of this Agreement and the Effective Time, any change in the
outstanding shares of capital stock of Preview shall occur by reason of any
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, or any similar transaction, or any stock dividend
thereon with a record date during such period, the number of shares of
Xxxxxxxxxxx.xxx Series A Preferred Stock or Xxxxxxxxxxx.xxx Common Stock (or
options to acquire such shares) issuable pursuant to this Agreement shall be
appropriately adjusted to provide the holders of shares of Preview Common
Stock the same economic effect as contemplated by this Agreement prior to
such event.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PREVIEW
Except as set forth in the Preview Disclosure Schedule delivered by
Preview to Sabre prior to the execution of this Agreement (the "Preview
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Disclosure Schedule"), Preview represents and warrants to Sabre, Travelocity
Holdings and Xxxxxxxxxxx.xxx as follows:
Section 3.1 Organization, Standing and Power. Preview and each of
its Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, has all requisite power and authority to own, lease and operate
its properties and to carry on its business as now being conducted and is
duly qualified and in good standing to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of its
properties makes such qualification necessary other than in such
jurisdictions where the failure so to qualify would not, either individually
or in the aggregate, have a Material Adverse Effect on Preview. The copies of
the certificate of incorporation and by-laws of Preview which were previously
furnished to Sabre are true, complete and correct copies of such documents as
in effect on the date of this Agreement.
Section 3.2 Capital Structure. (a) As of October 3, 1999, the
authorized capital stock of Preview consisted of (A) 50,000,000 shares of
Common Stock, of which 13,935,243 shares were outstanding and
(B) 5,000,000 shares of preferred stock, of which 100,000 shares of Series A
Participating Preferred Stock have been designated and reserved for issuance
upon exercise of the rights (the "Rights") distributed to the holders of
Preview Common Stock pursuant to the Preferred Shares Rights Agreement dated
as of October 29, 1998 between Preview and U.S. Stock Transfer Corporation,
as rights agent, as amended (the "Rights Agreement"). Since October 3, 1999
to the date of this Agreement, there have been no issuances of shares of the
capital stock of Preview or any other securities of Preview other than
issuances of shares (and accompanying Rights) pursuant to options or rights
outstanding as of October 3, 1999 under the Preview Benefit Plans. All
issued and outstanding shares of the capital stock of Preview are duly
authorized, validly issued, fully paid and nonassessable, and no class of
capital stock is entitled to preemptive rights. There were outstanding as of
October 3, 1999 no options, warrants or other rights to acquire capital stock
from Preview other than (w) the Rights, (x) options representing in the
aggregate the right to purchase 3,089,295 shares of Preview Common Stock at a
weighted average exercise price of $17.27 per share under Preview's
1988 Stock Option Plan, Preview's 1997 Stock Option Plan and Preview's 1997
Directors' Stock Option Plan (collectively, the "Preview Stock Option
Plans"), and (y) rights to purchase shares of Preview Common Stock under the
Preview 1997 Employee Stock Purchase Plan (the "ESPP"). No options or
warrants or other rights to acquire capital stock from Preview have been
issued or granted since October 3, 1999, other than (i) the associated Rights
issued with the shares issued as described above, (ii) options to purchase no
more than 100,000 shares of Preview Common Stock granted in the ordinary
course of business to non-executive employees and having an exercise price
not less than the current market price of Preview Common Stock on the date of
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grant and (iii) options to purchase up to that number of shares of Preview
Common Stock equal to the number of shares subject to outstanding options
that expire unexercised after the date hereof, provided that such options are
granted with the consent of Sabre and have an exercise price not less than
the current market price of Preview Common Stock on the date of grant.
(b) As of the date of this Agreement, no bonds, debentures, notes
or other indebtedness of Preview having the right to vote on any matters on
which stockholders may vote ("Preview Voting Debt") are issued or
outstanding.
(c) All of the outstanding shares of capital stock and other
equity securities of Preview's Subsidiaries have been duly authorized,
validly issued and are fully paid and nonassessable and are owned, directly
or indirectly, by Preview, free and clear of all pledges and security
interests.
(d) Except as otherwise set forth in this Section 3.2, as of the
date of this Agreement, there are no securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any kind to
which Preview or any of its Subsidiaries is a party or by which any of them
is bound obligating Preview or any of its Subsidiaries to issue, deliver,
register or sell, or cause to be issued, delivered, registered or sold,
additional shares of capital stock or other voting securities of Preview or
any of its Subsidiaries or obligating Preview or any of its Subsidiaries to
issue, grant, extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. As of the date of
this Agreement, there are no outstanding obligations of Preview or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital
stock of Preview or any of its Subsidiaries. There are no voting trusts,
proxies or other agreements or understandings to which Preview is a party
with respect to the voting of capital stock of Preview.
Section 3.3 Authority; No Conflicts. (a) Preview has all requisite
corporate power and authority to enter into this Agreement and the Ancillary
Agreements to which Preview will be a party and to consummate the
transactions contemplated hereby and thereby, subject in the case of the
consummation of the Merger to the approval of this Agreement and the Merger
by the Required Preview Vote. The execution and delivery of this Agreement
and the Ancillary Agreements to which Preview will be a party and the
consummation of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action on the part of Preview,
subject in the case of the consummation of the Merger to the approval of this
Agreement and the Merger by the Required Preview Vote. This Agreement has
been, and the Ancillary Agreements to which Preview will be a party will be,
duly executed and delivered by Preview and constitute a valid and binding
agreement of Preview, enforceable against it in accordance with its terms,
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except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally or by general equity principles.
(b) The execution and delivery of this Agreement does not and the
execution and delivery of the Ancillary Agreements to which Preview will be a
party will not, and the consummation of the Merger and the other transactions
contemplated hereby and thereby will not, conflict with, or result in any
violation of, or constitute a default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination, amendment,
cancellation or acceleration of any obligation or the loss of a material
benefit under, or the creation of a lien, pledge, security interest, charge
or other encumbrance on any assets (any such conflict, violation, default,
right of termination, amendment, cancellation or acceleration, loss or
creation, a "Violation") pursuant to: (A) any provision of the certificate
of incorporation or by-laws of Preview or any Subsidiary of Preview, or
(B) except as would not have a Material Adverse Effect on Preview and subject
to obtaining or making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in paragraph (c) below,
any loan, credit agreement, note, mortgage, bond, indenture, lease, benefit
plan or other agreement, obligation, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Preview or any Subsidiary of Preview or their
respective properties or assets.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any supranational, national, state,
municipal or local government, any instrumentality, subdivision, court,
administrative agency or commission or other authority thereof, or any
quasi-governmental or private body exercising any regulatory, taxing,
importing or other governmental or quasi-governmental authority, (a
"Governmental Entity"), is required by or with respect to Preview or any
Subsidiary of Preview in connection with the execution and delivery of this
Agreement and the Ancillary Agreements to which Preview will be a party by
Preview or the consummation of the Merger and the other transactions
contemplated hereby or thereby, except for those required under or in
relation to (i) the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (ii) state securities or "blue sky" laws (the "Blue
Sky Laws"), (iii) the Securities Act, (iv) the Securities Exchange Act of
1934, as amended (the "Exchange Act"), (v) the DGCL with respect to the
filing of the Delaware Certificate of Merger, (vi) rules and regulations of
Nasdaq, and (vii) such consents, approvals, orders, authorizations,
registrations, declarations and filings the failure of which to make or
obtain would not have a Material Adverse Effect on Preview.
Section 3.4 Reports and Financial Statements. Preview has filed all
required reports, schedules, forms, statements and other documents required
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to be filed by it with the Securities and Exchange Commission (the "SEC")
since November 19, 1997 (collectively, including all exhibits thereto, the
"Preview SEC Reports"). No Subsidiary of Preview is required to file any
form, report or other document with the SEC. None of the Preview SEC
Reports, as of their respective dates (and, if amended or superseded by a
filing prior to the date of this Agreement or the Closing Date, then on the
date of such filing), contained or will contain any untrue statement of a
material fact or omitted or will omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the
financial statements of Preview and its Subsidiaries (including the related
notes) included in the Preview SEC Reports present fairly, in all material
respects, the consolidated financial position and consolidated results of
operations and cash flows of Preview and its Subsidiaries as of the
respective dates or for the respective periods set forth therein, all in
conformity with U.S. GAAP consistently applied during the periods involved
except as otherwise noted therein, and subject, in the case of the unaudited
interim financial statements, to normal and recurring year-end adjustments
and the absence of notes. All of such Preview SEC Reports, as of their
respective dates (and as of the date of any amendment to the respective
Preview SEC Report), complied as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and the
rules and regulations promulgated thereunder.
Section 3.5 Information Supplied. (a) None of the information
supplied or to be supplied by Preview for inclusion or incorporation by
reference in (i) the Form S-4 will, at the time the Form S-4 is filed with
the SEC, at any time it is amended or supplemented or at the time it becomes
effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and
(ii) the Proxy Statement/Prospectus will, on the date it is first mailed to
Preview stockholders or at the time of the Preview Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Each of the financial statements of Preview and its
Subsidiaries (including the related notes) included in the Proxy
Statement/Prospectus will present fairly, in all material respects, the
consolidated financial position and consolidated results of operations and
cash flows of Preview and its Subsidiaries as of the respective dates or for
the respective periods set forth therein, all in conformity with U.S. GAAP
consistently applied during the periods involved except as otherwise noted
therein, and subject, in the case of the unaudited interim financial
statements, to normal and recurring year-end adjustments and the absence of
notes. The Form S-4 will comply as to form in all material respects with the
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requirements of the Exchange Act and the Securities Act and the rules and
regulations of the SEC thereunder.
(b) Notwithstanding the foregoing provisions of this Section 3.5,
no representation or warranty is made by Preview with respect to statements
made or incorporated by reference in the Proxy Statement/Prospectus based on
information supplied by Sabre, Travelocity Holdings or Xxxxxxxxxxx.xxx for
inclusion or incorporation by reference therein.
Section 3.6 Vote Required; DGCL. (a) The affirmative vote of the
holders of a majority of the outstanding shares of Preview Common Stock (the
"Required Preview Vote"), is the only vote of the holders of any class or
series of Preview capital stock necessary to adopt this Agreement and approve
the transactions contemplated hereby.
(b) Neither the restrictions on business combinations set forth in
Section 203 of the DGCL nor similar restrictions imposed by any other state
takeover or similar statute or regulation apply to the Merger, this
Agreement, any Ancillary Agreement to which Preview will be a party or any of
the transactions contemplated hereby and thereby.
Section 3.7 Rights Agreement. The Board of Directors of Preview has
resolved to, and Preview promptly after the execution of this Agreement will,
take all action necessary to render the rights issued pursuant to the Rights
Agreement inapplicable to the Merger Agreement and the Ancillary Agreements
to which Preview will be a party and the other transactions contemplated
hereby and thereby and for the rights to expire as of the Effective Time.
Section 3.8 Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in connection
with any of the transactions contemplated by this Agreement, except Xxxxxxxxx
& Xxxxx LLC (the "Financial Advisor"), whose fees and expenses will be paid
by Preview in accordance with Preview's agreement with such firm, based upon
arrangements made by or on behalf of Preview and previously disclosed to
Sabre.
Section 3.9 Opinion of Financial Advisor. Preview has received the
opinion of the Financial Advisor, dated the date of this Agreement, to the
effect that, as of such date, the transactions contemplated by this Agreement
are fair, from a financial point of view, to the holders of Preview Common
Stock (the "Preview Fairness Opinion"), a copy of which opinion has been made
available to Sabre.
Section 3.10 Absence of Certain Changes. Except as disclosed in the
Preview SEC Reports filed prior to this date, (a) since the end of Preview's
fiscal year last ended, Preview and each of its Subsidiaries has conducted
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its business in all material respects in the ordinary and usual course of its
business consistent with past practice and there has not been any change,
development or combination of developments that, individually or in the
aggregate, has had or would reasonably be expected to have a Material Adverse
Effect on Preview and (b) since the end of Preview's fiscal year last ended
there has not been (i) any declaration, setting aside or payment of any
dividend or other distribution in respect of the capital stock of Preview;
(ii) any change by Preview to its accounting policies, practices or methods;
(iii) other than in the ordinary course of business consistent with past
practice, any material tax election made or changed, any material tax audit
settled or any amended material Tax Returns filed; (iv) any amendment or
change to the terms of any of its indebtedness material to Preview and its
Subsidiaries taken as a whole; (v) any incurrence of any material
indebtedness; (vi) any transfer, lease, license, sale, mortgage, pledge,
encumbrance or other disposition of assets or properties material to Preview
and its Subsidiaries taken as a whole; (vii) any material damage, destruction
or other casualty loss with respect to any asset or property owned, leased or
otherwise used by Preview or its Subsidiaries material to Preview and its
Subsidiaries taken as a whole, whether or not covered by insurance;
(viii) except (1) in the ordinary course of business consistent with past
practice for employees other than executive officers or directors, (2) as
required by applicable law, (3) for the issuance of options to purchase not
more than 100,000 shares of Preview Common Stock granted in the ordinary
course of business to non-executive employees and having an exercise price
not less than the current market price of Preview Common Stock on the date of
grant, (4) options to purchase up to that number of shares of Preview Common
Stock equal to the number of shares subject to outstanding options that
expire unexercised after the date hereof, provided that such options are
granted with the consent of Sabre, and have an exercise price not less than
the current market price of Preview Common Stock on the date of grant,
(5) for options to purchase 2,205,996 shares issued after the end of
Preview's fiscal year last ended and prior to the date hereof or (6) for the
acceleration of stock options in connection with a change of control in the
amounts and on the terms and conditions as described in the Preview
Disclosure Schedule (A) any execution, adoption or amendment of any agreement
or arrangement relating to severance or any employment or consulting
agreement with any officer, director or other key employee, or any amendment
to any Preview Benefit Plan or adoption or execution of any new employee
benefit plan for the benefit of any officer, director or other key employee
(including, without limitation, the Preview Benefit Plans referred to in
Section 3.13) or (B) any grant of any stock options or other equity related
award; or (ix) any agreement or commitment entered into with respect to any
of the foregoing.
Section 3.11 Litigation and Liabilities. (a) Except as disclosed in
the Preview SEC Reports filed prior to this date, there are no civil,
criminal or administrative actions, suits or claims, proceedings (including
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condemnation proceedings) or hearings or, to the knowledge of Preview,
investigations, pending or, to the knowledge of Preview, threatened against
Preview or any of its Subsidiaries or any of their respective properties and
assets, except for any of the foregoing which would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Preview.
(b) Neither Preview nor any of its Subsidiaries has any
liabilities (absolute, accrued, contingent or otherwise) the existence of
which would, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on Preview except (i) liabilities described in the
Preview SEC Reports filed with the SEC prior to the date hereof or reflected
on Preview's consolidated balance sheet (and related notes thereto) as of the
end of its most recently completed fiscal year filed in the Preview SEC
Reports or (ii) liabilities of the type permitted to be incurred pursuant to
Section 5.1.
Section 3.12 No Violation of Law; Permits. The business of Preview
and each of its Subsidiaries is being conducted in accordance with all, and
not in violation of any, applicable statutes, rules, ordinances, regulations,
judgments, orders or decrees of all Governmental Entities, and all permits,
franchises, licenses, authorizations or consents granted by each Governmental
Entity, and Preview and each of its Subsidiaries has obtained all permits,
franchises, licenses, authorizations or consents necessary for the conduct of
its business, except, in each case, as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
Preview. Neither Preview nor any of its Subsidiaries is subject to any cease
and desist or other order, judgment, injunction or decree issued by, or is a
party to any written agreement, consent agreement or memorandum of
understanding with, is a party to any commitment letter or similar
undertaking to, is subject to any order or directive by, or has adopted any
board resolutions at the request of, any Governmental Entity that materially
restricts the conduct of its business (whether the type of business, the
location or otherwise) and which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on Preview, nor has
Preview been advised in writing that any Governmental Entity has proposed
issuing or requesting any of the foregoing.
Section 3.13 Employee Matters; ERISA. (a) Set forth in the Preview
Disclosure Schedule is a complete list of each Preview Benefit Plan and each
Preview Multiemployer Plan. The term "Preview Benefit Plan" shall mean
(i) each plan, program, policy, contract or agreement providing for
compensation, deferred compensation, severance, termination pay, performance
awards, stock or stock-related awards, fringe benefits or other employee
benefits of any kind, including, without limitation, any "employee benefit
plan," within the meaning of Section 3(3) of ERISA but excluding any
"multiemployer plan" within the meaning of Sections 3(37) or 4001(a)(3) of
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ERISA, and (ii) each employment, severance, "change of control," consulting,
non-compete, confidentiality, or similar agreement or contract, in each case,
with respect to which Preview or any Subsidiary of Preview has or may have
any liability (accrued, contingent or otherwise). The term "Preview
Multiemployer Plan" shall mean any "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA in respect of which Preview or any Subsidiary of
Preview has or may have any liability (accrued, contingent or otherwise).
(b) Preview has provided or made available to Sabre (i) current,
accurate and complete copies of all documents embodying each Preview Benefit
Plan, including all amendments, written interpretations (which interpretation
could be regarded as increasing the liabilities of Preview and its
Subsidiaries taken as a whole under the relevant Preview Benefit Plan) and
all trust or funding arrangements and insurance contracts with respect
thereto; (ii) the most recent annual actuarial valuation, if any, prepared
for each Preview Benefit Plan; (iii) the most recent annual report
(Series 5500 and all schedules), if any, required under ERISA in connection
with each Preview Benefit Plan or related trust; (iv) the most recent
determination letter received from the Internal Revenue Service, if any, for
each Preview Benefit Plan and related trust which is intended to satisfy the
requirements of Section 401(a) of the Code; (v) if any Preview Benefit Plan
is funded, the most recent annual and periodic accounting of such Preview
Benefit Plan's assets; (vi) the most recent summary plan description together
with the most recent summary of material modifications, if any, required
under ERISA with respect to each Preview Benefit Plan; and (vii) all material
communications to any one or more current, former or retired employee,
officer, consultant, independent contractor, agent or director of Preview or
any Subsidiary of Preview (each, a "Preview Employee" and collectively, the
"Preview Employees") relating to each Preview Benefit Plan (which
communication could be regarded as increasing the liabilities of Preview and
its Subsidiaries taken as a whole under the relevant Preview Benefit Plan).
(c) All Preview Benefit Plans have been administered in all
respects in accordance with the terms thereof and all applicable laws except
for violations which, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect on Preview. Each Preview
Benefit Plan which is an "employee pension benefit plan" within the meaning
of Section 3(2) of ERISA ("Pension Plan") and which is intended to be
qualified under Section 401(a) of the Code (each, a "Preview Pension Plan"),
has received a favorable determination letter from the Internal Revenue
Service, and Preview is not aware of any circumstances that would reasonably
be expected to result in the revocation or denial of this qualified status.
Except as otherwise set forth in the Preview Disclosure Schedule or in the
Preview SEC Reports filed prior to this date, as of the date hereof there is
no pending or, to Preview's knowledge, threatened, material claim,
litigation, proceeding, audit, examination or investigation relating to any
Preview Benefit Plans or any Preview Employees that, individually or in the
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aggregate, would reasonably be expected to have a Material Adverse Effect on
Preview.
(d) No material liability under Title IV of ERISA exists or is
reasonably expected to be incurred by Preview or any Subsidiary of Preview or
any entity which is considered a single employer with Preview or any
Subsidiary of Preview under Section 4001(a)(15) of ERISA or Section 414 of
the Code (a "Preview ERISA Affiliate"). No notice of a "reportable event,"
within the meaning of Section 4043 of ERISA for which the 30-day reporting
requirement has not been waived, has been required to be filed for any
Preview Pension Plan within the past twelve (12) months.
(e) All contributions, premiums and payments (other than
contributions, premiums or payments that are not material, in the aggregate)
required to be made as of the date of this Agreement under the terms of any
Preview Benefit Plan have been made. No Preview Pension Plan has an
"accumulated funding deficiency" (whether or not waived) within the meaning
of Section 412 of the Code or Section 302 of ERISA. Neither Preview nor any
Subsidiary of Preview nor any Preview ERISA Affiliate has provided, or is
required to provide, security to any Preview Pension Plan pursuant to Section
401(a)(29) of the Code.
(f) As of the date of this Agreement, none of Preview, any
Subsidiary of Preview or any Preview ERISA Affiliate have incurred any
withdrawal liability (within the meaning of Section 4201 of ERISA) to any
Preview Multiemployer Plan, which liability has not previously been fully
satisfied. None of Preview, any Subsidiary of Preview or any Preview ERISA
Affiliate has knowledge that any Preview Multiemployer Plan fails to qualify
under Section 401(a) of the Code, is insolvent or is in reorganization within
the meaning of Part 3 of Subtitle E of Title IV of ERISA or of any condition
that would reasonably be expected to result in a Preview Multiemployer Plan
becoming insolvent or going into reorganization.
(g) Except as set forth in the Preview Disclosure Schedule, the
execution of, and performance of the transactions contemplated in, this
Agreement will not (either alone or upon the occurrence of any additional or
subsequent events) (i) constitute an event under any Preview Benefit Plan
that will or would reasonably be expected to result in any payment (whether
of severance pay or otherwise), acceleration, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligation to fund benefits
with respect to any Preview Employee, or (ii) result in the triggering or
imposition of any restrictions or limitations on the right of Preview, any
Subsidiary of Preview or New Travelocity to amend or terminate any Preview
Benefit Plan. Except as set forth in the Preview Disclosure Schedule, no
payment or benefit which will or may be made by Preview, or any Subsidiary of
Preview, New Travelocity or any of their respective affiliates with respect
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to any Preview Employee will be characterized as an "excess parachute
payment," within the meaning of Section 280G(b)(1) of the Code.
Section 3.14 Labor Matters. (a) Except as set forth in the Preview
SEC Reports filed prior to this date, no work stoppage, slowdown, lockout or
labor strike against Preview or any Subsidiary of Preview by Preview
Employees is pending or, to the knowledge of Preview, threatened in writing.
(b) Except as set forth in the Preview SEC Reports filed prior to
this date, as of the date of this Agreement, neither Preview nor any
Subsidiary of Preview is involved in or, to the knowledge of Preview,
threatened with, any material labor dispute, grievance or arbitration or any
union organizing activity (by it or any of its employees) involving any
Preview Employees.
Section 3.15 Tax Matters. (a) All material Tax Returns required to
be filed by Preview or its Subsidiaries either on a separate or combined or
consolidated basis on or prior to the Effective Time have been or will be
prepared in good faith and timely filed with the appropriate Governmental
Entity on or prior to the Effective Time or by the due date thereof including
extensions. All such Tax Returns are (or, as to Tax Returns not filed on the
date hereof, will be) complete and accurate in all material respects.
(b) All material Taxes (as herein defined) shown as due on the Tax
Returns referred to in Section 3.15(a) either (i) have been fully paid
(except with respect to matters contested in good faith as set forth in the
Preview Disclosure Schedule) or (ii) are adequately reflected as a liability
on Preview's or its Subsidiaries' books and records. All material Taxes
required to be collected or withheld have been collected or withheld.
(c) With respect to any period for which Tax Returns have not yet
been filed, or for which Taxes are not yet due or owing, Preview and its
Subsidiaries have made due and sufficient accruals for such Taxes, to the
extent they are material, in their respective books and records and financial
statements.
(d) Preview and each of its Subsidiaries have not waived any
statute of limitations, or agreed to any extension of time, with respect to
federal income or material state Taxes or a material Tax assessment or
deficiency.
(e) As of this date, (i) there are not pending or, to the
knowledge of Preview, threatened in writing, any audits, examinations,
investigations or other proceedings in respect of Taxes or Tax matters and
(ii) there are not any unresolved questions or claims concerning Preview's or
any of its Subsidiaries' Tax liability that were raised by any taxing
authority in a written communication to Preview or any Subsidiary.
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(f) Preview has made available to Sabre correct and complete
copies of the United States federal income, all material state income or
franchise, and all material sales, use and excise Tax Returns filed by
Preview and its Subsidiaries since January 1, 1996.
(g) Preview has not distributed the stock of a "controlled
corporation" (within the meaning of that term as used in section 355(a) of
the Code) in a transaction subject to Section 355 of the Code within the past
two years.
(h) No written claim, and to the knowledge of Preview, no claim,
has ever been made by an authority in a jurisdiction where any of Preview and
its Subsidiaries does not file Tax Returns that it is or may be subject to
taxation by that jurisdiction.
(i) Preview has previously delivered to Sabre true and correct
copies of all federal, state, local and foreign income Tax Returns and all
other material Tax Returns filed with respect to any of Preview and its
Subsidiaries for taxable periods ending on or after January 1, 1996. None of
such Tax Returns has been audited or currently is the subject of an audit.
(j) None of Preview and its Subsidiaries is a party to any Tax
allocation or sharing agreement.
(k) As of December 31, 1998, the net operating loss carryforward
of Preview and its Subsidiaries for federal income Tax purposes was at least
$58,705,492, and for the six months ended June 30, 1999 Preview and its
Subsidiaries had negative taxable income of approximately $11,000,000, and
except as set forth in the Preview Disclosure Schedule, Preview and its
Subsidiaries are not subject to any limitations, e.g., Sections 382 and 384
of the Code and restrictions under the consolidated return regulations
pursuant to Section 1502 of the Code or provisions of state laws affecting
such net operating loss carryforwards for state income tax or state franchise
tax purposes, on their ability to use the net operating loss carryforward
other than those that may arise as a result of the transactions contemplated
by this Agreement.
As used in this Agreement, (i) the term "Tax" (including, with
correlative meaning, the terms "Taxes" and "Taxable") includes all federal,
state, local and foreign income, profits, franchise, gross receipts, license,
premium, environmental (including taxes under Section 59A of the Code),
capital stock, severance, stamp, payroll, sales, employment, unemployment,
disability, use, transfer, property, withholding, excise, production,
occupation, windfall profits, customs duties, social security (or similar),
registration, value added, alternative or add-on minimum, estimated,
occupancy and other taxes, duties or governmental assessments of any nature
whatsoever, together with all interest, penalties and additions imposed with
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respect to such amounts and any interest in respect of such penalties and
additions, and (ii) the term "Tax Return" includes all returns and reports
(including elections, declarations, disclosures, schedules, estimates and
information returns and any amendment thereto) required to be supplied to a
Tax authority relating to Taxes.
Section 3.16 Contracts. (a) Set forth in the Preview Disclosure
Schedule is a true and complete list of contracts or agreements, of any
nature whatsoever, whether written or oral, including all amendments thereof
and supplements thereto ("Contracts") of the following types to which Preview
or any Subsidiary is a party or by or to which Preview or any Subsidiary or
any of their properties may be bound or subject as of the date hereof:
(i) Contracts for the sale of any real or personal (tangible
or intangible) properties other than in the ordinary course of business, or
for the grant of any option or preferential rights to purchase any such
properties;
(ii) Contracts for the construction, modification or repair of
any building, structure or facility or for the incurrence of any capital
expenditures or for the acquisition of fixed assets, providing for payments
in excess of $100,000 in the aggregate;
(iii) Contracts relating to the acquisition by Preview or
any Subsidiary of any operating business or the capital stock of any other
Person that has not been consummated or that has been consummated but
contains representations, covenants, guaranties, indemnities or other
obligations that remain in effect;
(iv) Contracts relating to any litigation;
(v) Contracts relating to the lending or borrowing of money
or other indebtedness for borrowed money in excess of $75,000 or pursuant to
which Preview or any of its Subsidiaries' assets are or may become subject to
a lien, charge, mortgage or other encumbrance;
(vi) Contracts under which Preview or any Subsidiary agrees to
indemnify any Person;
(vii) Contracts containing non-competition, exclusivity or
other similar provisions that would limit, impair or restrict the ability of
Preview or any of its Subsidiaries to do business in any line of business or
in any geographical area or with any Person;
(viii) Contracts pursuant to which Preview or any
Subsidiary leases, subleases or otherwise has the right to use any real or
personal property, except those contracts terminable (other than in the case
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of default by a party thereto) on 90 days' or less notice without any penalty
and those involving receipt or payment of less than $75,000 in any year;
(ix) Contracts in respect of licenses or other Contracts
relating to Intellectual Property and Contracts relating to advertising
arrangements, except those contracts terminable (other than in the case of
default by a party thereto) on 90 days' or less notice without any penalty
and those involving receipt or payment of less than $75,000 in any year;
(x) Contracts relating to portal or other distribution
arrangements;
(xi) Contracts in respect of any joint venture, partnership or
other similar arrangement (including, without limitation, any joint
development agreement);
(xii) Contracts with any Governmental Entity;
(xiii) Contracts with any Preview Employee or consultant
relating to (A) non-disclosure, confidentiality, assignment of inventions,
proprietary rights or non-competition agreements and (B) severance, bonus or
similar arrangements that become operative in connection with or as a result
of the Merger; and
(xiv) Contracts (other than those specified in any of
clauses (i) through (xiii) of this clause (a)) which relate to or affect the
business, operations or any of the assets or properties of Preview or any
Subsidiary in a material way, except those (x) which are specifically not
required to be scheduled pursuant to the provisions of any of clauses (i)
through (xiii) of this paragraph (a), and (y) which are terminable (other
than in the case of default by a party thereto) on 90 days' or less notice
without any penalty and those involving payments of less than $50,000 in any
year; and, in the case of each of clauses (x) and (y) above, are not
material.
(b) Unless precluded by an applicable confidentiality agreement,
true and complete copies of all Contracts listed on Preview Disclosure
Schedule have been made available to Sabre, Travelocity Holdings or
Xxxxxxxxxxx.xxx. All of the Contracts referred to in the preceding
paragraph (a) clauses (i) through (xiv) are valid, binding, in full force and
effect and enforceable in accordance with their terms against Preview, or the
applicable Subsidiary (as the case may be), and, to the knowledge of Preview,
against the respective counterparties to such Contracts. None of Preview or
any of its Subsidiaries or, to the knowledge of Preview as of the date
hereof, any other party, is in breach, violation or default under any
Contract listed or required to be listed on the Preview Disclosure Schedule.
No event exists to the knowledge of Preview as of the date hereof which, with
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notice or lapse of time or both, would constitute a breach, violation or
default, or give rise to any lien, charge or encumbrance or right of
termination, modification, cancellation, prepayment, suspension, limitation,
revocation or acceleration, under any Contract listed or required to be
listed on the Preview Disclosure Schedule. None of Preview, any Subsidiary
or, to the knowledge of Preview, any other party to any of the Contracts
listed on the Preview Disclosure Schedule is in material arrears in respect
of the performance or satisfaction of the terms and conditions on its part to
be performed or satisfied under any of such Contracts and no waiver or
indulgence has been granted by any of the parties thereto.
Section 3.17 Intellectual Property. Each material item of Preview
Intellectual Property which is a patent, patent application, trademark,
trademark application, service xxxx, service xxxx application, domain name,
copyright registration, copyright application, or license, sublicense,
agreement, or permission concerning any of the foregoing, is set forth on the
Preview Disclosure Schedule. Except as set forth on the Preview Disclosure
Schedule:
(a) Preview possesses all right, title and interest in and to, and
is the sole and exclusive owner of or has a valid license to use, all the
Preview Intellectual Property, free and clear of any encumbrance, and has the
right to require the applicant of any Preview Intellectual Property which is
an application, including but not limited to patent applications or copyright
applications, to transfer ownership to Preview of the application and of the
registration once it issues, and, to Preview's knowledge, all registered
patents, trademarks, service marks and copyrights listed on the Preview
Disclosure Schedule are valid and subsisting and in full force and effect;
(b) The Preview Intellectual Property is all the Intellectual
Property that is necessary for the ownership, maintenance and operation of
Preview's properties and assets and Preview has the right to use all of the
Preview Intellectual Property in all jurisdictions in which Preview conducts
or proposes to conduct its business, and the consummation of the transactions
contemplated hereby will not alter or impair any such rights;
(c) To Preview's knowledge, Preview has not, and the continued
operation of its business as presently conducted and as presently proposed to
be conducted will not, interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Intellectual Property rights of third
parties, and Preview has not received written notice of any charge,
complaint, claim, demand or notice so alleging (including any claim that
Preview must license or refrain from using any Intellectual Property rights
of any third party);
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(d) To Preview's knowledge, no third party has interfered with,
infringed upon, misappropriated or otherwise come into conflict with any
Preview Intellectual Property; and
(e) To Preview's knowledge, no action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand has been made, is pending,
or, to the knowledge of Preview, is threatened which challenges the legality,
validity, enforceability, use or ownership of any Preview Intellectual
Property.
"Preview Intellectual Property" means all Intellectual Property used by
Preview in the operation of its business.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements
thereon, and all patents, patent applications and patent disclosures,
together with all reissuances, continuations, continuations-in-part,
revisions, extensions and reexaminations thereof, (b) all trademarks, service
marks, trade dress, logos, trade names, domain names, and corporate names,
together with all translations, adaptations, derivations and combinations
thereof and including all goodwill associated therewith, and all
applications, registrations and renewals in connection therewith, (c) all
copyrightable works, all copyrights and all applications, registrations and
renewals in connection therewith, (d) all trade secrets and confidential
business information (including ideas, know-how, customer and supplier lists,
pricing and cost information and business and marketing plans and proposals),
(e) all computer software (including data and related documentation), (f) all
other proprietary rights, (g) all copies and tangible embodiments of the
foregoing categories of intellectual property listed in subsections (a)
through (f) herein (in whatever form or medium), and (h) all licenses,
sublicenses, agreements, or permissions related to the foregoing categories
of intellectual property listed in subsections (a) through (f) herein.
Section 3.18 Year 2000 Compliance. Preview has provided to Sabre the
plans (the "Year 2000 Plan") that detail the steps Preview plans to take to
provide that all material computer software and hardware, and any other
systems affected by computer technology, used by Preview or any Subsidiary in
the conduct of its businesses as presently conducted (the "Systems") will
have date fields, processing logic, outputs and interfaces that (i) will
recognize the advent of the year 2000, (ii) will correctly process
information relating to the dates before, on and after January 1, 2000, and
(iii) will function accurately and without interruption before, during and
after January 1, 2000 without any change in operations associated with the
advent of the new century (collectively, "Year 2000 Compliant"). Preview has
used all means reasonably available to determine that (a) the Year 2000 Plan
will be effective to cause the Systems to be Year 2000 Compliant by
November 15, 1999; (b) the Year 2000 Plan has been carried out to date in a
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diligent manner and there is no fact or circumstance of which Preview is
aware that will cause the Year 2000 Plan not to result in the Systems being
Year 2000 Compliant; and (c) the Year 2000 Plan includes the steps necessary
to ascertain whether third party vendors upon whom Preview relies for goods
and services of a material nature utilize systems that are Year 2000
Compliant, and if they are not, to replace such vendors with vendors who have
systems that are Year 2000 Compliant.
Section 3.19 No Termination of Business Relationship. Since
January 1, 1999 through the date hereof, none of the Persons with which
Preview or any Subsidiary has a material business relationship has given
notice in writing or other indication in writing of any intention to cancel
or otherwise terminate, prior to the end of the applicable contract term, a
material business relationship with Preview or any Subsidiary and, to the
knowledge of Preview as of the date hereof, no event has occurred or failed
to occur which (i) would, to the knowledge of Preview as of the date hereof,
precipitate the cancellation or termination of such a business relationship
or (ii) would entitle any such entity or customer to terminate such a
business relationship.
Section 3.20 Insurance. Preview and each Subsidiary maintain in full
force and effect insurance with responsible and reputable insurance companies
or associations in such amounts, on such terms, with such deductibles, and
covering such risks (including fire, casualty, and liability), as is
consistent with industry practice. There is no default with respect to any
provision contained in any insurance policy, nor has Preview or any
Subsidiary failed to give any notice or present any claim under any such
policy in due and timely fashion. All premiums due and payable with respect
to the insurance policies have been paid. All such policies are in full
force and effect. Neither Preview nor any Subsidiary has failed to give any
notice or present any claim under any such insurance policy in due and timely
fashion or as required by any of such insurance policies or has otherwise,
through any act, omission or non-disclosure, jeopardized or impaired full
recovery of any claim under such policies, and there are no claims by Preview
or any Subsidiary under any of such policies to which any insurance company
is denying liability or defending under a reservation of rights or similar
clause. No notice of cancellation or non-renewal of any such policy has been
received by Preview or any Subsidiary.
Section 3.21 Disclosure. The information described on Schedule 3.21
(i) to the extent constituting historical facts, does not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements contained therein
not misleading, and (ii) to the extent constituting forward-looking
statements, represents Preview's best estimates prepared in good faith and
based upon reasonable assumptions (excluding the impact of the transactions
contemplated by this Agreement).
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Section 3.22 AOL Agreements. As of the date hereof, each of the
Interactive Services Agreement between America Online Inc. ("AOL") and
Preview dated September 1, 1997, the Database Agreement between AOL and
Preview dated September 25, 1997, (collectively, the "AOL Agreements"), are
valid, binding, in full force and effect and enforceable in accordance with
their terms against Preview and to Preview's knowledge, against AOL. As of
the date hereof, there is no breach, violation or default of or under the AOL
Agreements by Preview or, to Preview's knowledge, by AOL. To Preview's
knowledge, as of the date hereof, no event exists which, with notice or lapse
of time or both, would constitute a breach, violation or default, or give
rise to any right of termination, modification, cancellation, suspension,
limitation, revocation or acceleration under the AOL Agreements by either
Preview or AOL. Preview has no reason to believe that AOL will not be able
to fulfill all of its obligations under the AOL Agreements and, as of the
date hereof, Preview has not been notified that AOL intends to cancel,
terminate or modify the AOL Agreements and, as of the date hereof, Preview
does not have knowledge of any event which would precipitate any such
cancellation, termination or modification or entitle AOL to cancel, terminate
or modify the AOL Agreements. Preview and, to Preview's knowledge, AOL are in
compliance in all material respects with the AOL Agreements.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF SABRE, TRAVELOCITY HOLDINGS AND XXXXXXXXXXX.XXX
Except as set forth in the Sabre Disclosure Schedule delivered by Sabre
to Preview prior to the execution of this Agreement (the "Sabre Disclosure
Schedule"), each of Sabre, Travelocity Holdings and Xxxxxxxxxxx.xxx (as
applicable), jointly and severally, represents and warrants to Preview as
follows:
Section 4.1 Organization, Standing and Power. Each of Sabre,
Travelocity Holdings and Xxxxxxxxxxx.xxx is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has all requisite power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership or leasing
of its properties makes such qualification necessary other than in such
jurisdictions where the failure so to qualify would not, either individually
or in the aggregate, have a Material Adverse Effect on each of Sabre,
Travelocity Holdings or Xxxxxxxxxxx.xxx, as applicable.
Section 4.2 Authority; No Conflicts. (a) Each of Sabre, Travelocity
Holdings and Xxxxxxxxxxx.xxx has all requisite corporate power and authority
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to enter into this Agreement and the Ancillary Agreements to which it will be
a party and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and the Ancillary Agreements to
which it will be a party and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of each of Sabre, Travelocity Holdings and
Xxxxxxxxxxx.xxx. This Agreement has been, and the Ancillary Agreements to
which Sabre, Travelocity Holdings and Xxxxxxxxxxx.xxx will be a party will
be, duly executed and delivered by each of Sabre, Travelocity Holdings and
Xxxxxxxxxxx.xxx and constitute a valid and binding agreement of each of
Sabre, Travelocity Holdings and Xxxxxxxxxxx.xxx, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws relating
to or affecting creditors generally or by general equity principles.
(b) The execution and delivery of this Agreement does not and the
execution and delivery of the Ancillary Agreements to which Sabre,
Travelocity Holdings and Xxxxxxxxxxx.xxx will be a party will not and the
consummation of the Merger and the other transactions contemplated hereby or
thereby will not, conflict with, or result in any Violation pursuant to:
(A) any provision of the respective certificate of incorporation or by-laws
of Sabre, Travelocity Holdings or Xxxxxxxxxxx.xxx, or (B) except as would not
have a Material Adverse Effect on any of Sabre, Travelocity Holdings or
Xxxxxxxxxxx.xxx and subject to obtaining or making the consents, approvals,
orders, authorizations, registrations, declarations and filings referred to
in paragraph (c) below, any loan, credit agreement, note, mortgage, bond,
indenture, lease, benefit plan or other agreement, obligation, instrument,
permit, concession, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to any of Sabre, Travelocity
Holdings or Xxxxxxxxxxx.xxx or their respective properties or assets.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required
by or with respect to any of Sabre, Travelocity Holdings or Xxxxxxxxxxx.xxx
in connection with the execution and delivery of this Agreement or any
Ancillary Agreement by each of Sabre, Travelocity Holdings or Xxxxxxxxxxx.xxx
or the consummation of the Merger and the other transactions contemplated
hereby or thereby, except for those required under or in relation to (i) the
HSR Act, (ii) the Blue Sky Laws, (iii) the Securities Act, (iv) the Exchange
Act, (v) the DGCL with respect to the filing of the Delaware Certificate of
Merger, (vi) rules and regulations of Nasdaq, and (vii) such consents,
approvals, orders, authorizations, registrations, declarations and filings
the failure of which to make or obtain would not have a Material Adverse
Effect on any of Sabre, Travelocity Holdings, Xxxxxxxxxxx.xxx or Travelocity
LP.
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Section 4.3 Financial Statements. Sabre has provided to Preview the
audited balance sheets of the Travelocity Business as at December 31, 1998,
1997 and 1996, and the related statements of income, changes in stockholders'
equity and cash flows for the fiscal year then ended (collectively, the
"Travelocity Financial Statements"). Each of the financial statements of the
Travelocity Business (including the related notes) presents fairly in all
material respects, the financial position of the Travelocity Business and
results of operations and cash flows of the Travelocity Business as of the
respective dates or for the respective periods set forth therein, all in
conformity with U.S. GAAP consistently applied during the period involved
except as otherwise noted therein.
Section 4.4 Information Supplied. (a) None of the information
supplied or to be supplied by Sabre, Travelocity Holdings or Xxxxxxxxxxx.xxx
for inclusion or incorporation by reference in (i) the Form S-4 will, at the
time the Form S-4 is filed with the SEC, at any time it is amended or
supplemented or at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading and (ii) the Proxy Statement/Prospectus will, on the
date it is first mailed to Preview stockholders or at the time of the Preview
Stockholders Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. Each of the financial statements
(including the related notes) of the Travelocity Business included in the
Proxy Statement/Prospectus will present fairly, in all material respects, the
consolidated financial position and consolidated results of operations and
cash flows of the Travelocity Business as of the respective dates or for the
respective periods set forth therein, all in conformity with U.S. GAAP
consistently applied during the periods involved except as otherwise noted
therein, and subject, in the case of the unaudited interim financial
statements, to normal and recurring year-end adjustments and the absence of
notes. The Form S-4 will comply as to form in all material respects with the
requirements of the Exchange Act and the Securities Act and the rules and
regulations of the SEC thereunder.
(b) Notwithstanding the foregoing provisions of this Section 4.4,
no representation or warranty is made by Sabre, Travelocity Holdings or
Xxxxxxxxxxx.xxx with respect to statements made or incorporated by reference
in the Proxy Statement/Prospectus based on information supplied by Preview
for inclusion or incorporation by reference therein.
Section 4.5 Vote Required; DGCL. (a) The affirmative vote of the
holders of a majority of the outstanding shares of Xxxxxxxxxxx.xxx Common
Stock (the "Required Xxxxxxxxxxx.xxx Vote"), has been obtained and is the
only vote of the holders of any class or series of Xxxxxxxxxxx.xxx capital
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stock necessary to adopt this Agreement and approve the transactions
contemplated hereby.
(b) Neither the restrictions on business combinations set forth in
Section 203 of the DGCL nor similar restrictions imposed by any other state
takeover or similar statute or regulation apply to the Merger, this
Agreement, or any of the transactions contemplated hereby.
Section 4.6 Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in connection
with any of the transactions contemplated by this Agreement, except Xxxxxxx,
Xxxxx & Co. whose fees and expenses will be paid by Sabre in accordance with
Sabre's agreement with such firm, based upon arrangements made by or on
behalf of Sabre and previously disclosed to Preview.
Section 4.7 No Business Activities. Xxxxxxxxxxx.xxx has not
conducted any activities other than in connection with the organization of
Xxxxxxxxxxx.xxx, the negotiation and execution of this Agreement and the
consummation of the transactions contemplated hereby. Xxxxxxxxxxx.xxx has no
Subsidiaries.
Section 4.8 Absence of Certain Changes. Except as disclosed in any
required report, schedule, form, statement or other document required to be
filed by Sabre Holdings, Inc. with the SEC (collectively, including all
exhibits thereto, the "Sabre SEC Reports") filed prior to this date or the
Sabre Disclosure Schedule, (A) since the end of Sabre's fiscal year last
ended, Sabre has conducted the Travelocity Business in all material respects
in the ordinary and usual course of such business consistent with past
practice and there has not been any change, development or combination of
developments that, individually or in the aggregate, has had or would
reasonably be expected to have a Material Adverse Effect on the Travelocity
Business and (B) since the end of Sabre's fiscal year last ended until this
date there has not been (i) any change by the Travelocity Business to its
accounting policies, practices or methods; (ii) any amendment or change to
the terms of any indebtedness material to the Travelocity Business taken as a
whole; (iii) any incurrence of any material indebtedness by the Travelocity
Business; (iv) any transfer, lease, license, sale, mortgage, pledge,
encumbrance or other disposition of assets or properties material to the
Travelocity Business taken as a whole; (v) any material damage, destruction
or other casualty loss with respect to any asset or property owned, leased or
otherwise used by the Travelocity Business material to the Travelocity
Business taken as a whole, whether or not covered by insurance; (vi) except
in the ordinary course of business consistent with past practice for
employees other than executive officers or directors, or except as required
by applicable law or contemplated by this Agreement, (A) any execution,
adoption or amendment of any agreement or arrangement relating to severance
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or any employment or consulting agreement with any officer, director or other
key employee of the Travelocity Business, or any amendment to any Sabre
Benefit Plan or adoption or execution of any new employee benefit plan for
the benefit of any officer, director or other key employee of the Travelocity
Business (including, without limitation, the Sabre Benefit Plans referred to
in Section 4.11), or (B) any grant of any stock options or other equity
related award to any officer, director or employee of the Travelocity
Business; or (vii) any agreement or commitment entered into with respect to
any of the foregoing.
Section 4.9 Litigation and Liabilities. (a) Except as disclosed in
the Sabre SEC Reports filed prior to this date or the Sabre Disclosure
Schedule, there are no civil, criminal or administrative actions, suits or
claims, proceedings (including condemnation proceedings) or hearings or, to
the knowledge of Sabre, investigations, pending or, to the knowledge of
Sabre, threatened against the Travelocity Business or any of the properties
and assets used in the Travelocity Business, except for any of the foregoing
which would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Travelocity Business.
(b) The Travelocity Business has no liabilities (absolute,
accrued, contingent or otherwise) the existence of which would, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect
on the Travelocity Business except (i) liabilities described in the Sabre SEC
Reports filed with the SEC prior to the date hereof or on the Sabre
Disclosure Schedule or reflected on Sabre's consolidated balance sheet (and
related notes thereto) as of the end of its most recently completed fiscal
year filed in the Sabre SEC Reports or (ii) liabilities of the type permitted
to be incurred pursuant to Section 5.1.
Section 4.10 No Violation of Law; Permits. The Travelocity Business
is being conducted in accordance with all, and not in violation of any,
applicable statutes, rules, ordinances, regulations, judgments, orders or
decrees of all Governmental Entities, and all permits, franchises, licenses,
authorizations or consents granted by each Governmental Entity, and all
permits, franchises, licenses, authorizations or consents necessary for the
conduct of the Travelocity Business, except, in each case, as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Travelocity Business. The Travelocity Business is not
subject to any cease and desist or other order, judgment, injunction or
decree issued by, or is not subject to any written agreement, consent
agreement or memorandum of understanding with, is not subject to any
commitment letter or similar undertaking to, is not subject to any order or
directive by, or is not subject to any board resolutions at the request of,
any Governmental Entity that materially restricts the conduct of its business
(whether the type of business, the location or otherwise) and which,
individually or in the aggregate, would reasonably be expected to have a
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Material Adverse Effect on the Travelocity Business, nor has Sabre been
advised in writing that any Governmental Entity has proposed issuing or
requesting any of the foregoing.
Section 4.11 Employee Matters/ ERISA. (a) Set forth in the Sabre
Disclosure Schedule is a complete list of each Sabre Benefit Plan and each
Sabre Multiemployer Plan. The term "Sabre Benefit Plan" shall mean (i) each
plan, program, policy, contract or agreement providing for compensation,
deferred compensation, severance, termination pay, performance awards, stock
or stock-related awards, fringe benefits or other employee benefits of any
kind, including, without limitation, any "employee benefit plan," within the
meaning of Section 3(3) of ERISA but excluding any "multiemployer plan"
within the meaning of Sections 3(37) or 4001(a)(3) of ERISA, and (ii) each
employment, severance, "change of control," consulting, non-compete,
confidentiality, or similar agreement or contract, in each case, in which
Travelocity Business Employees (as defined in Section 4.11(b) below)
participate and with respect to which Sabre or any Subsidiary of Sabre has or
may have any liability (accrued, contingent or otherwise). The term "Sabre
Multiemployer Plan" shall mean any "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA in which employees of the Travelocity Business
participate and with respect to which Sabre or any Subsidiary of Sabre has or
may have any liability (accrued, contingent or otherwise).
(b) Sabre has provided or made available to Preview (i) current,
accurate and complete copies of all documents embodying each Sabre Benefit
Plan, including all amendments, written interpretations (which interpretation
could be regarded as increasing the liabilities of Sabre and its Subsidiaries
taken as a whole under the relevant Sabre Benefit Plan) and all trust or
funding arrangements and insurance contracts with respect thereto; (ii) the
most recent annual actuarial valuation, if any, prepared for each Sabre
Benefit Plan; (iii) the most recent annual report (Series 5500 and all
schedules), if any, required under ERISA in connection with each Sabre
Benefit Plan or related trust; (iv) the most recent determination letter
received from the Internal Revenue Service, if any, for each Sabre Benefit
Plan and related trust which is intended to satisfy the requirements of
Section 401(a) of the Code; (v) if any Sabre Benefit Plan is funded, the most
recent annual and periodic accounting of such Sabre Benefit Plan's assets;
(vi) the most recent summary plan description together with the most recent
summary of material modifications, if any, required under ERISA with respect
to each Sabre Benefit Plan; and (vii) all material communications to any one
or more current, former or retired employee, officer, consultant, independent
contractor, agent or director of the Travelocity Business (each, a
"Travelocity Business Employee" and collectively, the "Travelocity Business
Employees") relating to each Sabre Benefit Plan (which communication could be
regarded as increasing the liabilities of Sabre and its Subsidiaries taken as
a whole under the relevant Sabre Benefit Plan).
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(c) All Sabre Benefit Plans have been administered in all respects
in accordance with the terms thereof and all applicable laws except for
violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on the Travelocity Business. Each
Sabre Benefit Plan which is a Pension Plan, which is intended to be qualified
under Section 401(a) of the Code and in which Travelocity Business Employees
participate (each, a "Sabre Pension Plan"), has received a favorable
determination letter from the Internal Revenue Service, and Sabre is not
aware of any circumstances that would reasonably be expected to result in the
revocation or denial of this qualified status. Except as otherwise set forth
in the Sabre Disclosure Schedule or in the Sabre SEC Reports filed prior to
this date, there is no pending or, to Sabre's knowledge, threatened, material
claim, litigation, proceeding, audit, examination or investigation relating
to any Sabre Benefit Plans or any Travelocity Business Employees that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on the Travelocity Business.
(d) No material liability under Title IV of ERISA exists or is
reasonably expected to be incurred by Sabre or any Subsidiary of Sabre or any
entity which is considered a single employer with Sabre or any Subsidiary of
Sabre under Section 4001(a)(15) of ERISA or Section 414 of the Code (a "Sabre
ERISA Affiliate"). No notice of a "reportable event," within the meaning of
Section 4043 of ERISA for which the 30-day reporting requirement has not been
waived, has been required to be filed for any Sabre Pension Plan within the
past twelve (12) months.
(e) All contributions, premiums and payments (other than
contributions, premiums or payments that are not material, in the aggregate)
required to be made under the terms of any Sabre Benefit Plan have been made.
No Sabre Pension Plan has an "accumulated funding deficiency" (whether or not
waived) within the meaning of Section 412 of the Code or Section 302 of
ERISA. Neither Sabre nor any Subsidiary of Sabre nor any Sabre ERISA
Affiliate has provided, or is required to provide, security to any Sabre
Pension Plan pursuant to Section 401(a)(29) of the Code.
(f) As of the Closing Date, none of Sabre, any Subsidiary of Sabre
or any Sabre ERISA Affiliate will have incurred any withdrawal liability
(within the meaning of Section 4201 of ERISA) to any Sabre Multiemployer
Plan, which liability has not previously been fully satisfied. None of
Sabre, any Subsidiary of Sabre or any Sabre ERISA Affiliate has knowledge
that any Sabre Multiemployer Plan fails to qualify under Section 401(a) of
the Code, is insolvent or is in reorganization within the meaning of Part 3
of Subtitle E of Title IV of ERISA or of any condition that would reasonably
be expected to result in a Sabre Multiemployer Plan becoming insolvent or
going into reorganization.
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(g) Except as set forth in the Sabre Disclosure Schedule, the
execution of, and performance of the transactions contemplated in, this
Agreement will not (either alone or upon the occurrence of any additional or
subsequent events) (i) constitute an event under any Sabre Benefit Plan,
trust or loan that will or may result in any payment (whether of severance
pay or otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund benefits with
respect to any Travelocity Business Employee, or (ii) result in the
triggering or imposition of any restrictions or limitations on the right of
Sabre or any Subsidiary of Sabre to amend or terminate any Sabre Benefit
Plan. Except as set forth in the Sabre Disclosure Schedule, no payment or
benefit which will or may be made by Sabre, or any Subsidiary of Sabre, or
any of their respective affiliates with respect to any Travelocity Business
Employee will be characterized as an "excess parachute payment," within the
meaning of Section 280G(b)(1) of the Code.
Section 4.12 Labor Matters. (a) Except as set forth in the Sabre SEC
Reports filed prior to this date or the Sabre Disclosure Schedule, no work
stoppage, slowdown, lockout or labor strike by employees of the Travelocity
Business is pending or, to the knowledge of Sabre, threatened in writing.
(b) Except as set forth in the Sabre SEC Reports filed prior to
this date or the Sabre Disclosure Schedule, as of the date of this Agreement,
neither Sabre nor any Subsidiary of Sabre is involved in or, to the knowledge
of Sabre, threatened with, any material labor dispute, grievance or
arbitration or any union organizing activity (by it or any of its employees)
involving any employees of the Travelocity Business.
Section 4.13 Contracts. (a) Set forth in the Sabre Disclosure
Schedule is a true and complete list of Contracts of the following types to
which Sabre or any Subsidiary is a party relating to the Travelocity Business
or by or to which the Travelocity Business or any of its properties may be
bound or subject as of the date hereof:
(i) Contracts for the sale of any real or personal (tangible
or intangible) properties other than in the ordinary course of business, or
for the grant of any option or preferential rights to purchase any such
properties;
(ii) Contracts for the construction, modification or repair of
any building, structure or facility or for the incurrence of any capital
expenditures or for the acquisition of fixed assets, providing for payments
in excess of $100,000 in the aggregate;
(iii) Contracts relating to the acquisition by Sabre or
any Subsidiary of any operating business or the capital stock of any other
Person that has not been consummated or that has been consummated but
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contains representations, covenants, guaranties, indemnities or other
obligations that remain in effect;
(iv) Contracts relating to any litigation;
(v) Contracts relating to the lending or borrowing of money
or other indebtedness for borrowed money in excess of $75,000 or pursuant to
which any assets of the Travelocity Business are or may become subject to a
lien, charge, mortgage or other encumbrance;
(vi) Contracts under which Sabre or any Subsidiary agrees to
indemnify any Person;
(vii) Contracts containing non-competition, exclusivity or
other similar provisions that would limit, impair or restrict the ability of
the Travelocity Business to do business in any line of business or in any
geographical area or with any Person;
(viii) Contracts pursuant to which Sabre or any Subsidiary
leases, subleases or otherwise has the right to use any real or personal
property, except those contracts terminable (other than in the case of
default by a party thereto) on 90 days' or less notice without any penalty
and those involving receipt or payment of less than $75,000 in any year;
(ix) Contracts in respect of licenses or other Contracts
relating to Intellectual Property and Contracts relating to advertising
arrangements, except those contracts terminable (other than in the case of
default by a party thereto) on 90 days' or less notice without any penalty
and those involving receipt or payment of less than $75,000 in any year;
(x) Contracts relating to portal or other distribution
arrangements;
(xi) Contracts in respect of any joint venture, partnership or
other similar arrangement (including, without limitation, any joint
development agreement);
(xii) Contracts with any Governmental Entity;
(xiii) Contracts with any employee or consultant of the
Travelocity Business relating to (A) non-disclosure, confidentiality,
assignment of inventions, proprietary rights or non-competition agreements
and (B) severance, bonus or similar arrangements that become operative in
connection with or as a result of the Merger; and
(xiv) Contracts (other than those specified in any of
clauses (i) through (xiii) of this clause (a)) which relate to or affect the
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business, operations or any of the assets or properties of the Travelocity
Business in a material way, except those (x) which are specifically not
required to be scheduled pursuant to the provisions of any of clauses (i)
through (xiii) of this paragraph (a), and (y) which are terminable (other
than in the case of default by a party thereto) on 90 days' or less notice
without any penalty and those involving payments of less than $50,000 in any
year; and, in the case of each of clauses (x) and (y) above, are not
material.
(b) Unless precluded by an applicable confidentiality agreement,
true and complete copies of all Contracts listed on the Sabre Disclosure
Schedule have been made available to Preview. All of the Contracts referred
to in the preceding paragraph (a) clauses (i) through (xiv) are valid,
binding, in full force and effect and enforceable in accordance with their
terms against Sabre, or the applicable Subsidiary (as the case may be), and,
to the knowledge of Sabre, against the respective counterparties to such
Contracts. None of Sabre or any of its Subsidiaries or, to the knowledge of
Sabre, any other party is in breach, violation or default, and no event
which, with notice or lapse of time or both, would constitute a breach,
violation or default, or give rise to any lien, charge or encumbrance or
right of termination, modification, cancellation, prepayment, suspension,
limitation, revocation or acceleration, under any Contract listed or required
to be listed on the Sabre Disclosure Schedule. None of Sabre, any Subsidiary
or, to the knowledge of Sabre, any other party to any of the Contracts listed
on the Sabre Disclosure Schedule is in material arrears in respect of the
performance or satisfaction of the terms and conditions on its part to be
performed or satisfied under any of such Contracts and no waiver or
indulgence has been granted by any of the parties thereto.
Section 4.14 Intellectual Property. Each material item of Sabre
Intellectual Property that is a patent, patent application, trademark,
trademark application, service xxxx, service xxxx application, domain name,
copyright registration, copyright application, or license, sublicense,
agreement, or permission concerning any of the foregoing, and that is used
primarily in the Travelocity Business is set forth on the Sabre Disclosure
Schedule. Except as set forth on the Sabre Disclosure Schedule:
(a) Sabre possesses all right, title and interest in and to, and
is the sole and exclusive owner of, or has a valid license to use, all the
Sabre Intellectual Property, free and clear of any encumbrance, and has the
right to require the applicant of any Sabre Intellectual Property which is an
application, including but not limited to patent applications or copyright
applications, to transfer ownership to Sabre of the application and of the
registration once it issues, and, to Sabre's knowledge, all registered
patents, trademarks, service marks and copyrights listed on the Sabre
Disclosure Schedule are valid and subsisting and in full force and effect;
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(b) The Sabre Intellectual Property is all the Intellectual
Property that is necessary for the ownership, maintenance and operation of
the Travelocity Business and Sabre has the right to use all of the Sabre
Intellectual Property in all jurisdictions in which Sabre conducts or
proposes to conduct the Travelocity Business, and the consummation of the
transactions contemplated hereby will not alter or impair any such rights;
(c) To Sabre's knowledge, Sabre has not, and the continued
operation of the Travelocity Business as presently conducted and as presently
proposed to be conducted will not, interfered with, infringed upon,
misappropriated or otherwise come into conflict with any Intellectual
Property rights of third parties, and Sabre has not received written notice
of any charge, complaint, claim, demand or notice so alleging (including any
claim that Sabre must license or refrain from using any Intellectual Property
rights of any third party);
(d) To Sabre's knowledge, no third party has interfered with,
infringed upon, misappropriated or otherwise come into conflict with any
Sabre Intellectual Property; and
(e) To Sabre's knowledge, no action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand has been made, is pending,
or, to the knowledge of Sabre, is threatened which challenges the legality,
validity, enforceability, use or ownership of any Sabre Intellectual
Property.
"Sabre Intellectual Property" means all Intellectual Property used by Sabre
in the operation of the Travelocity Business.
Section 4.15 Year 2000 Compliance. All material software and leased
computer hardware used in the conduct by Sabre or any Subsidiary of the
Travelocity Business as presently conducted will be Year 2000 Compliant. All
licensed software and leased computer hardware systems used in the conduct of
the Travelocity Business are, to Sabre's knowledge, Year 2000 Compliant.
Section 4.16 No Termination of Business Relationship. Since
January 1, 1999 through the date hereof, none of the Persons with which the
Travelocity Business has a material business relationship has given notice in
writing or other indication in writing of any intention to cancel or
otherwise terminate, prior to the end of the applicable contract term, a
material business relationship with the Travelocity Business and, to the
knowledge of Sabre, no event has occurred or failed to occur which would
(i) precipitate the cancellation or termination of, or (ii) entitle any such
entity or customer to terminate, such a business relationship.
Section 4.17 Insurance. Sabre maintains with respect to the
Travelocity Business in full force and effect insurance with responsible and
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reputable insurance companies or associations in such amounts, on such terms,
with such deductibles, and covering such risks (including fire, casualty, and
liability), as is consistent with industry practice. There is no default
with respect to any provision contained in any insurance policy, nor has
Sabre failed to give any notice or present any claim under any such policy in
due and timely fashion. All premiums due and payable with respect to the
insurance policies have been paid. All such policies are in full force and
effect. Neither Sabre nor any Subsidiary has failed to give any notice or
present any claim under any such insurance policy in due and timely fashion
or as required by any of such insurance policies or has otherwise, through
any act, omission or non-disclosure, jeopardized or impaired full recovery of
any claim under such policies, and there are no claims by Sabre or any
Subsidiary under any of such policies to which any insurance company is
denying liability or defending under a reservation of rights or similar
clause. No notice of cancellation or non-renewal of any such policy has been
received by Sabre.
Section 4.18 Sufficiency of Assets. The assets to be conveyed
pursuant to the Sabre Assignments include all of the assets and properties
required to operate the Travelocity Business substantially in the manner as
it is now being conducted and operated.
Section 4.19 Disclosure. The information described on Schedule 4.19
(i) to the extent constituting historical facts, does not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements contained therein
not misleading, and (ii) to the extent constituting forward-looking
statements, represents Sabre's best estimates prepared in good faith and
based upon reasonable assumptions (excluding the impact of the transactions
contemplated hereby).
ARTICLE V
COVENANTS
Section 5.1 Covenants of Preview. During the period from the date of
this Agreement and continuing until the Effective Time, Preview agrees as to
itself and its Subsidiaries that (except as expressly contemplated or
permitted by this Agreement or as otherwise indicated on the Preview
Disclosure Schedule or to the extent that Sabre, Travelocity Holdings or
Xxxxxxxxxxx.xxx shall otherwise consent in writing):
(a) Ordinary Course. (i) Preview and each of its Subsidiaries
shall carry on their respective businesses in the usual, regular and ordinary
course in all material respects, in substantially the same manner as
heretofore conducted, shall use all reasonable best efforts to keep available
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the services of its officers and employees as a group (subject to changes in
the ordinary course) and shall use all reasonable efforts to preserve intact
their present lines of business, maintain their rights and franchises and
preserve their relationships with customers, suppliers, regulators,
distributors, creditors, lessors and others having business dealings with
them to the end that their ongoing businesses shall not be impaired in any
material respect at the Effective Time; provided, however, that no action by
Preview or its Subsidiaries with respect to matters specifically addressed by
any other provision of this Section 5.1 shall be deemed a breach of this
Section 5.1(a)(i) unless such action would constitute a breach of one or more
of such other provisions.
(ii) Preview shall not, and shall not permit any of its
Subsidiaries to, (A) enter into any new line of business, (B) incur or commit
to any capital expenditures other than capital expenditures incurred or
committed to in the ordinary course of business consistent with past practice
and which are not in excess of $250,000 in the aggregate or $50,000
individually or (C) incur or commit to any advertising expenditures before
March 31, 2000 not provided for in the advertising budget set forth in the
Preview Disclosure Schedule or incur or commit to any advertising
expenditures after March 31, 2000 not provided for in an advertising budget
as is mutually agreed by Preview and Sabre.
(iii) Preview shall perform and comply with the AOL
Agreements in the usual, regular and ordinary course and shall not willfully
breach, violate or default on the AOL Agreements or take any action that
would precipitate AOL or entitle AOL to cancel, terminate or modify the AOL
Agreements.
(b) Dividends; Changes in Share Capital. Preview shall not and
shall not propose to, (i) declare or pay any dividends on or make other
distributions in respect of any of its capital stock, (ii) split, combine or
reclassify any of its capital stock, or (iii) repurchase, redeem or otherwise
acquire any shares of its capital stock or any securities convertible into or
exercisable for any shares of its capital stock.
(c) Issuance of Securities. Preview shall not, and shall not
permit any of its Subsidiaries to, issue, deliver or sell, or authorize or
propose the issuance, delivery or sale of, any shares of its capital stock of
any class, any Preview Voting Debt or any securities convertible into or
exercisable for, or any rights, warrants or options to acquire, any such
shares or Preview Voting Debt, or enter into any agreement with respect to
any of the foregoing, other than (i) the issuance of Preview Common Stock
(and the associated Rights) upon the exercise of stock options or in
connection with other stock-based benefits plans outstanding on the date
hereof in accordance with their present terms, (ii) issuances by a wholly
owned Subsidiary of Preview of capital stock to such Subsidiary's parent,
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(iii) issuances in accordance with the Rights Agreement, (iv) issuances of
shares and options to purchase no more than 100,000 shares of Preview Common
Stock granted to non-executive employees in the ordinary course of business
and having an exercise price equal to the current market price of Preview
Common Stock on the date of grant, or (v) issuances of options to purchase up
to that number of shares of Preview Common Stock equal to the number of
shares subject to outstanding options that expire unexercised after the date
hereof, provided that such options are granted with the consent of Sabre and
have an exercise price not less than the current market price of Preview
Common Stock on the date of grant as contemplated by this Agreement.
(d) Governing Documents. Except to the extent required by law or
required by the rules and regulations of Nasdaq, Preview and its Subsidiaries
shall not amend or propose to amend their respective certificates of
incorporation, by-laws or other governing documents.
(e) No Acquisitions or Joint Ventures. Preview shall not, and
shall not permit any of its Subsidiaries to, acquire or agree to acquire by
merging or consolidating with, or by purchasing a substantial equity interest
in or a substantial portion of the assets of, or by any other manner, any
business or any corporation, partnership, association or other business
organization or division thereof or otherwise acquire or agree to acquire any
assets (other than the acquisition of assets used in the operations of the
business of Preview and its Subsidiaries in the ordinary course). Preview
shall not, and shall not permit any of its Subsidiaries to, enter into, or
agree to enter into, (i) any joint venture or partnership, or any discussions
with respect to any joint venture or partnership, or (ii) any material
marketing or technology alliance (other than supplier relationships and site
sponsorships entered into in the ordinary course of business) or any
discussions with respect to such alliance unless such alliance would not
extend beyond the Closing Date and Preview has given Sabre reasonable notice
to Sabre prior to entering into such alliance.
(f) No Reorganizations or Dispositions. Preview shall not, and
shall not permit any Subsidiary to, adopt a plan or agreement of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of Preview or any of its
Subsidiaries or sell, lease, encumber or otherwise dispose of, or agree to
sell, lease, encumber or otherwise dispose of, any of its assets (including
capital stock of Subsidiaries), except for the disposal of obsolete or
worn-out assets or properties in the ordinary course of business, consistent
with past practices, or as contemplated by this Agreement.
(g) Indebtedness. Preview shall not, and shall not permit any of
its Subsidiaries to, (i) make any loans, advances or capital contributions
to, or investments in, any other Person, other than by Preview or a
Subsidiary of Preview to or in Preview or any Subsidiary of Preview or
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(ii) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than indebtedness, loans, advances, payments, discharges or satisfactions
incurred or committed to in the ordinary course of business consistent with
past practice.
(h) Tax-Free Qualification. Preview shall not, and shall not
permit any of its Subsidiaries to, take any action that would prevent or
impede the Merger from qualifying as a reorganization under Section 368 of
the Code.
(i) Other Actions. Preview shall not, and shall not permit any of
its Subsidiaries to, take any action that would, or that could reasonably be
expected to, result in, except as otherwise permitted by Section 6.4, any of
the conditions to the Merger set forth in Article VII not being satisfied.
(j) Accounting Methods; Income Tax Elections; Tax Returns. Except
as disclosed in Preview SEC Reports filed prior to the date of this
Agreement, Preview shall not change its methods of accounting in effect at
December 31, 1998, except as required by changes in U.S. GAAP as concurred in
by Preview's independent auditors. Preview shall not (i) change its fiscal
year or (ii) make any material Tax election, other than in the ordinary
course of business consistent with past practice, without consultation with
Sabre. Preview shall prepare and file all Tax Returns required to be filed
and pay all required Taxes due in accordance with applicable law.
(k) Preview Rights Agreement. Except as contemplated by this
Agreement, Preview shall not amend, modify or waive any provision of the
Rights Agreement, and shall not take any action to redeem the Rights or
render the Rights inapplicable to any transaction, other than to permit a
Person to make a Superior Proposal if the Board of Directors of Preview
determines in its good faith judgment, after receiving the advice of outside
legal counsel, that, in light of the Superior Proposal, the Board of
Directors of Preview would be in violation of its fiduciary duties under
applicable law if it failed to amend, modify or waive such provision of the
Preview Rights Agreement.
(l) Preview Benefit Plans. Preview shall not, and shall not
permit its Subsidiaries, to (i) enter into, adopt or amend any agreement or
arrangement relating to severance or termination pay of any director or
officer or employee of Preview or any Subsidiary except, in the case of
employees, in the ordinary course of business, (ii) enter into, adopt or
amend any Preview Benefit Plan or Preview Multiemployer Plan, (iii) grant any
increase in base compensation or other payment or benefit to any directors,
officers or employees, except for increases occurring in the ordinary course
of business, and except in the case of clauses (i), (ii) and (iii), as
required under existing contracts and as required by law.
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(m) Standstills. Preview shall not amend or waive any provisions
of, or grant any approval under, any standstill agreement; provided that the
Board of Directors of Preview may grant a waiver of provisions of, or
approval under, a standstill agreement with any Person solely to permit such
Person to make a Superior Proposal if the Board of Directors of Preview
determines in its good faith judgment, after receiving the advice of outside
legal counsel, that, in light of the Superior Proposal, the Board of
Directors of Preview would be in violation of its fiduciary duties under
applicable law if it failed to grant such waiver;
(n) Commitments. Preview shall not enter into, or permit any of
its Subsidiaries to enter into, any commitments, contracts or agreements to
do any of the foregoing.
Section 5.2 Covenants of Sabre. During the period from the date of
this Agreement and continuing until the Effective Time, Sabre agrees as to
itself and its Subsidiaries that (except as expressly contemplated or
permitted by this Agreement or as otherwise indicated on the Sabre Disclosure
Schedule or to the extent that Preview shall otherwise consent in writing):
(a) Ordinary Course. (i) Sabre shall carry on the Travelocity
Business in the usual, regular and ordinary course in all material respects,
in substantially the same manner as heretofore conducted, and shall use all
reasonable best efforts to keep available the services of the employees as a
group of the Travelocity Business (subject to changes in the ordinary course)
and use all reasonable efforts to preserve intact the Travelocity Business,
maintain its rights and franchises and preserve its relationships with
customers, suppliers, regulators, distributors, creditors, lessors and others
having business dealings with Sabre with respect to the Travelocity Business
to the end that the Travelocity Business shall not be impaired in any
material respect at the Effective Time; provided, however, that no action by
Sabre with respect to matters specifically addressed by any other provisions
of this Section 5.2 shall be deemed a breach of this Section 5.2(a)(i) unless
such action would constitute a breach of one or more of such other
provisions.
(b) Issuance of Securities. Sabre shall not permit
Xxxxxxxxxxx.xxx to issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of its capital stock of any class
or any securities convertible into or exercisable for, or any rights,
warrants or options to acquire, any such shares, or enter into any agreement
with respect to any of the foregoing, other than issuances of Xxxxxx.xxx
Class A Common Stock to Sabre or its Affiliates or as described in the Sabre
Disclosure Schedule. Sabre shall not permit Xxxxxxxxxxx.xxx to declare any
cash dividends or effect any share repurchases.
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(c) No Acquisitions or Joint Ventures. Except as contemplated by
this Agreement, Sabre shall not permit Xxxxxxxxxxx.xxx to acquire or agree to
acquire by merging or consolidating with, or by purchasing a substantial
equity interest in or a substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof or otherwise acquire or agree to
acquire any assets (other than the acquisition of assets used in the
operations of the Travelocity Business in the ordinary course and the assets
of the Travelocity Business to be assigned to Xxxxxxxxxxx.xxx pursuant to the
Preview Assignments and Sabre Assignments).
(d) No Reorganizations or Dispositions. Sabre shall not, and
shall not permit any Subsidiary to, adopt a plan or agreement of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization affecting the Travelocity Business
or sell, lease, encumber or otherwise dispose of, or agree to sell, lease,
encumber or otherwise dispose of, any of the assets of the Travelocity
Business (including capital stock of Subsidiaries), except for the disposal
of obsolete or worn-out assets or properties in the ordinary course of
business, consistent with past practices, or as contemplated by this
Agreement.
. (e) Indebtedness. Sabre shall not permit the Travelocity Business
to (i) make any loans, advances or capital contributions to, or investments
in, any other Person, or (ii) pay, discharge or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than indebtedness, loans, advances, payments,
discharges or satisfactions incurred or committed to in the ordinary course
of the Travelocity Business consistent with past practice.
(f) Tax-Free Qualification. Sabre shall not, and shall not permit
any of its Subsidiaries to, take any action that would prevent or impede the
Merger from qualifying as a reorganization under Section 368 of the Code.
(g) Other Actions. Sabre shall not, and shall not permit any of
its Subsidiaries to, take any action that would, or that could reasonably be
expected to, result in any of the conditions to the Merger set forth in
Article VII not being satisfied.
(h) Accounting Methods. Except as disclosed in Sabre SEC Reports
filed prior to the date of this Agreement, Sabre shall not change its methods
of accounting in respect of the Travelocity Business in effect at December
31, 1998, except as required by changes in U.S. GAAP as concurred in by
Sabre's independent auditors.
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(i) Commitments. Sabre shall not enter into, or permit any of its
Subsidiaries to enter into, any commitments, contracts or agreements to do
any of the foregoing.
Section 5.3 Advice of Changes; Regular Reporting; Governmental
Filings. (a) Each Party shall confer on a regular and frequent basis with
the other and report (to the extent permitted by law or regulation or any
applicable confidentiality agreement) on operational matters including,
without limitation, the provision of regular reports by Preview (with respect
to it and its Subsidiaries) and Sabre (with respect to the Travelocity
Business) in the form attached at Exhibit 5.3. During the period from the
date hereof to the Closing, each Party shall give prompt written notice to
the other Parties of (i) the occurrence, or failure to occur, of any event
which occurrence or failure would cause or could reasonably be expected to
cause any representation or warranty of the Party giving notice contained in
this Agreement to be untrue or inaccurate in any material respect at any time
from the date hereof to the Closing, or (ii) any failure of the Party giving
notice to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by such Party hereunder; provided, however, that
the delivery of any notice pursuant to this Section 5.3 shall not limit or
otherwise affect the remedies available hereunder to the Parties receiving
notice, or modify in any way any disclosure made in or in connection with
this Agreement as of the date hereof.
(b) As soon as practicable after the end of each month during the
period from the date of this Agreement until the Closing Date, Preview will
prepare and promptly deliver to Sabre copies of an unaudited balance sheet as
of the end of such month and an unaudited income statement for the month then
ended for Preview and Sabre will prepare and promptly deliver to Preview
copies of an unaudited balance sheet as of the end of such month and an
unaudited income statement for the month then ended for the Travelocity
Business. All financial statements delivered hereunder by Preview shall (a)
be prepared in accordance with U.S. GAAP applied on a basis consistent with
past practice (except that such financial statements need not contain all of
the footnotes required under U.S. GAAP and may be subject to year-end accrual
adjustments) and (b) fairly present the consolidated financial position of
Preview and its Subsidiaries as at the dates thereof and the consolidated
results of its operations for the periods then ended. All financial
statements delivered hereunder by Sabre shall (a) be prepared in accordance
with U.S. GAAP applied on a basis consistent with past practice (except that
such financial statements need not contain all of the footnotes required
under U.S. GAAP and may be subject to year-end accrual adjustments) and
(b) fairly present the results of operations of the Travelocity Business for
the periods then ended.
(c) Preview and Sabre shall file all reports required to be filed
by each of them with the SEC (and all other Governmental Entities) between
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the date of this Agreement and the Effective Time and shall (to the extent
permitted by law or regulation or any applicable confidentiality agreement)
deliver to the other party copies of all such reports, announcements and
publications promptly after the same are filed. Subject to applicable laws
relating to the exchange of information, each of Preview and Sabre shall have
the right to review in advance, and will consult with the other with respect
to, all the information relating to the other party and each of their
respective Subsidiaries, which appears in any filings, announcements or
publications made with, or written materials submitted to, any third party or
any Governmental Entity in connection with the transactions contemplated by
this Agreement. In exercising the foregoing right, each of the parties hereto
agrees to act reasonably and as promptly as practicable. Each party agrees
that, to the extent practicable and as timely as practicable, it will consult
with, and provide all appropriate and necessary assistance to, the other
party with respect to the obtaining of all permits, consents, approvals and
authorizations of all third parties and Governmental Entities necessary or
advisable to consummate the transactions contemplated by this Agreement and
each party will keep the other party apprised of the status of matters
relating to completion of the transactions contemplated hereby.
(d) As soon as practicable after the end of each month during the
period from the date of this Agreement until the Closing Date, if requested
by Sabre, Preview will prepare and promptly deliver to Sabre reports
regarding the AOL Agreements addressing such matters as Sabre shall request,
including traffic, development obligations, or other information and Preview
shall promptly notify Sabre of any actual or potential breaches, violation or
defaults by it or AOL under the AOL Agreements or any event which would
precipitate any cancellation, termination or modification of the AOL
Agreements by AOL. In addition, if requested by Sabre, Preview shall
promptly provide Sabre with copies of all reports supplied to AOL and of all
reports supplied by AOL under the AOL Agreements.
Section 5.4 Transition Planning. Xxxxx Xxxxx, as President of
Xxxxxxxxxxx.xxx (and on behalf of Travelocity Holdings and Sabre), and Xxxxx
Xxxxxxx, as President of Preview, jointly shall be responsible for
coordinating all aspects of transition planning and implementation relating
to the Sabre Assignments, the Preview Assignments, the Merger and the other
transactions contemplated hereby. If either such person ceases to be
President of his company for any reason, such person's successor shall assume
his predecessor's responsibilities under this Section 5.4. During the period
between the date of this Agreement and the Effective Time, Xxxxx Xxxxx and
Xxxxx Xxxxxxx jointly shall examine various alternatives regarding the manner
in which to best organize and manage the businesses of Xxxxxxxxxxx.xxx LP
after the Effective Time to the extent permitted by law or regulation or any
applicable confidentiality agreement.
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ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Preparation of Form S-4 and Proxy Statement; Preview
Stockholders Meeting. (a) The parties shall cooperate and promptly prepare,
and Sabre shall file with the SEC as soon as practicable, a Registration
Statement on Form S-4 with respect to the issuance of Xxxxxxxxxxx.xxx Common
Stock in the Merger (the "Form S-4"), a portion of which Registration
Statement shall also serve as the proxy statement/prospectus with respect to
the meeting of Preview's stockholders in connection with the Merger (the
"Proxy Statement/Prospectus"). Sabre shall use its reasonable best efforts
to, and Preview will cooperate with Sabre to, have the Form S-4 declared
effective by the SEC as promptly as practicable and to keep the Form S-4
effective as long as is necessary to consummate the Merger. Sabre shall use
its reasonable best efforts to obtain, prior to the effective date of the
Form S-4, all necessary permits or approvals required under Blue Sky Laws to
carry out the Merger.
(b) Preview shall, as promptly as practicable following the
execution of this Agreement, duly call, give notice of, convene and hold a
meeting of its stockholders (the "Preview Stockholders Meeting") for the
purpose of obtaining the Required Preview Vote with respect to the
transactions contemplated by this Agreement. In connection with the Preview
Stockholders Meeting, Preview will mail to its stockholders as promptly as
practicable, the Proxy Statement/Prospectus and all other proxy materials for
the Preview Stockholders Meeting, (i) will use its reasonable best efforts,
subject to paragraph (c) of this Section 6.1, to obtain the Required Preview
Vote and (ii) will otherwise comply with all legal requirements applicable to
the Preview Stockholders Meeting.
(c) Except as provided in the next sentence, the Board of
Directors of Preview shall recommend approval and adoption of this Agreement
and the Merger by Preview's stockholders. The Board of Directors of Preview
shall be permitted (i) not to recommend to Preview's stockholders that they
give the Required Preview Vote or (ii) to withdraw or modify in a manner
adverse to Sabre its recommendation to Preview's stockholders that they give
the Required Preview Vote, only (w) if after receiving an Acquisition
Proposal that constitutes a Superior Proposal, the Board of Directors of
Preview determines in its good faith judgment, after receiving the advice of
outside legal counsel, that, in light of this Superior Proposal, the Board of
Directors would be in violation of its fiduciary duties under applicable law
if it failed not to take such action, (x) if three Business Days have elapsed
following delivery by Preview to Sabre of written notice advising Sabre that
the Board of Directors of Preview intends to resolve to take such action
absent modification to the terms and conditions of this Agreement, (y) if,
assuming this Agreement were amended to reflect all adjustments to the terms
and conditions hereof proposed by Sabre during such three Business Day
period, such Acquisition Proposal would nonetheless constitute a Superior
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Proposal (it being understood that Sabre shall be permitted to propose
adjustments to the terms and conditions hereof, notwithstanding anything
contained in the Confidentiality Agreement); and (z) if Preview has complied,
in all material respects, with its obligations set forth in Section 6.4;
provided, however, that nothing in this paragraph (c) shall be interpreted to
excuse Preview from complying with its obligations under paragraphs (a) and
(b) of this Section 6.1.
(d) Sabre shall, and shall cause its respective Subsidiaries to,
approve and adopt this Agreement and the Merger.
Section 6.2 Access to Information. (a) Upon reasonable notice,
Preview shall (and shall cause its Subsidiaries to) afford to the officers,
employees, accountants, counsel, financial advisors and other representatives
of Sabre reasonable access during normal business hours, during the period
prior to the Effective Time, to all its properties, books, contracts,
commitments and records and, during such period, Preview shall (and shall
cause its Subsidiaries to) furnish promptly to Sabre (i) a copy of each
report, schedule, registration statement and other document filed, published,
announced or received by it during such period pursuant to the requirements
of Federal or state securities laws, as applicable (other than reports or
documents which such party is not permitted to disclose under applicable
law), and (ii) consistent with its legal obligations, all other information
concerning its business, properties and personnel as such other party may
reasonably request; provided, however, that Preview may restrict the
foregoing access to the extent that any law, treaty, rule or regulation of
any Governmental Entity or any confidentiality agreement applicable to
Preview requires Preview or its Subsidiaries to restrict access to any
properties or information.
(b) Upon reasonable notice, Sabre shall (and shall cause its
Subsidiaries to) afford to the officers, employees, accountants, counsel,
financial advisors and other representatives of Preview reasonable access
during normal business hours, during the period prior to the Effective Time,
to all its properties, books, contracts, commitments and records relating to
the Travelocity Business and, during such period, Sabre shall (and shall
cause its Subsidiaries to) furnish promptly to Preview (i) a copy of each
report, schedule, registration statement and other document filed, published,
announced or received by it during such period pursuant to the requirements
of Federal or state securities laws, as applicable (other than reports or
documents which such party is not permitted to disclose under applicable
law), and (ii) consistent with its legal obligations, all other information
concerning the Travelocity Business, as such other party may reasonably
request; provided, however, that Sabre may restrict the foregoing access to
the extent that any law, treaty, rule or regulation of any Governmental
Entity or any confidentiality agreement applicable to Sabre requires Sabre or
its Subsidiaries to restrict access to any properties or information.
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(c) The parties will hold any such information which is non-public
in confidence to the extent required by, and in accordance with, the
provisions of the letter dated January 18, 1999 between Preview and Sabre
(the "Confidentiality Agreement".) Any investigation by Preview or Sabre
shall not affect the representations and warranties of Sabre, Travelocity
Holdings, Xxxxxxxxxxx.xxx or Preview, as the case may be.
Section 6.3 Reasonable Best Efforts. (a) Subject to Section 6.3(b),
Sabre and Preview shall each cooperate with the other and use (and shall
cause their respective Subsidiaries to use) their respective reasonable best
efforts to promptly (i) take or cause to be taken all necessary actions, and
do or cause to be done all things, necessary, proper or advisable under this
Agreement and applicable laws to consummate and make effective the Merger and
the other transactions contemplated by this Agreement as soon as practicable,
including, without limitation, preparing and filing promptly and fully all
documentation to effect all necessary filings, notices, petitions,
statements, registrations, submissions of information, applications and other
documents and (ii) obtain all approvals, consents, registrations, permits,
authorizations and other confirmations required to be obtained from any third
party necessary, proper or advisable to consummate the Merger and the other
transactions contemplated by this Agreement. Subject to applicable laws
relating to the exchange of information, Sabre and Preview shall have the
right to review in advance, and to the extent practicable each will consult
the other on, all the information relating to Preview and its Subsidiaries or
Sabre and its Subsidiaries, as the case may be, that appears in any filing
made with, or written materials submitted to, any third party and/or any
governmental authority in connection with the Merger and the other
transactions contemplated by this Agreement.
(b) Without limiting Section 6.3(a), Preview and Sabre shall each
use its reasonable best efforts to avoid the entry of, or to have vacated or
terminated, any decree, order, or judgment that would restrain, prevent or
delay the Closing, on or before the Termination Date, including without
limitation defending through litigation on the merits any claim asserted in
any court by any Person.
(c) Each of Sabre, Travelocity Holdings, Xxxxxxxxxxx.xxx and
Preview shall use its reasonable best efforts to cause the Merger to qualify,
and will not (both before and after consummation of the Merger) take any
actions which to its knowledge could reasonably be expected to prevent the
Merger from qualifying, as a reorganization under the provisions of Section
368 of the Code.
Section 6.4 No Solicitation. (a) Each of Preview and its
Subsidiaries will not, and will use its reasonable best efforts to cause its
respective officers, directors, employees, investment bankers, consultants,
attorneys, accountants, agents and other representatives not to, directly or
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indirectly, take any action to solicit, initiate, knowingly encourage or
knowingly facilitate the making of any Acquisition Proposal (including
without limitation, by amending, or granting any waiver under, the Rights
Agreement) or any inquiry with respect thereto or engage in discussions or
negotiations with any Person with respect thereto, or in connection with any
Acquisition Proposal or potential Acquisition Proposal, disclose any
nonpublic information relating to it or its Subsidiaries or afford access to
the properties, books or records of it or its Subsidiaries to, any Person
that has made, or to such party's knowledge, is considering making, any
Acquisition Proposal; provided, however, that, in the event that prior to
receipt by Preview of the Required Preview Vote, (i) Preview shall receive a
Superior Proposal that was not solicited by it and did not otherwise result
from a breach of this Section 6.4, (ii) the Board of Directors of Preview,
determines in its good faith judgment, after receiving the advice of outside
counsel that, in light of this Superior Proposal, if Preview fails to
participate in such discussions or negotiations with, or to provide such
information or access to, the party making the Superior Proposal, it would be
in violation of its fiduciary duties under applicable law, and (iii) after
giving Sabre 24 hours' notice of its intention to do so, Preview may
(x) furnish information or access with respect to it and its Subsidiaries to
the Person making such Superior Proposal pursuant to a customary
confidentiality agreement containing terms generally no less restrictive than
the terms contained in the Confidentiality Agreement, provided that a copy of
all such written information is simultaneously, or has been previously,
provided to Sabre and (y) participate in discussions and negotiations
regarding such Superior Proposal; and provided, further, that after receipt
of an unsolicited, written, bona fide Acquisition Proposal that the Board of
Directors of Preview reasonably concludes may constitute a Superior Proposal,
Preview may on one occasion submit to the party making such Acquisition
Proposal a written list of questions, the sole purpose of which is to elicit
clarifications as to the material terms of the Acquisition Proposal so as to
enable the Board of Directors of Preview to make a determination whether such
Acquisition Proposal is in fact a Superior Proposal (it being agreed that any
correspondence with such party shall be limited to questions and such
questions shall be limited to the purpose of clarifying the material terms of
such Acquisition Proposal and shall not solicit or encourage any new
Acquisition Proposal or any change to the Acquisition Proposal).
(b) Nothing contained in this Agreement shall prevent the Board of
Directors of Preview from complying with Rule 14d-9 or Rule 14e-2 under the
Exchange Act with regard to an Acquisition Proposal; provided that the Board
of Directors of Preview shall not recommend that the stockholders of Preview
tender their shares in connection with a tender offer except to the extent,
after receiving a Superior Proposal, the Board of Directors of Preview
determines in its good faith judgment, after receiving the advice of outside
legal counsel, that, in light of the Superior Proposal, the Board of
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Directors would be in violation of its fiduciary duties under applicable law
if it fails to make such a recommendation.
(c) If Preview or any Subsidiary of Preview receives an
Acquisition Proposal, Preview will (A) promptly (and in no event later than
24 hours after receipt of any Acquisition Proposal) notify (which notice
shall be provided orally and in writing and shall identify the Person making
the Acquisition Proposal and set forth the material terms thereof) Sabre of
the receipt of the Acquisition Proposal, or any request for non-public
information relating to Preview or any Subsidiary of Preview or for access to
the properties, books or records of Preview or any Subsidiary of Preview by
any Person that has made, or to Preview or any Subsidiary's knowledge may be
considering making, an Acquisition Proposal, and (B) will keep Sabre
reasonably informed of any changes to the material terms of any such
Acquisition Proposal or request. Preview shall, and shall cause its
Subsidiaries to, immediately cease and cause to be terminated, and use
reasonable best efforts to cause its officers, directors, employees,
investment bankers, consultants, attorneys, accountants, agents and other
representatives to, immediately cease and cause to be terminated, all
discussions and negotiations, if any, that have taken place prior to the date
hereof with any Persons with respect to any actual or potential Acquisition
Proposal.
For purposes of this Agreement, "Acquisition Proposal" means any offer
or proposal for, or any indication of interest in, any (i) direct or indirect
acquisition or purchase of a business or asset of Preview or any of its
Subsidiaries that constitutes 20% or more of the net revenues or assets of
Preview and its Subsidiaries, taken as a whole; (ii) direct or indirect
acquisition or purchase of 20% or more of any class of equity securities of
Preview or any of its Subsidiaries whose business constitutes 20% or more of
the net revenues or assets of Preview and its Subsidiaries, taken as a whole;
(iii) tender offer or exchange offer that, if consummated, would result in
any Person beneficially owning 20% or more of any class of equity securities
of Preview or any of its Subsidiaries whose business constitutes 20% or more
of the net revenues or assets of Preview and its Subsidiaries, taken as a
whole; or (iv) merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Preview or any of its Subsidiaries whose business constitutes 20% or more of
the net revenue or assets of Preview and its Subsidiaries, taken as a whole,
other than the transactions contemplated by this Agreement. For purposes of
this Agreement, "Superior Proposal" means any bona fide written Acquisition
Proposal for or in respect of more than 50 percent of the outstanding shares
of Preview Common Stock on terms that the Board of Directors of Preview
determines in its good faith judgment (after consultation with a financial
advisor of nationally recognized reputation and taking into account all the
terms and conditions of the Acquisition Proposal deemed relevant by Preview's
Board of Directors, including any break-up fees, expense reimbursement
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provisions, conditions to consummation, and the ability of the party making
such proposal to obtain financing for such Acquisition Proposal) are more
favorable from a financial point of view to its stockholders than the Merger.
(d) Nothing contained in this Agreement shall prohibit a deferral
of the distribution of rights issued pursuant to the Preview Rights Agreement
following the commencement of a tender offer or an exchange offer for Preview
Common Stock.
(e) Each of Preview and its Subsidiaries agrees that it will take
the necessary steps promptly to inform its officers, directors, investment
bankers, consultants, attorneys, accountants, agents and other
representatives, as appropriate, of the obligations undertaken in this
Section 6.4.
Section 6.5 Employee Matters. Preview and Sabre agree that the
individuals who immediately prior to the Effective Time are employees of
Preview and its Subsidiaries (the "Continuing Employees") shall, following
the Effective Time, be provided with employee benefits that are no less
advantageous in the aggregate to (in Sabre's discretion) either (i) the
employee benefits provided to the Continuing Employees immediately prior to
the Effective Time or (ii) the employee benefits provided to those
individuals who following the Effective Time are employees of Xxxxxxxxxxx.xxx
LP, other than the Continuing Employees (but excluding in any event awards
under stock option and other equity-based plans and flight benefit
privileges); and provided, that nothing herein shall limit the right of any
entity to make such changes to any employee benefit plan or arrangement as
may be necessary to conform a plan or arrangement with applicable law or to
terminate the employment of any person following the Effective Time. The
Surviving Corporation shall grant or cause Xxxxxxxxxxx.xxx LP to grant all
Continuing Employees credit for all service with Preview and its Subsidaries
and their respective predecessors prior to the Effective Time for all
purposes for which such service is recognized under employee benefit plans
provided to such Continuing Employees following the Effective Time. To the
extent that Continuing Employees receive medical, dental or health insurance
benefits after the Effective Time, Sabre shall waive or cause Xxxxxxxxxxx.xxx
LP to waive any pre-existing condition exclusions and actively-at-work
requirements for Continuing Employees and their covered dependents and
provide that any expenses incurred during the portion of the calendar year
proceding the Effective Time by a Continuing Employee or a Continuing
Employee's covered dependents shall be taken into account under any such
medical, dental or health plans provided to such Continuing Employees for
purposes of satisfying applicable deductible, coinsurance and maximum
out-of-pocket provisions.
Section 6.6 Fees and Expenses. Whether or not the Merger is
consummated, (i) all Expenses incurred in connection with the Preview
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Assignments, the Sabre Assignments, this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such Expenses, and
(ii) all Expenses incurred in connection with the printing, filing and
mailing of the Form S-4 and the Proxy Statement/Prospectus shall be shared
equally by Sabre and Preview, except in each case as provided in Section 8.3.
As used in this Agreement, "Expenses" includes all out-of-pocket expenses
(including, without limitation, all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a party hereto
and its affiliates) incurred by a party or on its behalf in connection with
or related to the authorization, preparation, negotiation, execution and
performance of this Agreement and the transactions contemplated hereby,
including the preparation, printing, filing and mailing of the Proxy
Statement/Prospectus and the solicitation of stockholder approvals and all
other matters related to the transactions contemplated hereby.
Section 6.7 Director and Officer Liability (a) Xxxxxxxxxxx.xxx
shall indemnify and hold harmless, to the fullest extent permitted under
applicable law, the individuals who on or prior to the Effective Time were
officers, directors and employees of Preview or its Subsidiaries
(collectively, the "Indemnitees") with respect to all acts or omissions by
them in their capacities as such or taken at the request of Preview or any of
its Subsidiaries at any time on or prior to the Effective Time. Following
the Effective Time, Xxxxxxxxxxx.xxx shall honor all indemnification
obligations presently provided under Preview's certificate of incorporation
and by-laws in effect on the date hereof. Xxxxxxxxxxx.xxx shall honor all
indemnification agreements with Indemnitees in effect as of the date of this
Agreement in accordance with the terms thereof.
(b) For six years after the Effective Time, Xxxxxxxxxxx.xxx shall
procure the provision of officers' and directors' liability insurance in
respect of acts or omissions occurring prior to the Effective Time covering
each such Person currently covered by Preview's officers' and directors'
liability insurance policy on terms with respect to coverage and in amounts
no less favorable than those of such policy in effect on the date hereof;
provided, that if the aggregate annual premiums for such insurance at any
time during such period shall exceed 200% of the per annum rate of premium
paid by Preview and its Subsidiaries as of the date hereof for such
insurance, then Xxxxxxxxxxx.xxx shall provide only such coverage as shall
then be available at an annual premium equal to 200% of such rate.
(c) The obligations of Xxxxxxxxxxx.xxx under this Section 6.7
shall not be terminated or modified in such a manner as to adversely affect
any Indemnitee to whom this Section 6.7 applies without the consent of the
affected Indemnitee (it being expressly agreed that the Indemnitees to whom
this Section 6.7 applies shall be third party beneficiaries of this Section
6.7).
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Section 6.8 Public Announcements. Sabre and Preview shall use all
reasonable efforts to develop a joint communications plan and each party
shall use all reasonable efforts (i) to ensure that all press releases and
other public statements with respect to the transactions contemplated hereby
shall be consistent with such joint communications plan, and (ii) unless
otherwise required by applicable law or by obligations pursuant to any
listing agreement with or rules of any securities exchange, to consult with
each other before issuing any press release or otherwise making any public
statement with respect to this Agreement or the transactions contemplated
hereby.
Section 6.9 Accountants' Letters. Upon reasonable notice from the
other, Sabre and Preview shall use their respective reasonable best efforts
to cause their respective independent public accountants to deliver to
Preview or Sabre, as the case may be, a letter, dated within two Business
Days of the Effective Time of the Form S-4 covering such matters as are
reasonably requested by Preview or Sabre, as the case may be, and as are
customarily addressed in accountant's "comfort" letters.
Section 6.10 Listing of Shares of Xxxxxxxxxxx.xxx Common Stock.
Xxxxxxxxxxx.xxx shall use its reasonable best efforts to cause the shares of
Xxxxxxxxxxx.xxx Common Stock to be approved for quotation, upon official
notice of issuance, on Nasdaq.
Section 6.11 Officers and Senior Management. Prior to the Closing
Date, Sabre shall identify the officers and senior managers of the Surviving
Corporation.
Section 6.12 Year 2000 Compliance. Preview shall use its reasonable
best efforts to cause all computer software and hardware used by it or any
Subsidiary in the conduct of its business, and Sabre shall use its reasonable
best efforts to cause all computer software and hardware used by it or any
Subsidiary in the conduct of the Travelocity Business, to be Year 2000
Compliant by November 15, 1999.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to Each Party's Obligation to Effect the
Merger. The obligations of Preview, Sabre, Travelocity Holdings and
Xxxxxxxxxxx.xxx to effect the Merger are subject to the satisfaction or
waiver on or prior to the Closing Date of the following conditions:
(a) Stockholder Approval. Preview shall have obtained the
Required Preview Vote in connection with the adoption of this Agreement and
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approval of the Merger by the stockholders of Preview in accordance with the
DGCL.
(b) No Injunctions or Restraints, Illegality. No statute, rule,
ordinance or regulation shall have been adopted or promulgated, and no
temporary restraining order, preliminary or permanent injunction or other
order issued by a court or other Governmental Entity of competent
jurisdiction shall be in effect, having the effect of making the Merger
illegal or otherwise prohibiting consummation of the Merger.
(c) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger, the formation of Xxxxxxxxxxx.xxx LP or the other
transactions contemplated hereby under the HSR Act shall have been terminated
or shall have expired.
(d) Nasdaq Listing. Nasdaq shall have approved the shares of
Xxxxxxxxxxx.xxx Common Stock upon official notice of issuance for quotation
on Nasdaq.
(e) Effectiveness of the Form S-4. The Form S-4 shall have been
declared effective by the SEC under the Securities Act. No stop order
suspending the effectiveness of the Form S-4 shall have been issued by the
SEC and no proceedings for that purpose shall have been initiated or
threatened by the SEC.
Section 7.2 Additional Conditions to Obligations of Sabre,
Travelocity Holdings and Xxxxxxxxxxx.xxx. The obligations of Sabre,
Travelocity Holdings and Xxxxxxxxxxx.xxx to effect the Merger are subject to
the satisfaction of, or waiver by Sabre on or prior to the Closing Date of
the following conditions:
(a) Representations and Warranties. Each of the representations
and warranties of Preview set forth in this Agreement that is qualified as to
"materiality" or "Material Adverse Effect" shall be true and correct on the
Closing Date as if made on the Closing Date (except to the extent that any
such representation or warranty is made as of a specified date, in which case
such representation or warranty shall be true and correct as of such
specified date), and each of the representations and warranties of Preview
that is not so qualified shall be true and correct in all material respects
on the Closing Date as if made on the Closing Date (except to the extent that
any such representation or warranty is made as of a specified date, in which
case such representation or warranty shall be true and correct in all
material respects as of such specified date), and Travelocity Holdings shall
have received a certificate of an executive officer of Preview to such
effect.
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(b) Performance of Obligations of Preview. Preview shall have
performed or complied with all agreements and covenants required to be
performed by it under this Agreement at or prior to the Closing Date that are
qualified as to materiality and shall have performed or complied in all
material respects with all other agreements and covenants required to be
performed by it under this Agreement at or prior to the Closing Date that are
not so qualified as to materiality, and Travelocity Holdings shall have
received a certificate of an executive officer of Preview to such effect.
(c) Tax Opinion. Xxxxxxxxxxx.xxx shall have received from Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel to Xxxxxxxxxxx.xxx, on the Closing
Date, a written opinion dated as of such date substantially in the form of
Exhibit 7.2(c)(1). In rendering such opinion, counsel to Xxxxxxxxxxx.xxx
shall be entitled to rely upon representations of officers of Xxxxxxxxxxx.xxx
and Preview substantially in the form of Exhibits 7.2(c)(2) and 7.2(c)(3).
(d) Consents. The consents set forth on Exhibit 7.2(d) shall have
been obtained on terms reasonably acceptable to Sabre.
(e) Comfort Letter. The letter contemplated by Section 6.9 to be
delivered to Sabre shall have been delivered as contemplated thereby.
Section 7.3 Additional Conditions to Obligations of Preview. The
obligations of Preview to effect the Merger are subject to the satisfaction
of, or waiver by Preview, on or prior to the Closing Date of the following
additional conditions:
(a) Representations and Warranties. Each of the representations
and warranties of each of Sabre, Travelocity Holdings and Xxxxxxxxxxx.xxx set
forth in this Agreement that is qualified as to materiality or "Material
Adverse Effect" shall be true and correct on the Closing Date as if made on
the Closing Date (except to the extent that any such representation or
warranty is made as of a specified date, in which case such representation or
warranty shall be true and correct as of such specified date), and each of
the representations and warranties of each of Sabre, Travelocity Holdings and
Xxxxxxxxxxx.xxx that is not so qualified shall be true and correct in all
material respects on the Closing Date as if made on the Closing Date (except
to the extent that any such representation or warranty is made as of a
specified date, in which case such representation or warranty shall be true
and correct in all material respects as of such specified date), and Preview
shall have received a certificate of an executive officer of Sabre to such
effect.
(b) Performance of Obligations of Sabre. Each of Sabre,
Travelocity Holdings and Xxxxxxxxxxx.xxx shall have performed or complied
with all agreements and covenants required to be performed by it under this
Agreement at or prior to the Closing Date that are qualified as to
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materiality and shall have performed or complied in all material respects
with all agreements and covenants required to be performed by it under this
Agreement at or prior to the Closing Date that are not so qualified as to
materiality, and Preview shall have received a certificate of the an
executive officer of Sabre to such effect.
(c) Tax Opinion. Preview shall have received from Xxxxxxx Xxxxxxx
& Xxxxxxxx, counsel to Preview, on the Closing Date, a written opinion dated
as of such date substantially in the form of Exhibit 7.3(c)(2). In rendering
such opinion, counsel to Preview shall be entitled to rely upon
representations of officers of Sabre and Preview substantially in the form of
Exhibits 7.3(c)(2) and 7.3(c)(3).
(d) Consents. The consents set forth on Exhibit 7.3(d) shall have
been obtained on terms reasonably acceptable to Preview.
(e) Travelocity LP. Travelocity LP shall have been formed as a
Delaware limited partnership and Travelocity Holdings, Sabre, Xxxxxxxxxxx.xxx
and their affiliates shall have entered into the Limited Partnership
Agreement.
(f) Assignments to New Travelocity. The Sabre Assignments shall
have been consummated.
(g) Ancillary Agreements. Sabre, Travelocity Holdings and
Xxxxxxxxxxx.xxx LP shall have entered into the Ancillary Agreements to which
they are parties.
(h) Comfort Letter. The letter contemplated by Section 6.9 to be
delivered to Preview shall have been delivered as contemplated thereby.
ARTICLE VIII
TERMINATION AND AMENDMENT
Section 8.1 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, by action
taken or authorized by the Board of Directors of the terminating party or
parties (notwithstanding any approval of this Agreement by the stockholders
of Preview):
(a) By mutual written consent of Sabre and Preview;
(b) By either Sabre or Preview if the Effective Time shall not
have occurred on or before March 31, 2000 (the "Termination Date"); provided,
however, that the right to terminate this Agreement under this Section 8.1(b)
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shall not be available to any party whose failure to fulfill any obligation
under this Agreement (including without limitation Section 6.3) has been the
cause of, or resulted in, the failure of the Effective Time to occur on or
before the Termination Date;
(c) By either Sabre or Preview if there shall be any law or
regulation that makes consummation of the Merger or the assignment of assets
to New Travelocity, LP illegal or otherwise prohibited or if any Governmental
Entity shall have issued an order, decree or ruling or taken any other action
(which the parties shall have used their reasonable best efforts to resist,
resolve or lift, as applicable, in accordance with Section 6.3) permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated
by this Agreement, and such order, decree, ruling or other action shall have
become final and nonappealable; provided, however, that the right to
terminate this Agreement under this Section 8.1(c) shall not be available to
any party whose failure to comply with Section 6.3 has to any extent been the
cause of such action;
(d) By either Sabre or Preview if the approval by the stockholders
of Preview required for the consummation of the Merger shall not have been
obtained by reason of the failure to obtain the Required Preview Vote at a
duly held meeting of stockholders of Preview or at any adjournment thereof;
(e) By Sabre if the Board of Directors of Preview (i) shall
withdraw or modify or change in any manner adverse to Sabre its approval or
recommendation of this Agreement or the Merger whether or not permitted by
the terms hereof, (ii) shall fail to call the Preview Stockholders' Meeting
in accordance with Section 6.1(b), (iii) shall recommend a Superior Proposal
or (iv) shall resolve to take any of the actions specified in clauses (i),
(ii) or (iii) above;
(f) By Sabre (i) if there has been a breach by Preview of any
representation or warranty contained in this Agreement that would cause the
condition in Section 7.2(a) not to be satisfied, or (ii) if there has been a
breach of any of the covenants or agreements set forth in this Agreement on
the part of Preview that would cause the condition in Section 7.2(b) not to
be satisfied, and, in the case of (i) or (ii), the breach is not curable or,
if curable, is not cured within twenty (20) Business Days after written
notice of such breach is given by Sabre to Preview;
(g) By Preview (i) if there has been a breach by Sabre,
Travelocity Holdings or Xxxxxxxxxxx.xxx of any representation or warranty
contained in this Agreement that would cause the condition set forth in
Section 7.3(a) not to be satisfied, or (ii) if there has been a breach of any
of the covenants or agreements set forth in this Agreement on the part of
Sabre, Travelocity Holdings or Xxxxxxxxxxx.xxx that would cause the condition
in Section 7.3(b) not to be satisfied, and, in the case of (i) or (ii), the
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breach is not curable or, if curable, is not cured within twenty (20)
Business Days after written notice of such breach is given by Preview to
Sabre, Travelocity Holdings or Xxxxxxxxxxx.xxx; or
(h) By Preview if (i) the board of directors of Preview authorizes
Preview to enter into a binding written agreement concerning a transaction
that constitutes a Superior Proposal and Preview notifies Sabre in writing
that it intends to enter into such an agreement, attaching the most current
version of such agreement to such notice (which version shall be updated on a
current basis) and (ii) Sabre does not make, within three Business Days (or,
in the case of any update of such version with respect to a given third
party, other than the initial notification, one Business Day) of receipt of
Preview's written notification of its intention to enter into a binding
agreement for a Superior Proposal, a non-revocable binding offer that the
board of directors of Preview determines, in good faith, is at least as
favorable to the stockholders of Preview as the Superior Proposal;
Section 8.2 Effect of Termination. In the event of termination of
this Agreement by either Sabre or Preview as provided in Section 8.1, this
Agreement shall forthwith become void and of no effect and there shall be no
liability or obligation on the part of Sabre, Travelocity Holdings,
Xxxxxxxxxxx.xxx or Preview or their respective officers or directors except
with respect to Section 6.6, this Section 8.2 and Section 8.3 and the
Confidentiality Agreement, and except that no such termination shall relieve
any party hereto from any liability or damages resulting from any willful
breach of this Agreement.
Section 8.3 Termination Fee. (a) If:
(i) Sabre shall terminate this Agreement pursuant to Section
8.1(e), unless at the time of such failure to recommend, withdrawal or
adverse modification or change, failure to call the Preview Stockholders
Meeting or recommendation of a Superior Proposal, any of the conditions set
forth in Section 7.3(a) or (b) would not have been satisfied as of such date
and would not be reasonably capable of being satisfied; or
(ii) either Preview or Sabre shall terminate this Agreement
pursuant to Section 8.1(d) and prior to the Preview Stockholders Meeting any
Person shall have publicly announced an Acquisition Proposal and within six
months after such termination Preview enters into a definitive agreement with
respect to, or consummates, any Acquisition Proposal; or
(iii) Sabre shall terminate this Agreement pursuant to
Section 8.1(f) and prior to such termination any Person shall have publicly
announced an Acquisition Proposal and within six months after such
termination Preview enters into a definitive agreement with respect to, or
consummates, any Acquisition Proposal; or
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(iv) Preview shall terminate this Agreement pursuant to
Section 8.1(h).
then, (x) in the case of clauses (i) and (iv), Preview shall pay to Sabre,
not later than the date of termination of this Agreement, an amount equal to
$10,000,000, and (y) in the case of clauses (ii) and (iii), Preview shall pay
to Sabre, not later than the date a definitive agreement is entered into with
respect to any Acquisition Proposal or any Acquisition Proposal is
consummated, an amount equal to $10,000,000 less any amounts previously paid
pursuant to Section 8.3(b). Receipt by Sabre of the final payment to which
Sabre is entitled in connection with the events described in clauses (i),
(ii) and (iii) (other than in the case of the events described in clause
(iii), if the breach involved constitutes a willful breach) and (iv), as
applicable, referred to in the foregoing sentence shall constitute conclusive
evidence that this Agreement has been validly terminated and upon acceptance
of payment of such amount, Preview shall be fully released and discharged
from any liability or obligation resulting from or under this Agreement.
(b) If no fee is payable pursuant to Section 8.3(a) and Sabre
shall terminate this Agreement pursuant to Section 8.1(f), then, in any such
case, Preview shall, upon request of Sabre, reimburse Sabre for all of its
Expenses (documented in reasonable detail) incurred in connection with this
Agreement and the transactions contemplated hereby up to an aggregate of
$4,000,000.
(c) If Preview shall terminate this Agreement pursuant to
Section 8.1(g), then Sabre shall, upon request of Preview, reimburse Preview
for all of its Expenses (documented in reasonable detail) incurred in
connection with this Agreement and the transactions contemplated hereby up to
an aggregate of $3,000,000.
(d) If this Agreement is terminated for any reason, then in
addition to any other payments required under this Section 8.3, Preview shall
reimburse Sabre for all payments made by Sabre to AOL to discharge Preview's
obligations under Section 4.1 of the AOL Agreements.
(e) All payments and reimbursements made under this Section 8.3
shall be made by wire transfer of immediately available funds to an account
specified by Sabre or Preview, as applicable.
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ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations and Warranties. The
representations and warranties contained herein and in any certificate or
other writing delivered pursuant hereto shall not survive the Effective Time.
Section 9.2 Notices. All notices and other communications hereunder
shall be in writing (including facsimile or similar writing) and shall be
given,
if to Sabre, Travelocity Holdings or Xxxxxxxxxxx.xxx, to
Sabre Inc.
0000 Xxxx Xxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxx 00000
Attention: Executive Vice President and
Chief Financial Officer
Facsimile No.: (000) 000-0000
with a copy to
Sabre Inc.
0000 Xxxx Xxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
and a copy to
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
if to Preview to
Preview Travel, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention:
Facsimile No.: (000) 000-0000
with a copy to
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Xxxxxxx Xxxxxx
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Facsimile No.: (000) 000-0000
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties. Each such notice, request or
other communication shall be effective (a) if given by facsimile, when such
facsimile is transmitted to the facsimile number specified in this Section
and the appropriate facsimile confirmation is received or (b) if given by any
other means, when delivered at the address specified in this Section.
Section 9.3 Interpretation. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall be to a
Section of or Exhibit or Schedule to this Agreement unless otherwise
indicated. The table of contents, glossary of defined terms and headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. Whenever
the words "include", "includes" or "including" are used in this Agreement,
they shall be deemed to be followed by the words "without limitation".
Section 9.4 Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
Section 9.5 Entire Agreement. This Agreement (including the Exhibits
and Schedules), and the Confidentiality Agreement constitute the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersede all prior agreements and understandings, both oral
and written, between the parties with respect to the subject matter hereof
and thereof. Except as provided in Section 6.7(c), no provision of this
Agreement or any other agreement contemplated hereby is intended to confer on
any Person other than the parties hereto any rights or remedies.
Section 9.6 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Delaware without regard to
principles of conflicts of law.
Section 9.7 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such a determination, the parties shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties
as closely as possible in an acceptable manner in order that the transactions
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contemplated hereby be consummated as originally contemplated to the fullest
extent possible.
Section 9.8 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns; provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto except that
Xxxxxxxxxxx.xxx may transfer or assign, in whole or from time to time in
part, to one or more of its affiliates, its rights under this Agreement, but
any such transfer or assignment will not relieve Xxxxxxxxxxx.xxx of its
obligations hereunder.
Section 9.9 Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement, the Option Agreement or the transactions
contemplated hereby or thereby may be brought in any federal or state court
located in the State of Delaware, and each of the parties hereby consents to
the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to
the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding
which is brought in any such court has been brought in an inconvenient forum.
Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of
process on such party as provided in Section 9.2 shall be deemed effective
service of process on such party.
Section 9.10 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 9.11 Amendments; No Waivers. (a) Any provision of this
Agreement (including the Exhibits and Schedules hereto) may be amended or
waived prior to the Effective Time at any time prior to or after the receipt
of the Required Preview Vote, if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by Sabre, Preview and
Xxxxxxxxxxx.xxx, or in the case of a waiver, by the party against whom the
waiver is to be effective; provided that after the receipt of the Required
Preview Vote, if any such amendment or waiver shall by law or in accordance
with the rules and regulations of any relevant securities exchange requires
further approval of stockholders, the effectiveness of such amendment or
waiver shall be subject to obtaining the necessary stockholder approval.
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(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
Section 9.12 Definitions. As used in this Agreement:
(a) "Board of Directors" means the Board of Directors of any
specified Person and any committees thereof.
(b) "Business Day" means any day on which banks are not required
or authorized to close in the City of New York.
(c) "Knowledge" means the knowledge of any of the officers or
employees of Preview or Sabre, as applicable, listed in Schedule 9.12(c) of
the Preview Disclosure Schedule or the Sabre Disclosure Schedule, as
applicable, after due inquiry.
(d) "Material Adverse Effect" means, with respect to any entity,
any adverse effect that, individually or in the aggregate with all other
adverse effects, is or could reasonably be expected to be materially adverse
to the business, financial condition, operations or results of operations of
such entity and its Subsidiaries taken as a whole other than adverse effects
caused by (i) changes in the economy generally or (ii) changes in the
consumer direct Internet travel business.
(e) "Person" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization, other
entity or group (as defined in the Exchange Act).
(f) "Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or unincorporated,
(i) of which such party or any other Subsidiary of such party is a general
partner (excluding partnerships, the general partnership interests of which
held by such party or any Subsidiary of such party do not have a majority of
the voting interests in such partnership) or (ii) at least a majority of the
securities or other interests of which having by their terms ordinary voting
power to elect a majority of the Board of Directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such party or by any one or
more of its Subsidiaries, or by such party and one or more of its
Subsidiaries.
Section 9.13 Other Agreements. The parties hereto acknowledge and
agree that, except as otherwise expressly set forth in this Agreement, the
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rights and obligations of Preview and Sabre, Travelocity Holdings or
Xxxxxxxxxxx.xxx or any of their respective Subsidiaries or affiliates under
any other agreement between such parties shall not be affected by any
provision of this Agreement.
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IN WITNESS WHEREOF, Sabre, Travelocity Holdings, Preview and
Xxxxxxxxxxx.xxx have caused this Agreement to be signed by their respective
officers thereunto duly authorized, all as of October 3, 1999.
SABRE INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
TRAVELOCITY HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X.Xxxxx
Title: President
XXXXXXXXXXX.XXX INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: President
PREVIEW TRAVEL, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: President
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Execution Copy
AGREEMENT AND PLAN OF MERGER
DATED AS OF
OCTOBER 3, 1999
BY AND AMONG
SABRE INC.,
TRAVELOCITY HOLDINGS, INC.,
XXXXXXXXXXX.XXX INC.
AND
PREVIEW TRAVEL, INC.
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TABLE OF CONTENTS
Page
ARTICLE I THE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Assignments to New Travelocity and Xxxxxxxxxxx.xxx . . 2
Section 1.3 The Closing; Effective Time . . . . . . . . . . . . . 3
Section 1.4 Certificate of Incorporation; Bylaws; Listing Symbol . 3
ARTICLE II THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.1 Conversion of Common Stock of Preview and
Exchange of Certificates . . . . . . . . . . . . . . . 4
Section 2.2 Exchange of Certificates Representing Preview Common
Stock . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.3 Stock Options and Equity Awards . . . . . . . . . . . 6
Section 2.4 Adjustments . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PREVIEW . . . . . . . . . 8
Section 3.1 Organization, Standing and Power . . . . . . . . . . . 8
Section 3.2 Capital Structure . . . . . . . . . . . . . . . . . . 8
Section 3.3 Authority; No Conflicts . . . . . . . . . . . . . . . 9
Section 3.4 Reports and Financial Statements . . . . . . . . . . . 10
Section 3.5 Information Supplied . . . . . . . . . . . . . . . . . 11
Section 3.6 Vote Required; DGCL . . . . . . . . . . . . . . . . . 11
Section 3.7 Rights Agreement . . . . . . . . . . . . . . . . . . . 11
Section 3.8 Brokers or Finders . . . . . . . . . . . . . . . . . . 12
Section 3.9 Opinion of Financial Advisor . . . . . . . . . . . . . 12
Section 3.10 Absence of Certain Changes . . . . . . . . . . . . . . 12
Section 3.11 Litigation and Liabilities . . . . . . . . . . . . . . 13
Section 3.12 No Violation of Law; Permits . . . . . . . . . . . . . 13
Section 3.13 Employee Matters; ERISA . . . . . . . . . . . . . . . 13
Section 3.14 Labor Matters . . . . . . . . . . . . . . . . . . . . 15
Section 3.15 Tax Matters . . . . . . . . . . . . . . . . . . . . . 16
Section 3.16 Contracts . . . . . . . . . . . . . . . . . . . . . . 17
Section 3.17 Intellectual Property . . . . . . . . . . . . . . . . 19
Section 3.18 Year 2000 Compliance . . . . . . . . . . . . . . . . . 20
Section 3.19 No Termination of Business Relationship . . . . . . . 21
Section 3.20 Insurance . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.21 Disclosure . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.22 AOL Agreements . . . . . . . . . . . . . . . . . . . . 21
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SABRE, TRAVELOCITY
HOLDINGS AND XXXXXXXXXXX.XXX . . . . . . . . . . . . . . 22
Section 4.1 Organization, Standing and Power . . . . . . . . . . . 22
Section 4.2 Authority; No Conflicts . . . . . . . . . . . . . . . 22
Section 4.3 Financial Statements . . . . . . . . . . . . . . . . . 23
Section 4.4 Information Supplied . . . . . . . . . . . . . . . . . 23
Section 4.5 Vote Required; DGCL . . . . . . . . . . . . . . . . . 24
Section 4.6 Brokers or Finders . . . . . . . . . . . . . . . . . . 24
Section 4.7 No Business Activities . . . . . . . . . . . . . . . . 24
Section 4.8 Absence of Certain Changes . . . . . . . . . . . . . . 24
Section 4.9 Litigation and Liabilities . . . . . . . . . . . . . . 25
Section 4.10 No Violation of Law; Permits . . . . . . . . . . . . . 25
Section 4.11 Employee Matters/ ERISA . . . . . . . . . . . . . . . 26
Section 4.12 Labor Matters . . . . . . . . . . . . . . . . . . . . 28
Section 4.13 Contracts . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.14 Intellectual Property . . . . . . . . . . . . . . . . 30
Section 4.15 Year 2000 Compliance . . . . . . . . . . . . . . . . . 31
Section 4.16 No Termination of Business Relationship . . . . . . . 31
Section 4.17 Insurance . . . . . . . . . . . . . . . . . . . . . . 31
Section 4.18 Sufficiency of Assets . . . . . . . . . . . . . . . . 31
Section 4.19 Disclosure . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE V COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.1 Covenants of Preview . . . . . . . . . . . . . . . . . 32
Section 5.2 Covenants of Sabre . . . . . . . . . . . . . . . . . . 35
Section 5.3 Advice of Changes; Regular Reporting; Governmental
Filings . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.4 Transition Planning . . . . . . . . . . . . . . . . . 38
ARTICLE VI ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . 38
Section 6.1 Preparation of Form S-4 and Proxy Statement;
Preview Stockholders Meeting . . . . . . . . . . . . . 38
Section 6.2 Access to Information . . . . . . . . . . . . . . . . 39
Section 6.3 Reasonable Best Efforts . . . . . . . . . . . . . . . 40
Section 6.4 No Solicitation . . . . . . . . . . . . . . . . . . . 40
Section 6.5 Employee Matters . . . . . . . . . . . . . . . . . . . 42
Section 6.6 Fees and Expenses . . . . . . . . . . . . . . . . . . 43
Section 6.7 Director and Officer Liability . . . . . . . . . . . . 43
Section 6.8 Public Announcements . . . . . . . . . . . . . . . . . 44
Section 6.9 Accountants' Letters . . . . . . . . . . . . . . . . . 44
Section 6.10 Listing of Shares of Xxxxxxxxxxx.xxx Common Stock . . 44
Section 6.11 Officers and Senior Management . . . . . . . . . . . . 44
Section 6.12 Year 2000 Compliance . . . . . . . . . . . . . . . . . 44
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ARTICLE VII CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . 45
Section 7.1 Conditions to Each Party's Obligation to Effect the
Merger . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 7.2 Additional Conditions to Obligations of Sabre,
Travelocity Holdings and Xxxxxxxxxxx.xxx. . . . . . . . 45
Section 7.3 Additional Conditions to Obligations of Preview . . . 46
ARTICLE VIII TERMINATION AND AMENDMENT . . . . . . . . . . . . . . . . . 47
Section 8.1 Termination . . . . . . . . . . . . . . . . . . . . . 47
Section 8.2 Effect of Termination . . . . . . . . . . . . . . . . 49
Section 8.3 Termination Fee . . . . . . . . . . . . . . . . . . . 49
ARTICLE IX GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . 50
Section 9.1 Non-Survival of Representations and Warranties . . . . 50
Section 9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . 50
Section 9.3 Interpretation . . . . . . . . . . . . . . . . . . . . 51
Section 9.4 Counterparts . . . . . . . . . . . . . . . . . . . . . 52
Section 9.5 Entire Agreement . . . . . . . . . . . . . . . . . . . 52
Section 9.6 Governing Law . . . . . . . . . . . . . . . . . . . . 52
Section 9.7 Severability . . . . . . . . . . . . . . . . . . . . . 52
Section 9.8 Successors and Assigns . . . . . . . . . . . . . . . . 52
Section 9.9 Jurisdiction . . . . . . . . . . . . . . . . . . . . . 52
Section 9.10 Waiver of Jury Trial . . . . . . . . . . . . . . . . . 53
Section 9.11 Amendments; No Waivers . . . . . . . . . . . . . . . . 53
Section 9.12 Definitions . . . . . . . . . . . . . . . . . . . . . 53
Section 9.13 Other Agreements . . . . . . . . . . . . . . . . . . . 54
-67-
Acquisition Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Ancillary Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 1.2(d)
Blue Sky Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3(c)
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . 9.12(a)
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.12(b)
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
Certificate of Merger . . . . . . . . . . . . . . . . . . . . . . . . . 1.3(b)
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3(a)
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3(a)
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Confidentiality Agreement . . . . . . . . . . . . . . . . . . . . . . . 6.2(c)
Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.16(a)
DGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3(b)
ESPP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2(a)
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3(c)
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
Exchange Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.6
Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8
Form S-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1(a)
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3(c)
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3(c)
Indemnitees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7(a)
Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.12(c)
Limited Partnership Agreement . . . . . . . . . . . . . . . . . . . . . 1.2(c)
Management Services Agreement . . . . . . . . . . . . . . . . . . . . . 1.2(c)
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . 9.12(d)
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.13(c)
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.12(e)
Preview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Preview Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2(b)
Preview Benefit Plan . . . . . . . . . . . . . . . . . . . . . . . . 3.13(a)
Preview Common Stock . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Preview Contribution Agreement . . . . . . . . . . . . . . . . . . . . 1.2(b)
Preview Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . . . 3
Preview Employee . . . . . . . . . . . . . . . . . . . . . . . . . . 3.13(b)
Preview Employees . . . . . . . . . . . . . . . . . . . . . . . . . . 3.13(b)
Preview ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . 3.13(d)
Preview Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . 3.9
Preview Multiemployer Plan . . . . . . . . . . . . . . . . . . . . . 3.13(a)
Preview Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . 3.13(c)
Preview SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4
Preview Stock Option . . . . . . . . . . . . . . . . . . . . . . . . . 2.3(a)
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Preview Stock Option Plan . . . . . . . . . . . . . . . . . . . . . . . 3.2(a)
Preview Stockholders Meeting . . . . . . . . . . . . . . . . . . . . 6. 1 (b)
Preview Voting Debt . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2(b)
Proxy Statement/Prospectus . . . . . . . . . . . . . . . . . . . . . 6. 1 (a)
Required Preview Vote . . . . . . . . . . . . . . . . . . . . . . . . . 3.6(a)
Required Xxxxxxxxxxx.xxx Vote . . . . . . . . . . . . . . . . . . . . . 4.5(a)
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2(a)
Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2(a)
Sabre . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Sabre Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2(a)
Sabre Benefit Plan . . . . . . . . . . . . . . . . . . . . . . . . . 4.11 (a)
Sabre Contribution Agreements . . . . . . . . . . . . . . . . . . . . . 1.2(a)
Sabre Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . . . . 4
Sabre ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . 4.11 (d)
Sabre Multiemployer Plan . . . . . . . . . . . . . . . . . . . . . . 4.11 (a)
Sabre Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . . 4.11 (c)
Sabre SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8
Sabre Stock Option . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3(b)
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3(e)
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.12(f)
Superior Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.18
Tax Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.15
Tax, Taxes and Taxable . . . . . . . . . . . . . . . . . . . . . . . . . 3.15
Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . 8. 1 (b)
Travelocity Business . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Travelocity Business Employee . . . . . . . . . . . . . . . . . . . . 4.11 (b)
Travelocity Business Employees . . . . . . . . . . . . . . . . . . . 4.11 (b)
Travelocity Holdings . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Xxxxxxxxxxx.xxx . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Xxxxxxxxxxx.xxx Certificate . . . . . . . . . . . . . . . . . . . . . . 1.4(a)
Travelocity.corn Class A Common Stock . . . . . . . . . . . . . . . . 2. 1 (a)
Travelocity.corn Class B Common Stock . . . . . . . . . . . . . . . . 2. 1 (a)
Xxxxxxxxxxx.xxx Common Stock . . . . . . . . . . . . . . . . . . . . 2. 1 (a)
Travelocity.corn LP . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Travelocity.corn Series A Preferred Stock . . . . . . . . . . . . . . 2. 1 (a)
Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3(b)
Year 2000 Compliant . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.18
Year 2000 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.18
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