<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TRAVELNOW.COM INC.
AT
$4.16 NET PER SHARE
BY
WONSUB, INC.,
A WHOLLY-OWNED SUBSIDIARY OF
HOTEL RESERVATIONS NETWORK, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 9, 2001, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED
AS OF JANUARY 3, 2001, BY AND AMONG HOTEL RESERVATIONS NETWORK, INC. ("HRN"),
WONSUB, INC., A WHOLLY-OWNED SUBSIDIARY OF HRN (THE "PURCHASER"), AND
TRAVELNOW.COM INC. ("TRAVELNOW"). THE BOARD OF DIRECTORS OF TRAVELNOW HAS
UNANIMOUSLY DETERMINED THAT THE OFFER AND THE MERGER (EACH AS DEFINED HEREIN)
ARE FAIR TO, AND IN THE BEST INTERESTS OF, TRAVELNOW AND ITS STOCKHOLDERS (OTHER
THAN HRN, THE PURCHASER AND THEIR AFFILIATES AND STOCKHOLDERS OF TRAVELNOW WHO
HAVE ENTERED INTO STOCKHOLDER AGREEMENTS WITH HRN TO TENDER THEIR SHARES), HAS
UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, INCLUDING THE OFFER AND THE MERGER, AND UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS ACCEPT THE OFFER AND TENDER ALL OF THEIR SHARES PURSUANT THERETO.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED, AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED HEREIN),
THAT NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE (THE "SHARES"),
OF TRAVELNOW THAT (TOGETHER WITH ANY SHARES OWNED BY THE PURCHASER, HRN OR USA
NETWORKS, INC., THE PARENT CORPORATION OF HRN ("USAI")) CONSTITUTES A MAJORITY
OF THE OUTSTANDING SHARES OF COMMON STOCK, ON A FULLY DILUTED BASIS, OF
TRAVELNOW ON THE DATE THAT SHARES ARE ACCEPTED FOR PAYMENT (THE "MINIMUM
CONDITION"). THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS SET FORTH
IN THIS OFFER TO PURCHASE. THE OFFER IS NOT SUBJECT TO ANY FINANCING CONDITION.
IMPORTANT
Any stockholder desiring to tender all or any portion of his Shares should
(1) complete and sign the Letter of Transmittal or a facsimile thereof in
accordance with the instructions in the Letter of Transmittal, and mail or
deliver the Letter of Transmittal or such facsimile with certificate(s) for the
tendered Shares and any other required documents to the Depositary, (2) follow
the procedures for book-entry tender of Shares set forth in Section 3 of this
Offer to Purchase, or (3) request such stockholder's broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for such
stockholder. Stockholders having Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee are urged to contact
such broker, dealer, commercial bank, trust company or other nominee if they
desire to tender such Shares.
A stockholder who desires to tender Shares and whose certificates for such
Shares are not immediately available, or who cannot comply with the procedures
for book-entry transfer on a timely basis, may tender such Shares by following
the procedures for guaranteed delivery set forth in Section 3 of this Offer to
Purchase.
Stockholders who have questions about the Offer should call MacKenzie
Partners, Inc., the Information Agent for the Offer, or CIBC World Markets
Corp., the Dealer Manager for the Offer, at their respective addresses and
telephone numbers set forth on the back cover of this Offer to Purchase.
Stockholders can also obtain additional copies of this Offer to Purchase, the
related Letter of Transmittal and the Notice of Guaranteed Delivery from
MacKenzie Partners, Inc. or their broker, dealer, commercial bank, trust company
or other nominee.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL BOTH CONTAIN
IMPORTANT INFORMATION. STOCKHOLDERS SHOULD CAREFULLY READ BOTH IN THEIR ENTIRETY
BEFORE MAKING ANY DECISION WITH RESPECT TO THE OFFER.
THE DEALER MANAGER FOR THE OFFER IS:
[LOGO]
January 12, 2001
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TABLE OF CONTENTS
<TABLE>
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PAGE
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SUMMARY TERM SHEET.................................................................. 1
INTRODUCTION........................................................................ 6
THE OFFER........................................................................... 8
1. Terms of the Offer.......................................... 8
2. Acceptance for Payment and Payment for Shares............... 10
3. Procedure for Tendering Shares.............................. 10
4. Withdrawal Rights........................................... 13
5. Certain Federal Income Tax Consequences of the Offer and the
Merger.................................................... 14
6. Price Range of Shares; Dividends............................ 15
7. Effect of the Offer on Market for the Shares; Stock Market
Quotation and Exchange Act Registration................... 16
8. Certain Information Concerning TravelNow.................... 17
9. Certain Information Concerning the Purchaser and HRN........ 18
10. Source and Amount of Funds.................................. 19
11. Background of the Offer and the Merger; Contacts with
TravelNow; the Merger Agreement and Stockholder
Agreements................................................ 20
12. Purpose of the Offer and the Merger; Plans for TravelNow
After the Offer and the Merger; Stockholder Approval and
Appraisal Rights.......................................... 41
13. Dividends and Distributions................................. 42
14. Conditions of the Offer..................................... 42
15. Certain Legal Matters and Regulatory Approvals.............. 44
16. Fees and Expenses........................................... 45
17. Miscellaneous............................................... 46
Schedule I--Directors and Executive Officers of USAi, HRN and the Purchaser
Schedule II--Transactions in Shares
</TABLE>
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SUMMARY TERM SHEET
Wonsub, Inc., a wholly-owned subsidiary of Hotel Reservations
Network, Inc., is offering to purchase all of the outstanding common stock of
TravelNow.com Inc. for $4.16 per share in cash. The following are some of the
questions that you, as a stockholder of TravelNow, may have and answers to those
questions. We urge you to read carefully the remainder of this Offer to Purchase
and the Letter of Transmittal because the information in this summary term sheet
is not complete. Additional important information is contained in the remainder
of this Offer to Purchase and the Letter of Transmittal.
WHO IS OFFERING TO BUY MY SECURITIES?
Our name is Wonsub, Inc. We are a Delaware corporation formed for the
purpose of making a tender offer for all of the outstanding common stock of
TravelNow other than shares of common stock Hotel Reservations Network, Inc.
already owns. We are a subsidiary of Hotel Reservations Network, a Delaware
corporation, which, in turn, is a majority-owned subsidiary of USA
Networks, Inc., a Delaware corporation. We have carried on no activities other
than in connection with this offer and the merger agreement by and among us,
Hotel Reservations Network and TravelNow. See the "Introduction" to this Offer
to Purchase and Section 9 "Certain Information Concerning the Purchaser and
HRN."
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
We are seeking to purchase all of the outstanding shares of common stock of
TravelNow other than shares of common stock HRN already owns. See the
"Introduction" to this Offer to Purchase and Section 1 "Terms of the Offer."
HOW MUCH ARE YOU OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT? WILL I HAVE TO
PAY ANY FEES OR COMMISSIONS?
We are offering to pay $4.16 per share, net to you, in cash. If you are the
record owner of your shares and you tender your shares to us in the offer, you
will not have to pay brokerage fees or similar expenses. If you own your shares
through a broker or other nominee, and your broker tenders your shares on your
behalf, your broker or nominee may charge you a fee for doing so. You should
consult your broker or nominee to determine whether any charges will apply. See
the "Introduction" to this Offer to Purchase and Section 3 "Procedure for
Tendering Shares."
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
Yes. We have available cash resources that are larger than needed to
complete the offer and the merger. This cash reserve will provide us with
sufficient funds to purchase all shares validly tendered and not withdrawn in
the offer and to provide funding for the merger, which is expected to follow the
successful completion of the offer in accordance with the terms and conditions
of the merger agreement. The offer is not conditioned on any financing
arrangements. See Section 10 "Source and Amount of Funds."
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
We do not think our financial condition is relevant to your decision whether
to tender in the offer because the form of payment consists solely of cash,
which we have available, because the offer is not subject to any financing
condition and because the offer is for all outstanding shares of TravelNow other
than shares we own. Also, upon consummation of the offer, we will acquire in the
merger all shares that are not tendered in the offer for the same price per
share as in the offer. See Section 10 "Source and Amount of Funds."
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HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
Unless the offer is extended, you will have until 12:00 midnight, New York
City time, on Friday, February 9, 2001 to tender your shares in the offer. If
you cannot deliver everything that is required in order to make a valid tender
by that time, you may be able to use a guaranteed delivery procedure, which is
described later in this Offer to Purchase. See Section 1 "Terms of the Offer"
and Section 3 "Procedure for Tendering Shares."
CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
Subject to the terms of the merger agreement, we can extend the offer. We
have agreed in the merger agreement that we may extend the offer:
- as required by any rule, regulation or interpretation of the Securities
and Exchange Commission;
- if any condition to the offer is not satisfied, for such periods initially
up to five days at a time as we may reasonably deem necessary, except that
in no event may the offer be extended more than 90 days from the date of
the merger agreement;
- in connection with any increase in the consideration paid to tendering
stockholders;
- up to fifteen business days in the event that TravelNow publicly announces
the receipt of a competing acquisition proposal or TravelNow's board of
directors makes a public announcement withdrawing or modifying its
approval of the offer; or
- through a subsequent offering period as described below.
For more details on our ability to extend the offer see the description of
the merger agreement contained in Section 11 "Background of the Offer and the
Merger; Contacts with TravelNow; the Merger Agreement and Stockholder
Agreements."
WILL THERE BE A SUBSEQUENT OFFERING PERIOD?
The merger agreement permits us to make available a subsequent offering
period by extending the offer on one occasion for up to 20 business days if, on
Friday, February 9, 2001, the shares of TravelNow common stock tendered and not
withdrawn pursuant to the offer plus any shares we already own equal less than
ninety percent (90%) of the outstanding shares on a fully diluted basis. In
order to extend the offer in this way, we must waive any remaining conditions to
the offer except for conditions requiring the absence of (i) the occurrence of
any injunction, proceeding, action, suit or litigation by any governmental
entity seeking to make illegal or prohibit the consummation of the offer or
(ii) any promulgation, enactment or enforcement of any law that makes illegal or
prohibits the consummation of the offer.
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If we extend the offer, we will inform Mellon Investor Services LLC, the
depositary for the offer, of that fact and will make a public announcement of
the extension not later than 9:00 a.m., New York City time, on the next business
day after the day on which the offer was scheduled to expire. See Section 1
"Terms of the Offer."
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
- We are not obligated to purchase any shares that are validly tendered
unless the number of shares validly tendered and not withdrawn (together
with shares we own) before the expiration of the offer represents
(together with shares we already own) a majority of the outstanding shares
of TravelNow on a fully diluted basis. We call this condition the "minimum
condition."
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- We are not obligated to purchase shares that are validly tendered if,
among other things, there is a material adverse change in TravelNow or its
business.
The offer is also subject to additional conditions. For a complete list of
the conditions to the Offer, see Section 14 "Conditions of the Offer."
HOW DO I TENDER MY SHARES?
To tender shares, you must deliver the certificates representing your
shares, together with a completed letter of transmittal and any other documents
required by the letter of transmittal, to Mellon Investor Services LLC, the
depositary for the offer, not later than the time that the offer expires. If
your shares are held in street name (i.e., through a broker, dealer or other
nominee), the shares can be tendered by your nominee through The Depository
Trust Company. If you are unable to deliver any required document or instrument
to the depositary by the expiration of the tender offer, you may still
participate in the offer by having a broker, a bank or other fiduciary that is
an eligible institution guarantee that the missing items will be received by the
depositary within three New York Stock Exchange or NASDAQ Stock Market trading
days. For the tender to be valid, however, the depositary must receive the
missing items within that three trading day period. See Section 3 "Procedure for
Tendering Shares."
UNTIL WHAT TIME CAN I WITHDRAW TENDERED SHARES?
You may withdraw shares at any time until the offer has expired and, if we
have not accepted your shares for payment by Tuesday, March 13, 2001, you may
withdraw them at any time after that date until we accept shares for payment.
See Section 1 "Terms of the Offer" and Section 4 "Withdrawal Rights."
HOW DO I WITHDRAW TENDERED SHARES?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary while you
still have the right to withdraw the shares. See Section 4 "Withdrawal Rights."
WHEN AND HOW WILL I BE PAID FOR MY TENDERED SHARES?
Subject to the terms and conditions of the offer, we will pay for all
validly tendered and not withdrawn shares promptly after the expiration date of
the offer, subject to the satisfaction or waiver of the conditions to the offer.
We do, however, reserve the right, in our sole discretion, to delay payment for
shares pending receipt of any regulatory or governmental approvals to the offer.
We will pay for your validly tendered and not withdrawn shares by depositing the
purchase price with Mellon Investor Services LLC, the depositary for the offer,
which will act as your agent for the purpose of receiving payments from us and
transmitting such payments to you. In all cases, payment for tendered shares
will be made only after timely receipt by Mellon of certificates for such shares
(or of a confirmation of a book-entry transfer of such shares), a properly
completed and duly executed Letter of Transmittal (or Agent's Message if the
transfer is made by book-entry transfer) and any other required documents for
such shares.
WHAT DOES THE BOARD OF DIRECTORS OF TRAVELNOW THINK OF THIS OFFER?
We are making the offer pursuant to the merger agreement among us, Hotel
Reservations Network and TravelNow. The board of directors of TravelNow has
unanimously approved the merger agreement and the transactions contemplated in
the merger agreement, including the offer and the merger. The board of directors
of TravelNow has determined that the offer and the merger are fair to, and in
the best interests of, the stockholders of TravelNow (other than Hotel
Reservations Network,
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Wonsub and their affiliates and stockholders of TravelNow who have entered into
stockholder agreements with Hotel Reservations Network to tender their shares)
and unanimously recommends that the stockholders of TravelNow (other than Hotel
Reservations Network, Wonsub and their affiliates and the stockholders who have
entered into stockholder agreements with Hotel Reservations Network to tender
their shares) accept the offer and tender all of their shares. See the
"Introduction" to this Offer to Purchase.
HAVE ANY STOCKHOLDERS AGREED TO TENDER THEIR SHARES?
Yes. Jeffrey A. Wasson, the chief executive officer of TravelNow, and
certain other officers, directors and significant stockholders have agreed,
subject to the terms and conditions described in Section 11 herein, to tender
all of their shares of TravelNow stock, representing in the aggregate
approximately 40.6% of the outstanding common stock of TravelNow. Mr. Wasson and
the other officers, directors and significant stockholders have also agreed,
subject to the terms and conditions described in Section 11 herein, to vote in
favor of the merger and against any competing acquisition proposal. Because
Hotel Reservations Network currently owns approximately 9.9% of the outstanding
common stock of TravelNow, the minimum condition will be satisfied assuming the
stockholders who have agreed to tender do tender and their shares are accepted.
See the "Introduction" to this Offer to Purchase and Section 11 "Background of
the Offer and the Merger; Contacts, with TravelNow; the Merger Agreement and
Stockholder Agreements."
WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL SHARES OF TRAVELNOW ARE NOT
TENDERED IN THE OFFER?
If we accept for payment and pay for at least a majority of the outstanding
shares of TravelNow on a fully diluted basis, we will be merged with and into
TravelNow, and TravelNow will become a wholly-owned subsidiary of Hotel
Reservations Network. If that merger takes place, Hotel Reservations Network
will own all of the shares of TravelNow and all other persons who were
stockholders of TravelNow immediately prior to the merger (other than
stockholders properly exercising appraisal rights) will receive $4.16 per share
in cash (or any higher price per share that is paid in the offer). See the
"Introduction" to this Offer to Purchase.
IF A MAJORITY OF THE OUTSTANDING SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT,
WILL TRAVELNOW CONTINUE AS A PUBLIC COMPANY?
No. Following the purchase of shares in the offer we expect to consummate
the merger. If the merger takes place, TravelNow no longer will be publicly
owned. Even if for some reason the merger does not take place, if we purchase
all of the tendered shares, there may be so few remaining stockholders and
publicly held shares that:
- TravelNow common stock may no longer be eligible to be quoted and traded
on the Nasdaq SmallCap Market or any other securities market or exchange,
- there may not be a public trading market for TravelNow common stock; and
- TravelNow may cease making filings with the Securities and Exchange
Commission or otherwise cease being required to comply with the Securities
and Exchange Commission rules relating to publicly held companies.
See Section 7 "Effect of the Offer on Market for the Shares; Stock Market
Quotation and Exchange Act Registration."
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
If the merger described above takes place, stockholders not tendering in the
offer will receive the same amount of cash per share that they would have
received had they tendered their shares in the
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offer, subject to any appraisal rights properly exercised under Delaware law.
Therefore, if the merger takes place and you do not perfect your appraisal
rights, the only difference to you between tendering your shares and not
tendering your shares is that you will be paid earlier if you tender your
shares. If the merger does not take place, however, the number of stockholders
and the number of shares of TravelNow that are still in the hands of the public
may be so small that there may no longer be an active public trading market (or,
possibly, there may not be any public trading market) for the TravelNow common
stock. Also, as described above, TravelNow may cease making filings with the
Securities and Exchange Commission or otherwise cease being required to comply
with the Securities and Exchange Commission rules relating to publicly held
companies. See the "Introduction" to this Offer to Purchase and Section 7
"Effect of the Offer on Market for the Shares; Stock Market Quotation and
Exchange Act Registration."
There are no appraisal rights in connection with the offer. However, if the
merger takes place, stockholders who have not sold their shares in the offer,
have not voted for the merger, and have complied with other requirements of
Delaware law, will have appraisal rights under Delaware law. See Section 12
"Purpose of the Offer and the Merger; Plans for TravelNow After the Offer and
the Merger; Stockholder Approval and Appraisal Rights."
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On January 3, 2001, the last trading day before we announced the signing of
the merger agreement, the last sale price of TravelNow common stock reported on
the Nasdaq SmallCap Market was $3.625 per share. On January 11, 2001, the
closing price of TravelNow common stock reported on the Nasdaq SmallCap Market
was $4.063. We encourage you to obtain a recent quotation for shares of
TravelNow common stock in deciding whether to tender your shares. See Section 6
"Price Range of Shares; Dividends."
WHAT ARE THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF TENDERING SHARES?
The receipt of cash for shares pursuant to the offer or the merger will be a
taxable transaction for United States federal income tax purposes and possibly
for state, local and foreign income tax purposes as well. In general, a
stockholder who sells shares in the offer or receives cash in exchange for
shares in the merger will recognize gain or loss for United States federal
income tax purposes equal to the difference, if any, between the amount of cash
received and the stockholder's adjusted tax basis in the shares sold in the
offer or exchanged for cash in the merger. If the shares exchanged constitute
capital assets in the hands of the stockholder, the gain or loss will be capital
gain or loss. In general, capital gains recognized by an individual will be
subject to a maximum United States federal income tax rate of 20% if the shares
were held for more than one year, and if held for one year or less they will be
subject to tax at ordinary income tax rates. See Section 5 "Certain Federal
Income Tax Consequences of the Offer and the Merger."
WHOM CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER?
You can call MacKenzie Partners, Inc., the information agent for the offer,
at (800) 322-2885 (toll free) or CIBC World Markets Corp., the dealer manager
for the offer, at (212) 856-4181 (call collect).
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To the Holders of Common Stock of TravelNow.com Inc.:
INTRODUCTION
Wonsub, Inc., a Delaware corporation (the "Purchaser") and a wholly-owned
subsidiary of Hotel Reservations Network, Inc., a Delaware corporation ("HRN"),
hereby offers to purchase all of the outstanding shares of common stock, par
value $0.01 per share (the "Shares"), of TravelNow.com Inc., a Delaware
corporation ("TravelNow"), at a price of $4.16 per Share, without interest
thereon, net to the seller in cash (the "Offer Consideration"), upon the terms
and subject to the conditions set forth in this Offer to Purchase and in the
related Letter of Transmittal (which, as amended and supplemented from time to
time, together constitute the "Offer").
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of January 3, 2001, by and among TravelNow, HRN
and the Purchaser. The Merger Agreement provides that, among other things, as
soon as practicable after the purchase of Shares pursuant to the Offer and the
satisfaction or, if permissible, waiver of the conditions set forth in the
Merger Agreement, including the purchase of Shares pursuant to the Offer
(sometimes referred to herein as the "consummation" of the Offer) and the
adoption of the Merger Agreement by the stockholders of TravelNow (the
"Stockholders") (if required by applicable law) in accordance with the relevant
provisions of the General Corporation Law of the State of Delaware (the "DGCL"),
the Purchaser will be merged with and into TravelNow. Following consummation of
the Merger, TravelNow will continue as the surviving corporation (the "Surviving
Corporation") and will be a direct wholly-owned subsidiary of HRN. The purpose
of the Offer and the Merger is to facilitate the acquisition of all of the
Shares for cash and thereby enable HRN to own 100% of the Shares. At the
effective time of the Merger (the "Effective Time"), each Share issued and
outstanding immediately prior to the Effective Time held by the Stockholders
will be canceled and, subject to appraisal rights under the DGCL, converted
automatically into the right to receive $4.16 in cash, or, in the event any
higher price is paid in the Offer, such higher price (the "Merger
Consideration"), without interest. The Merger Agreement is more fully described
in Section 11 "Background of the Offer and the Merger; Contacts with TravelNow;
the Merger Agreement and Stockholder Agreements."
Stockholders who hold their Shares at the time of the Merger and who fully
comply with the statutory dissenters' procedures set forth in the DGCL will be
entitled to dissent from the Merger and have the fair value of their Shares, as
of the effective time of the Merger and exclusive of any element of value
arising from the accomplishment or expectation of the Merger (which may be more
than, equal to, or less than the Merger Consideration), judicially determined
and paid to them in cash pursuant to the procedures prescribed by the DGCL.
DISSENTERS' RIGHTS ARE AVAILABLE ONLY IN CONNECTION WITH THE MERGER AND NOT
IN CONNECTION WITH THE OFFER. SEE SECTION 12 "PURPOSE OF THE OFFER AND THE
MERGER; PLANS FOR TRAVELNOW AFTER THE OFFER AND THE MERGER; STOCKHOLDER APPROVAL
AND APPRAISAL RIGHTS."
TRAVELNOW'S BOARD OF DIRECTORS ("TRAVELNOW'S BOARD") HAS DETERMINED THAT THE
OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, TRAVELNOW AND
ITS STOCKHOLDERS (OTHER THAN HRN, THE PURCHASER OR THEIR AFFILIATES AND THE
SELLING STOCKHOLDERS (AS DEFINED BELOW)), HAS UNANIMOUSLY APPROVED AND DECLARED
ADVISABLE THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND THE MERGER, AND UNANIMOUSLY RECOMMENDS THAT THE
STOCKHOLDERS (OTHER THAN HRN, THE PURCHASER AND THE SELLING STOCKHOLDERS) ACCEPT
THE OFFER AND TENDER ALL OF THEIR SHARES PURSUANT THERETO.
TravelNow has advised HRN that Legg Mason Wood Walker, Incorporated,
TravelNow's financial advisor ("Legg Mason"), has delivered to TravelNow its
written opinion that, as of the date of such opinion and based upon and subject
to the matters set forth therein, the consideration to be received by the
Stockholders in the Offer and the Merger is fair, from a financial point of
view, to the
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Stockholders other than the stockholders entering into the Stockholder
Agreements contemplated by the Merger Agreement and any other stockholder that
owns 9% or more of TravelNow. A copy of the written opinion of Legg Mason is
contained in TravelNow's Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9"), filed with the Securities and Exchange
Commission (the "SEC") in connection with the Offer, a copy of which is being
furnished to the Stockholders concurrently with this Offer to Purchase.
Simultaneously with entering into the Merger Agreement, HRN and the
Purchaser entered into Stockholder Agreements with each of Jeffrey A. Wasson,
the chief executive officer of TravelNow, and certain other officers, directors
and significant stockholders of TravelNow (together, the "Selling
Stockholders"), dated as of January 3, 2001 (the "Stockholder Agreements"),
pursuant to which the Selling Stockholders (i) agreed, subject to the terms and
conditions described in Section 11 hereof, to tender all Shares owned by them
(the "Stockholder Agreements Shares," which equal approximately 40.6% of the
outstanding Shares) in the Offer, and (ii) agreed, subject to the terms and
conditions described in Section 11 hereof, to vote the Stockholder Agreement
Shares in favor of the Merger Agreement and the Merger and against any
Acquisition Proposal (as defined herein). The Stockholder Agreements also
require the Selling Stockholders, subject to the conditions described in
Section 11, to pay to Purchaser 90% of any amounts received by the Selling
Stockholders in excess of the Merger Consideration in any Acquisition Proposal
consummated upon termination of the Merger Agreement. HRN and Purchaser also
required that, simultaneously with the execution of the Merger Agreement, four
key executive officers of TravelNow enter into amendments to their employment
agreements with TravelNow and that Jeffrey A. Wasson, the Chief Executive
Officer of TravelNow enter into an Agreement with TravelNow regarding
indebtedness owed by Mr. Wasson to TravelNow. See Section 11 "Background of the
Offer and the Merger; Contacts with TravelNow; the Merger Agreement and
Stockholder Agreements."
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED, AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED HEREIN),
THAT NUMBER OF SHARES THAT (TOGETHER WITH ANY SHARES OWNED BY HRN AND THE
PURCHASER) CONSTITUTES A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED
BASIS ON THE DATE THAT THE SHARES ARE ACCEPTED FOR PAYMENT (THE "MINIMUM
CONDITION"). THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS SET FORTH
IN THIS OFFER TO PURCHASE, AS DESCRIBED IN SECTION 14 "CONDITIONS TO THE OFFER."
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including (if required by the DGCL) the adoption of the
Merger Agreement by the affirmative vote or written consent of the holders of a
majority of the outstanding Shares entitled to vote thereon. Under the DGCL the
affirmative vote or written consent of the holders of a majority of the
outstanding Shares is the only vote that would be necessary to adopt the Merger
Agreement at any required meeting of Stockholders. If the Minimum Condition is
satisfied and as a result of the purchase of Shares by the Purchaser pursuant to
the Offer, Purchaser and its affiliates own a majority of the outstanding
Shares, the Purchaser will be able to effect the Merger without the affirmative
vote of any other Stockholder.
If the Purchaser acquires pursuant to the Offer Shares which, together with
Shares already owned by HRN or the Purchaser, represent at least 90% of the then
issued and outstanding Shares, the Purchaser's board of directors will be able
to adopt a plan of merger to effect the Merger without a vote of Stockholders,
pursuant to Section 253 of the DGCL (a "Short-Form Merger"). If the Purchaser
does not acquire pursuant to the Offer, Shares which, together with Shares
already owned by HRN or the Purchaser, represent at least 90% of the then issued
and outstanding Shares, a vote of the Stockholders will be required under the
DGCL to effect the Merger, and a significantly longer period of time will be
required to effect the Merger. HRN, the Purchaser and TravelNow have agreed to
take all necessary and appropriate action to cause the Merger to become
effective as promptly as practicable after the consummation of the Offer.
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The Purchaser may extend the Offer (a) as required by any rule, regulation
or interpretation of the SEC, (b) if any condition to the Offer is not
satisfied, for such periods initially up to five days at a time as it may
reasonably deem necessary, except that in no event may the Offer be extended
more than 90 days from the date of the Merger Agreement, (c) in connection with
any increase in the Merger Consideration paid to tendering Stockholders, or
(d) up to fifteen business days in the event that TravelNow publicly announces
the receipt of a competing acquisition proposal or TravelNow's Board makes a
public announcement withdrawing or modifying its approval of the Offer. In
addition, the Purchaser may, without the consent of TravelNow, make available a
subsequent offering period by extending the Offer on one occasion for up to 20
business days if, on Friday, February 9, 2001, the Shares tendered and not
withdrawn pursuant to the Offer plus any Shares already owned by HRN or the
Purchaser equals less than ninety percent (90%) of the outstanding Shares on a
fully diluted basis. In order to extend the Offer in this way, the Purchaser
must waive any remaining conditions to the Offer except for conditions requiring
the absence of (i) the occurrence of any injunction, proceeding, action, suit or
litigation by any governmental entity seeking to make illegal or prohibit the
consummation of the Offer or (ii) any promulgation, enactment or enforcement of
any law that makes illegal or prohibits the consummation of the Offer.
According to TravelNow, as of January 8, 2001, there were 10,961,261 Shares
issued and outstanding, held by approximately 250 holders of record. As of the
date hereof, HRN is the beneficial owner of 1,080,000 Shares. Based on the
issued and outstanding Shares as of January 8, 2001 (which number is subject to
increase upon the exercise of outstanding and exercisable options to purchase up
to 560,602 Shares), the Minimum Condition would be satisfied if at least
4,400,631 Shares are tendered in the Offer and not withdrawn prior to the close
of the Offer. Pursuant to the Stockholder Agreements, the Selling Stockholders
have agreed, subject to certain conditions, to tender an aggregate of 4,453,884
Shares. Based on such number of issued and outstanding Shares, the Purchaser
would be able to effect a Short-Form Merger if 8,785,135 Shares (or at least
4,331,251 Shares in addition to the Shares tendered by the Selling Stockholders)
were validly tendered in the Offer and not withdrawn prior to the close of the
Offer.
Tendering Stockholders who tender Shares directly will not be obligated to
pay brokerage fees or commissions or, subject to Instruction 6 of the Letter of
Transmittal, stock transfer taxes, if any, with respect to the purchase of
Shares by the Purchaser pursuant to the Offer. However, any tendering
Stockholder or other payee who fails to complete and sign the Substitute
Form W-9 included in the Letter of Transmittal may be subject to required backup
federal income tax withholding of 31% of the gross proceeds payable to such
Stockholder or other payee pursuant to the Offer. The Purchaser will pay all
charges and expenses of Mellon Investor Services LLC, as Depositary (the
"Depositary"), MacKenzie Partners, Inc., as information agent (the "Information
Agent"), and CIBC World Markets Corp., as the dealer manager (the "Dealer
Manager"), in connection with the Offer. See Section 16 "Fees and Expenses."
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
THE OFFER
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), the Purchaser will accept for payment, and pay for, all Shares
validly tendered on or prior to the Expiration Date (as defined below) and not
withdrawn as permitted by Section 4 hereof. The term "Expiration Date" means
12:00 Midnight, New York City time, on Friday, February 9, 2001, unless the
Purchaser, in accordance
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with the terms of the Merger Agreement, extends the Offer, in which event the
term "Expiration Date" will mean the latest time and date on which the Offer, as
so extended, expires.
The Offer is conditioned upon the satisfaction of the Minimum Condition and
each of the other conditions described in Section 14 "Conditions to the Offer."
If any of these conditions are not satisfied prior to the Expiration Date (as it
may be extended), the Purchaser may decline to purchase any Shares tendered in
the Offer and may terminate the Offer and return all tendered Shares to
tendering Stockholders. The Purchaser reserves the right, subject to the
provisions of the Merger Agreement, to waive any and all of such conditions,
except the Minimum Condition, or, subject to the right of Stockholders to
withdraw their Shares until the Expiration Date, to retain the Shares that have
been tendered during the period or periods for which the Offer is extended.
Pursuant to the Merger Agreement and Rule 14d-11 under the Exchange Act of
1934, as amended (the "Exchange Act"), the Purchaser, subject to certain
conditions, may elect to make available a subsequent offering period by
extending the Offer on one occasion for up to 20 business days (the "Subsequent
Offering Period") if, on Friday, February 9, 2001, the Shares tendered and not
withdrawn pursuant to the Offer plus any shares we already own equal less than
ninety percent (90%) of the outstanding Shares on a fully diluted basis. In
order to extend the Offer in this way, we must waive any remaining conditions to
the Offer except for conditions requiring the absence of (i) the occurrence of
any injunction, proceeding, action, suit or litigation by any governmental
entity seeking to make illegal or prohibit the consummation of the offer or
(ii) any promulgation, enactment or enforcement of any law that makes illegal or
prohibits the consummation of the Offer. Under the Exchange Act, no withdrawal
rights may apply to Shares tendered during the Subsequent Offering Period, and
no withdrawal rights may apply during the Subsequent Offering Period with
respect to Shares previously tendered and accepted for payment in the Offer. If
a Subsequent Offering Period is commenced, the Purchaser will promptly purchase
and pay for any Shares tendered at the same per share price paid in the Offer.
Any extension, delay, termination, waiver or amendment of the Offer will be
followed as promptly as practicable by public announcement thereof. In the case
of an extension, such announcement shall be issued no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date. Subject to applicable federal securities laws (including
Rules 14d-4(d), 14d-6(b), 14d-6(c) and 14e-1 under the Exchange Act, which
require that material changes be promptly disseminated to Stockholders in a
manner reasonably designed to inform them of such changes) and without limiting
the manner in which the Purchaser may choose to make any public announcement,
the Purchaser shall have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by issuing a press release
or similar announcement.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Purchaser will extend the Offer to the extent required by
Rules 14d-4(d), 14d-6(b), 14d-6(c) and 14e-1 under the Exchange Act.
Subject to the terms of the Merger Agreement, if, prior to the Expiration
Date, the Purchaser should increase the Offer Consideration, such increase will
be applicable to all Stockholders whose Shares are accepted for payment pursuant
to the Offer. If, at the time notice of any increase in the Offer Consideration
is first published, sent or given to holders of Shares, the Offer is scheduled
to expire at any time earlier than the period ending on the tenth business day
from and including the date that such notice is first so published, sent or
given, the Offer will be extended at least until the expiration of such ten
business day period. For purposes of the Offer, a "business day" means any day
other than a Saturday, Sunday or federal holiday and consists of the time period
from 12:01 a.m. through 12:00 Midnight, New York City time.
TravelNow has provided the Purchaser with TravelNow's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase and the
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related Letter of Transmittal will be mailed to record holders of Shares whose
names appear on TravelNow's stockholder list. It will also be furnished, for
subsequent transmittal to beneficial owners of Shares, to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the stockholder list or, if applicable, who are
listed as participants in a securities clearing agency's security position
listing.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including any
extension or amendment), the Purchaser will accept for payment and pay for all
Shares validly tendered and not withdrawn on or prior to the Expiration Date.
The Purchaser will pay for such Shares promptly after the later to occur of
(1) the Expiration Date and (2) the satisfaction or waiver of the conditions set
forth in Section 14 "Conditions to the Offer." Subject to the Merger Agreement
and compliance with Rule 14e-1 of the Exchange Act, the Purchaser expressly
reserves the right to delay acceptance for payment of, or payment for, Shares in
order to comply, in whole or in part, with any applicable laws.
Payment for Shares tendered and accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
(the "Certificates") representing tendered Shares (or confirmation of a
book-entry transfer (a "Book-Entry Confirmation") of such Shares into the
Depositary's account at The Depository Trust Company (the "Book-Entry Transfer
Facility")), (ii) a properly completed and executed Letter of Transmittal (or a
manually signed facsimile thereof) (or an Agent's Message (as defined in
Section 3) in connection with a book-entry transfer) and (iii) any other
required documents.
The Purchaser will be deemed to have accepted for payment, and thereby
purchased, Shares validly tendered and not withdrawn if, as and when the
Purchaser gives oral or written notice to the Depositary of the Purchaser's
acceptance of such Shares. Payment for accepted Shares will be made by deposit
of the Offer Consideration therefore with the Depositary, who will act as agent
for the tendering Stockholders for the purposes of receiving payments from the
Purchaser and transmitting such payments to Stockholders whose Shares have been
accepted for payment.
Under no circumstances will the Purchaser pay interest on the purchase price
paid by the Purchaser for tendered Shares, regardless of any extension of the
Offer or delay in making such payment.
If any tendered Shares are not accepted for payment for any reason or if
Certificates are submitted evidencing more Shares than are tendered or accepted
for payment, then Certificates for such unpurchased Shares will be returned,
without expense to the tendering Stockholder as promptly as practicable
following expiration or termination of the Offer. In the case of Shares tendered
by book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility, such Shares will be credited to an account maintained with the
Book-Entry Transfer Facility.
The Purchaser reserves the right to assign, in whole or in part, to any
newly-formed wholly-owned subsidiary of HRN or the Purchaser, the right to
purchase all or any portion of the Shares tendered pursuant to the Offer. Any
such assignment will not relieve the Purchaser of its obligations under the
Offer and will in no way prejudice the rights of tendering Stockholders to
receive payment for Shares validly tendered and accepted for payment.
3. PROCEDURE FOR TENDERING SHARES.
VALID TENDER OF SHARES. In order for a Stockholder to validly tender Shares
pursuant to the Offer, a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), together with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message (as
defined below) in lieu of the Letter of Transmittal), and any other documents
required by the Letter of
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Transmittal, must be received by the Depositary on or prior to the Expiration
Date at one of its addresses set forth on the back cover of this Offer to
Purchase. Also, on or prior to the Expiration Date, either (i) the Certificates
evidencing tendered Shares must be received by the Depositary at such address,
(ii) such Shares must be tendered pursuant to the procedures for book-entry
transfer described below (and a Book-Entry Confirmation of such delivery
(including on Agent's Message if the tendering Stockholder has not delivered a
Letter of Transmittal) must be received by the Depositary, or (iii) the
tendering Stockholder must comply with the guaranteed delivery procedures set
forth below.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility and received by the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility that such participant has received and agrees to be bound by
the terms of the Letter of Transmittal and that the Purchaser may enforce such
agreement against the participant.
BOOK-ENTRY DELIVERY. The Depositary will establish accounts with respect to
the Shares at the Book-Entry Transfer Facility for purposes of the Offer within
two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the Book-Entry Transfer Facility's system
may make book-entry delivery of the Shares by causing the Book-Entry Transfer
Facility to transfer such Shares into the Depositary's account in accordance
with the Book-Entry Transfer Facility's procedure for such transfer. However,
although delivery of Shares may be effected through book-entry at the Book-Entry
Transfer Facility, a Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed, together with any required
signature guarantees (or an Agent's Message in lieu of the Letter of
Transmittal) and any other required documents, must, in any case, be received by
the Depositary prior to the Expiration Date at one of its addresses set forth on
the back cover of this Offer to Purchase. Alternatively, a tendering Stockholder
may comply with the guaranteed delivery procedure described below.
Delivery of documents to the Book-Entry Transfer Facility in accordance with
the Book-Entry Transfer Facility's procedures does not constitute delivery to
the Depositary.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE SOLE ELECTION AND RISK OF THE TENDERING STOCKHOLDER.
DELIVERY WILL BE DEEMED MADE ONLY WHEN SUCH ITEMS ARE ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT STOCKHOLDERS USE
PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY TO THE DEPOSITARY.
SIGNATURE GUARANTEES. Except as otherwise provided below, all signatures on
a Letter of Transmittal must be guaranteed by a financial institution that is a
participant in the Securities Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program, or by any other "eligible guarantor institution," as such
term is defined in Rule 17Ad- 15 under the Exchange Act (each of the foregoing
being referred to as an "Eligible Institution"). Signatures on a Letter of
Transmittal need not be guaranteed (i) if the Letter of Transmittal is signed by
the registered holder (which term, for purposes of this section, includes any
participant in any of the Book-Entry Transfer Facility's systems whose name
appears on a security position listing as the owner of the Shares) of Shares and
such registered holder has not completed either the box entitled "Special
Payment Instructions" or the box entitled "Special Delivery Instructions" on the
Letter of Transmittal or (ii) if such Shares are tendered for the account of an
Eligible Institution. See the Instructions to the Letter of Transmittal. If a
Certificate is registered in the name of a person other than the signer of the
Letter of Transmittal, or if payment is to be made, or Certificates for Shares
not tendered or not accepted for payment are to be returned to a person other
than the registered holder of the Certificates surrendered, then the tendered
Certificates must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name or
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names of the registered owner or owners appear on the Certificates. The
signatures on the Certificates or stock powers must also be guaranteed by an
Eligible Institution. See the Instructions to the Letter of Transmittal.
GUARANTEED DELIVERY. If a Stockholder desires to tender Shares pursuant to
the Offer and (i) such Stockholder's Certificates are not immediately available;
(ii) time will not permit all required documents to reach the Depositary on or
prior to the Expiration Date; or (iii) the procedures for book-entry transfer
cannot be completed on a timely basis, such Shares may nevertheless be tendered
if all of the following conditions are satisfied:
- the tender is made by or through an Eligible Institution;
- a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided herewith, is received by the Depositary
on or prior to the Expiration Date; and
- the Certificates (or a Book-Entry Confirmation) representing all tendered
Shares, in proper form for transfer together with a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile
thereof), with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message) and any other documents required
by the Letter of Transmittal are received by the Depositary within three
Nasdaq trading days after the date of execution of such Notice of
Guaranteed Delivery.
Any Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram, telex or facsimile transmission to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in the
Notice of Guaranteed Delivery provided herewith.
OTHER REQUIREMENTS. In all cases, payment for Shares tendered and accepted
pursuant to the Offer will be made only after timely receipt by the Depositary
of (i) Certificates for (or a timely Book-Entry Confirmation with respect to)
such Shares, (ii) a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message), and (iii) any other
documents required by the Letter of Transmittal. Accordingly, tendering
Stockholders may be paid at different times depending upon when Certificates or
Book-Entry Confirmations with respect to the Shares are actually received by the
Depositary. Under no circumstances will interest be paid on the purchase price
to be paid by the Purchaser for the tendered Shares, regardless of any extension
of the Offer or any delay in making such payment.
TENDER CONSTITUTES AN AGREEMENT. The valid tender of Shares pursuant to one
of the procedures described above will constitute a binding agreement between
the tendering Stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tendered Shares will be determined by the Purchaser, in its sole discretion,
which determination shall be final and binding on all parties. The Purchaser
reserves the absolute right to reject any and all tenders of Shares determined
by it not to be in proper form or the acceptance for payment of which, or
payment for, such Shares may, in the opinion of the Purchaser's counsel, be
unlawful. Subject to the provisions of the Merger Agreement, the Purchaser also
reserves the absolute right, in its sole discretion, to waive any of the
conditions of the Offer or any defect or irregularity in the tender of any
Shares of any particular Stockholder, whether or not similar defects or
irregularities are waived in the case of other Stockholders. No tender of Shares
will be deemed to have been validly made until all defects and irregularities
relating thereto have been cured or waived to the satisfaction of the Purchaser.
None of the Purchaser, HRN, the Depositary, the Information Agent, the Dealer
Manager or any other person will be under any duty to give notification of any
defects or irregularities in tenders or will incur any liability for failure to
give any such
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notification. The Purchaser's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and instructions thereto) will be
final and binding.
APPOINTMENT. By executing a Letter of Transmittal as set forth above
(including through delivery of an Agent's Message), a tendering Stockholder
irrevocably appoints designees of the Purchaser as such Stockholder's
attorneys-in-fact and proxies in the manner set forth in the Letter of
Transmittal, each with full power of substitution, to the full extent of such
Stockholder's rights with respect to the Shares tendered by such Stockholder.
All such proxies will be considered coupled with an interest in the tendered
Shares. This appointment is effective if, when, and only to the extent that the
Purchaser accepts such Shares for payment pursuant to the Offer. Upon such
appointment, all prior powers of attorney, proxies and consents given by such
Stockholder will be revoked, and no subsequent proxies may be given nor any
subsequent consent executed by such Stockholder with respect thereto. The
Purchaser's designees will, with respect to the Shares for which the appointment
is effective, be empowered to exercise all voting and other rights of such
Stockholder as they, in their sole discretion, may deem proper at any annual,
special or adjourned meeting of the Stockholders, by written consent in lieu of
any such meeting or otherwise. The Purchaser reserves the right to require that,
in order for Shares to be deemed validly tendered, immediately upon the
Purchaser's payment of the purchae price for such Shares, the Purchaser must be
able to exercise full voting rights with respect to such Shares.
BACKUP WITHHOLDING. Under the "backup withholding" provisions of U.S.
federal income tax laws, the Depositary may be required to withhold 31% of the
amount of any payments made pursuant to the Offer. In order to prevent backup
federal income tax withholding with respect to payments of cash pursuant to the
Offer, a U.S. Holder (as defined in Section 5 "Certain Federal Income Tax
Consequences of the Offer and the Merger") surrendering Shares in the Offer
must, unless an exemption applies, provide the Depositary with such U.S.
Holder's correct taxpayer identification number (the "TIN") on a Substitute
Form W-9 and certify under penalties of perjury that such TIN is correct and
that such U.S. Holder is not subject to backup withholding. If a U.S. Holder
does not provide a correct TIN or fails to provide the certifications described
above, the Internal Revenue Service (the "IRS") may impose a penalty on such
U.S. Holder and payments of cash pursuant to the Offer may be subject to backup
withholding. All U.S. Holders surrendering Shares pursuant to the Offer should
complete and sign the Substitute Form W-9 included as part of the Letter of
Transmittal to provide the information and certification necessary to avoid
backup withholding (unless an applicable exemption exists and is proved in a
manner satisfactory to the Purchaser and the Depositary). Certain persons are
not subject to backup withholding. Noncorporate foreign Stockholders should
complete and sign a Form W-8, Certificate of Foreign Status, a copy of which may
be obtained from the Depositary, in order to avoid backup withholding.
4. WITHDRAWAL RIGHTS.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
such Shares may be withdrawn at any time pursuant to the procedures set forth
below at any time on or prior to the Expiration Date and, unless previously
accepted for payment by the Purchaser, may also be withdrawn at any time after
Tuesday, March 13, 2001. If the Purchaser extends the Offer, is delayed in its
acceptance for payment of Shares or is unable to accept Shares for payment for
any reason, then, without prejudice to the Purchaser's rights under the Offer,
the Depositary may, on behalf of the Purchaser, retain tendered Shares. Such
Shares may not be withdrawn except to the extent that tendering Stockholders are
entitled to withdrawal rights as set forth in this Section 4.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify (i) the name of the person who tendered
the Shares to be withdrawn, (ii) the number of Shares to be withdrawn, and
(iii) the name of the registered holder of such Shares, if different from that
of the person who tendered such
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Shares. If Certificates evidencing Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then prior to the physical release of
such Certificates, the serial numbers shown on the particular Certificates to be
withdrawn must be submitted to the Depositary, and the signature(s) on the
notice of withdrawal must be guaranteed by an Eligible Institution, unless such
Shares have been tendered for the account of an Eligible Institution. If Shares
have been tendered pursuant to the procedures for book-entry transfer, any
notice of withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and
otherwise comply with the Book-Entry Transfer Facility's procedures.
All questions as to the form and validity (including, without limitation,
time of receipt) of notices of withdrawal will be determined by the Purchaser,
in its sole discretion, which determination shall be final and binding. None of
HRN, the Purchaser, the Depositary, the Information Agent, the Dealer Manager or
any other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give such notification.
Any Shares properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered at any time prior to the Expiration Date by following one of the
procedures described in Section 3 "Procedure for Tendering Shares."
In the event the Purchaser provides a Subsequent Offering Period following
the Offer, no withdrawal rights will apply to Shares tendered during such
Subsequent Offering Period or to Shares previously tendered in the Offer and
accepted for payment.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER AND THE MERGER.
The following is a general discussion of certain U.S. federal income tax
consequences of the receipt of cash by a holder of Shares pursuant to the Offer
or the Merger. The discussion is based on the Internal Revenue Code of 1986, as
amended to the date hereof (the "Code"), Treasury Regulations, administrative
pronouncements and judicial decisions, in each case as in effect on the date
hereof, all of which are subject to change (possibly with retroactive effect).
No ruling will be requested from the IRS regarding the tax consequences of the
Offer or the Merger and there can be no assurance that the IRS will agree with
the discussion set forth below. This discussion does not address state, local or
foreign tax laws and, except as specifically noted, applies only to a U.S.
Holder.
A "U.S. Holder" means a holder of Shares that is for U.S. federal income tax
purposes (i) a citizen or resident of the United States, (ii) a corporation or
other entity taxable as a corporation created or organized in or under the laws
of the United States or any political subdivision thereof or therein, (iii) an
estate, the income of which is subject to U.S. federal income taxation
regardless of its source or (iv) a trust if (x) a court within the United States
is able to exercise primary supervision over the administration of the trust and
(y) one or more U.S. persons have the authority to control all substantial
decisions of the trust. In the case of a partnership that holds Shares, any
partner described in any of clauses (i) through (iv) above generally is also a
U.S. Holder. A "Non-U.S. Holder" is a holder of Shares, generally including any
partner in a partnership that holds Shares, that is not a U.S. Holder.
The transfer of Shares pursuant to the Offer or the Merger will be a taxable
transaction for U.S. federal income tax purposes under the Code and may also be
a taxable transaction under applicable state, local or foreign income or other
tax laws. Generally, for U.S. federal income tax purposes, a U.S. Holder will
recognize gain or loss equal to the difference between the amount of cash
received by the U.S. Holder pursuant to the Offer or the Merger and the
aggregate tax basis in the Shares transferred by such U.S. Holder pursuant to
the Offer (or canceled pursuant to the Merger). Gain or loss will be calculated
separately for each block of Shares tendered and purchased pursuant to the Offer
(or canceled pursuant to the Merger).
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Gain (or loss) will be capital gain (or loss), assuming that such Shares are
held as a capital asset. Capital gains of individuals, estates and trusts
generally are subject to preferential U.S. federal income tax rates if, at the
time the Purchaser accepts the Shares for payment, the Stockholder held the
Shares for more than one year. Capital gains of corporations generally are taxed
at the same federal income tax rates applicable to corporate ordinary income. In
addition, under present law, the ability to use capital losses to offset
ordinary income is limited.
A U.S. Holder that tenders Shares pursuant to the Offer or surrenders Shares
pursuant to the Merger may be subject to 31% backup withholding unless the U.S.
Holder provides its TIN and certifies that such number is correct or properly
certifies that it is awaiting a TIN, or unless an exemption applies. A
Stockholder that does not furnish its TIN may be subject to a penalty imposed by
the IRS.
If backup withholding applies to a holder of Shares, the Depositary is
required to withhold 31% from payments to such holder. Backup withholding is not
an additional tax. Rather, the amount of the backup withholding can be credited
against the U.S. federal income tax liability of the person subject to the
backup withholding, provided that the required information is given to the IRS.
If backup withholding results in an overpayment of tax, a refund can be claimed
by the Stockholder on a timely filed U.S. federal income tax return.
The foregoing discussion may not be applicable with respect to Shares
received pursuant to the exercise of employee stock options or otherwise as
compensation or with respect to holders of shares who are subject to special
treatment under the Code, such as Non-U.S. Holders, life insurance companies,
tax-exempt organizations, financial institutions, dealers in securities or
currencies, persons who hold Shares as a position in a "straddle" or as part of
a "hedging," "conversion" or "constructive sale" transaction and persons that
have a functional currency other than the U.S. dollar. The discussion may not
apply to a holder of Shares in light of such holder's individual circumstances
and may not discuss every aspect of U.S. federal tax law that may be relevant to
holders (including, but not limited to, the applicability of any estate or gift
tax laws). Stockholders are urged to consult their own tax advisors to determine
the particular tax consequences to them (including the application and effect of
any state, local or foreign income and other tax laws) of the Offer and the
Merger.
6. PRICE RANGE OF SHARES; DIVIDENDS.
The common stock of TravelNow's predecessor, Sentry Accounting, Inc. ("Old
Sentry"), traded under the symbol "SNTY" on the OTC Bulletin Board from
February 5, 1999 until August 1, 1999. There were approximately 491,000 shares
of Old Sentry's common stock issued and outstanding as of July 23, 1999. The
high and low bid information for Old Sentry common stock, if in fact such
activities in the shares occurred, is not available.
The Shares were traded under the symbol "TNOW" on the OTC Bulletin Board
from August 2, 1999, to May 24, 2000. On May 25, 2000, the Shares were approved
for listing on the Nasdaq SmallCap Market, where they are currently traded under
the symbol "TNOW." The following table shows (i) for the period from August 2,
1999 to May 24, 2000 the high and low bid information for the Shares as reported
on the OTC Bulletin Board, which reflect inter-dealer prices without retail
mark-up, mark-down or commission, and which may not represent actual
transactions and (ii) for the period
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<PAGE>
from May 25, 2000 to January 11, 2001, the high and low closing prices for the
Shares as reported on the Nasdaq SmallCap Market.
<TABLE>
<CAPTION>
FISCAL YEAR 1999 HIGH LOW
---------------- -------- --------
<S> <C> <C>
Second Quarter (August 2 - September 30, 1999).............. $15.125 $ 5.125
Third Quarter (October 1 - December 31, 1999)............... $15.875 $10.375
Fourth Quarter (January 1 - March 31, 2000)................. $17.500 $10.000
<CAPTION>
FISCAL YEAR 2000 HIGH LOW
---------------- -------- --------
<S> <C> <C>
First Quarter (April 1 - June 30, 2000)..................... $11.000 $ 7.750
Second Quarter (July 1 - September 30, 2000)................ $11.125 $ 7.813
Third Quarter (October 1 - December 31, 2000)............... $10.750 $ 0.656
Fourth Quarter (January 1 - January 11, 2001)............... $ 4.078 $ 3.125
</TABLE>
On January 3, 2001, the last full trading day prior to the public
announcement of the execution of the Merger Agreement, the reported closing
sales price per Share on the Nasdaq SmallCap Market was $3.625. On January 11,
2001, the last full trading day prior to the commencement of the Offer, the
reported closing sales price per Share on the Nasdaq SmallCap Market was $4.063.
As of that date, there were approximately 250 stockholders of record. We urge
you to obtain current market quotations for the Shares.
TravelNow has never declared or paid any cash dividends on its Common Stock.
Pursuant to the Merger Agreement, TravelNow has agreed that, without the prior
written consent of HRN, it will not declare, set aside or pay any dividend or
other distribution on any shares of capital stock of TravelNow.
7. EFFECT OF THE OFFER ON MARKET FOR THE SHARES; STOCK MARKET QUOTATION AND
EXCHANGE ACT REGISTRATION.
MARKET FOR SHARES. The purchase of Shares by the Purchaser pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly. It
will also reduce the number of holders of Shares, which could adversely affect
the liquidity and market value of the remaining Shares.
STOCK MARKET QUOTATION. Depending upon the number of Shares purchased
pursuant to the Offer, the Shares may no longer meet the requirements for
continued inclusion and quotation on the Nasdaq Small Cap Market and may be
cease to be quoted on that exchange. According to Nasdaw's published guidelines,
Nasdaq would consider no longer including the Shares for quotation and trading
if, among other things, the number of publicly held Shares was less than
500,000, there were less than 300 round lot holders (round lot holders are
considered holders of 100 shares or more) of Shares or the aggregate market
capitalization of TravelNow was less than $35 million. TravelNow has advised the
Purchaser that, as of January 8, 2001, there were 10,961,261 Shares outstanding,
held by approximately 250 holders of record. If Nasdaq were to discontinue the
quotation and trading of the Shares, the market for the Shares could be
adversely affected.
If Nasdaq were to discontinue the quotation and trading of the Shares, it is
possible that the Shares would be traded or quoted on other securities exchanges
or in the over-the-counter market and that price quotations would be reported by
such exchanges or other sources. The extent of the public market for the Shares
and the availability of such quotations would, however, depend upon the number
of Stockholders and/or the aggregate market value of the Shares remaining at
such time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration of the Shares under
the Exchange Act and other factors. The Purchaser cannot predict whether the
reduction in the number of Shares that might otherwise trade publicly would have
an adverse effect on the market price for or marketability of the Shares or
whether it would cause future market prices to be greater or less than the Offer
Consideration.
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<PAGE>
EXCHANGE ACT REGULATION. The Shares are currently registered under the
Exchange Act. Such registration may be terminated by TravelNow upon application
to the SEC if the Shares are not listed on a national securities exchange and if
there are fewer than 300 record holders of the Shares. The termination of
registration of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by TravelNow to its Stockholders and to the
SEC and would make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b), the requirement of
furnishing a proxy statement in connection with Stockholders' meetings and the
related requirement of furnishing an annual report to Stockholders, and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going-
private" transactions, no longer applicable to the Shares. In addition,
"affiliates" of TravelNow and persons holding "restricted securities" of
TravelNow may be deprived of the ability to dispose of such securities pursuant
to Rule 144 under the Securities Act of 1933, as amended (the "Securities Act").
If registration of the Shares under the Exchange Act were terminated, the Shares
would no longer be eligible for listing on the Nasdaq or for continued inclusion
on the Federal Reserve Board's list of "margin securities."
8. CERTAIN INFORMATION CONCERNING TRAVELNOW.
GENERAL. TravelNow is a Delaware corporation with its principal executive
offices at 318 Park Central East, Suite 396, Springfield, Missouri 65806. The
telephone number of TravelNow's executive offices is (417) 864-3600. TravelNow
is an Internet-based travel services company that provides online travel
information and reservations to its customers on a worldwide basis. Through its
website (www.travelnow.com), TravelNow gives customers real-time access to
hotel, car and airline information regarding schedules, availability and rates
and enables the booking of reservations on an automated basis.
FORECASTS. In connection with this transaction, HRN received some financial
information forecasting potential future operating performance of TravelNow.
TravelNow does not as a matter of course make public forecasts as to future
operations, and these forecasts were not prepared with a view to public
disclosure or compliance with published guidelines of the SEC or the American
Institute of Certified Public Accountants regarding financial forecasts. Such
information is set forth below for the limited purpose of making available to
stockholders the forecasts that were made available to HRN in connection with
the Offer. Neither TravelNow nor HRN intends to update or otherwise revise these
forecasts.
These forecasts necessarily reflect numerous assumptions as to general
business and economic conditions and other matters, many of which are inherently
uncertain or beyond TravelNow's control. It is not possible to predict whether
the assumptions made in preparing these forecasts will be valid, and actual
results may prove to be materially higher or lower than these forecasts. Factors
that may cause actual results to differ, perhaps materially, from these
forecasts include changes in demand and prices for TravelNow's products, changes
in the economic conditions of the various markets TravelNow serves, change in
interest rates, and changes in the amount of severity of inclement weather. The
inclusion of these forecasts does not mean that HRN considered them reliable or
relied upon them, and these forecasts should not be relied on as predictors of
future events. Neither HRN nor TravelNow takes any responsibility for the
validity, reasonableness, accuracy or completeness of these forecasts. TravelNow
has made no representation to HRN regarding these forecasts, and HRN asked for
none.
The following are forecasted revenues, net income and cash flow from
operating activities for the fiscal years ending March 31, 2001 and March 31,
2002 for TravelNow (dollars in millions):
<TABLE>
<CAPTION>
2001 2002
-------- --------
<S> <C> <C>
Revenues.................................................... $10.9 $19.8
Net Income (Loss) Before Taxes.............................. $(2.7) $ 2.0
Cash Flow from Operating Activities......................... $(1.8) $ 3.9
</TABLE>
17
<PAGE>
AVAILABLE INFORMATION. TravelNow is subject to the informational
requirements of the Exchange Act and in accordance therewith files periodic
reports, proxy statements and other information with the SEC relating to its
business, financial condition and other matters. TravelNow is required to
disclose in such proxy statements certain information, as of particular dates,
concerning TravelNow's directors and officers, their remuneration, stock options
granted to them, the principal holders of TravelNow's securities and any
material interest of such persons in transactions with TravelNow. Such reports,
proxy statements and other information may be inspected at the public reference
facilities maintained by the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; 7 World Trade Center, Suite 1300, New York, New York
10048; and Citicorp Center, Suite 1400, 500 W. Madison Street, Chicago, Illinois
60661. Copies of such material can also be obtained at prescribed rates from the
Public Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, or free of charge at the website maintained by the SEC
at http://www.sec.gov.
Except as otherwise stated in this Offer to Purchase, the information
concerning TravelNow contained herein has been taken from or is based upon
reports and other documents on file with the SEC or otherwise publicly
available. Although the Purchaser has no knowledge that would indicate that any
statements contained herein based upon such reports and documents are untrue, it
takes no responsibility for the accuracy or completeness of the information
contained in such reports and other documents or for any failure by TravelNow to
disclose events that may have occurred and may affect the significance or
accuracy of any such information but that are unknown to it.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND HRN.
GENERAL. The Purchaser is a Delaware corporation incorporated on
December 29, 2000, with principal executive offices at 8140 Walnut Hill Lane,
Suite 800, Dallas, Texas 75231. The telephone number of the Purchaser's
principal executive offices is (214) 361-7311. To date, the Purchaser has
engaged in no activities other than those incident to the Purchaser's formation
and the commencement of the Offer. The Purchaser is a wholly-owned subsidiary of
HRN.
HRN is a Delaware corporation with principal executive offices at 8140
Walnut Hill Lane, Suite 800, Dallas, Texas 75231. The telephone number of HRN's
executive offices is (214) 361-7311. HRN is a leading online consolidator of
hotel and other time-based accommodations in terms of rooms booked online,
providing service through its websites, affiliated websites and its toll-free
call center. HRN contracts with lodging properties in advance for volume
purchases and guaranteed availability of rooms at wholesale prices and sells
these rooms to consumers, often at significant discounts to published rates. In
addition, HRN's supply relationships often allow it to offer its customers
accommodation alternatives for otherwise unavailable dates. At December 31,
2000, HRN provided accommodations at over 2,200 hotels in 83 major markets in
North America and Western Europe and vacation rentals at approximately 100
properties in 13 markets. HRN markets its hotel accommodations primarily over
the Internet through its own websites (www.hoteldiscount.com,
www.180096hotel.com and www.condosaver.com) and through third-party affiliated
websites. HRN is a majority-owned subsidiary of USA Networks, Inc., a Delaware
corporation ("USAi").
The name, business address, principal occupation or employment, five year
employment history and citizenship of each director and executive officer of
USAi, HRN and the Purchaser and certain other information are set forth on
Schedule I.
Except as set forth in this paragraph, none of HRN, the Purchaser nor, to
the best of their knowledge, any of the persons listed in Schedule I to this
Offer to Purchase, nor any associate or majority-owned subsidiary of any of the
foregoing, beneficially owns or has any right to acquire, directly or
indirectly, any Shares and none of HRN, the Purchaser nor, to the best of their
knowledge any of the persons or entities referred to above, any director,
executive officer or subsidiary of any of the foregoing, has effected any
transaction in the Shares during the past 60 days. As of January 12, 2001, HRN
owned 1,080,000 Shares constituting approximately 9.9% of the issued and
outstanding Shares on
18
<PAGE>
that date. HRN purchased the Shares from two significant stockholders of
TravelNow pursuant to Stock Purchase Agreements as described in Schedule II to
this Offer to Purchase. In connection with the execution of the Merger
Agreement, HRN entered into stockholder agreements (the "Stockholder
Agreements") with Jeffrey A. Wasson, the Chief Executive Officer of TravelNow,
and certain other officers, directors and significant Stockholders of TravelNow
(together, the "Selling Stockholders"), pursuant to which the Selling
Stockholders are required, subject to the conditions described in Section 11
below, to tender their Shares into the Offer and to vote their Shares against
any other third-party acquisition proposals. The Selling Stockholders hold
outstanding Shares that represent in the aggregate approximately 40.6% of the
outstanding Shares. See Section 11 "Background of the Offer; Contacts with
TravelNow; the Merger Agreement and Stockholder Agreements" for a description of
the Stockholder Agreements.
Except as provided in the Merger Agreement and the Stockholder Agreements,
and as otherwise described in this Offer to Purchase, (i) none of HRN, the
Purchaser nor any of their respective subsidiaries nor, to the best of their
knowledge, any of the persons listed in Schedule I to this Offer to Purchase,
has any contract, arrangement, understanding or relationship with any other
person with respect to any securities of TravelNow, including, but not limited
to, any contract, arrangement, understanding or relationship concerning the
transfer or the voting of any such securities, finder's fees, joint ventures,
loan or option arrangements, puts or calls, guaranties of loans, guaranties
against loss, guarantees of profits, division of profits or loss or the giving
or withholding of proxies, and (ii) none of HRN, the Purchaser nor, to the best
of their knowledge, any of the persons listed on Schedule I to this Offer to
Purchase, has had any business relationship or transaction with TravelNow or any
of its executive officers, directors or affiliates that is required to be
reported under the rules and regulations of the SEC applicable to the Offer. Set
forth below in Section 11 "Background of the Offer and the Merger; Contacts with
TravelNow; the Merger Agreement and Stockholder Agreements" and elsewhere herein
is a summary description of the mutual contacts, negotiations and transactions
between the Purchaser or HRN, any of their respective subsidiaries or any of the
persons listed on Schedule I to this Offer to Purchase, on the one hand, and
TravelNow or its affiliates, on the other hand, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets.
None of the persons listed in Schedule I has, during the past five years,
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). Except as described in Schedule I, none of the persons listed in
Schedule I has, during the past five years, been a party to any judicial or
administrative proceeding (except for matters that were dismissed without
sanction or settlement) that resulted in a judgment, decree or final order
enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of
federal or state securities laws.
AVAILABLE INFORMATION. HRN is subject to the informational requirements of
the Exchange Act and in accordance therewith files periodic reports, proxy
statements and other information with the SEC relating to its business,
financial condition and other matters. HRN is required to disclose in such proxy
statements certain information, as of particular dates, concerning its directors
and officers, their remuneration, stock options granted to them, the principal
holders of its securities and any material interests of such persons in
transactions with HRN. Such reports, proxy statements and other information
should be available for inspection and copying at the offices of the SEC in the
same manner as set forth with respect to TravelNow in Section 8 "Certain
Information Concerning TravelNow."
10. SOURCE AND AMOUNT OF FUNDS.
The Purchaser estimates that the total amount of funds required to purchase
all of the outstanding Shares pursuant to the Offer, to provide funding for the
subsequent Merger and to pay related fees
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<PAGE>
and expenses will be approximately $49 million. The Purchaser will obtain these
funds from HRN in the form of capital contributions and/or loans from HRN. HRN
has available cash reserves that are much larger than that needed to complete
the contemplated transactions The Offer is not conditioned on any financing
arrangements.
11. BACKGROUND OF THE OFFER AND THE MERGER; CONTACTS WITH TRAVELNOW; THE MERGER
AGREEMENT AND STOCKHOLDER AGREEMENTS.
PRIOR TRANSACTIONS WITH TRAVELNOW
In 1998, HRN and TravelNow entered into an Affiliate Agreement, whereby
TravelNow agreed to market for sale HRN's hotel and other time-based lodging
products through TravelNow's proprietary websites and other third-party websites
affiliated with TravelNow, in exchange for a commission based upon the gross
revenues generated by HRN from hotel reservations made by visitors to
TravelNow's website and such third-party websites.
During the week of April 24, 2000, the two Co-Chief Executive Officers of
TravelNow, the President of HRN and certain other executive officers of
TravelNow and HRN met in New York City to discuss possible changes to the
Affiliate Agreement and the possibility of other alliances between the two
companies. These negotiations continued until May 31, 2000, when HRN and
TravelNow entered into an amended and restated Affiliate Agreement. The May 31
amendment made a number of changes to the prior arrangement, including the rate
at which commissions were paid by HRN to TravelNow. On August 30, 2000, HRN and
TravelNow entered into another amendment to the Affiliate Agreement. The
August 30 amendment was principally to define and clarify certain marketing
obligations of the parties and covered the time period from August 30, 2000 to
December 31, 2000.
BACKGROUND OF THE OFFER
During the course of the negotiations to amend the Affiliate Agreement,
which began in April 2000 and ended with the August 30, 2000 amendment, the
parties conducted general discussions regarding a possible business combination
with HRN, including a possible acquisition by HRN of TravelNow. On or about
May 19, 2000 HRN's Chief Financial and Strategic Officer requested that
TravelNow provide to HRN confidential, non-public information about TravelNow.
TravelNow required HRN to enter into a confidentiality agreement on May 23, 2000
before providing the requested information. Although the parties continued
discussions and TravelNow continued to provide financial information to HRN, HRN
did not pursue those discussion or propose terms during this period because
TravelNow's common stock was trading between $8.00 and $7.85, and HRN was not
interested in pursuing a transaction at or above that price range.
By October 2000, TravelNow's stock trading range had declined to as low as
$3.50. In late October and early November 2000, the Chief Executive Officers of
TravelNow and HRN conducted additional discussions regarding each party's
interest in a potential transaction between TravelNow and HRN, including the
possibility of HRN making a direct equity investment in TravelNow.
On November 29, 2000 TravelNow announced that it had engaged the financial
advisory firm of Legg Mason to explore TravelNow's strategic alternatives,
including the possible sale of TravelNow. Legg Mason and TravelNow compiled and
ranked a list of possible companies engaged in the on-line travel industry that
might be interested in a potential business combination or other transaction
with TravelNow. During the period from November 29, 2000 through December 29,
2000, representatives of Legg Mason contacted by telephone eight of the
highest-ranked companies, including HRN, to inquire about their interest in a
potential business combination or other transaction with TravelNow. All eight
companies expressed an interest in a possible transaction with TravelNow and
four companies, including HRN (the "Potential Buyers"), executed confidentiality
agreements with Legg Mason. Legg Mason distributed confidential materials
regarding TravelNow to all Potential Buyers. Thereafter and through
December 29, 2000, representatives of Legg Mason and the Potential Buyers
engaged in telephone
20
<PAGE>
discussions regarding such materials and TravelNow's management participated in
various conference calls or meetings with the Potential Buyers.
On November 29, 2000 the Chief Executive Officer of HRN and the Chief
Executive Officer of TravelNow discussed the possibility of a business
combination between the two companies. In that conversation, HRN indicated an
interest in pursuing the matter further and engaging in more substantive
discussions. As a follow-up to this discussion, on December 3, 2000, HRN
delivered to TravelNow a request for specific information about TravelNow's
business and results of operations. Following the delivery of that request,
representatives of Legg Mason advised the Chief Financial and Strategic Officer
of HRN of the sale process being contemplated by TravelNow. That process
included a requirement that HRN enter into agreements with TravelNow regarding
confidentiality and prohibiting HRN's acquisition of common stock of TravelNow
without the prior consent of the TravelNow board of directors (the
"Confidentiality Agreements").
On December 15, 2000, the Chief Executive Officer of Parent contacted two
significant stockholders of TravelNow regarding the possibility of Parent
purchasing some or all of the Shares held by those stockholders. On
December 18, 2000, Parent entered into Stock Purchase Agreements with both
stockholders to purchase from them a total of 1,080,000 Shares.
Between December 5 and December 19, 2000, representatives of Legg Mason
continued discussions with representatives of HRN and the other Potential
Buyers. During that same period, legal counsel for HRN and TravelNow negotiated
the terms of the Confidentiality Agreements. HRN entered into the
Confidentiality Agreements on December 19, 2000.
On December 19, 2000, representatives of Legg Mason began to distribute to
HRN preliminary information regarding TravelNow. TravelNow and Legg Mason
delivered to HRN a variety of due diligence materials over the two weeks
following the execution of the Confidentiality Agreements. On December 19, 2000,
Legg Mason discussed with HRN's Chief Financial and Strategic Officer a schedule
for negotiating a possible transaction. Over the following three days,
management of TravelNow and its financial advisor met with representatives of
HRN in Springfield, Missouri to conduct on-site operational and financial due
diligence. On December 22, 2000, representatives of Legg Mason discussed with
representatives of HRN a possible business combination and various forms of
consideration. Discussions among management of HRN and TravelNow and its
financial advisor included major integration issues of the combined business and
continued by telephone through December 24, 2000.
On December 26, 2000, representatives of Legg Mason discussed with
representatives of HRN various options relating to the purchase price and the
form of consideration for HRN's acquisition of TravelNow. During the
negotiations, HRN made a preliminary proposal for a cash or a stock offer in
which the price for a stock offer was slightly higher than a cash offer. HRN
informed Legg Mason that its proposal at that time was subject to HRN's further
due diligence and that the price would depend, among other things, on the
financial impact on TravelNow of existing employment agreements that would
require, upon consummation of a transaction, a cash payment to certain
executives of TravelNow. On December 27, 2000, a representative of Legg Mason
contacted the Chief Financial and Strategic Officer of HRN to inform HRN that
TravelNow would prefer to consider a cash offer due to the relative speed with
which a cash offer could be completed and the uncertainty of the value of Parent
stock, resulting from the limited liquidity, volatility and limited trading
history for the Parent stock.
On December 28, 2000, HRN responded by increasing the cash consideration
proposed. Among other issues under discussion at this time, HRN indicated that
its revised proposal would be conditioned on the waiver by four executive
officers of TravelNow (including Mr. Wasson) of change of control payments owed
to them by TravelNow under their employment agreements. Because TravelNow did
not have the ability to unilaterally modify these contractual obligations, it
instructed Legg Mason to
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<PAGE>
request that HRN revise its offer to eliminate this contingency for all
executive officers other than Mr. Wasson, who agreed to waive these benefits for
himself.
After further negotiations, on December 28, 2000, HRN offered to acquire
TravelNow for cash in an amount of $4.16 per share of TravelNow common stock.
The proposal was contingent on, among other items, Mr. Wasson's agreement to
forego the cash payment that would have been required under his employment
agreement upon the consummation of a transaction with HRN and a modification of
the timing of the payment due to other executive officers. HRN's proposal also
included a requirement that the Selling Stockholders agree to the transaction
and that TravelNow agree to negotiate exclusively with HRN for a limited period
of time.
During the period from December 26 through December 29, 2000, Legg Mason
and management of TravelNow had further discussions with various of the other
Potential Buyers and determined that it was in the best interests of TravelNow
and its Stockholders to work expeditiously to reach agreement with HRN, if
possible.
At a meeting held on December 29, 2000 TravelNow's Board authorized the
negotiation of definitive merger documents based on HRN's revised offer of $4.16
per share. At that meeting, the TravelNow Board also authorized entering into an
exclusivity agreement with HRN, whereby TravelNow agreed to negotiate
exclusively with HRN until midnight on January 2, 2001. TravelNow and HRN
executed the exclusivity agreement later on December 29, 2000.
HRN's legal counsel provided an initial draft of the Merger Agreement to
TravelNow and its financial and legal advisors on the evening of December 29,
2000. On December 30, 2000, HRN's counsel delivered an initial draft of the form
of Stockholder Agreement to TravelNow and its financial and legal advisors. The
Chief Financial and Strategic Officer of HRN and the Chief Executive Officer and
Chief Financial Officer of TravelNow met in Dallas, Texas on that date to
discuss certain information requests of HRN regarding the business and
operations of TravelNow.
On December 31, 2000, management of the two companies, their respective
legal advisors and Legg Mason commenced negotiations of the definitive Merger
Agreement and Stockholder Agreements. Management of HRN and TravelNow continued
due diligence discussions regarding TravelNow's business, operations and
agreements.
Negotiations between legal counsel for TravelNow and HRN continued in Dallas
from December 31, 2000 through January 2, 2001. On January 2, 2000, after
conducting additional due diligence regarding TravelNow, HRN's Chief Financial
and Strategic Officer informed TravelNow's Chief Executive Officer that HRN was
reducing its offer. TravelNow responded that it would not accept the reduced
offer. HRN's Chief Financial and Strategic Officer and TravelNow's Chief
Executive Officer then discussed HRN's reasons for the reduced offer and
TravelNow provided HRN with additional information that resulted in HRN
resubmitting its $4.16 offer.
On the evening of January 2, 2001, the Board of Directors of TravelNow met
again to discuss HRN's acquisition of TravelNow. The meeting adjourned late in
the evening of January 2, 2001 and reconvened the next morning. During the board
meeting, legal counsel for TravelNow conducted several conversations with legal
counsel for HRN regarding questions that had arisen in the board meeting.
Negotiations continued throughout the day on January 3, 2000. As part of
these negotiations, TravelNow's Chief Executive Officer agreed to enter into an
agreement with TravelNow to reduce the amount of indebtedness owed by him to
TravelNow by $15,000 and to provide for his repayment of the remaining $50,000
of indebtedness to TravelNow upon consummation of the Merger. The board
adjourned its meeting in the afternoon of January 3 and reconvened in the late
afternoon of January 3. At this meeting, the directors of TravelNow received an
opinion as to the fairness of the consideration to be offered in the Offer and
the Merger from a financial point of view, issued by Legg Mason, and determined
that the Offer and the Merger were fair to, and in the best interests of,
TravelNow and its
22
<PAGE>
Stockholders (other than HRN, the Purchaser or their affiliates and the Selling
Stockholders) and unanimously approved and declared advisable the Merger
Agreement and the transactions contemplated thereby, including the Offer and the
Merger. Following the board's approval, officers of TravelNow and HRN signed the
final Merger Agreement and the relevant stockholders of TravelNow signed their
Stockholder Agreements with HRN.
The next morning, on January 4, 2001, HRN and TravelNow issued a joint press
release announcing the signing of the merger agreement.
THE MERGER AGREEMENT
The following is a summary of the material terms of the Merger Agreement.
This summary is not a complete description and is qualified in its entirety by
reference to the full text thereof, which is incorporated herein by reference
and a copy of which has been filed with the SEC as an exhibit to the Schedule
TO. The Merger Agreement may be examined, and copies thereof may be obtained, as
set forth in Section 8 "Certain Information Concerning TravelNow" above.
THE OFFER. The Merger Agreement provides for the commencement of the Offer.
The Purchaser and HRN have expressly reserved the right to amend or modify the
terms of the Offer at any time prior to acceptance of Shares for payment.
However, without the prior written consent of TravelNow, the Purchaser or HRN
will not:
- decrease the Merger Consideration, change the form of the Merger
Consideration or decrease the number of Shares sought pursuant to the
Offer;
- amend or waive the Minimum Condition;
- extend the Expiration Date of the Offer, which will initially be not less
than 20 business days after the date the Offer is commenced; provided,
however, that the Purchaser may extend the Expiration Date of the Offer:
- as required by any rule, regulation or interpretation of the SEC;
- in the event that any condition to the Offer is not satisfied as of the
Expiration Date, for such periods for up to five business days at a
time (or such longer period as may be approved by TravelNow) as the
Purchaser may reasonably deem necessary, but, except as provided in
below, in no event may the Offer be extended to a date later than
90 days after the date of the Merger Agreement (the "Offer Termination
Date") (provided that, in the event that any condition to the Offer is
not satisfied as of the scheduled expiration date thereof, the
Purchaser will extend the expiration date of the Offer at the request
of TravelNow for up to five business days at a time (or such longer
period as may be mutually agreed) until the earlier of the acceptance
for payment of any Shares pursuant to the Offer or 60 calendar days
after the commencement of the Offer; provided that such extension will
not be required if in the reasonable judgment of the Purchaser, any
such condition is incapable of being satisfied prior to the expiration
of such 60 calendar day period); or
- notwithstanding the foregoing, beyond the Offer Termination Date:
- in connection with an increase in the Merger Consideration so as to
comply with applicable rules and regulations of the SEC; and
- for up to a period not to exceed 15 business days after the date
that either:
- TravelNow will have publicly announced the receipt of an
Acquisition Proposal (as defined in the Merger Agreement) in
the event such announcement is made less than ten business days
prior to the Offer Termination Date;
- TravelNow publicly announces its reaffirmation of its approval
or recommendation of the Offer following the public
announcement of the receipt of any Acquisition
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Proposal in the event that such reaffirmation or announcement
is made less than ten business days prior to the Offer
Termination Date;
- TravelNow's Board will have withdrawn or adversely modified, or
taken a public position materially inconsistent with, its
approval or recommendation of the Offer, the Merger or the
Merger Agreement at any time within ten business days prior to
the Offer Termination Date; or
- any notice is given by TravelNow in accordance with its
termination rights following the receipt of an unsolicited
written bona fide Acquisition Proposal (as described below in
this Section 12) if such notice is made less than 15 business
days prior to the Offer Termination Date;
- amend the terms of the Offer in any manner that is adverse to the holders
of Shares; or
- impose any condition to the Offer in addition to those set forth in
Section 13 "Conditions to the Offer."
Without the consent of TravelNow, the Purchaser may make available a
subsequent offering period (within the meaning of Rule 14d-11 under the Exchange
Act) by extending the Offer on one occasion for up to 20 business days if on the
Expiration Date, the Shares validly tendered and not withdrawn pursuant to the
Offer equal less than ninety percent (90%) of the outstanding Shares on a fully
diluted basis notwithstanding that all the conditions to the Offer have been
satisfied.
Except as set forth above, the Purchaser may waive any other condition to
the Offer in its sole discretion. Assuming the prior satisfaction or waiver of
the conditions to the Offer, the Purchaser will accept for payment and pay for
all Shares validly tendered and not withdrawn pursuant to the Offer as soon as
practicable after the Expiration Date. TravelNow will not tender into the Offer
any Shares beneficially owned by it.
BOARD REPRESENTATION. The Merger Agreement provides that upon the purchase
by the Purchaser pursuant to the Offer of such number of Shares that represents
a majority of the outstanding shares of Common Stock (on a fully-diluted basis),
and from time to time thereafter, the parties to the Merger Agreement agree to
cause to be elected to TravelNow's Board such number of directors designated by
the Purchaser, rounded up to the next whole number (but in no event more than
two less than the total number of directors on TravelNow's Board), as will give
the Purchaser, subject to compliance with Section 14(f) of the Exchange Act,
representation on TravelNow's Board equal to the product of:
- the number of directors on TravelNow's Board (giving effect to any
increase in the number of directors pursuant to the Merger Agreement) and
- the percentage (the "Board Percentage") that such number of Shares so
purchased bears to the aggregate number of Shares outstanding.
TravelNow has agreed, upon request by the Purchaser and subject to applicable
law, to:
- promptly satisfy the Board Percentage by increasing the size of
TravelNow's Board or using its reasonable efforts to secure the
resignations of such number of directors as is necessary to enable the
Purchaser's designees to be elected to TravelNow's Board; and
- to cause the Purchaser's designees promptly to be so elected, provided
that no such action will be taken that would result in there being, prior
to the consummation of the Merger, less than two directors of TravelNow
who are Continuing Directors (as defined below), except to the extent that
all Continuing Directors have resigned.
If requested by the Purchaser, TravelNow will use its best efforts to cause each
committee of TravelNow's Board to include persons designated by the Purchaser
constituting the Board Percentage of such committee. TravelNow also has agreed
to promptly amend, or cause to be amended, its by-laws, if necessary, to
increase the size of TravelNow's Board if such increase is required to satisfy
the Board
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Percentage. TravelNow has agreed to take, at its own expense, any lawful action
necessary to effect any such election, including, without limitation, mailing to
Stockholders the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder, unless such information has previously been
provided to the Stockholders in a Schedule 14D-9. The Purchaser has agreed to
supply TravelNow with, and be solely responsible for, any information with
respect to itself and its nominees, directors and affiliates required by
Section 14(f) of the Exchange Act and Rule 14f-1.
The term "Continuing Director" means (1) each member of TravelNow's Board
immediately prior to the acceptance for payment of Shares tendered pursuant to
the Offer or (2) any director elected or appointed to fill any vacancy or newly
created directorship after the date of the Merger Agreement who is
(x) recommended or elected, as the case may be, by a majority of the Continuing
Directors then on TravelNow's Board and (y) not affiliated with, and not a
designee or nominee of, HRN or the Purchaser.
Following the election or appointment of the Purchaser's designees pursuant
to the Merger Agreement and prior to the Effective Time, the approval of a
majority of the Continuing Directors will be required to authorize any of the
following:
- any termination of the Merger Agreement by TravelNow;
- any consent or agreement by TravelNow to a termination of the Merger
Agreement;
- any amendment of the Merger Agreement requiring action of TravelNow's
Board;
- any extension of time for the performance of any of the obligations of HRN
or the Purchaser under the Merger Agreement;
- any waiver of compliance with any of the agreements or conditions under
the Merger Agreement for the benefit of TravelNow or the Stockholders; and
- any action to seek to enforce any obligation of HRN or the Purchaser under
the Merger Agreement.
The Continuing Directors will also be authorized, on behalf of and at the
expense of TravelNow, to retain financial and legal advisors.
CONSIDERATION TO BE PAID IN THE MERGER. The Merger Agreement provides that
upon the terms and subject to the conditions set forth therein, and in
accordance with the DGCL, the Purchaser will be merged with and into TravelNow,
with TravelNow continuing as the surviving corporation and as a direct
wholly-owned subsidiary of HRN.
At the Effective Time, by virtue of the Merger and without any action on the
part of any holder of Shares or any holder of shares of capital stock of the
Purchaser:
- each Share issued and outstanding immediately prior to the Effective Time
(excluding shares of Common Stock owned, directly or indirectly, by HRN,
the Purchaser or any dissenting Stockholders) will be converted into the
right to receive the Merger Consideration;
- each share of capital stock of the Purchaser issued and outstanding
immediately prior to the Effective Time will be converted into and become
one fully paid and nonassessable share of common stock, par value $0.01
per share, of the Surviving Corporation; and
- each Share owned, directly or indirectly, by TravelNow, HRN or the
Purchaser will be canceled and retired and will cease to exist.
STOCK OPTIONS AND STOCK OPTION PLAN. At the Effective Time, each then
outstanding option (the "Options") to purchase or acquire Shares, whether or not
issued under TravelNow's 2000 Omnibus Stock Incentive Plan, and whether or not
then exercisable or vested, will be canceled. As to any such Options that are
vested and exercisable, according to their terms, as of the Effective Time
(each, a "Vested Option"), the cancellation of such Vested Options will
represent the right to receive the
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following consideration in settlement thereof: for each Share subject to such
Vested Option an amount (subject to any applicable withholding tax) in cash
equal to the difference between the Merger Consideration and the per share
exercise price of such Vested Option to the extent such difference is a positive
number (the "Option Consideration"); provided, however, that with respect to any
person subject to Section 16(a) of the Exchange Act, any such Option
Consideration will not be payable until the first date that payment can be made
without liability to such person under Section 16(b) of the Exchange Act, but
will be paid as soon as practicable thereafter.
STOCKHOLDER MEETING. The Merger Agreement provides that as soon as
practicable following the date of acceptance for payment of and payment for
Shares by the Purchaser (the "Funding Date"), TravelNow and HRN will prepare and
file with the SEC a proxy statement relating to a meeting of the Stockholders to
adopt the Merger Agreement (as it may be amended from time to time, the "Proxy
Statement"). TravelNow has agreed to use all reasonable efforts to respond to
all SEC comments with respect to the Proxy Statement and to cause the Proxy
Statement to be mailed to the Stockholders at the earliest practicable date.
The Merger Agreement provides that TravelNow will, as soon as practicable
following the Funding Date, duly call, give notice of, convene and hold a
meeting (the "Special Meeting") of its Stockholders for the purpose of adopting
the Merger Agreement or, in lieu of such meeting, HRN and the Purchaser will
cause the Merger Agreement to be adopted by written consent of the Stockholders.
At the Special Meeting (or in connection with any consent in lieu thereof), HRN
will cause all of the shares then owned by HRN and the Purchaser to be voted in
favor of, or consented to, the adoption of the Merger Agreement.
Notwithstanding the preceding two paragraphs or any other provision of the
Merger Agreement, in the event that HRN and the Purchaser acquire in the
aggregate at least 90% of the outstanding Shares in the Offer, the parties to
the Merger Agreement have agreed to take all necessary and appropriate action to
cause the Merger to become effective, as soon as practicable after the
expiration of the Offer, without a meeting of the Stockholders in accordance
with the "short-form" merger provisions set forth in Section 253 of the DGCL.
If the Minimum Condition is satisfied and the Purchaser acquires less than
90% of the outstanding Shares pursuant to the Offer, the Purchaser intends to
exercise the option granted by TravelNow, pursuant to the Merger Agreement, in
order to acquire an aggregate number of Shares in excess of 90% of the
outstanding Shares, thereby permitting the Purchaser to effect the Merger
pursuant to the "short-form" merger provisions of Section 253 of the DGCL. In
addition, the Stockholder Agreements provide that, if the Minimum Condition is
not satisfied and the tender by the Selling Stockholders of Shares issuable upon
the exercise by the Selling Stockholders of Options for which the exercise price
is equal to or less than the Offer Consideration (the "Underlying Shares") would
satisfy the Minimum Condition, then each Selling Stockholder will exercise the
Options beneficially owned by him and tender the Underlying Shares in the Offer.
The Stockholder Agreements also require that if the Offer is consummated and
(i) the Purchaser acquires less than 90% of the Shares and (ii) the Underlying
Shares together with the Shares acquired in the Offer or otherwise owned by HRN
or the Purchaser aggregate at least 90% of the outstanding Shares, then each
Selling Stockholder will exercise his Options beneficially owned by him with an
exercise price equal to or less than the Offer Consideration and will sell the
Underlying Shares to the Purchaser at a price per Share equal to the Offer
Consideration.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains numerous
representations and warranties made by TravelNow. The most significant of these
relate to:
- capitalization;
- corporate existence and good standing;
- qualifications to do business;
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- corporate power, authority, authorizations, consents and approvals to
enter into the contemplated transactions;
- absence of violations of organizational documents, laws or certain
material agreements as a result of the contemplated transactions;
- governmental authorizations;
- the repurchases of Shares;
- the ownership of subsidiaries;
- SEC filings;
- financial statements;
- conduct of TravelNow's business in the ordinary course;
- the absence of occurrences having a Material Adverse Effect (as defined
below);
- compliance with laws, licenses and permits;
- employee matters;
- labor matters;
- intellectual property matters;
- litigation;
- environmental matters;
- pension and benefit plan matters;
- tax matters;
- the recommendation of TravelNow's Board in favor of the Merger;
- related party transactions; and
- the opinion of TravelNow's financial advisor.
Certain representations and warranties in the Merger Agreement made by
TravelNow are qualified as to materiality or "Material Adverse Effect." For
purposes of the Merger Agreement and this Offer to Purchase, the term "Material
Adverse Effect" means any result, occurrence, fact, change, event or effect
that, individually or in the aggregate with any such other results, occurrences,
facts, changes, events or effects, is or, in HRN's reasonable judgment, could
(a) be expected to be materially adverse to the historical or near-term or
long-term projected:
- business;
- operations, licenses, permits, rights or privileges;
- assets;
- liabilities;
- financial condition;
- results of operations; or
- capitalization
of TravelNow taken as a whole, (b) materially impair the ability of TravelNow to
perform its obligations under the Merger Agreement or any Stockholder Agreements
(the "Transaction Documents"), or (c) prevent the consummation of any of the
transactions contemplated thereby.
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The Merger Agreement contains several representations and warranties made by
HRN and the Purchaser, including:
- the absence of any breach of organizational documents, laws or certain
material agreements as a result of the contemplated transactions;
- the authorization to enter into the contemplated transactions;
- governmental approvals; and
- the accuracy of information provided for inclusion in TravelNow's
Schedule 14D-9 and the Proxy Statement.
CONDUCT OF BUSINESS PENDING THE MERGER. TravelNow has agreed that, during
the period from the date of the Merger Agreement and continuing until the
designees of the Purchaser have been appointed to TravelNow's Board, except as
expressly contemplated or permitted by the Transaction Documents or to the
extent that Parent will otherwise consent in writing, TravelNow will:
- carry on its businesses in the usual, regular and ordinary course
consistent with past practice;
- use all reasonable efforts to preserve intact its present business
organization and goodwill and retain the services of its current officers
and employees and preserve its relationships with customers, suppliers and
others having business dealings with it;
- not declare or pay any dividends on or make other distributions in respect
of any of its capital stock, or set aside funds therefore;
- not split, combine or reclassify any of its capital stock, or issue,
authorize or propose the issuance of any other securities in respect of,
in lieu of or in substitution for, shares of its capital stock;
- not repurchase or otherwise acquire any shares of its capital stock,
except as required by the terms of its securities outstanding or any
employee benefit plan in effect on the date of the Merger Agreement, or
set aside funds therefore;
- not grant any options, warrants or other rights to purchase shares of its
capital stock, amend the terms of or reprice any Option outstanding on the
date of the Merger Agreement or amend the terms of the any stock option
plan;
- except for Shares issuable pursuant to options outstanding on the date of
the Merger Agreement, not authorize, issue, deliver or sell any shares of
its capital stock, any bonds, debentures, notes or other instruments or
evidence of indebtedness of TravelNow or any securities convertible into,
or any rights, warrants or options to acquire such;
- not amend or propose to amend its certificate of incorporation or by-laws;
- not merge or consolidate with, or acquire any equity interest in, any
corporation, partnership, association or other business organization, or
enter into an agreement with respect thereto;
- not acquire or agree to acquire any material assets, except for capital
expenditures otherwise permitted by the Merger Agreement;
- not make any loan or advance to, or otherwise make any investment in, any
person;
- not sell, lease, encumber or otherwise dispose of, or agree to sell, lease
(whether such lease is an operating or capital lease), encumber or
otherwise dispose of, any of its material assets;
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- not authorize, recommend, propose or announce any intention to adopt a
plan of complete or partial liquidation or dissolution;
- except as may be required by law or pursuant to any of the employee
benefit plans or arrangements existing on the date of the Merger
Agreement, not, with respect to any of its directors, officers, management
employees or key employees:
- grant any increase in compensation;
- pay or agree to pay any pension, retirement allowance or other employee
benefit;
- enter into any new, or materially amend any existing, employment or
severance or termination agreement;
- become obligated under any new benefit plan or employment agreement
that was not in existence on the date of the Merger Agreement or amend
any such plan or arrangement in existence on such date or materially
amend such plan or agreement; or
- extend any loans or advances, except for ordinary course of business
advances for business related expenses;
- not grant any general increase in compensation (including without
limitation, salary, bonus and other benefits) to employees, except for
increases occurring in the ordinary course of business, consistent with
past practice;
- not assume or incur any indebtedness for borrowed money or guarantee any
such indebtedness;
- not issue or sell any debt securities or warrants or rights to acquire any
debt securities or guarantee any debt obligations of any other person
(except obligations of wholly-owned subsidiaries of TravelNow);
- not enter into any lease, create any lien (other than permitted
encumbrances) on any of its property or enter into any agreement or
arrangement to maintain the financial condition of any other person;
- not enter into any contracts involving aggregate annual payments in excess
of $50,000, or modify, rescind, terminate, waive, release or otherwise
amend in any material respect any of the terms or provisions of any
material contract;
- other than as required by the SEC, by law or by generally accepted
accounting principles, not make any changes with respect to accounting
policies, procedures and practices;
- except as otherwise disclosed in the Merger Agreement, incur capital
expenditures in excess of $25,000 individually and $100,000 in the
aggregate;
- not engage in or permit any transaction or act that, if it had been
engaged in or permitted prior to the date of the Merger Agreement, would
have rendered untrue in any material respect any of the representations
and warranties of TravelNow contained in the Merger Agreement;
- not deposit or otherwise invest any cash on hand into accounts, securities
or other instruments having a maturity of more than 30 days or that will
impose payment or penalty upon liquidation within 30 days of such deposit
or investment;
- not transfer or license to any person, or extend or modify in any material
respect, any rights to any material intellectual property, other than
non-exclusive licenses in the ordinary course of business and consistent
with past practice; or
- not agree to or make any commitment to, whether orally or in writing, take
any actions prohibited by the Merger Agreement.
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OTHER AGREEMENTS. TravelNow, HRN and the Purchaser have agreed to use their
respective reasonable efforts to take, or cause to be taken, all actions
necessary, proper or advisable to consummate the transactions contemplated by
the Transaction Documents, subject, if applicable, to Stockholder approval.
TravelNow, HRN and the Purchaser have also agreed to cooperate and use their
respective reasonable efforts to promptly prepare and file all necessary
documentation to effect all necessary applications, notices, petitions, filings
and other documents, and to use all reasonable efforts to obtain (and will
cooperate with each other in obtaining) any consent, acquiescence,
authorization, order or approval of, or any exemption or nonopposition by, any
governmental entity required to be obtained or made by HRN or TravelNow or any
of their respective affiliates in connection with the Offer and the Merger or
the taking of any other action contemplated by the Transaction Documents;
provided, however, that HRN, the Purchaser and their respective affiliates will
not be required to divest any assets in connection with the Merger Agreement.
TravelNow will use all reasonable efforts to obtain any consent from third
parties necessary to allow TravelNow to continue operating its business as
presently conducted as a result of the consummation of the transactions
contemplated by the Merger Agreement.
TravelNow has agreed to afford access, upon reasonable notice, to the
officers, employees, accountants, counsel and other representatives of HRN and
the Purchaser, during normal business hours during the period prior to the
Effective Time, to all of its properties, books, contracts, commitments and
records. During the period prior to the Effective Time, TravelNow will furnish
promptly to HRN and the Purchaser (i) a copy of each report, schedule,
registration statement and other document filed by it or received from the SEC
during such period, and (ii) all other information concerning its business,
properties and personnel as HRN and the Purchaser may reasonably request.
INDEMNIFICATION. The Merger Agreement provides that, until six years from
the Effective Time, unless otherwise required by applicable law, the certificate
of incorporation and by-laws of the Surviving Corporation will contain
provisions no less favorable with respect to the elimination of liability of
directors and the indemnification of (and advancement of expenses to) directors,
officers, employees and agents than are set forth in the certificate of
incorporation and by-laws of TravelNow, as in effect as of the date of the
Merger Agreement. The Merger Agreement also provides that, from and after the
Effective Time, HRN and the Surviving Corporation will, jointly and severally,
indemnify, defend and hold harmless each person who is now, or has been at any
time prior to the date of the Merger Agreement or who becomes prior to the
Effective Time, an officer, director, employee or agent of TravelNow or any of
its subsidiaries (collectively, the "Indemnified Parties") against all losses,
reasonable expenses (including reasonable attorneys' fees), claims, damages,
liabilities or amounts that are paid in settlement of, or otherwise in
connection with, any threatened or actual claim, action, suit, proceeding or
investigation (a "Claim"), based in whole or in part on or arising in whole or
in part out of the fact that the Indemnified Party is or was a director,
officer, employee or agent of TravelNow and pertaining to any matter existing or
arising out of actions or omissions occurring at or prior to the Effective Time
(including, without limitation, any Claim arising out of the Merger Agreement or
any of the transactions contemplated thereby), whether asserted or claimed prior
to, at or after the Effective Time, in each case to the fullest extent permitted
under Delaware law, and will pay any expenses, as incurred, in advance of the
final disposition of any such action or proceeding to each Indemnified Party to
the fullest extent permitted under Delaware Law.
DIRECTORS' AND OFFICER'S INSURANCE. The Merger Agreement provides that HRN
will cause to be maintained, for a period of not less than six years from the
Effective Time, TravelNow's current directors' and officers' insurance and
indemnification policy to the extent that it provides coverage for events
occurring prior to the Effective Time ("D&O Insurance") for all persons who are
directors and officers of TravelNow on the date of the Merger Agreement and for
all former directors and officers of the TravelNow, so long as the annual
premium therefor would not be in excess of 125% of the last annual premium
therefor paid prior to the date of the Merger Agreement. However, HRN may, in
lieu
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of maintaining such existing D&O Insurance as provided above, cause coverage to
be provided under any policy maintained for the benefit of HRN or any of its
affiliates, so long as the terms thereof are no less advantageous to the
intended beneficiaries thereof than the existing D&O Insurance.
NO SOLICITATION. TravelNow has agreed that, from and after the date of the
Merger Agreement, until the termination of the Merger Agreement, TravelNow will
not, and will cause its Representatives (as defined below) not to, directly or
indirectly:
- initiate, solicit or knowingly encourage, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes,
or may reasonably be expected to lead to, any Acquisition Proposal (as
defined below);
- enter into any agreement contemplating or participate in any discussions
regarding an Acquisition Proposal;
- furnish to any third party any information in connection with any
Acquisition Proposal;
- maintain or continue discussions or negotiations with any person or entity
in furtherance of such inquiries or for the purpose of obtaining an
Acquisition Proposal;
- agree to or endorse any Acquisition Proposal;
- withdraw, modify or not make a recommendation of TravelNow's Board in
favor of the Offer or the Merger; or
- release any third party from any standstill or confidentiality agreement,
or waive or amend any provision thereof, to which it is a party.
TravelNow has agreed to notify HRN orally (within one business day) and in
writing (as promptly as practicable) of all of the relevant details relating to,
and all material aspects of (including the identity of the person or entity
making such inquiry or proposal), all inquiries and proposals that it or any of
its Representatives may receive relating to any of such matters and, if such
inquiry or proposal is in writing, TravelNow will deliver to HRN a copy of such
inquiry or proposal as promptly as practicable.
Notwithstanding the foregoing, prior to the acceptance of Shares for payment
pursuant to the Offer, TravelNow's Board may:
(i) following the receipt of an unsolicited written, bona fide
Acquisition Proposal,
(A) furnish information to, or enter into discussions or negotiations
with, the person or entity that makes such Acquisition Proposal; or
(B) withdraw, modify or not make a recommendation to the Stockholders
to accept the Offer and adopt the Merger Agreement
if, and only to the extent that, (1) in the case of either clause (A) or
(B) above, TravelNow's Board, after consultation with its legal counsel (who
may be TravelNow's regularly engaged counsel), determines in good faith that
the failure to take such action would result in a breach by TravelNow's
Board of its fiduciary obligations under applicable law and (2) TravelNow
(w) in the case of either clause (A) or (B) above, provides reasonable prior
notice to HRN to the effect that it is taking such action, which notice will
(to the extent consistent with the fiduciary duties of the Board of
Directors to stockholders under applicable law) include the identity of the
person or entity engaging in such discussions or negotiations, requesting
such information or making such Acquisition Proposal, and the material terms
and conditions of any Acquisition Proposal, (x) in the case of clause (A)
above, receives from such person or entity making such Acquisition Proposal
an executed confidentiality agreement having terms no more favorable to such
person or entity than those terms included in the confidentiality agreement
(the "Confidentiality Agreement") in
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existence between TravelNow and HRN and its affiliates, (y) in the case of
clause (A) above, TravelNow furnishes to HRN all such nonpublic information
delivered to such person or entity concurrently with the delivery of such
information to such person or entity, and (z) in the case of clause (A)
above, TravelNow will, to the extent consistent with the fiduciary duties of
the Board of Directors to stockholders under applicable law, promptly and
continuously advise HRN as to all of the relevant details relating to, and
all material aspects of, any such discussions or negotiations; or
(ii) take or disclose to the Stockholders a position contemplated by
Rule 14e-2 of the Exchange Act if, after receipt of an unsolicited written
bona fide Acquisition Proposal, TravelNow's Board, after consultation with
its legal counsel (who may be TravelNow's regularly engaged counsel),
determines in good faith that the failure to take such action would result
in a breach by TravelNow's Board of its fiduciary obligations under
applicable law.
Except for the Confidentiality Agreement referred to in clause (i) and any
agreement relating to an Acquisition Proposal entered into contemporaneous with
terminating the Merger Agreement, nothing in the Merger Agreement will permit
TravelNow to enter into any agreement with respect to any Acquisition Proposal
during the term of the Merger Agreement. In the Merger Agreement, TravelNow
agreed to immediately cease and cause to be terminated any existing
solicitation, initiation, encouragement, activity, discussion or negotiation
with any parties conducted by TravelNow or any Representatives with respect to
any Acquisition Proposal existing on the date of the Merger Agreement.
"Acquisition Proposal" is defined in the Merger Agreement to mean any
agreement or offer (other than the transactions among TravelNow, HRN and the
Purchaser contemplated by the Merger Agreement) involving TravelNow for:
- any merger, consolidation, share exchange, recapitalization,
reorganization, business combination or other similar transaction;
- any sale, lease, exchange, mortgage, pledge, transfer or other disposition
of 10% or more of the assets of TravelNow in a single transaction or
series of transactions; or
- any tender offer or exchange offer for all or any portion of the
outstanding shares of capital stock of TravelNow or the filing of a
registration statement under the Securities Act in connection therewith.
A "Representative" of a person is defined in the Merger Agreement to mean
that person's employees, officers, directors, representatives (including,
without limitation, any investment banker, attorney or accountant), agents or
affiliates.
FEES AND EXPENSES. The Merger Agreement provides that, except with respect
to claims for damages incurred as a result of a material breach of the Merger
Agreement, all costs and expenses incurred in connection with the Merger
Agreement and the transactions contemplated thereby will be paid by the party
incurring such expenses, except as otherwise provided below.
If the Merger Agreement is terminated pursuant to either:
- paragraphs (c), (d), (e) or (f) listed below under "Termination--HRN;" or
- paragraph (c) listed below under "Termination--TravelNow"
then TravelNow will deliver to HRN or HRN's designee, contemporaneously with the
termination of the Merger Agreement, a promissory note in the principal amount
of $2,750,000 (the "Promissory Note"). This Promissory Note will be due and
payable (the "Due Date") upon the earlier to occur of:
- the date of execution by TravelNow of a definitive agreement to consummate
an Acquisition Proposal; and
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- 180 days after the termination of the Merger Agreement.
All amounts due under the Promissory Note will bear interest at the prime rate
of interest, as announced from time to time by The Chase Manhattan Bank, plus 1%
from the Due Date through and including the date of payment.
Any amounts payable in accordance with these provisions of the Merger
Agreement will be paid by TravelNow without reservation of rights or protests
and TravelNow, upon making such payment, will be deemed to have released and
waived any and all rights that it may have to recover such amounts.
OTHER ACTIONS. Except as expressly permitted by the terms of the Merger
Agreement, TravelNow will not knowingly or intentionally take or agree to take
any action that is reasonably likely to result in any of TravelNow's
representations or warranties contained in the Merger Agreement being untrue in
any material respect.
APPRAISAL RIGHTS. TravelNow has agreed not to settle or compromise any
claim for appraisal rights in respect of the Merger without the prior consent of
HRN, which consent will not be unreasonably withheld.
GRANT OF COMMON SHARE OPTION. TravelNow has granted to the Purchaser an
irrevocable option (the "Common Share Option") to purchase, for a per share
price equal to the per share Offer Consideration (the "Per Common Share Price")
in cash, a number of shares of Common Stock of TravelNow (the "Optioned Common
Shares") equal to the Applicable Common Share Amount. The "Applicable Common
Share Amount" will be the lesser of:
- the number of shares of Common Stock that, when added to the number of
Shares owned by the Purchaser immediately prior to the exercise of the
Common Share Option, would result in the Purchaser owning immediately
after the exercise of the Common Share Option, 90% of the then outstanding
Shares; and
- the number of shares of Common Stock represented by:
- the total authorized number of shares of Common Stock under TravelNow's
certificate of incorporation, less
- the sum of the number of shares of Common Stock outstanding plus the
number of shares of Common Stock reserved for issuance, subscribed for
or otherwise committed for issuance.
The Purchaser may exercise the Common Share Option only if:
- the Funding Date has occurred;
- upon such exercise, it will own at least 90% of the then outstanding
shares of Common Stock of TravelNow; and
- such exercise would not violate applicable law.
The Common Share Option will expire if not exercised prior to the earlier of
the Effective Time and 12:00 Midnight, New York City time, on the date 15
business days after the Funding Date.
CONDITIONS TO THE MERGER. Pursuant to the Merger Agreement, the respective
obligations of each party to the Merger Agreement to effect the Merger are
subject to the satisfaction of the following conditions prior to the Closing
Date:
- adoption of the Merger Agreement by the affirmative vote of the holders of
a majority of the outstanding Shares entitled to vote thereon if such vote
is required by applicable law; provided
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that HRN and the Purchaser have agreed to vote all Shares purchased
pursuant to the Offer in favor of adoption of the Merger Agreement;
- no temporary restraining order, preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Merger being
in effect;
- no statute, rule, order, decree or regulation having been enacted or
promulgated by any government or governmental agency or authority that
prohibits consummation of the Merger; and
- the Purchaser has accepted for payment and paid for the Shares tendered in
the Offer; provided that this condition will be deemed to have been
satisfied if the Purchaser, in violation of the terms and conditions of
the Offer, fails to accept for payment and pay for Shares pursuant to the
Offer.
TERMINATION
The Merger Agreement may be terminated and the Merger abandoned at any time
prior to the Effective Time, whether before or after the adoption of the Merger
Agreement by the Stockholders or by mutual written consent of HRN and TravelNow
or under the following circumstances.
HRN OR TRAVELNOW. The Merger Agreement provides that either HRN or
TravelNow may terminate the Merger Agreement and abandon the Merger if any
permanent injunction or other order of a court or other competent authority
preventing consummation of the Offer or the Merger has become final and
nonappealable.
HRN. The Merger Agreement provides that HRN may terminate the Merger
Agreement and abandon the Merger prior to the acceptance of Shares for payment
pursuant to the Offer, so long as neither HRN nor the Purchaser is in material
breach of its obligations under the Merger Agreement, if:
(a) there has been a breach of any representation or warranty (when made
on or at the time of termination as if made on such date of termination,
except to the extent it relates to a particular date) on the part of
TravelNow (provided that any representation or warranty of TravelNow
contained in the Merger Agreement that is subject to a "materiality,"
"Material Adverse Effect" or similar qualification will not be so qualified
for purposes of determining the existence of any breach thereof on the part
of TravelNow), and which breach:
(1) has not been cured within ten business days following receipt by
TravelNow of notice of such breach; and
(2) is existing at the time of termination of the Merger Agreement,
except for such breaches on the part of TravelNow that could not have a
Material Adverse Effect on TravelNow;
(b) TravelNow has breached its covenants regarding the solicitation of
Acquisition Proposals, or TravelNow is in material breach of any other
covenant or agreement set forth in the Merger Agreement (provided that any
covenant or agreement of TravelNow contained in the Merger Agreement the
performance of which is subject to a "materiality," "Material Adverse
Effect" or similar qualification will not be so qualified for purposes of
determining the existence of any nonperformance thereof on the party of
TravelNow), which material breach has not been cured within ten business
days following receipt by TravelNow of notice of such breach which is
existing at the time of termination by the Merger Agreement;
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(c) TravelNow's Board (whether or not under circumstances permitted by
the Merger Agreement) fails to make the favorable recommendation to the
Stockholders contemplated by the Merger Agreement and the Proxy Statement or
will have withdrawn or modified in any manner which is adverse to HRN, its
recommendation or approval of the Offer, the Merger or the Merger Agreement
and the transactions contemplated thereby, or resolves to do so;
(d) TravelNow's Board will have recommended to the Stockholders any
Acquisition Proposal, or resolves to do so;
(e) a tender offer or exchange offer for 50% or more of the outstanding
shares of capital stock of TravelNow is commenced (other than by the
Purchaser or its affiliates) and TravelNow's Board fails to recommend,
within the time period required by Rule 14e-2 of the Exchange Act, against
the Stockholders tendering their Shares into such tender offer or exchange
offer;
(f) an Acquisition Proposal has been publicly announced by TravelNow and
TravelNow fails to publicly reaffirm its approval or recommendation of the
Offer, the Merger and the Merger Agreement on or before the tenth business
day following the date on which such Acquisition Proposal has been
announced; provided that HRN may condition the effectiveness of such
termination pursuant to the Merger Agreement upon the receipt by HRN or
HRN's designee of the any amounts payable to HRN upon the termination of the
Merger Agreement; or
(g) the Offer terminates, is withdrawn, abandoned or expires by reason
of the failure to satisfy any condition set forth in the Merger Agreement;
provided, however, that HRN may not so terminate if the termination,
withdrawal, abandonment or expiration of the Offer arises from a breach of
this Agreement by HRN or the Purchaser.
TRAVELNOW. The Merger Agreement provides that TravelNow may terminate the
Merger Agreement and abandon the Merger prior to the acceptance of Shares for
payment pursuant to the Offer (so long as TravelNow is not in material breach of
its obligations under the Merger Agreement) if:
(a) there has been a breach of any representation or warranty (when made or
at the time of termination as if made on such date of termination, except to the
extent it relates to a particular date) on the part of HRN or the Purchaser
(provided that any representation or warranty of HRN or the Purchaser contained
in the Merger Agreement that is subject to a "materiality," "Material Adverse
Effect" or similar qualification will not be so qualified for purposes of
determining the existence of any breach thereof on the party of HRN or the
Purchaser), and which breach has not been cured within ten business days
following receipt by HRN or the Purchaser of notice of such breach and is
existing at the time of the termination of the Merger Agreement, except for such
breaches that, individually or in the aggregate with any other breaches on the
part of HRN or the Purchaser, would not materially and adversely affect the
ability of the parties to the Merger Agreement to consummate the transactions
contemplated thereby;
(b) there has been a material breach of any covenant or agreement on the
part of HRN or the Purchaser set forth in the Merger Agreement (provided that
any covenant or agreement of HRN or the Purchaser contained in the Merger
Agreement the performance of which is subject to a "materiality," "Material
Adverse Effect" or similar qualification will not be so qualified for purposes
of determining the existence of any nonperformance thereof on the part of HRN or
the Purchaser), and which breach has not been cured within ten business days
following receipt by HRN or the Purchaser of notice of such breach and is
existing at the time of the termination of the Merger Agreement; or
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(c) following the receipt of an unsolicited written bona fide Acquisition
Proposal from any person or entity and contemporaneously with entering into a
definitive agreement relating to such Acquisition Proposal, provided that
TravelNow may not effect such this termination unless and until:
(1) TravelNow's Board has in good faith determined that (y) such person
or entity has, or is reasonably likely to have, the necessary funds or will
have obtained, or is reasonably likely to obtain, customary commitments to
provide the funds to consummate such Acquisition Proposal and (z) such
Acquisition Proposal is more favorable to TravelNow and its Stockholders
than the transactions contemplated by the Merger Agreement;
(2) HRN receives at least five days prior written notice (which notice
must include the identity of the person or entity making the relevant
Acquisition Proposal, the material terms and conditions of such Acquisition
Proposal and the material terms and conditions of any agreements or
arrangements to be entered into in connection with such Acquisition Proposal
with any party to any of the Stockholder Agreements with respect to their
then existing agreements and arrangements with TravelNow, to the extent
known to TravelNow) from TravelNow of its intention to effect such
termination pursuant to the provision described this paragraph (c); and
(3) if, during such five-day period, HRN has revised the terms and
conditions of the Offer or the Merger, TravelNow's Board, after receiving
advice from TravelNow's financial and legal advisors, has determined in good
faith that the terms and conditions of the Acquisition Proposal giving rise
to such termination right are superior to those of the Offer and the Merger
as so revised; and provided further, that TravelNow may not effect
termination under such provision unless TravelNow has contemporaneously with
such termination tendered payment to HRN or HRN's designee of the any
amounts payable to HRN upon the termination of the Merger Agreement.
TravelNow may also terminate the Merger Agreement if the Offer has expired
(without having been extended in accordance herewith) or has been withdrawn,
abandoned or terminated by HRN without any Shares being purchased by the
Purchaser or if the Funding Date does not occur when required under the Exchange
Act (but which in no event may be more than four business days following the
acceptance by the Purchaser of Shares tendered pursuant to the Offer).
AMENDMENT. The Merger Agreement may be amended, modified or supplemented,
before or after the approval by the Stockholders, only by written agreement of
HRN, the Purchaser and TravelNow at any time prior to the Effective Time with
respect to any of the terms contained therein; provided however, that after the
approval of the Merger Agreement by TravelNow's Stockholders, no term or
condition of the Merger Agreement may be amended or modified in any manner that
by law requires further approval by the Stockholders of TravelNow without so
obtaining such approval.
TIMING. The Merger Agreement provides that the closing of the Merger must
occur as promptly as practical (but in no event later than the second business
day) after satisfaction and/or waiver of the conditions set forth in the Merger
Agreement unless another date, time or place is agreed to in writing by HRN, the
Purchaser and TravelNow. The Merger will become effective upon the filing of a
certificate of merger with the Secretary of State of the State of Delaware, as
provided in the DGCL, which certificate will be filed as soon as practicable on
or after the date of the closing of the Merger.
The exact timing and details of the Merger will depend upon legal
requirements and a variety of other factors, including the number of Shares
acquired by the Purchaser pursuant to the Offer. Although HRN has agreed to
cause the Merger to be consummated on the terms set forth above, there can be no
assurance as to the timing of the Merger.
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OTHER AGREEMENTS
THE STOCKHOLDER AGREEMENTS. Simultaneously with the execution of the Merger
Agreement, HRN and the Purchaser entered into Stockholder Agreements (the
"Stockholder Agreements") with each of Jeffrey A. Wasson, the Chief Executive
Officer of TravelNow, and certain other officers, directors and significant
stockholders of TravelNow (collectively, the "Selling Stockholders"). The
Selling Stockholders beneficially own approximately 40.6% of the outstanding
Shares. The following is a summary of the material terms of the Stockholder
Agreements. This summary is not a complete description of the terms and
conditions of the Stockholder Agreements and is qualified in its entirety by
reference to the full text of the Stockholder Agreements, which is incorporated
herein by reference and a copy of which has been filed with the SEC as an
exhibit to the Schedule TO of which this Offer to Purchase is a part The
Stockholder Agreements may be examined, and copies may be obtained, as set forth
in Section 8 "Certain Information Concerning TravelNow" above.
AGREEMENT TO TENDER AND OPTION EXERCISE. Each Selling Stockholder has
agreed that he will (i) tender all of his Shares into the Offer promptly,
and in any event no later than the third business day following the
commencement of the Offer, and (ii) not withdraw any Shares so tendered
prior to the termination of the Merger Agreement.
In the event that (i) the Minimum Condition is not satisfied, (ii) the
Purchaser notifies a Selling Stockholder that the Purchaser is prepared to
close the tender but for the fact that the Minimum Condition is not
satisfied, and (iii) the tender by that Selling Stockholder of Shares
issuable to that Selling Stockholder upon the exercise by that Selling
Stockholder of the Options beneficially owned by that Selling Stockholder
(the "Underlying Shares"), together with the tender by any other Selling
Stockholders of their Underlying Shares, would cause the Minimum Condition
to be satisfied, then the Selling Stockholder has agreed that, at any time
prior to any termination of the Merger Agreement, immediately upon the
request of the Purchaser, he will exercise all of the Options beneficially
owned by him, the exercise price of which is then equal to or less than the
Offer Consideration, and immediately tender the Underlying Shares received
upon such exercise into the Offer (and not withdraw such Underlying Shares
so tendered). The Purchaser has agreed to advance to the Selling Stockholder
the funds necessary to exercise such Options and the Selling Stockholder
will repay the Purchaser the amount of such advance without interest
immediately upon receipt of the Offer Consideration by him for his
Underlying Shares.
In the event that (i) the Offer has been consummated, (ii) the Selling
Stockholder has not exercised his Options pursuant to the provisions
described in the preceding paragraph, (iii) the Purchaser has acquired
pursuant to the Offer a number of Shares which constitutes, on a fully
diluted basis (as defined in the Merger Agreement), less than 90% of the
outstanding Shares, (iv) the Shares acquired by the Purchaser pursuant to
the Offer or otherwise, together with the Underlying Shares, aggregate at
least 90% of the outstanding Shares, then the Selling Stockholder has agreed
that, immediately upon the request of the Purchaser, he will (x) exercise
all of the Options beneficially owned by him, the exercise price of which is
then equal to or less than the Offer Consideration, and (y) immediately sell
to the Purchaser each Underlying Share received upon such exercise, free and
clear of all liens, in consideration of an amount equal to the Offer
Consideration as in effect on the date of the Stockholder Agreement. Except
as described in this paragraph and the immediately preceding paragraph, each
Selling Stockholder has agreed that he will not exercise any Option that he
beneficially owns. The obligations of the Selling Stockholders under the
Stockholders Agreements, other than the obligations described under the
subheading "Capture" below, terminate upon the termination of the Merger
Agreement.
CAPTURE. In the event that the Merger Agreement has been terminated
under circumstances where HRN is entitled to receive a fee, HRN will be
entitled to receive 90% of all Profit received by each Selling Stockholder
from the consummation of any Acquisition Proposal that is entered
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into (including by way of announcement of an intent to commence a tender or
exchange offer) or consummated upon such termination or within 548 days
thereafter (an "Alternate Transaction"). "Profit" means an amount equal to
the excess, if any, of the Alternative Transaction Consideration over the
Current Transaction Consideration (each as defined below).
If, following the date of the Stockholder Agreements, the amount of the
consideration to be received for Shares in connection with the Merger should
be increased (a "Second Transaction"), then, at the request of HRN, the
Selling Stockholders must either (i) execute and deliver to HRN such
documents or instruments as may be necessary to waive the right to receive
90% of such increase to the extent that such increase results in any Profit
or (ii) tender and pay and assign, or cause to be paid and assigned, to HRN,
or its designee, 90% of the Profit realized by the Selling Stockholders from
the Second Transaction in the same form of consideration delivered by HRN to
the Selling Stockholders in connection with the Second Transaction. "Profit"
means an amount equal to the excess, if any, of the Second Transaction
Consideration over $4.16.
"Acquisition Proposal," as used in the Stockholder Agreements, means any
agreement, offer or proposal (other than the transactions among TravelNow,
HRN and the Purchaser contemplated in the Merger Agreement) involving
TravelNow or any of its subsidiaries for (i) any merger, consolidation,
share exchange, recapitalization, reorganization, business combination, or
other similar transaction, (ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition of 10% or more of the assets of TravelNow and
its subsidiaries, taken as a whole, in a single transaction or series of
transactions, or (iii) any tender offer or exchange offer for all or any
portion of the outstanding shares of capital stock of TravelNow or any of
its Subsidiaries or the filing of a registration statement under the
Securities Act in connection therewith, but shall not include the Second
Transaction.
"Alternative Transaction Consideration" means all cash, securities,
settlement or termination amounts, notes or other debt instruments, and
other consideration received or to be received, directly or indirectly, by
the Selling Stockholder and his affiliates (excluding officers and directors
of TravelNow) in connection with or as a result of an Alternative
Transaction or any agreements or arrangements (including, without
limitation, any employment agreement, consulting agreement, non-competition
agreement, confidentiality agreement, settlement agreement or release
agreement) entered into, directly or indirectly, by the Selling Stockholder
or his affiliates (excluding officers and directors of TravelNow) as a part
of or in connection with the Alternative Transaction or associated
Acquisition Proposal.
"Current Transaction Consideration" means the sum of all amounts to be
received, directly or indirectly, by the Selling Stockholder and his
affiliates pursuant to the Merger Agreement and the Selling Stockholder's
Stockholder Agreement.
"Second Transaction Consideration" shall mean the sum of all amounts to
be received, directly or indirectly, by a Selling Stockholder and his
affiliates (excluding officers and directors of TravelNow) in connection
with or as a result of a Second Transaction or any agreements or
arrangements entered into, directly or indirectly, by the Selling
Stockholder or his affiliates as a part of or in connection with the Second
Transaction.
VOTING. From and after the date of the Stockholder Agreements and ending
as of the first to occur of the Effective Time or the date of termination of
the Merger Agreement, at any meeting of the Stockholders, however called, or
in any other circumstance upon which the vote, consent or other approval of
the Stockholders is sought, each Selling Stockholder has agreed to vote (or
cause to be voted) his issued and outstanding Shares (i) against any action
or agreement that would result in a breach in any material respect of any
covenant, representation or warranty or any other material obligation or
agreement of TravelNow under the Merger Agreement or the Stockholder
Agreements; and (ii) against the following actions (other than the Merger
and the transactions
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contemplated by the Merger Agreement): (A) any Acquisition Proposal other
than an Acquisition Proposal with HRN or any affiliate thereof, and (B) to
the extent that such (1) are intended to, or could reasonably be expected
to, impede, interfere with, delay, postpone or materially adversely affect
the Offer, the Merger or the transactions contemplated by the Merger
Agreement or the Stockholder Agreements or (2) are intended to, or could
reasonably be expected to, implement or lead to any Acquisition Proposal
(other than an Acquisition Proposal with HRN or any affiliate thereof):
(x) any change in a majority of the persons who constitute the board of
directors of TravelNow; (y) any change in the present capitalization of
TravelNow or any amendment of TravelNow's certificate of incorporation or
by-laws (other than as expressly contemplated by the Merger Agreement); or
(z) any other material change in TravelNow's corporate structure or
business. Notwithstanding the foregoing, nothing in the Stockholder
Agreements in any way restricts or limits a Selling Stockholder from taking
any action in his capacity as a director or officer of TravelNow or
otherwise fulfilling his fiduciary obligations as a director and officer of
TravelNow.
REPRESENTATIONS, WARRANTIES, COVENANTS AND OTHER AGREEMENTS. In
connection with the Stockholder Agreements, each Selling Stockholder has
made certain customary representations, warranties and covenants, including
with respect to (i) his ownership of the Shares and his rights and powers
with respect thereto, (ii) his authority to enter into and perform his
obligations under the Stockholder Agreement, (iii) noncontravention and
enforceability, (iv) absence of conflicts, (v) the absence of liens and
encumbrances on and in respect of his Shares, (vi) restrictions on the
transfer of his Shares and the granting of proxies with respect thereto and
(vii) the solicitation of Acquisition Proposals.
EMPLOYMENT AGREEMENTS. Contemporaneously with the execution and delivery of
the Merger Agreement, TravelNow and HRN entered into a Conditional Amendment to
Employment Agreement (the "Employment Agreements") with each of Jeffrey A.
Wasson, the Chief Executive Officer of TravelNow, Whit Ehrler, the Chief
Financial Officer of TravelNow, J. Christopher Kuhn, the Chief Information
Officer of TravelNow and Michael Bauer, the Vice President of Sales & Marketing
of TravelNow. Pursuant to the Employment Agreements, as of the date that the
Purchaser accepts for payment any Shares tendered pursuant to the Offer,
TravelNow will continue to employ Messrs. Wasson, Ehrler, Kuhn and Bauer in
their current positions, in accordance with the terms and provisions of the
Employment Agreements. The following is a summary of the material terms of the
Employment Agreements. This summary is not a complete description of the terms
and conditions of the Employment Agreements and is qualified in its entirety by
reference to the full text of the Employment Agreements, which is incorporated
by reference and a copy of which has been filed with the SEC as an exhibit to
the Schedule TO of which this Offer to Purchase is a part. The Employment
Agreements may be examined, and copies thereof may be obtained, as set forth in
Section 8 "Certain Information Concerning TravelNow" above.
TERMS OF EMPLOYMENT. Effective as of the date the Purchaser accepts for
payment any Shares tendered pursuant to the Offer, (i) Mr. Wasson will serve
as the Chief Executive Officer of TravelNow and will receive a monthly
salary of $12,500, (ii) Mr. Ehrler will serve as the Chief Financial Officer
of TravelNow and will receive a monthly salary of $10,834, (iii) Mr. Kuhn
will serve as Chief Information Officer of TravelNow and will receive a
monthly salary of $10,834 and (iv) Mr. Bauer will serve as the Vice
President Sales and Marketing of TravelNow and will receive a monthly salary
of $8,667.
CONFIDENTIAL INFORMATION. Each of Messrs. Wasson, Ehrler, Kuhn and Bauer
has agreed (i) that the Company will provide him with confidential and
proprietary information (collectively, the "Confidential Information") and
(ii) from and after the date that the Purchaser accepts for payment any
Shares tendered pursuant to the Offer, to hold the Confidential Information
in strictest confidence and not to use, except for the benefit of TravelNow,
or to disclose to any
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person, firm or corporation without the written consent of TravelNow's
Board, any Confidential Information.
NONCOMPETITON. Each of Messrs. Wasson, Ehrler, Kuhn and Bauer has agreed
that for the term beginning as of the date that the Purchaser accepts for
payment any Shares tendered pursuant to the Offer and continuing until one
year after the date of termination of his employment he will not (other than
for the benefit of TravelNow), directly or by assisting others, engage in
any equity or profit interest, or render services of any kind or nature to
any business that competes with TravelNow as provided in the Employment
Agreements.
TERMINATION OF EXISTING EMPLOYMENT AGREEMENTS. Effective as of the date
that the Purchaser accepts for payment any Shares tendered pursuant to the
Offer, the Employment Agreements (the "Existing Agreements") by and between
TravelNow and each of Messrs. Wasson, Ehrler, Kuhn and Bauer shall be
terminated in full. From and after the date of termination of the Existing
Agreements, none of Messrs. Wasson, Ehrler, Kuhn or Bauer shall be entitled
to receive (i) any further wages or other compensation provided for or
anticipated by the Existing Agreements, (ii) except for the Special Payment
(as defined herein), any other payment following a change in control
contemplated by the Existing Agreements, or (iii) any other benefits or
compensation arising under or pursuant to the Existing Agreements. The
Existing Agreements provide that each of Messrs. Wasson, Ehrler, Kuhn and
Bauer become entitled to certain specified payments, payable over time as
provided therein, on the consummation of the Offer and the closing of the
Merger (the "Special Payments"). Mr. Wasson waived his right to receive a
Special Payment in his Employment Agreement and agreed that his salary will
be paid into an escrow account for a period of 180 days following the
consummation of the Merger to be released to him after such time period has
lapsed. Assuming that the Merger is consummated on February 15, 2001,
Messrs. Ehrler, Kuhn and Bauer are entitled to receive Special Payments in
the amount of $457,500, $444,167 and $433,333, respectively. TravelNow has
agreed to deposit the aggregate Special Payments into an escrow account on
the date of the consummation of the Offer. HRN has agreed to advance to
TravelNow, in the form of a loan, an amount of funds sufficient to fund the
aggregate Special Payments upon the request of TravelNow following
consummation of the Offer. The Special Payments will be paid to
Messrs. Ehrler, Kuhn and Bauer on the 180th day following the closing of the
Merger.
CONFIDENTIALITY AGREEMENT. On December 20, 2000, HRN and TravelNow entered
into a Confidentiality Agreement (the "Confidentiality Agreement") pursuant to
which TravelNow agreed to supply certain information to HRN and HRN agreed to
treat such information as confidential and to use such information solely in
connection with the evaluation of a possible transaction with TravelNow. The
Merger Agreement provides that the Confidentiality Agreement shall terminate in
full upon the consummation of the Offer.
AFFILIATE AGREEMENT. In 1998, TravelNow and HRN entered into an affiliate
agreement in which TravelNow agreed to market for sale HRN's hotel and other
time-based lodging products through TravelNow's proprietary websites and other
third-party websites affiliated with TravelNow in exchange for a commission
based on the gross revenues generated by HRN from hotel reservations made by
visitors to TravelNow's website and such third-party websites. This agreement
was amended and restated on May 31, 2000. The May 31 amendment made a number of
changes to the prior arrangement, including the rate at which commissions were
paid by Parent to the Company. On August 30, 2000 Parent and the Company entered
into another amendment to the agreement. This amendment was principally to
define and clarify certain marketing obligations of the parties and covered the
time period from August 30, 2000 to December 31, 2000. The agreement has a term
of five years and automatically renews for successive one-year periods unless
canceled by either party with 30 days notice. In 1999 and 2000, Parent paid the
Company $58,104 and $505,920, respectively, in commissions under the agreement.
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12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR TRAVELNOW AFTER THE OFFER AND
THE MERGER; STOCKHOLDER APPROVAL AND APPRAISAL RIGHTS.
PURPOSE OF THE OFFER AND THE MERGER. The purpose of the Offer and the
Merger is for HRN to acquire control of, and the entire equity interest in,
TravelNow. The Offer is intended to increase the likelihood that the Merger will
be completed promptly. The acquisition of the entire equity interest in
TravelNow has been structured as a cash tender offer followed by a cash merger
in order to provide a prompt and orderly transfer of ownership of TravelNow from
the Stockholders to HRN and to provide the Stockholders with cash in a per share
amount equal to the Merger Consideration for each of their Shares.
PLANS FOR TRAVELNOW. Following the Merger, TravelNow will be operated as a
wholly-owned subsidiary of HRN. Except as otherwise provided in this Offer to
Purchase, the Purchaser and HRN have no present plans or proposals that would
result in an extraordinary corporate transaction, such as a merger,
reorganization, liquidation or sale or transfer of a material amount of assets
involving TravelNow, or any other material changes in TravelNow's
capitalization, dividend policy, corporate structure, business or the
composition of TravelNow's Board or TravelNow's management.
STOCKHOLDER APPROVAL. Under the DGCL, the approval of TravelNow's Board
and, except as described below, the affirmative vote of the holders of a
majority of the outstanding Shares is required to approve and adopt the Merger
Agreement and the transactions contemplated thereby, including the Merger.
TravelNow's Board has unanimously approved and adopted the Merger Agreement and
the transactions contemplated thereby and, unless the Merger is consummated
pursuant to the short-form merger provisions under the DGCL described below, the
only remaining required corporate action of TravelNow is the approval and
adoption of the Merger Agreement by the affirmative vote of the holders of a
majority of the outstanding Shares. Accordingly, if the Minimum Condition is
satisfied, the Purchaser will have sufficient voting power to cause the approval
and adoption of the Merger Agreement and the transactions contemplated thereby
without the affirmative vote of any other Stockholder.
In the Merger Agreement, TravelNow has agreed to take all action necessary
to convene a meeting of its Stockholders as soon as practicable after the
consummation of the Offer for the purpose of considering and taking action on
the Merger Agreement and the transactions contemplated thereby.
Under the DGCL if the Purchaser acquires, pursuant to the Offer or
otherwise, such number of Shares that, when added to the Shares owned of record
by the Purchaser on such date, constitutes at least 90% of the then outstanding
Shares, the Purchaser will be able to approve and adopt the Merger Agreement and
effect the Merger pursuant to the short-form merger provisions of the DGCL
without a vote of the Stockholders. HRN, the Purchaser and TravelNow have agreed
to take all necessary and appropriate action to cause the Merger to be effective
as soon as practicable after such acquisition. If the Purchaser does not acquire
such number of Shares that, when added to the Shares owned of record by the
Purchaser on the Expiration Date, constitutes at least 90% of the then
outstanding Shares pursuant to the Offer or otherwise and a vote of the
Stockholders is required under the DGCL, a significantly longer period of time
will be required to effect the Merger. If the Minimum Condition is satisfied and
the Purchaser acquires less than 90% of the outstanding Shares pursuant to the
Offer, the Purchaser intends to exercise the option granted by TravelNow
pursuant to the Merger Agreement to acquire an aggregate number of Shares in
excess of 90% of the outstanding Shares. In addition, pursuant to the
Stockholder Agreements, the Selling Stockholders have agreed, subject to certain
conditions to exercise their Options and tender the Underlying Shares to the
Purchaser. See Item 11 "Background of the Offer and the Merger; Contracts with
TravelNow; the Merger Agreement and Stockholder Agreements."
41
<PAGE>
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, Stockholders will have the rights
under Section 262 of the DGCL to dissent and demand appraisal of, and to receive
payment in cash for the fair value of, their Shares. Such rights to dissent, if
all statutory procedures are complied with, could lead to a judicial
determination of the fair value (as of the effective time of the Merger and
excluding any value arising from the accomplishment or expectation of the
Merger) required to be paid in cash to dissenting Stockholders for their Shares.
Any judicial determination of the fair value of Shares could be based upon
considerations other than or in addition to the Merger Consideration and the
market value of the Shares, including asset values and the investment value of
the Shares. The value as so determined could be more or less than the Merger
Consideration. Failure to precisely follow the steps required by Section 262 of
the DGCL for the perfection of appraisal rights may result in the loss of those
rights.
If a Stockholder who demands appraisal under Section 262 of the DGCL fails
to perfect, or effectively withdraws or loses, his or her right to appraisal as
provided in the DGCL, the Shares of that Stockholder will be converted into the
right to receive the Merger Consideration in accordance with the Merger
Agreement. A Stockholder may withdraw his demand for appraisal by delivering to
TravelNow a written withdrawal of such demand for appraisal and acceptance of
the Merger.
GOING PRIVATE TRANSACTIONS. Rule 13e-3 under the Exchange Act is applicable
to certain "going-private" transactions. HRN and the Purchaser do not believe
that Rule 13e-3 will be applicable to the Merger. If applicable, Rule 13e-3
would require, among other things, that certain financial information concerning
TravelNow and certain information relating to the fairness of the Merger and the
consideration offered to Stockholders therein be filed with the SEC and
disclosed to Stockholders prior to consummation of the Merger.
13. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that TravelNow will not, between the date of
the Merger Agreement and the earlier of (i) the date on which the designees of
the Purchaser have been appointed to TravelNow's Board in accordance with the
Merger Agreement and (ii) the Termination Date, without the prior written
consent of HRN, (x) declare or pay any dividends on or make any other
distributions in respect of any capital stock or (y) split, combine or
reclassify any capital stock or issue, authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for any capital
stock or (iii) repurchase or otherwise acquire any shares of its capital stock,
except as required by the terms of its securities or any of its employee
benefits plan in effect on the date of the Merger Agreement.
14. CONDITIONS TO THE OFFER.
Notwithstanding any other provision of the Offer, the Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to the Purchaser's obligation to pay for or return tendered Shares promptly
after expiration or termination of the Offer), to pay for any Shares tendered,
and may postpone the acceptance for payment or, subject to the restriction
referred to above, the payment for any Shares tendered, and, to the extent
permitted by the Merger Agreement, may amend or terminate the Offer, if:
(a) the Minimum Condition has not been satisfied;
(b) any applicable waiting periods under the Hart-Scott Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), has not expired or been
terminated prior to the expiration of the Offer; or
42
<PAGE>
(c) at any time on or after the date of the Merger Agreement and before
acceptance for payment of, or payment for, such Shares pursuant to the Offer any
of the following events have occurred and are continuing:
(1) there is pending as of the expiration of the Offer or at any time
thereafter any injunction, proceeding, action, suit or litigation by any
governmental entity that seeks to (i) challenge the acquisition by HRN, the
Purchaser or any of their respective affiliates of Shares pursuant to the
Offer, (ii) restrain, prohibit or delay the making or consummation of the
Offer or the Merger, (iii) make the purchase of or payment for some or all
of the Shares pursuant to the Offer or the Merger illegal, (iv) impose
material limitations on the ability of HRN, the Purchaser, TravelNow or any
of their respective affiliates to acquire or hold, or to require HRN, the
Purchaser, TravelNow or any of their respective affiliates to dispose of or
hold separate, any material portion of their assets or business, (v) impose
material limitations on the ability of HRN, the Purchaser, TravelNow or any
of their respective affiliates to continue to conduct, own or operate, as
heretofore conducted, owned or operated, all or any material portion of
their businesses or assets, (vi) impose or result in material limitations on
the ability of HRN, the Purchaser, TravelNow or any of their respective
affiliates to exercise full rights of ownership of the Shares purchased by
them, including, without limitation, the right to vote the Shares purchased
by them on any or all matters properly presented to the stockholders of the
TravelNow, or (vii) prohibit or restrict in a material manner the financing
of any of the transactions contemplated by the Transaction Documents;
(2) there has been promulgated, enacted, entered, enforced or deemed
applicable, any law (other than the application of any applicable waiting
period provision of the HSR Act), or there has been issued any injunction
that results in any of the consequences referred to in subsection
(a) above;
(3) there has occurred any event or events (whether or not covered by
insurance) that, individually or in the aggregate, have had, or would be
reasonably expected to have, a Material Adverse Effect;
(4) there has occurred and is continuing (i) any general suspension of
trading in, or general limitation on prices for, securities on any national
securities exchange or in the over-the-counter market in the United States
for a period in excess of 48 hours, (ii) the declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States, (iii) the commencement of a war, armed hostilities or other
international or national calamity involving the United States having a
significant adverse effect on the functioning of the financial markets in
the United States, (iv) any material limitations (whether or not mandatory)
imposed by any governmental entity on the nature or extension of credit or
further extension of credit by banks or other lending institutions, or
(v) in the case of clauses (iii) and (iv) of this paragraph (d), if existing
at the time of the commencement of the Offer, a material acceleration or
worsening thereof;
(5) any of the representations and warranties of TravelNow contained in
the Agreement are not true and correct in all respects (provided that any
representation or warranty of TravelNow contained in the Merger Agreement
that is subject to a "materiality," "Material Adverse Effect" or similar
qualification will not be so qualified for purposes of determining the
existence of any breach thereof on the part of TravelNow) as of the date of
the Merger Agreement and (except to the extent that such representations and
warranties speak as of an earlier date) as of the date of the acceptance of
Shares for payment pursuant to the Offer as though made on and as of such
date, except for such breaches that, individually or in the aggregate with
any other breaches on the part of TravelNow, could not have a Material
Adverse Effect;
(6) TravelNow has not performed in all material respects (provided that
any obligation the performance of which is subject to materiality, "Material
Adverse Effect" or similar qualification
43
<PAGE>
will not be so qualified for purposes of determining the existence of any
nonperformance thereof) all obligations required to be performed by it under
the Merger Agreement at or prior to the acceptance of Shares for payment
pursuant to the Offer;
(7) the Merger Agreement has been terminated in accordance with its
terms;
(8) (i) TravelNow's Board has failed to make or shall have withdrawn or
modified or changed (including by amendment of the Schedule 14D-9) in a
manner adverse to the Purchaser its recommendation of the Offer, the Merger
Agreement or the Merger, or has approved or recommended any Acquisition
Proposal or any other acquisition of the shares of TravelNow's Common Stock
other than the Offer and the Merger, or (ii) any person or other entity or
group has entered into a definitive agreement or an agreement in principle
with TravelNow with respect to any Acquisition Proposal;
(9) TravelNow has failed to comply with its obligations to allow the
Purchaser's designees to be elected to TravelNow's Board and all ancillary
obligations;
(10) each of the representations and warranties contained in the
Stockholder Agreements of the Selling Stockholders are not true and correct
in all material respects as of the date of the acceptance of Shares for
payment pursuant to the Offer as though made on and as of such date; or
(11) any of the Selling Stockholders has not performed in all material
respects, or has otherwise materially breached or given notice of any
intention to materially breach, any obligations required to be performed by
such stockholders under the Stockholder Agreements at or prior to the
acceptance of Shares for payment pursuant to the Offer.
The foregoing conditions are for the sole benefit of the Purchaser and its
affiliates and may be asserted by the Purchaser regardless of the circumstances
giving rise to any such condition or may be waived by the Purchaser, in whole or
in part, from time to time in its sole discretion, except as otherwise provided
in the Merger Agreement. The failure by the Purchaser at any time to exercise
any of the foregoing rights will not be deemed a waiver of any such right and
each such right shall be deemed an ongoing right and may be asserted at any time
and from time to time.
15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
GENERAL. Neither HRN nor the Purchaser is aware of any governmental license
or regulatory permit that appears to be material to TravelNow's business that
might be adversely affected by the Purchaser's acquisition of Shares pursuant to
the Offer or of any approval or other action by any government or governmental
administrative or regulatory authority or agency, domestic or foreign, that
would be required for the acquisition or ownership of Shares pursuant to the
Offer. Should any such approval or other action be required, HRN and the
Purchaser currently contemplates that such approval or other action will be
sought, except as described below under "State Takeover Laws." There can be no
assurance that any such approval or other action, if needed, would be obtained
(with or without substantial conditions) or that, if such approvals were not
obtained or such other actions were not taken, adverse consequences might not
result to TravelNow's business or certain parts of TravelNow's business might
not have to be disposed of, any of which could cause HRN to elect to terminate
the Offer without purchasing any Shares in the Offer. The Purchaser's obligation
under the Offer to accept for payment and pay for Shares is subject to certain
conditions. See Section 14 "Conditions of the Offer."
STATE TAKEOVER LAWS. Section 203 of the DGCL prohibits a Delaware
corporation such as TravelNow from engaging in a "business combination" (defined
as a variety of transactions, including mergers) with an "interested
stockholder" (defined generally as a person that is the beneficial owner of 15%
or more of the subject corporation's outstanding voting stock) for a period of
three years
44
<PAGE>
following the time that such person became an interested stockholder unless,
among other things, prior to the time such person became an interested
stockholder, the board of directors of the corporation approved either the
business combination or the transaction that resulted in the stockholder
becoming an interested stockholder. The provisions of Section 203 of the DGCL
are not applicable to the Offer and the Merger because the Merger Agreement and
the transactions contemplated thereby were approved by TravelNow's Board prior
to the execution of the Merger Agreement.
HRN and the Purchaser do not believe that the antitakeover laws and
regulations of any state other than the State of Delaware will, by their terms,
apply to the Offer, and, except as set forth above with respect to Section 203
of the DGCL, neither HRN nor the Purchaser has attempted to comply with any
state takeover statutes in connection with this Offer or the Merger. HRN and the
Purchaser reserve the right to challenge the validity or applicability of any
state law allegedly applicable to the Offer or the Merger, and nothing in this
Offer to Purchase nor any action that they take in connection with the Offer is
intended as a waiver of that right. If it is asserted that one or more takeover
statutes apply to the Offer or the Merger, and it is not determined by an
appropriate court that the statutes in question do not apply or are invalid as
applied to the Offer or the Merger, as applicable, HRN and the Purchaser may be
required to file certain documents with, or receive approvals from, the relevant
state authorities, and might be unable to accept for payment or purchase Shares
tendered in the Offer or be delayed in continuing or consummating the Offer. In
that case, HRN and the Purchaser may not be obligated to accept for purchase, or
pay for, any Shares tendered. See Section 14 "Conditions of the Offer."
ANTITRUST. Under the HSR Act, and the rules that have been promulgated
thereunder by the Federal Trade Commission (the "FTC"), certain acquisition
transactions may not be consummated unless certain information has been
furnished to the Antitrust Division of the Department of Justice and the FTC and
certain waiting period requirements have been satisfied. The purchase of Shares
pursuant to the Offer and the subsequent Merger are not subject to such
requirements.
16. FEES AND EXPENSES.
HRN has engaged CIBC World Markets Corp. to act as the Dealer Manager in
connection with the Offer, for which services CIBC World Markets will receive
customary compensation. HRN has also agreed to reimburse the Dealer Manager for
its out-of-pocket expenses, including the reasonable fees and expenses of
counsel, and to indemnify the Dealer Manager and certain related parties against
certain liabilities, including certain liabilities under the federal securities
laws, arising out of its engagement. In the ordinary course of business, the
Dealer Manager and its affiliates may actively trade or hold the securities of
the Company and HRN and its affiliates for the Dealer Manager's and its
affiliates' own account or for the account of customers and, accordingly, may at
any time hold a long or short position in such securities.
HRN has retained MacKenzie Partners, Inc. to act as the Information Agent
and Mellon Investor Services LLC to act as the Depositary in connection with the
Offer. The Information Agent may contact holders of Shares by mail, telephone,
telex, telegraph and personal interviews and may request brokers, dealers,
banks, trust companies and other nominees to forward materials relating to the
Offer to beneficial owners. The Information Agent and the Depositary will each
receive reasonable and customary compensation for their respective services,
will be reimbursed for certain reasonable out-of-pocket expenses and will be
indemnified against certain liabilities in connection therewith, including
certain liabilities under the federal securities laws.
Neither HRN nor the Purchaser will pay any fees or commissions to any broker
or dealer or any other person (other than the Dealer Manager, the Information
Agent and the Depositary) for soliciting tenders of Shares pursuant to the
Offer. Brokers, dealers, commercial banks and trust companies will,
45
<PAGE>
upon request, be reimbursed by us for reasonable and necessary costs and
expenses incurred by them in forwarding materials to their customers.
17. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. However, the Purchaser may, in its sole discretion, take such
action as it may deem necessary to make the Offer in any such jurisdiction and
extend the Offer to holders of Shares in such jurisdiction. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer will be deemed to be made on behalf of the
Purchaser by the Dealer Manager or by one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
Neither the Purchaser nor HRN is aware of any jurisdiction in which the
making of the Offer or the acceptance of Shares in connection therewith would
not be in compliance with the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR HRN THAT IS NOT CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The Purchaser and HRN have filed with the SEC a Tender Offer Statement on
Schedule TO pursuant to Rule 14d-3 under the Exchange Act, together with
exhibits furnishing certain additional information with respect to the Offer,
and may file amendments thereto. In addition, TravelNow has filed with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9, together with exhibits,
pursuant to Rule 14d-9 under the Exchange Act, setting forth the recommendation
of TravelNow's Board with respect to the Offer and the reasons for such
recommendation and furnishing certain additional related information. A copy of
such documents, and any amendments thereto, including exhibits, may be examined
at, and copies may be obtained from, the principal office of the SEC in
Washington, D.C., in the manner set forth in Section 8 "Certain Information
Concerning TravelNow."
HOTEL RESERVATIONS NETWORK, INC.
WONSUB, INC.
January 12, 2001
46
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF USAI, HRN AND THE PURCHASER
USAI: The name, current principal occupation or employment and material
occupations, positions, offices or employment for the past five years, of each
director and executive officer of USAi are set forth below. References herein to
"USAi" means USA Networks, Inc. Unless otherwise indicated below, the business
address of each director and officer is c/o USA Networks, Inc., 152 West 57th
Street, New York, New York 10019. Where no date is shown, the individual has
occupied the position indicated for the past five years. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
employment with USAi. None of the directors and officers of USAi listed below
has, during the past five years, (i) been convicted in a criminal proceeding or
(ii) been a party to any judicial or administrative proceeding that resulted in
a judgment, decree or final order enjoining the person from future violations
of, or prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws. All directors and
officers listed below are citizens of the United States.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL POSITIONS
NAME HELD DURING THE PAST FIVE YEARS
---- -----------------------------------------------------------------
<S> <C>
Paul G. Allen........................ Mr. Allen is a director of USAi. Mr. Allen has been a private
investor for more than five years with interests in a wide
variety of companies, many of which focus on multimedia digital
communications.
Edgar Bronfman, Jr................... Mr. Bronfman is a director of USAi. Since December 2000, he has
served as the Executive Vice Chairman of Vivendi Universal, a
media and communications corporation. Previously, from June 1994,
he was President and Chief Executive Officer of Seagram Company
Ltd.
Anna M. Busquet...................... Ms. Busquet is a director of USAi. Since October 1995, she has
served as President of American Express Relationship Services.
Barry Diller......................... Mr. Diller has been a director and the Chairman and Chief
Executive Officer of USAi (or its predecessors) since August
1995.
Julius Genachowski................... Mr. Genachowski has served as Senior Vice President, General
Counsel and Secretary of USAi since July 2000. Previously, from
December 1997, Mr. Genachowski served as General Counsel and
Senior Vice President, Business Development of USA Broadcasting,
a division of USAi, and from January 2000 to July 2000, he held
the additional position of Vice President, Corporate Development
of Ticketmaster-Online Citysearch, Inc. Prior to December 1997,
Mr. Genachowski was Chief Counsel to the Chairman of the Federal
Communications Commission.
Victor A. Kaufman.................... Mr. Kaufman is a director of USAi. Since October 1999,
Mr. Kaufman has served as Vice Chairman of USAi. From January
1997 until October 1999, Mr. Kaufman served in the Office of the
Chairman for USAi, and, from November 1997 until October 1999, he
served as Chief Financial Officer for USAi. Prior to that time,
since 1992, he served as Chairman and Chief Executive Officer of
Savoy.
Donald R. Keough..................... Mr. Keough is a director of USAi. Since 1993, he has served as
Chairman of the Board of Allen & Company Incorporated, an
investment banking firm.
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL POSITIONS
NAME HELD DURING THE PAST FIVE YEARS
---- -----------------------------------------------------------------
<S> <C>
Dara Khosrowshahi.................... Mr. Khosrowshahi has served as Executive Vice President,
Operation and Strategic Planning and a director of USAi since
June 2000. Mr. Khosrowshahi was the Vice President of Strategic
Planning for USAi from March 1998 to August 1999. Prior to
joining USAi, from 1991 to 1998, he employed by Allen & Company
Incorporated where he was a Vice President from 1995 to 1996 and
Director from 1996 to 1998.
Samuel Minzberg...................... Mr. Minzberg is a director of USAi. Since 1998, he has served as
President and Chief Executive Officer of Claridge Inc.
Previously, he was Chairman of and a partner in the Montreal
office of Goodman, Phillips and Vineberg, attorneys at law, of
which he is currently of counsel.
Brian C. Mulligan.................... Mr. Mulligan is a director of USAi. He has been Executive Vice
President and Chief Financial Officer of Seagram since January
2000. Prior to that time, Mr. Mulligan served as co-Chairman of
Universal Pictures from June 1999 to December 1999, as Executive
Vice President, Finance and Operations, of Universal Studios,
Inc. from November 1998 through May 1999, as Senior Vice
President, Corporate Development and Strategic Planning, of
Universal Studios from December 1997 to November 1998, and as
Vice President, Corporate Development, of Universal Studios from
June 1995 through November 1997.
William D. Savoy..................... Mr. Savoy is a director of USAi. Since 1990, he has served in
various executive capacities at Vulcan Ventures Inc. and Vulcan
Northwest Inc.
Gen. H. Norman Schwarzkopf........... Gen. Schwarzkopf is a director of USAi. Since his retirement from
the United States Army in August 1991, Gen. Schwarzkopf has been
an author, a lecturer and a participant in several television
specials.
Michael Sileck....................... Mr. Sileck has served as Chief Financial Officer and a Senior
Vice President of USAi since October 1999,. Before joining USAi,
Mr. Sileck was Vice President of Finance at Sinclair Broadcast
Group from June 1996 to August 1999. From July 1990 to June 1996,
he served as Director of Finance at River City
Broadcasting, L.P.
Diane Von Furstenberg................ Ms. Furstenberg is a director of USAi. Since 1995, Ms.
Furstenberg has been Chairman of Diane Von Furstenberg Studio
L.P., a fashion design firm.
</TABLE>
HRN: The name, current principal occupation or employment and material
occupations, positions, offices or employment for the past five years, of each
director and executive officer of HRN are set forth below. References herein to
"HRN" means Hotel Reservations Network, Inc. Unless otherwise indicated below,
the business address of each director and officer is 8140 Walnut Hill Lane Suite
800, Dallas, Texas 75231. Where no date is shown, the individual has occupied
the position indicated for the past five years. Unless otherwise indicated, each
occupation set forth opposite an individual's name refers to employment with
HRN. None of the directors and officers of HRN listed below has, during the past
five years, (i) been convicted in a criminal proceeding or (ii) been a party to
any judicial or administrative proceeding that resulted in a judgment, decree or
final order enjoining the person from future violations of, or prohibiting
activities subject to, federal or state securities laws,
I-2
<PAGE>
or a finding of any violation of federal or state securities laws. All directors
and officers listed below are citizens of the United States.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL POSITIONS HELD DURING
NAME THE PAST FIVE YEARS
---- -----------------------------------------------------------------------------
<S> <C>
Robert Diener........................ Mr. Diener serves as HRN's President and as one of its directors. He founded
HRN's predecessor business with Mr. Litman in 1991 and previously served as
that entity's President and Treasurer.
Sandra D'Arcy........................ Ms. D'Arcy has served as HRN's Executive Vice President since 1998. From 1994
to 1998, she served as a Vice President of HRN's predecessor business.
Beverly Harms........................ Ms. Harms is a director of HRN. Since 1990, she has been Senior Vice
President of Managed Investments for Communications Equity Associates.
Victor Kaufman....................... Mr. Kaufman is a director of HRN. Since October 1999, Mr. Kaufman has served
as Vice Chairman of USAi. From January 1997 until October 1999, Mr. Kaufman
served in the Office of the Chairman for USAi and, from November 1997 until
October 1999, he served as Chief Financial Officer for USAi. Prior to that
time, since 1992, he served as Chairman and Chief Executive Officer of Savoy.
Dara Khosrowshahi.................... Mr. Khosrowshahi is a director of HRN. Mr. Khosrowshahi has served as
Executive Vice President, Operation and Strategic Planning and a director of
USAi since June 2000. Previously, from August 1999, Mr. Khosrowshahi was
President of USA Networks Interactive, a division of USAi. Mr. Khosrowshahi
was the Vice President of Strategic Planning for USAi and USANi LLC from
March 1998 to August 1999. Prior to joining USAi, from 1991 to 1998, he was
employed by Allen & Company Incorporated where he was a Vice President from
1995 to 1996 and Director from 1996 to 1998.
David Litman......................... Mr. Litman serves as HRN's Chief Executive Officer and as one of its
directors. He co-founded HRN's predecessor business with Mr. Diener in 1991
and previously served as that entity's Chief Executive Officer.
Jon Miller........................... Mr. Miller is a director of HRN. Since June 2000, Mr. Miller has served as
President and Chief Executive Officer of USA Information and Services, a
division of USAi. Previously, from October 1999, Mr. Miller served as the
President and Chief Executive Officer of USA Electronic Commerce and
Services, a division of USAi. From July 1997 to October 1999, Mr. Miller was
a President and Chief Executive Officer of USA Broadcasting, a division of
USAi. Prior to July 1997, Mr. Miller was the Managing Director of Nickelodean
International.
Greg Porter.......................... Mr. Porter has served as HRN's General Counsel and Secretary since June 2000.
Previously, from August 1999, Mr. Porter was an attorney with the law firm of
Baker & McKenzie. From 1995 to 1999, Mr. Porter was Vice President--Legal of
Harken Energy Corporation, an oil and gas exploration company.
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL POSITIONS HELD DURING
NAME THE PAST FIVE YEARS
---- -----------------------------------------------------------------------------
<S> <C>
Mel Robinson......................... Mr. Robinson has served as HRN's Chief Financial and Strategic Officer since
September 2000. Previously, from 1997, Mr. Robinson was Senior Vice
President of Travel Services International, a leisure travel distribution
firm. From 1994 to 1997, Mr. Robinson was Chief Financial Officer of Cruises
Only.
Eli Segal............................ Mr. Segal is a director of HRN. He currently serves as President and Chief
Executive Officer of The Welfare to Work Partnership. Mr. Segal has served as
Chairman of the Board of School Sports, Inc., an online network and high
school sports magazine, since December 1996. Mr. Segal previously served as
Assistant to the President of the United States from January 1993 to February
1996.
Michael Sileck....................... Mr. Sileck is a director of HRN. Since October 1999, Mr. Sileck has served as
Chief Financial Officer of USA Networks, Inc. Before joining USAi, Mr. Sileck
was Vice President of Finance at Sinclair Broadcast Group from June 1996 to
August 1999. From July 1990 to June 1996, he served as Director of Finance at
River City Broadcasting. L.P.
</TABLE>
PURCHASER: The name, current principal occupation or employment and
material occupations, positions, offices or employment for the past five years,
of each director and executive officer of the Purchaser are set forth below. The
business address of each director and officer is 8140 Walnut Hill Lane Suite
800, Dallas, Texas 75231. Where no date is shown, the individual has occupied
the position indicated for the past five years. Unless otherwise indicated, each
occupation set forth opposite an individual's name refers to employment with the
Purchaser. None of the directors and officers of the Purchaser listed below has,
during the past five years, (i) been convicted in a criminal proceeding or
(ii) been a party to any judicial or administrative proceeding that resulted in
a judgment, decree or final order enjoining the person from future violations
of, or prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws. All directors and
officers listed below are citizens of the United States.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL POSITIONS HELD DURING
NAME THE PAST FIVE YEARS
---- -----------------------------------------------------------------------------
<S> <C>
Robert Diener........................ Mr. Diener serves as the Purchaser's President and as one of its directors.
He founded HRN's predecessor business with Mr. Litman in 1991 and previously
served as that entity's President and Treasurer.
David Litman......................... Mr. Litman serves as the Purchaser's Chief Executive Officer and as one of
its directors. He co-founded HRN's predecessor business with Mr. Diener in
1991 and previously served as that entity's Chief Executive Officer.
Greg Porter.......................... Mr. Porter has served as the Purchaser's General Counsel and Secretary since
December 2000 and as HRN's General Counsel and Secretary since June 2000.
Previously, from August 1999, Mr. Porter was an attorney with the law firm
of Baker & McKenzie. From 1995 to 1999, Mr. Porter was Vice President--Legal
of Harken Energy Corporation, an oil and gas exploration company.
Mel Robinson......................... Mr. Robinson has served as the Purchaser's Chief Financial and Strategic
Officer since December 2000 and as HRN's Chief Financial and Strategic
Officer since September 2000. Previously, from 1997, Mr. Robinson was Senior
Vice President of Travel Services International, a leisure travel
distribution firm. From 1994 to 1997, Mr. Robinson was Chief Financial
Officer of Cruises Only.
</TABLE>
I-4
<PAGE>
SCHEDULE II
TRANSACTIONS IN SHARES
<TABLE>
<CAPTION>
DATE NO. OF SHARES PURCHASED PRICE PER SHARE TRANSACTION
--------------------- ----------------------- --------------- -------------------------------------------------
<C> <C> <C> <S>
12/18/00 1,000,000 $3.00 Purchased from J. Christopher Noble pursuant to a
Stock Purchase Agreement dated December 18, 2000
12/18/00 80,000 $3.00 Purchased from Andrew Schepp pursuant to a Stock
Purchase Agreement dated December 18, 2000
</TABLE>
<PAGE>
The Letter of Transmittal and certificates for Shares and any other required
documents should be sent to the Depositary at one of the addresses set forth
below:
THE DEPOSITARY FOR THE OFFER IS:
Mellon Investor Services LLC
<TABLE>
<S> <C> <C>
BY MAIL: BY HAND: BY OVERNIGHT:
Reorganization Department Reorganization Department Reorganization Department
P.O. Box 3301 120 Broadway 85 Challenger Road
South Hackensack, New Jersey 07606 13th Floor Mail Stop - Reorg.
New York, New York 10271 Ridgefield Park, New Jersey 07660
</TABLE>
CONFIRM BY TELEPHONE:
(201) 296-4860
If you have questions or need assistance, you can call the Information Agent
or the Dealer Manager at their respective addresses and telephone numbers set
forth below. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
Call Toll Free (800) 322-2885
THE DEALER MANAGER FOR THE OFFER IS:
[LOGO]
425 Lexington Avenue
New York, New York 10017
(212) 856-4181 (Call Collect)
