Investment Banking
Legg Mason Wood Walker, Incorporated
100 Light Street, 34th Floor, Baltimore, MD 21202
410.539.0000 Fax: 410.454.4508
Member New York Stock Exchange, Inc./Member SIPC
PERSONAL AND CONFIDENTIAL
-------------------------
December 19, 2000
Hotel Reservations, Network, Inc.
8140 Walnut Hill Lane
Suite 800
Dallas, TX 75231
Attention: Mr. Mel Robinson
President & Chief Financial Officer
Ladies and Gentlemen:
In connection with your consideration of a possible transaction with
TravelNow.com Inc., a Delaware company (the "Company"), the Company is prepared
to make available to you certain information concerning the business, operations
and assets of the Company. As a condition to such information being furnished to
you and your Representatives (as defined herein), you agree to treat any
information concerning the Company (whether prepared by the Company, its
advisors or otherwise and irrespective of the form of communication) which is
furnished to you or to your Representatives by or on behalf of the Company
(herein collectively referred to as the "Evaluation Material") in accordance
with the provisions of this letter agreement.
The term "Evaluation Material" shall be deemed to include all notes,
analyses, compilations, studies, interpretations or other documents prepared by
you or your Representatives which contain, reflect or are based upon, in whole
or in part, the information furnished to you or your Representatives pursuant
hereto. The term "Evaluation Material" does not include information which (i) is
or becomes generally available to the public other than as a result of a
disclosure by you or your Representatives, (ii) was within your possession prior
to its being furnished to you by or on behalf of the Company pursuant hereto, or
(iii) becomes available to you on a non-confidential basis from a source other
than the Company or any of its Representatives; provided that with respect to
clauses (ii) and (iii) above, the source of such information was not bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality known by you after reasonable investigations to be
owed to the Company or any other party with respect to such information.
You hereby agree that you recognize and acknowledge the competitive value
and the confidential and proprietary nature of the Evaluation Material and the
damage that could result to the Company if it is used for any purpose other then
the proposed transaction contemplated by this letter agreement or is disclosed
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to any third party, other than as set forth in this paragraph. You and your
Representatives agree that you shall use the Evaluation Material solely for the
purpose of evaluating a possible transaction between the Company and you and not
in any manner that is competitive with or detrimental to the Company. You
further agree that you will keep the Evaluation Material confidential and that
you will not disclose any of the Evaluation Material in any manner whatsoever;
provided, however, that (i) you may make any disclosure of such information to
which the Company gives its prior written consent and (ii) any such information
may be disclosed to your employees, directors, agents or representatives
(collectively, your "Representative") who need to know such information in
connection with your evaluation of a possible transaction with the Company, and
who agree to keep such information confidential and who are provided with a copy
of this letter agreement and agree to be bound by the terms hereof to the same
extent as if they were parties hereto. In any event, you shall be responsible
for any breach of this letter agreement by any of your Representatives from
prohibited or unauthorized disclosure or use of the Evaluation Material.
You hereby acknowledge that the Evaluation Material is being furnished to
you in consideration of your agreement that neither you, nor any entity directly
or indirectly controlled by you (collectively, an "Affiliate"), will directly or
indirectly propose to the Company or any other person any transaction between
you and the Company and/or its security holders or involving any of its
Securities (as defined below) or security holders regarding an acquisition,
directly or indirectly, of control of the Company or any of the Company's
Securities, businesses or assets, unless the Company shall have requested in
writing that you make such a proposal, and that neither you nor any of your
Affiliates will acquire, or assist, advise or encourage any other persons in
acquiring, directly or indirectly, control of the Company or any of the
Company's Securities, businesses or assets for a period of six months from the
date of this letter agreement unless the Company shall have consented in advance
in writing to such acquisition. Provided, however, that the restrictions set
forth in this paragraph shall no longer be applicable in the event that any
third-party, without the prior written consent of the Board of Directors of the
Company, makes a bona fide public offer to acquire or acquires directly or
indirectly voting stock of the Company or publicly announces its desire to enter
into any merger or other business combination with the Company. You also agree
that the Company shall be entitled to equitable relief, including injunction, in
the event of any breach of the provisions of this paragraph and that you shall
not oppose the granting of such relief. The term "Securities" shall have the
same meaning herein as in the Securities Act of 1933, as amended. The Company
acknowledges that you have entered into an agreement with Chris Noble to
purchase from him 1,000,000 shares of the Company's Common Stock, and an
agreement with Andrew Shepp to purchase from him 80,000 shares of the Company's
Common Stock, and the Company further acknowledges that the provisions of this
paragraph shall not apply to such agreement.
In addition, you agree that, without the prior written consent of the
Company, you and your Representatives will not disclose to any person the fact
that the Evaluation Material has been made available to you, that discussions or
negotiations are taking place concerning a possible transaction involving the
Company or any of the terms, conditions or other facts with respect thereto,
unless such disclosure is required by law and then only with as much prior
written notice to the Company as is practical under the circumstances and only
to the extent required by law. You further agree not to contact any employees of
the Company regarding a possible transaction or the Evaluation Materials without
the Company's prior written consent and that all communications regarding a
possible transaction with the Company, requests for additional information and
questions regarding procedures with respect to a possible transaction will be
first submitted or directed to Legg Mason Wood Walker, Incorporated ("Legg
Mason") and not to the Company or its Representatives. The term "person" as used
in this letter agreement shall be broadly interpreted to include the media and
any corporation, partnership, group, individual or other entity.
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In the event that you or any of your Representatives are requested or
become legally compelled to disclose any of the Evaluation Material or that
discussions between you and the Company now are taking place or will take place,
you shall provide the Company with prompt written notice of any such request or
requirement so that the Company may seek a protective order or other appropriate
remedy. In the event that such protective order or other remedy is not obtained,
you agree to (i) furnish only that portion of the Evaluation Material for which
you are advised by written opinion of counsel, reasonably satisfactory to the
Company, is legally required and (ii) exercise your best efforts to obtain
assurance that the Evaluation Material will be accorded such confidential
treatment.
If you decide that you do not wish to proceed with a transaction with the
Company you will promptly inform the Company of that decision. In that case, or
at any time upon the request of the Company for any reason, you will and will
cause your Representatives to promptly deliver to the Company all documents and
all copies thereof furnished to you or your Representatives by or on behalf of
the Company pursuant hereto. In the event of such a decision or request, all
other Evaluation Material prepared by you or your Representatives shall be
destroyed and no copy thereof shall be retained and, upon request, you shall
certify in writing to the Company that such action has been taken.
Notwithstanding the return or destruction of the Evaluation Material, you and
your Representatives will continue to be bound by your obligations of
confidentiality and other obligations hereunder for a period of five (5) years
from the date of this letter agreement.
The Company retains the right to determine, in its discretion, what
information, properties, personnel and other Evaluation Material the Company
will make available to you. Although the Company has endeavored to include in
the Evaluation Material information which the Company believes to be relevant
for the purpose of your evaluation of a possible transaction with the Company,
you acknowledge that none of the Company, Legg Mason nor any of their respective
Representatives makes any express or implied representation or warranty as to
the accuracy or completeness of the Evaluation Material. You agree that none of
the Company, Legg Mason nor any of their respective Representatives shall have
any liability to you or to any of your Representatives relating to or resulting
from the use of the Evaluation Material. You also agree that you are not
entitled to rely on the accuracy or completeness of the Evaluation Material and
that you will be entitled to rely solely on such representations and warranties
as may be included in any definitive agreement with respect to a transaction
between the Company and you, subject to such limitations and restrictions as may
be contained therein. You further agree that, if you determine to engage in a
transaction with the Company, your determination will be based solely on the
terms of such definitive agreement and on your own investigation, analysis and
assessment of the Company and the transaction.
In consideration of the Evaluation Material being furnished to you, you
agree that, without the prior written consent of the Company, for a period of
one (1) year from the date hereof, you will not, directly or indirectly, (i)
solicit any person or employee whom you know or have a reasonable basis to know
is an employee of the Company; or (ii) solicit for employment any person
employed by the Company with whom you had contact or who became known to you
during your evaluation of the Company.
You agree that unless and until a definitive agreement regarding a
transaction between the Company and you has been executed, neither the Company
nor you will be under any legal obligation of any kind whatsoever with respect
to such a transaction by virtue of this letter agreement except for the matters
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specifically agreed to herein and you hereby waive, in advance, any claims in
connection with any possible transaction with the Company unless and until you
shall have entered into a final definitive agreement. You also acknowledge and
agree that (i) Legg Mason and its Representatives may conduct the process that
may or may not result in a transaction with the Company in such manner as Legg
Mason, in its sole discretion, may determine, including, without limitation,
negotiating and entering into a final definitive agreement with any third party
without notice to you, and (ii) Legg Mason reserves the right to change, in its
sole discretion, at any time and without notice to you, the procedures relating
to the Company's and your consideration of the proposed transaction, including,
without limitation, terminating all further discussions with you and requesting
that you return all Evaluation Material to the Company. You hereby confirm that
you are not acting as a broker for or Representative of any person and are
considering a possible transaction with the Company only for your own account.
You further acknowledge and agree that the Company reserves the right, in its
sole discretion, to reject any and all proposals made by you or any of your
Representatives with regard to a transaction between the Company and you, and to
terminate discussions and negotiations with you at any time.
You acknowledge that you and your Representatives are aware that the United
States securities laws prohibit any person who has material non-public
information about a company from purchasing or selling securities of such
company, or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities.
The Company reserves the right to assign all of its rights, powers and
privileges under this letter agreement, including without limitation, the right
to enforce all of the terms of this letter agreement.
It is understood and agreed that no failure or delay by the Company in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right, power or privilege
hereunder.
It is further understood and agreed that money damages would not be a
sufficient remedy for any breach of this letter agreement by you or any of your
Representatives and that the Company shall be entitled to equitable relief,
including injunction and specific performance, as a remedy for any such breach.
Such remedies shall not be deemed to be the exclusive remedies for a breach by
you of this letter agreement, but shall be in addition to all other remedies
available at law or equity to the Company. Consequently, the Company shall be
entitled to secure enforcement of this letter agreement in any court of
competent jurisdiction in the United States or any state thereof (and you agree
to waive any requirement for the posting of bond in connection with such
remedy).
The terms and provisions of this letter agreement are solely for the
benefit of the Company, Legg Mason and you and their respective successors,
assigns, heirs and personal representatives, and no other person shall acquire
or have any right by virtue of this letter agreement. This letter agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware without giving effect to such state's principles of conflicts of laws.
This letter agreement may be waived, amended or modified only by an
instrument in writing signed by the party against which such waiver, amendment
or modification is sought to be enforced.
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You represent and warrant that this letter agreement has been duly and
validly executed and delivered and is a valid and binding agreement enforceable
in accordance with its terms.
If any provision of this letter agreement or the application of any such
provision to any person or circumstance is held invalid, illegal or
unenforceable for any reason whatsoever, the remaining provisions of the letter
agreement and the application of such provision to other persons or
circumstances shall not be affected thereby. To the fullest extent possible the
court finding such provision invalid, illegal or unenforceable shall modify and
construe the provisions as to render it valid and enforceable as against all
persons or entities and to give the maximum possible protection to the Company
and its officers, directors, employees, agents, advisors and controlling persons
within the bounds of validity, legality and enforceability.
Please confirm your agreement with the foregoing by signing and returning
one copy of this letter to the undersigned, whereupon this letter agreement
shall become a binding agreement between you and the Company.
Very truly yours,
LEGG MASON WOOD WALKER, INCORPORATED
on behalf of: TRAVELNOW.COM INC.
By: /s/ Legg Mason Wood Walker, Inc.
Accepted and agreed as of
the date first written above:
Hotel Reservations Network, Inc.
By: /s/ Mel Robinson
