EXHIBIT 10.1

 

MASTER AGREEMENT

 

 

DATED AUGUST 20, 2004

 

 

OTTO (GMBH & CO KG)

 

OTTO FREIZEIT UND TOURISTIK GMBH

 

TRAVELOCITY.COM LP

 

TRAVELOCITY GMBH

 

KOMMANDITGESELLSCHAFT TRAVEL OVERLAND FLUGREISEN GMBH & CO.

 

TRAVELOCITY HOLDINGS GMBH

 

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CONTENTS

 

Clause

 

Page

1.

RESTRUCTURING OF 2001 JOINT VENTURE AND SALE OF THE BUSINESS IN FRANCE, UK AND
SCANDINAVIA

2

2.

FUNDING ARRANGEMENTS

2

3.

CONDITION PRECEDENTS

3

4.

CLOSING

4

5.

RESCISSION

5

6.

INTERIM PERIOD

5

7.

FURTHER UNDERTAKINGS

6

8.

FURTHER ASSURANCE

6

9.

STATEMENTS OF THE PARTIES

7

10.

CONFIDENTIALITY

7

11.

COSTS AND EXPENSES

7

12.

FINAL PROVISIONS

7

 

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THIS AGREEMENT is made in Hamburg the 20. August 2004

 

BETWEEN

 

(1)                                  Otto (GmbH & Co KG) (OTTO) having its
corporate seat in Hamburg, Germany, registered with the commercial register of
the local court of Hamburg under HRA 62024; and

 

(2)                                  Otto Freizeit und Touristik GmbH (OFT)
having its corporate seat in Hamburg, Germany, registered with the commercial
register of the local court of Hamburg under HRB 53725; and

 

(3)                                  Travelocity.com LP (Travelocity) having its
corporate seat in Southlake, Texas, USA; and

 

(4)                                  Travelocity GmbH (TVL GmbH), having its
corporate seat in Munich, Germany, registered with the commercial register of
the local court of Munich under HRB 141895; and

 

(5)                                  Kommanditgesellschaft TRAVEL OVERLAND
Flugreisen GmbH & Co (TEU Partnership), having its corporate seat in Munich,
Germany, registered with the commercial register of the local court of Munich
under HRA 70203; and

 

(6)                                  Travelocity Holdings GmbH (TEU) having its
corporate seat in Munich, Germany, registered with the commercial register of
the local court of Munich under HRB 141917.

 

OTTO, OFT, Travelocity, TVL GmbH, TEU Partnership and TEU are hereinafter also
referred to as Party or together as Parties.

 

WHEREAS:

 

(A)                              Travelocity, OFT and OTTO entered into a joint
venture agreement on 7 September 2001 (Deed No. 1703/2001 of the notary Dr. Axel
Pfeifer, Hamburg) (the 2001 Joint Venture Agreement). Under the 2001 Joint
Venture Agreement Travelocity and OFT agreed to conduct an online and offline
travel services business (the 2001 Joint Venture).

 

(B)                                Under the 2001 Joint Venture TEU Partnership
conducts business in Germany, France, United Kingdom, and Scandinavia. Whereas
the business in Germany is carried out by TEU Partnership directly, TEU
Partnership currently operates its business in France through VFinances SAS and
Travelocity France SAS and its subsidiaries, in the United Kingdom through
Travelocity.co.uk Ltd (Travelocity UK), and in Scandinavia through Resfeber
Sverige AB (Travelocity Scandinavia) and its subsidiaries (the businesses
operated in France, the United Kingdom and Scandinavia are hereinafter referred
to as the Business). Each of Travelocity France, Travelocity UK and Travelocity
Scandinavia are wholly owned subsidiaries of TEU. TEU is a wholly owned
subsidiary of TEU Partnership.

 

(C)                                The business in France is currently being
reorganised with the effect that it is envisaged that as of Closing VFinances
SAS will have been merged into the current subsidiary of VFinances SAS, Usit
Connections SAS. Consequently, the term Travelocity France shall mean Usit
Connections SAS and Travelocity France SAS unless the reorganisation in France
is not completed until Closing in which case the term Travelocity France shall
mean VFinances SAS and Travelocity France SAS.

 

(D)                               Travelocity and OFT intend to restructure
their 2001 Joint Venture with the ultimate effect that TVL GmbH will acquire the
Business and Travelocity and OFT will limit the activities of the 2001 Joint
Venture from Europe (including Russia, Turkey and any country a portion of which
is west of the Dardanelle) to the territory of Germany.

 

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NOW IT IS HEREBY AGREED as follows:

 

1.                                      RESTRUCTURING OF 2001 JOINT VENTURE AND
SALE OF THE BUSINESS IN FRANCE, UK AND SCANDINAVIA

 

1.1                                 The Parties agree on the following steps to
restructure the 2001 Joint Venture and to transfer the Business to TVL GmbH:

 

(a)                                  TEU shall acquire all shares in NewCo,
having its corporate seat in Munich, Germany, registered with the commercial
register of the local court of Munich under HRB 152122 (NewCo).

 

(b)                                 TEU shall contribute all shares in
Travelocity France, Travelocity UK and Travelocity Scandinavia to the capital
reserves of NewCo.

 

(c)                                  TEU shall sell its shareholding in NewCo to
TEU Partnership with the consideration being in the form of debt.

 

(d)                                 TEU Partnership shall distribute the shares
in NewCo equally to its sole shareholders OFT and TVL GmbH.

 

(e)                                  OFT shall sell its 50% shareholding in
NewCo to TVL GmbH.

 

(f)                                    OTTO, OFT, Travelocity and TEU
Partnership shall enter into a new joint venture agreement.

 

(g)                                 Travelocity and TEU Partnership shall amend
the Travelocity Brand License and Usage Agreement entered into between those
parties on 7 September 2001.

 

(h)                                 Travelocity and TEU Partnership shall amend
the Travelocity License and Information Technology Services Agreement and the
Webhosting Agreement entered into between those parties on 7 September 2001.

 

(i)                                     TEU Partnership, OFT and Travelocity,
amongst others, shall enter into a transition and ongoing services agreement.

 

(j)                                     TEU shall be merged into TEU
Partnership.

 

1.2                                 Exhibit 1.2 contains charts illustrating the
above restructuring process.

 

2.                                      FUNDING ARRANGEMENTS

 

2.1                                 The funding for the Business from 1
July 2004 onwards shall be done by Travelocity alone. Travelocity and OFT,
however, shall be liable for all costs, expenses and accruals for the Business
through 30 June 2004.

 

2.2                                 In the event that Closing does not occur by
1 January 2005 or any other day the Parties mutually agree upon or the Parties
agree not to further proceed with the transactions contemplated in this
Agreement, OFT shall be obliged to fund the Business, as shall Travelocity in an
equal amount, and to reimburse OFT’s share of funding provided by Travelocity
for the Business during the period from 1 July 2004 until the date OFT resumes
funding (i.e., for the avoidance of doubt OFT would have to reimburse
Travelocity 50% of the funding provided by Travelocity for the Business during
the above period).

 

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2.3                                 OFT shall contribute to TEU Partnership its
50% share (in the amount of Euro 3,600,000 (in words: three million six hundred
thousand Euros)) in the funding of the acquisition of VFinances SAS and its
subsidiaries (Boomerang) in France prior to the Closing Date.

 

2.4                                 OFT shall contribute its 50% share (in the
amount of Euro 2,200,000 (in words two million two hundred thousand Euros)) of
the working capital related funding into TEU (relating to Boomerang) prior to
the Closing Date.

 

2.5                                 OFT, TVL GmbH, TEU Partnership and TEU shall
procure that TEU shall use the financing under 2.3 and 2.4 to repay its
outstanding liabilities to Travelocity.

 

2.6                                 Travelocity shall allow the remainder of the
payments due under the framework agreement between TEU Partnership, OFT and TVL
GmbH, dated 24 March 2004 (Deed No. 443/2004 of the notary Dr. Axel Pfeifer,
Hamburg) (totalling Euro 7,671,118.06 (in words: seven million six hundred
seventy one thousand one hundred eighteen point zero six Euros) to be fully
utilised in Germany for the benefit of TEU Partnership.

 

2.7                                 OTTO, OFT, and Travelocity understand that
there are various amounts outstanding or owed by the subsidiaries of TEU to TEU
Partnership (either directly or via TEU). All such amounts to the extent they
relate to any period prior to 30 June 2004 shall be settled prior to the Closing
Date by funding provided by TEU Partnership in the manner previously provided.
Furthermore, OTTO, OFT, and Travelocity understand that there is an additional
working capital requirement of the subsidiaries of TEU for any period prior to
30 June 2004. Therefore, funding of Euro 5,718,000 (in words: five million seven
hundred eighteen thousand Euros) shall be made prior to the Closing Date by TEU
Partnership to meet working capital requirements of the subsidiaries of TEU and
repayment of outstanding inter company amounts. In respect of this funding Euro
4,354,000 (in words: four million three hundred fifty four thousand Euros) shall
be used to repay inter company indebtedness to TEU Partnership. The calculation
of the working capital and repayment amounts outstanding or owed on an inter
company basis is attached hereto as Appendix 2.7.

 

2.8                                 It is understood that from 1 July 2004 till
31 December 2004 both OFT and Travelocity will still continue to make the agreed
contributions for TEU Partnership as per the investment plan but only to the
extent that it pertains to the German business (41.2%). This means that OFT and
Travelocity will each make equal capital contributions towards the funding of
TEU Partnership of Euro 1,240,000 (in words: one million two hundred forty
thousand Euros) (July 2004 contribution) and Euro 890,000 (in words: eight
hundred ninety thousand Euros)  (October 2004 contribution); however in view of
the transactions set out in this Agreement both contributions shall be made by
the end of October 2004. Furthermore, without prejudice to any rights and
obligations of the parties of the new joint venture agreement (see Appendix
4.4(g)), given the extra funding in Germany arising from the Travelchannel
acquisition (as described above), no additional funding will be required until
after 30 June 2006 by either OFT or Travelocity absent an extraordinary
transaction or market development for which the spend is mutually agreed by the
parties.

 

3.                                      CONDITIONS PRECEDENT

 

The obligation of the Parties to procure the actions set out under clause 4.3 to
4.5 (Closing) shall be conditional upon the following conditions precedent
(aufschiebende Bedingungen) having been fulfilled unless, with respect to the
condition under (b), Travelocity waives such conditions:

 

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(a)                                  The cartel authorities of Germany and
Norway have informed OFT and Travelocity that they will not interfere with the
proposed transactions substantially as contemplated herein or the time for any
objections has elapsed.

 

(b)                                 The payments due prior to the Closing Date
under clause 2.3, 2.4 and 2.7 have been made and, insofar as the payments under
2.3 and 2.4 are concerned, TEU has used such funds to repay its liabilities to
Travelocity.

 

4.                                      CLOSING

 

4.1                                 Closing will occur within 10 business days
after the last condition precedent (see clause 3) has been fulfilled but in no
event prior to 1 October 2004 or on such other date as agreed upon between OTTO
and Travelocity (the Closing Date).

 

4.2                                 Closing will take place at the offices of
Allen & Overy LLP in Frankfurt or such other place as agreed upon between OTTO
and Travelocity.

 

4.3                                 As soon as possible after the last condition
precedent (see clause 3) has been fulfilled but in any event prior to the action
under clause 4.4(a) having been taken, TEU shall procure that TEU and Mössbauer
Lucky Start GmbH, Munich, sign a notarial deed (including a share purchase
agreement and a shareholder’s resolution of NewCo as to the change of managing
directors of NewCo and the change of the name and the object of NewCo) in the
form as attached hereto as Appendix 4.3 and TEU shall file an application for
registration of the change of name, object and managing directors with the
commercial register.

 

4.4                                 At the Closing, the Parties shall take the
following actions, or shall procure that their relevant subsidiaries take the
following actions, in the order as set out below:

 

(a)                                  TEU Partnership in its position as sole
shareholder of TEU shall pass a shareholder’s resolution in the form as attached
hereto as Appendix 4.4(a).

 

(b)                                 TEU and NewCo shall enter into a share
transfer agreement in the form as attached hereto as Appendix 4.4(b).

 

(c)                                  TEU and TEU Partnership shall enter into a
share purchase and transfer agreement in the form as attached hereto as Appendix
4.4(c).

 

(d)                                 OFT and TVL GmbH, in their position as sole
shareholders of TEU Partnership, shall pass a shareholder’s resolution in the
form as attached hereto as Appendix 4.4(d).

 

(e)                                  TEU Partnership, OFT and TVL GmbH shall
enter into a share transfer agreement in the form as attached hereto as Appendix
4.4(e).

 

(f)                                    OFT and TVL GmbH shall enter into a share
purchase and transfer agreement in the form as attached hereto as Appendix
4.4(f).

 

(g)                                 OTTO, OFT, Travelocity and TEU Partnership
shall enter into the amended joint venture agreement in the form as attached
hereto as Appendix 4.4(g).

 

(h)                                 Travelocity and TEU Partnership shall enter
into the amendment to the Travelocity brand license and usage agreement, in the
form as attached hereto as Appendix 4.4(h).

 

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(i)                                     Travelocity and TEU Partnership shall
enter into the amendment to the Travelocity license and information technology
services agreement and webhosting agreement in the form as attached hereto as
Appendix 4.4(i).

 

(j)                                     TEU Partnership, OFT and Travelocity,
amongst others, shall enter into a transition and ongoing services agreement in
the form as attached hereto as Appendix 4.4(j).

 

4.5                                 On the Closing Date, the Parties shall sign
and deliver all such other documents and instruments, and shall take all such
actions (in particular all actions the Parties are obliged to take under the
documents and agreements attached hereto as Appendices 4.4(a) through 4.4(j)) as
may be necessary or advisable to perfect the Closing, and to effect the purposes
of this Agreement.  All Parties hereby undertake to act in good faith and give
full support to the achievement of the Closing.

 

4.6                                 As soon as practicable after the Closing
Date, TEU and TEU Partnership shall enter into a merger agreement according to
which TEU would be merged into TEU Partnership in the form as attached hereto as
Appendix 4.6.

 

4.7                                 As soon as practicable after the Closing
Date, NewCo and TVL GmbH shall enter into a merger agreement according to which
NewCo would be merged into TVL GmbH in the form as attached hereto as Appendix
4.7.

 

5.                                      RESCISSION

 

5.1                                 Travelocity shall have the right to rescind
this Agreement (Rücktritt) with effect for and against all Parties of this
Agreement by giving notice to OTTO in writing (registered mail required) if
prior to the Closing a Material Adverse Change occurs.

 

5.2                                 For the purpose of this clause a Material
Adverse Change is any change, circumstance, event or effect (“Events”) that with
respect to TEU Partnership or any of its subsidiaries or their respective
businesses – individually or in aggregate with other adverse changes,
circumstances, events or effects – has, or may reasonably be expected to have in
the view of Travelocity, a material adverse effect on the financial position,
results of operations or business operations and prospects of TEU Partnership
and/or its subsidiaries. It is understood that such Events by way of
illustration or example would be events at least comparable with the events of
11 September 2001 or a SARS outbreak if it occurred in Europe.

 

6.                                      INTERIM PERIOD

 

6.1                                 Between the day of signing of this Agreement
(the Signing Date) and the Closing Date OTTO, OFT, TVL GmbH and Travelocity
shall:

 

(a)                                  ensure that TEU Partnership and its
subsidiaries conduct their respective businesses only in the ordinary and usual
course and in accordance with past practices, which are in accordance with the
law, prudent and customary under the circumstances;

 

(b)                                 consult fully with each other in relation to
any matters which may have a material effect upon the businesses of TEU
Partnership and/or its subsidiaries;

 

(c)                                  make prompt disclosure, and shall ensure
that TEU Partnership and its subsidiaries make prompt disclosure, of any other
fact or circumstance which comes to the notice of any of them which has, or may
have, an adverse effect upon the financial position, results of operations or
business operations and prospects of TEU Partnership and/or its subsidiaries;

 

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(d)                                 make prompt disclosure, and shall ensure
that TEU Partnership and its subsidiaries make prompt disclosure, of all
relevant information which comes to the notice of any of them in relation to any
fact or matter (whether existing on or before the Signing Date or arising
afterwards) which may constitute a breach of any of the representations and
warranties or any other provision of the share purchase agreement attached
hereto as Appendix 4.4(f); and

 

(e)                                  not allow or procure any act or omission
which may constitute a breach of any of the representations and warranties or
any other provision of, or is otherwise inconsistent with this Agreement, the
agreements and documents attached hereto or the consummation of the transactions
contemplated herein.

 

6.2                                 Travelocity and OFT will agree on
appropriate instructions to the management of TEU Partnership to regulate the
activities of TEU Partnership with respect to its subsidiaries during the period
from the Signing Date until the Closing Date to the intent that both Travelocity
and OFT have a greater degree of visibility, approval and control of activities
of TEU Partnership prior to the Closing Date.

 

7.                                      FURTHER UNDERTAKINGS

 

7.1                                 The Parties acknowledge that certain
guarantees of OFT in favour of the Business (such as IATA bonding) shall be
replaced as soon as reasonable practicable after the Closing Date by
Travelocity. Guarantees due to expire on or before 31 December 2004 need not be
replaced under this provision provided always Travelocity shall indemnify OFT
from any costs incurred in connection with, and liabilities suffered under, the
guarantees from the Closing Date onwards.

 

7.2                                 OTTO undertakes to use its best efforts to
ensure that the Business will benefit after the Closing Date from any OTTO group
agreement the benefit of which is currently enjoyed by the Business.

 

7.3                                 In the event that the reorganisation of the
French business of TEU Partnership is not completed until Closing, the Parties
agree to amend all documents due for signing on the Closing Date as appropriate
in order to reflect the then current structure of the French business.

 

8.                                      FURTHER ASSURANCE

 

OFT, TVL GmbH, TEU Partnership and TEU shall use their best efforts to achieve
the following tasks, to the extent possible, prior to the Closing Date:

 

(a)                                  Update of the share register of Travelocity
Scandinavia so that the company register correctly reflects the actual
shareholding of TEU;

 

(b)                                 Undertake all necessary steps to replace
potentially existing share certificates, or as the case may be, issue new share
certificates of Travelocity Scandinavia and their subsidiaries reflecting the
actual shareholding of TEU or Travelocity Scandinavia, respectively;

 

(c)                                  Unless the floating charge certificate with
respect to Box Office AB (registered in the amount of SEK 250,000) is found,
initiate a procedure of mortifying and replacing such lost certificate in
accordance with the Swedish Act on Mortification of Instruments; and

 

(d)                                 Ensure that any benefits (e.g. claims under
the guarantees) under the Share Purchase Agreement between TEU and Laurent,
Pascal and Gabriel Villa, dated 15 March 2004, regarding the acquisition of
VFinances SAS and it subsidiaries have been transferred to TVL

 

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GmbH, with such transfer being made under the condition precedent of having
received cartel clearance in accordance with subsection 3(a) above.

 

9.                                      STATEMENTS OF THE PARTIES

 

All Parties to this Agreement have all requisite power and authority to execute
and perform this Agreement and carry out the transactions contemplated hereunder
and this Agreement, when executed, will constitute a valid and binding
obligation of the Parties enforceable in accordance with its terms. Neither this
Agreement nor any term hereof or, in whole or in part, the transactions
contemplated in this Agreement, may be declared null and void or ineffective for
a reason attributable to a Party to this Agreement.

 

10.                               CONFIDENTIALITY

 

10.1                           The contents of this Agreement, its existence and
all matters relating to this Agreement as well as the negotiations relating to
this Agreement shall be held confidential, and each Party agrees not to divulge
any such information to any person without the prior written approval of either
OTTO or Travelocity (as the case may be), such approval not to be unreasonably
withheld or delayed. Either Party may, without such approval, announce or
disclose such matters or information if required to do so by law or the rules of
any relevant stock exchange or governmental or other regulatory or supervisory
body or authority of competent jurisdiction to whose rules the Party making the
announcement or disclosure is subject, provided always that the Party making
such announcement or disclosure shall consult with the other Parties in advance
as to the form, contents and timing of such announcement or disclosure.

 

10.2                           OTTO and Travelocity intend to announce the
transactions contemplated herein on a date mutually agreed by releasing a press
release substantially in the form attached hereto as Appendix 10.2.

 

11.                               COSTS AND EXPENSES

 

Whether or not the transactions contemplated by this Agreement are consummated,
OFT and Travelocity shall each pay its own respective costs and expenses, and
the related fees and expenses of its counsel and accountants and other
representatives, incurred in connection with the transactions contemplated by
this Agreement. Travelocity and OFT shall equally bear the fees raised by the
cartel authorities in connection with the merger control clearance, the costs of
Travelocity’s advisers who will prepare the applications to the appropriate
cartel authorities, as well as all notary fees incurred in connection with the
transactions contemplated herein as well as stamp duties.

 

12.                               FINAL PROVISIONS

 

12.1                           Changes and supplements to this agreement as well
as the waiver of rights under this agreement must be in writing unless
notarisation is required. This is true also for changes, or the cancellation, of
this clause.

 

12.2                           Should a provision of this Agreement or a
provision which has become part of the Agreement later on be or become
ineffective or invalid (undurchführbar oder unwirksam) in whole or in part or
should the Agreement contain a gap, then this shall not effect the validity of
the remaining provisions. In lieu of such ineffective or invalid provision, or
in order to fill in such gap, the Parties shall agree with retro-active effect
such effective provision which legally and economically comes as close as
possible to what the Parties intended to agree upon or, taking

 

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into account the ratio of this Agreement, would have agreed if they would been
aware of such issue at the time of signing this Agreement.

 

12.3                           All notices and other communications which are
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if delivered personally or by registered
mail or courier, or faxed (return receipt requested), and addressed as follows:

 

If to OTTO, OFT, TEU Partnership or TEU:

 

Otto (GmbH & Co KG)
Attn.: Dr. Michael E. Crüsemann
Wandsbeker Straße 3 - 7
22172 Hamburg, Germany

 

With a copy to:

 

Otto (GmbH & Co KG)
Attn.: Head of Legal Department
Wandsbeker Straße 3 - 7
22172 Hamburg, Germany

 

and

 

Otto Freizeit und Touristik GmbH
Attn.: Christoph Rische
Osterbekstraße 90a
22083 Hamburg, Germany

 

If to Travelocity or TVL GmbH:

 

Travelocity.com LP
Attn.: President
3150 Sabre Drive
Southlake, Texas 76092, U.S.A.

 

With a copy to:

 

Travelocity.com LP
Attn.:General Counsel
3150 Sabre Drive
Southlake, Texas 76092, USA

 

12.4                           This Agreement is governed by German law.
Exclusive place of jurisdiction is Frankfurt am Main.

 

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