LIQUIDATION AND DISSOLUTION AGREEMENT
This is an agreement (the "Agreement") dated January 22, 2002 by and
among Three Cities Fund III, L.P. ("TCF III"), a Delaware limited partnership,
Xxxxxx Equity Investors III, L.P. ("Xxxxxx"), a Delaware limited partnership,
CVG Investment LLC ("CVGI"), a Delaware limited liability company and sole
holder of 7.5% Convertible Senior Subordinated Notes and 7.5% Exchangeable
Senior Subordinated Notes (the "7.5% Notes") of Classic Vacation Group, Inc.
(the "Company") and GV Investment LLC ("GVI"), a Delaware limited liability
company and sole holder of 9% Convertible Subordinated Notes (the "9% Notes") of
the Company, which Agreement is as follows:
1. Xxxxxx and TCF III each will do everything in its power to cause
CVGI to, and CVGI will, as promptly as practicable after (i) the 7.5% Notes are
purchased by Expedia, Inc. ("Expedia"), a Washington corporation, in exchange
for shares of Expedia common stock (the "Expedia Shares") pursuant to a Note
Purchase Agreement (the "Expedia Note Purchase Agreement") dated as of the date
of this Agreement by and among CVGI, GVI, the Company and Expedia, (ii) CVGI
sells all of the Expedia Shares for cash in one or more transactions as
contemplated by Section 2.09 of the Expedia Note Purchase Agreement and (iii)
CVGI receives any additional consideration (and, if such consideration is
received in the form of Expedia Shares, CVGI sells those Expedia Shares) or
refunds any amounts received in excess of the 7.5% Notes Purchase Price as
contemplated by Section 2.09(c) of the Expedia Note Purchase Agreement,
distribute the 7.5% Note Purchase Price proceeds, less any expenses CVGI has
incurred, to TCF III and Xxxxxx in proportion to the respective numbers of
membership units in CVGI that each of them holds.
2. In lieu of Xxxxxx paying to GVI the 9% Notes Option exercise price
and GVI issuing to Xxxxxx 9% Notes, GVI will, as promptly as practicable after
(i) the 9% Notes are purchased by Expedia in exchange for Expedia Shares
pursuant to the Expedia Note Purchase Agreement and (ii) GVI receives from sales
of Expedia Shares for cash net proceeds of at least $3,000,000 in excess of the
sums GVI is required to pay to Allied Capital Corporation under GVI's 12%
Partially Exchangeable Notes, GVI will pay to Xxxxxx $3,000,000 of the 9% Notes
Purchase Price proceeds in full satisfaction of each of GVI and Xxxxxx'x
obligations under Section 5.2 of a Capital Contribution Agreement dated November
2, 2001, as amended, among CVGI, TCF III, GVI and Xxxxxx. GVI agrees that it
will sell a sufficient amount of Expedia Shares necessary to make the $3,000,000
payment to Xxxxxx as promptly as practicable following the day on which it is
permitted to sell Expedia Shares under the Expedia Note Purchase Agreement.
3. Xxxxxx instructs GVI to (i) retain $495,761 out of the $3,000,000
payment described in Paragraph 2 and (ii) pay $484,745 of that amount to the
unaffiliated public shareholders of the Company at the rate of $0.11 per share
in accordance with Section 6.06(b) of the Expedia Note Purchase Agreement.
4. As the sole members of CVGI, Xxxxxx and TCF III each will do
everything in its power to cause CVGI to dissolve, as promptly as practicable
following the completion of all distributions described in Paragraph 1 (the
"Dissolution Event"), in accordance with 12.1.4 of CVGI's Limited Liability
Company Agreement.
IN WITNESS WHEREOF, the TCF III, Xxxxxx, GVI and CVGI have executed
this Agreement, intending to be legally bound by it, on the day shown above.
THREE CITIES FUND III, L.P.
By: TCR Associates III, L.L.C.,
General Partner
By: TCR GP, L.L.C.
Managing Member
By: /s/ XXXXXX XX XXXXX
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Managing Member
XXXXXX EQUITY INVESTORS III, L.P.
By: TC Equity Partners, L.L.C., Its
general partner
By: /s/ XXXXXX X. XXXXXX
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Managing Director
GV INVESTMENT LLC
By: /s/ XXXXXXXX XXXXX
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Name: Xxxxxxxx Xxxxx
Title: Secretary
CVG INVESTMENT LLC
By: /s/ XXXXXXXX XXXXX
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Name: Xxxxxxxx Xxxxx
Title: Secretary