VACATION PROPERTIES INTERNATIONAL INC, S-1/A, 1998-04-29

VACATION PROPERTIES INTERNATIONAL INC
S-1/A, 1998-04-29
HOTELS & MOTELS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 29, 1998
REGISTRATION NO. 333-47867

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

-----------
AMENDMENT NO. 2

TO
FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

-----------
RESORTQUEST INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 7011 52-2055247
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)

</TABLE>
1355-B Lynnfield Road
Suite 245
Memphis, TN 38119
(901) 818-5445

(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)

-----------
DAVID C. SULLIVAN
CHAIRMAN AND CHIEF EXECUTIVE OFFICER

RESORTQUEST INTERNATIONAL, INC.

1355-B Lynnfield Road
Suite 245

Memphis, TN 38119
(901) 818-5445

(Name and address, including zip code, and telephone
number, including area code, of agent for service)

Copies to:

Bruce S. Mendelsohn, Esq. Peter S. Kolevzon, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P. Kramer, Levin, Naftalis & Frankel
1333 New Hampshire Avenue, N.W. 919 Third Avenue
Washington, D.C. 20036 New York, New York 10022
(202) 887-4000 (212) 715-9100

-----------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.

-----------
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE>

SUBJECT TO COMPLETION, DATED APRIL 29, 1998

P R O S P E C T U S

5,800,000 SHARES

[RESORTQUEST INTERNATIONAL, INC. LOGO]

RESORTQUEST INTERNATIONAL, INC.

COMMON STOCK

All of the 5,800,000 shares of Common Stock offered hereby are being
offered by the Company. Prior to this offering (the "Offering"), there has not
been a public market for the Common Stock of the Company. It is currently
estimated that the initial public offering price will be between $10.00 and
$12.00 per share. See "Underwriting" for information relating to the factors
considered in determining the initial public offering price. The Common Stock
has been approved for listing on the New York Stock Exchange subject to official
notice of issuance under the symbol " ."

Following the completion of the Offering, the Company's executive officers
and directors, the founders of ResortQuest International, Inc. and the former
stockholders of the Founding Companies and entities affiliated with them will
beneficially own approximately 61% of the Common Stock. These persons, if acting
in concert, will be able to exercise control over the Company's affairs, to
elect the entire board of directors and to control the disposition of any matter
submitted to a vote of stockholders. Unless the Underwriters' over-allotment
option is exercised, all of the net proceeds of the Offering will be used to pay
the cash portion of the purchase price for the Founding Companies and to repay
debt assumed in the Combinations.

SEE "RISK FACTORS" COMMENCING ON PAGE 11 OF THIS PROSPECTUS FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE COMMON STOCK OFFERED HEREBY.

------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMIS-
SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
=========================================================================================

PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY (2)
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Per Share $ $ $
- -----------------------------------------------------------------------------------------
Total (3) $ $ $

=========================================================================================
</TABLE>

(1) For information regarding indemnification of the Underwriters, see
"Underwriting."

(2) Before deducting expenses payable by the Company, estimated at $4,000,000.

(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 870,000 additional shares of Common Stock solely to cover
over-allotments, if any. See "Underwriting." If the Underwriters exercise
such option in full, the Price to Public will total $ , the Underwriting
Discount will total $ and the Proceeds to Company will total $ .

The shares of Common Stock are offered by the several Underwriters named
herein, subject to prior sale, when, as and if accepted by them and subject to
certain conditions. It is expected that certificates for the shares of Common
Stock offered hereby will be available for delivery on or about , 1998
at the office of Smith Barney Inc., 333 West 34th Street, New York, New York
10001.

------------
SALOMON SMITH BARNEY NATIONSBANC MONTGOMERY
SECURITIES LLC

FURMAN SELZ

, 1998

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

<PAGE>

[INSERT PICTURES]

Aston(Reg. TM) and Aston Hotels & Resorts(Reg. TM) are registered tradenames and
trademarks of AST Brands, LLC.

------------------
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING PURCHASES OF THE COMMON STOCK TO STABILIZE ITS MARKET PRICE, PURCHASES
OF THE COMMON STOCK TO COVER SOME OR ALL OF A SHORT POSITION IN THE COMMON STOCK
MAINTAINED BY THE UNDERWRITERS AND THE IMPOSITION OF PENALTY BIDS. SUCH
ACTIVITIES, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. FOR A DESCRIPTION OF
THESE ACTIVITIES, SEE "UNDERWRITING."

<PAGE>

PROSPECTUS SUMMARY

ResortQuest International, Inc. was founded in September, 1997 and has
conducted no operations to date. Simultaneously with and as a condition to the
closing of the Offering, ResortQuest International, Inc. will acquire, in
separate combination transactions (the "Combinations") in exchange for cash and
shares of Common Stock, all of the common stock and ownership interests of 12
vacation rental and property management companies and one vacation rental and
property management software company (each, a "Founding Company" and,
collectively, the "Founding Companies"). Unless otherwise indicated, all
references to the "Company" herein include ResortQuest International, Inc. and
the Founding Companies, and references to "RQI" mean ResortQuest International,
Inc. prior to the closing of the Combinations. For more information about the
Combinations, see "Certain Transactions."

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the financial statements
and related notes thereto appearing elsewhere in this Prospectus. Unless
otherwise indicated, all share, per share and financial information in this
Prospectus: (i) has been adjusted to give effect to the Combinations and a
8,834.76-for-one stock split effected on March 9, 1998; (ii) assumes an initial
public offering price of $11.00 per share; and (iii) assumes no exercise of the
Underwriters' over-allotment option. See "Description of Capital Stock."

THE COMPANY

Upon consummation of the Offering, the Company will be the leading provider
of vacation condominium and home rentals in premier destination resorts
throughout the United States. Through the consolidation of leading vacation
rental and property management companies, the development of a national brand
and marketing initiative and best practices management systems, the Company
intends to offer vacationers a branded network of high quality, fully furnished,
privately-owned condominium and home rentals while offering property owners
superior management services designed to enhance their rental income. Currently,
most vacationers seeking to rent a condominium or home at a popular destination
resort must use a local vacation rental and property management firm to inquire
about availability and make reservations. Vacationers typically make rental
choices with limited information and, as a result, face great uncertainty
concerning the quality of their rental. To address this need, the Company
intends to provide vacationers with consistent quality and service, increased
information and easy access to a broad array of high quality condominium and
home rentals in premier destination resorts.

Upon consummation of the Offering, the Company will acquire the 13 Founding
Companies, which together manage approximately 8,900 condominiums and homes in
eight states and in Canada. These condominiums and homes are located in beach
and island resorts such as the Hawaiian Islands; Bethany Beach, DE; Nantucket,
MA; the Outer Banks, NC; Sanibel and Captiva Islands, FL; and St. Simons Island,
GA; and mountain resorts such as Aspen, Breckenridge and Telluride, CO; Park
City, UT, and Whistler, British Columbia. The Company also manages 11 hotels,
with an aggregate of approximately 1,650 hotel rooms located primarily in the
Hawaiian Islands.

The Company provides a wide range of services to both vacationers and
property owners. Because of the variety of the Company's resort locations
throughout the United States and Canada and the diversity of rental prices
throughout its rental pool, the Company is able to target a broad range of
vacationers, including families, couples and individuals. For vacationers, the
Company offers the convenience and accommodations of a condominium or home,
while providing many of the amenities and services of a hotel. Vacation
condominium and home rentals generally offer greater space and convenience than
resort hotel rooms, including separate living, sleeping and eating quarters. As
a result, vacationers generally have more privacy and greater flexibility in a
vacation condominium or home. The Company typically offers such services as
convenient check-in and check-out, frequent housekeeping and cleaning and
emergency maintenance assistance. In addition, in most of its markets, the
Company provides specialized concierge-type services such as arranging golf tee
times,

<PAGE>

purchasing ski lift tickets and making restaurant reservations. For property
owners, the Company offers a comprehensive set of services, including marketing
and rental services, maintenance and security. The Company's primary source of
revenue is property rental fees, which are charged to the property owners as a
percentage of the vacationers' total rental price. Fee percentages for vacation
condominiums and homes range from approximately 3% to over 40% of rental rates
for the various Founding Companies depending on the type of services provided to
the property owner and the type of rental unit managed. On a pro forma basis for
the year ended December 31, 1997, the Company generated total revenues of
approximately $56.8 million, which includes $30.5 million of revenues from
property rental fees, and net income of $7.0 million. In addition, in many
markets, the Company provides traditional real estate brokerage services for
property owners seeking to sell their condominiums and homes. The Company
believes that a national brand and superior management services, which are
designed to enhance rental income for property owners, will provide it with a
competitive advantage in attracting additional high quality condominiums and
homes in its markets.

The vacation rental and property management industry is highly fragmented
and inefficient, with an estimated 3,000 vacation rental and property management
companies in the United States. Presently, most vacation rental condominiums and
homes are managed by and booked through local vacation rental and property
management firms, whose principal means of attracting property owners and
vacationers is by referral, word of mouth, limited local advertising and direct
mailings. The Company believes this presents a significant market penetration
opportunity for a well-capitalized company offering a large, national network of
high quality vacation condominiums and homes. The Company's objective is to
enhance its position as the leading provider of premier destination resort
condominium and home rentals by:

o NATIONAL BRAND. Developing a national brand based on offering
vacationers an extensive network of high quality condominiums and
homes in premier destination resorts throughout the United States;

o SUPERIOR CUSTOMER SERVICE. Offering vacationers superior customer
service with the convenience and accommodations of a condominium or
home as well as many of the amenities and services of a hotel;

o INCREASED RENTAL INCOME. Enhancing value for condominium and home
owners with strategies designed to increase occupancy and rental rates
resulting in increased rental income;

o MANAGEMENT'S EXPERIENCE. Relying on the industry experience of its
senior management including David Sullivan, Chairman and Chief
Executive Officer, who was the Chief Operating Officer of Promus Hotel
Corporation, as well as David Levine, President and Chief Operating
Officer, Jeffery M. Jarvis, Senior Vice President and Chief Financial
Officer, and Michael Murphy, Senior Vice President of Development of
the Company, each of whom have extensive experience in the hotel and
resort industries; and

o LOCAL EXPERTISE. Maintaining the local relationships and expertise of
the management teams of the Founding Companies, each of which has
extensive experience in their respective resort areas.

Management teams already in place from all of the Founding Companies will
become employees of the Company, bringing valuable industry relationships and
providing local market knowledge in each market in which the Company will
operate. The Founding Companies have an average of over 20 years of experience
in the industry. Additionally, officers and directors of the Company, the former
owners of the Founding Companies, the founders of the Company and their
respective affiliates will own approximately 61% of the Common Stock upon
completion of the Offering.

<PAGE>

The Company believes it can achieve significant growth internally and
through an active acquisition program. The primary elements of the Company's
internal growth strategy include:

o NATIONAL MARKETING STRATEGY. Implementing a national marketing
strategy emphasizing: (i) cross-selling to existing customers; (ii)
bringing in new customers; and (iii) increasing the use of marketing
channels such as the world wide web, travel agents and national print
media, which are difficult for local vacation rental and property
management companies to use in a cost-effective manner;

o CAPITALIZE ON TECHNOLOGY. Capitalizing on technology by utilizing the
technological expertise of First Resort, a Founding Company, to create
a comprehensive web site that includes all of the Company's
condominium, home and hotel rentals through which vacationers can
ultimately view photographs and detailed floor plans of the Company's
rental properties and make reservations and payments;

o GROWTH WITHIN EXISTING MARKETS. Expanding its market share of
condominium, home and hotel room rentals in existing markets; and

o PROFIT MARGIN EXPANSION. Pursuing opportunities for profit margin
expansion via cost synergies and additional revenue sources including
the implementation of best practices achieved by tapping the industry
experience of the management teams in each of the Founding Companies.

The Company also intends to build a national market presence through
strategic acquisitions. The vacation rental and property management industry is
highly fragmented, which the Company believes provides significant opportunities
for consolidation. While the Company will seek to acquire the leading companies
in each new market, the Company also plans to pursue tuck-in acquisitions
through which it can expand its selection of condominiums and homes available
for rent in its existing markets. The Company believes that the opportunity to
join with it will be attractive to many vacation rental and property management
companies. The Company expects to offer acquisition candidates: (i) affiliation
with a national brand; (ii) the ability to cross-sell to customers of other
vacation rental and property management companies; (iii) the ability to increase
liquidity as a result of the Company's financial strength as a public company;
and (iv) the ability to increase profitability as a result of the Company's
centralization of certain administrative functions and other economies of scale.

First Resort is the leading provider of software services to vacation
rental and property management companies. Over 650 clients utilize First
Resort's software to automate and computerize their reservations, rental
management and owner accounting activities. Many acquisition candidates utilize
First Resort's software, which the Company believes will enhance its ability to
integrate such companies upon acquisition.

The aggregate purchase price being paid by RQI to acquire the Founding
Companies consists of $55.1 million in cash (which represents all of the net
proceeds of the Offering unless the Underwriters' over-allotment option is
exercised), 6,123,718 shares of Common Stock and the assumption of $5.3 million
in outstanding indebtedness of the Founding Companies. See "The Companies -- The
Combinations."

The Company intends to finance future acquisitions through internally
generated cash flow, borrowings under its credit facility and in certain
instances through the issuance of Common Stock to the owners of businesses to be
acquired. The Company has received a commitment from NationsBank N.A. for a
three-year $40 million senior revolving credit facility (the "Credit Facility").

The Company's executive offices are located at 1355-B Lynnfield Road, Suite
245, Memphis, Tennessee 38119, and its telephone number is (901) 818-5445.

<PAGE>

THE OFFERING

COMMON STOCK OFFERED BY THE
COMPANY................. 5,800,000 shares (1)

COMMON STOCK TO BE OUTSTAND-
ING AFTER THE OFFERING.. 15,058,348 shares (2)

USE OF PROCEEDS.......... The net proceeds of the Offering ($55.3 million),
together with $4.6 million of indebtedness to be
incurred under the Credit Facility, will be used
to pay the cash portion of the purchase price for
the Founding Companies ($55.1 million) and to
repay certain indebtedness assumed in the
Combinations ($4.8 million).

PROPOSED NEW YORK STOCK EX-
CHANGE SYMBOL........... To be determined.

- -----------

(1) Does not include up to 870,000 shares of Common Stock subject to
over-allotment options granted to the Underwriters. See "Underwriting."

(2) Excludes 1,807,000 shares of Common Stock reserved for issuance pursuant to
the Company's 1998 Long-Term Incentive Plan, of which options to purchase
1,641,000 shares will be granted by the Company concurrently with the
Offering at an exercise price equal to the initial public offering price
per share.

<PAGE>

SUMMARY UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

RQI will acquire the Founding Companies simultaneously with and as a
condition to the consummation of the Offering. For financial statement
presentation purposes, however, Hotel Corporation of the Pacific, Inc., known
primarily by its trade name, Aston Hotels & Resorts ("Aston Hotels & Resorts"),
one of the Founding Companies, has been designated as the "accounting acquiror."
The following summary unaudited pro forma combined financial data present
certain data for the Company as adjusted for: (i) the effects of the
Combinations on a historical basis; (ii) the effects of certain pro forma
adjustments to the historical financial statements; and (iii) the consummation
of the Offering and the application of the net proceeds therefrom. See the
Unaudited Pro Forma Combined Financial Statements and the notes thereto included
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PRO FORMA COMBINED
-------------------------------------------------------
THREE MONTHS ENDED
YEAR ENDED ----------------------------------
DECEMBER 31, 1997 MARCH 31, 1997 MARCH 31, 1998
------------------ ---------------- ---------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA (1):
Revenues:
Property rental fees ........................... $ 30,483 $ 12,542 $ 13,754
Service fees ................................... 12,583 3,263 4,087
Other .......................................... 13,753 3,015 3,480
----------- ----------- -----------
56,819 18,820 21,321
Operating expenses (2) .......................... 27,680 7,327 7,949
General and administrative expenses (2) ......... 12,383 2,574 3,602
Depreciation and amortization (3) ............... 3,760 998 998
----------- ----------- -----------
Income from operations .......................... 12,996 7,921 8,772
Interest and other income, net .................. (39) (36) 143
----------- ----------- -----------
Income before income taxes ...................... 12,957 7,885 8,915
Provision for income taxes ...................... 6,077 3,396 3,703
----------- ----------- -----------
Net income ...................................... $ 6,880 $ 4,489 $ 5,212
=========== =========== ===========
Net income per share ............................ $ 0.46 $ 0.30 $ 0.35
=========== =========== ===========
Shares used in computing pro forma net in-
come per share (4) ............................. 15,058,348 15,058,348 15,058,348
</TABLE>

MARCH 31, 1998
------------------------------
PRO FORMA AS
COMBINED (5) ADJUSTED (6)
-------------- -------------
BALANCE SHEET DATA:
Working capital surplus (deficit) (7) ....... $ (52,699) $ 3,404
Total assets (8) ............................ 130,567 130,803
Long-term debt .............................. 4,468 5,029
Stockholders' equity ........................ 37,687 93,229

- -----------

(1) The pro forma combined statement of operations data assume that the
Combinations and the Offering were consummated on January 1, 1997 and are
not necessarily indicative of the results the Company would have obtained
had these events actually then occurred or of the Company's future results.
During the period presented above, the Founding Companies were not under
common control or management and, therefore, the data presented may not be
comparable to or indicative of post-combination results to be achieved by
the Company. The pro forma combined statements of operations data are based
on preliminary estimates, available information and certain assumptions
that management deems appropriate and should be read in conjunction with
the other financial statements and notes thereto included elsewhere in this
Prospectus. Following the Combinations, the Company expects to realize
certain savings as a result of (i) volume purchasing and national contracts
for telecommunications, credit card fees, advertising, printing,
housekeeping supplies and other operating expenses and (ii) consolidation
of insurance, employee benefits and other general and administrative
expenses. The Company cannot quantify these savings accurately at this
time. It is anticipated that these savings will be partially offset by the
costs of being a publicly traded company and the incremental costs related
to the Company's new management team. However, these costs, like the
savings that they offset, cannot be quantified accurately at this time.
Neither these anticipated savings nor these anticipated costs have been
included in the pro forma combined financial information of the Company.

7
<PAGE>

(2) The unaudited pro forma combined statement of operations data include pro
forma reductions in salary, bonuses and benefits to the owners and certain
key employees of the Founding Companies to which they have agreed
prospectively (the "Compensation Differential") and excludes the effects of
the exclusion of certain non-operating assets and the assumption or
retirement of certain liabilities that will be retained by certain
stockholders of the Founding Companies. For the year ended December 31,
1997 and the three months ended March 31, 1997 and 1998, the Compensation
Differential was approximately $2.3 million, $299,000 and $690,000,
respectively.

(3) Reflects amortization of the goodwill (which is not deductible for tax
purposes) to be recorded as a result of the Combinations over a 40-year
period, except for the goodwill related to First Resort, which will be
amortized over a 15-year period, and computed on the basis described in the
notes to the Unaudited Pro Forma Combined Financial Statements.

(4) Includes (i) 6,123,718 shares to be issued to owners of the Founding
Companies; (ii) 3,134,630 shares issued to the management and founders of
RQI; and (iii) 5,800,000 shares representing the number of shares sold in
the Offering necessary to pay the cash portion of the consideration for the
Combinations, to repay debt assumed in the Combinations and to pay the
estimated underwriting discount and other Offering expenses. Excludes
options to purchase 1,641,000 shares to be granted concurrently with the
Offering at an exercise price equal to the initial public offering price.
See "Certain Transactions."

(5) The pro forma combined balance sheet data assume that the Combinations were
consummated on March 31, 1998. The unaudited pro forma combined balance
sheet data are based upon preliminary estimates, available information and
certain assumptions that management deems appropriate and should be read in
conjunction with the other financial statements and notes thereto included
elsewhere in this Prospectus.

(6) Adjusted for the sale of 5,800,000 shares of Common Stock offered hereby
(less estimated underwriting discount and offering expenses) and the
application of the net proceeds therefrom.

(7) Includes the cash portion of the consideration to be paid to the Founding
Companies and the amount of debt to be repaid from net proceeds of the
Offering of $59.9 million, borrowings under the line of credit of $4.6
million and approximately $232,000 representing certain working capital
adjustments from certain stockholders of the Founding Companies in
connection with the Combinations.

(8) Reflects (i) the creation of approximately $87.7 million of goodwill and
(ii) a reduction of net assets of approximately $5.1 million, including
certain non-operating assets and the assumption or retirement of certain
liabilities that will be excluded from the Combinations and retained by
certain stockholders of the Founding Companies.

<PAGE>

SUMMARY INDIVIDUAL FOUNDING COMPANY FINANCIAL DATA
(IN THOUSANDS)

The following table presents summary data for each of the Founding
Companies (see "The Company" for the complete names of each Founding Company) on
a historical basis for the periods indicated. Income from operations for the
Founding Companies for each of the years in the three year period ended December
31, 1997 and for the three months ended March 31, 1997 and 1998 does not include
pro forma adjustments, including the Compensation Differential. See Compensation
Differential Table below.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
--------------------------------------- -----------------------
1995 1996 1997 1997 1998
------------- ---------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
BEACH AND ISLAND RESORTS
Aston Hotels & Resorts (Hawaii)
Revenues ...................................... $19,048 $19,460 $19,554 $5,581 $ 5,693
Income from operations ........................ 3,064 3,485 5,171 2,055 1,882

Maui Condominium and Home (Hawaii)
Revenues ...................................... $ 910 $ 1,222 $ 1,422 $ 462 $ 554
Income from operations ........................ 29 45 77 237 259

Brindley & Brindley (Outer Banks, NC)
Revenues ...................................... $ 2,443 $ 2,950 $ 4,021 $ 269 $ 257
Income (loss) from operations ................. (123) 131 511 (271) (544)

Coastal Resorts (Bethany Beach, DE)
Revenues ...................................... $ 1,902 $ 1,917 $ 3,615 $ 424 $ 577
Income (loss) from operations ................. 450 603 1,183 3 (16)

The Maury People (Nantucket, MA)
Revenues ...................................... $ 926 $ 988 $ 1,183 $ 370 $ 338
Income from operations ........................ 362 135 290 213 77

Priscilla Murphy Realty (Sanibel and Captiva Is-
lands, FL)
Revenues ...................................... $ 4,316 $ 4,721 $ 4,740 $1,959 $ 2,275
Income from operations ........................ 740 1,282 1,690 1,191 1,322

Trupp-Hodnett Enterprises (St. Simons Island, GA)
Revenues ...................................... $ 3,202 $ 3,431 $ 4,061 $ 767 $ 1,254
Income from operations ........................ 45 126 199 25 85

MOUNTAIN RESORTS
Collection of Fine Properties (Breckenridge, CO)
Revenues ...................................... $ 3,500 $ 4,141 $ 4,303 $2,714 $ 2,689
Income (loss) from operations ................. (44) 416 580 1,455 1,535

Houston and O'Leary (Aspen, CO)
Revenues ...................................... $ 837 $ 829 $ 1,596 $ 484 $ 421
Income (loss) from operations ................. 40 (24) 780 306 94

Resort Property Management (Park City, UT)(1)
Revenues ...................................... $ 1,355 $ 1,630 $ 2,295 $1,606 $ 1,468
Income (loss) from operations ................. (3) 20 108 760 807

Telluride Resort Accommodations (Telluride, CO)
Revenues ...................................... $ 4,404 $ 4,858 $ 4,313 $2,135 $ 2,342
Income from operations ........................ 365 369 246 911 915

Whistler Chalets (Whistler, British Columbia)
Revenues ...................................... $ 1,948 $ 2,247 $ 2,060 $1,191 $ 1,135
Income (loss) from operations ................. 66 (223) 109 567 501

SOFTWARE SALES AND SERVICES
First Resort (Aspen, CO)
Revenues ...................................... $ 2,207 $ 2,462 $ 2,864 $ 578 $ 828
Income from operations ........................ 377 467 743 108 254
</TABLE>

<PAGE>

COMPENSATION DIFFERENTIAL

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
----------------------------------- ----------------
1995 1996 1997 1997 1998
--------- ---------- ---------- ------ -------
<S> <C> <C> <C> <C> <C>
Aston Hotels & Resorts .................. $ 380 $ 282 $ 282 $ 73 $ 70
Maui Condominium and Home ............... 240 245 284 71 26
Brindley & Brindley ..................... 39 37 69 -- --
Coastal Resorts ......................... -- -- -- -- --
The Maury People ........................ 30 129 142 19 --
Priscilla Murphy Realty ................. 250 320 31 8 29
Trupp-Hodnett Enterprises ............... 954 865 1,143 74 463
Collection of Fine Properties ........... 64 74 94 30 21
Houston and O'Leary ..................... 160 178 58 15 29
Resort Property Management(1) ........... 46 149 186 -- --
Telluride Resort Accommodations ......... 30 -- -- -- --
Whistler Chalets ........................ 33 34 35 9 52
First Resort ............................ 76 (53) (42) -- --
------ ------ ------ ---- ----
$2,302 $2,260 $2,282 $299 $690
====== ====== ====== ==== ====
</TABLE>
- -----------
(1) Fiscal years presented are for the periods ending September 30, 1995, 1996
and 1997 and the three months ended March 31, 1997 and 1998.

<PAGE>

RISK FACTORS

An investment in the shares of Common Stock offered by this Prospectus
involves a high degree of risk. In addition to the other information in this
Prospectus, the following risk factors should be considered carefully in
evaluating an investment in the Common Stock. This Prospectus contains certain
forward-looking statements which involve risks and uncertainties. The Company's
actual results could differ materially from the results anticipated in these
forward-looking statements as a result of certain of the factors set forth in
the following risk factors and elsewhere in this Prospectus.

ABSENCE OF COMBINED OPERATING HISTORY; RISKS OF INTEGRATION

RQI was founded in September 1997 but has conducted no operations and
generated no revenues to date. RQI has entered into agreements to acquire the
Founding Companies simultaneously with and as a condition to the closing of the
Offering. Prior to the closing of the Offering, each of the Founding Companies
has operated as separate independent entities. Currently, the Company has no
centralized financial reporting system and will initially rely on the existing
reporting systems of the Founding Companies. The pro forma combined financial
statements of the Founding Companies cover periods when the Founding Companies
and RQI were not under common control or management and, therefore, may not be
indicative of the Company's future financial or operating results. The Company's
senior management group has been assembled only recently, and there can be no
assurance that the management group will be able to integrate and manage
effectively the combined entity or effectively implement the Company's operating
and growth strategies. The inability of the Company to integrate successfully
the Founding Companies would have a material adverse effect on the Company's
business, financial condition and results of operations. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business -- Business Strategy" and "-- Growth Strategy."

The Founding Companies offer a variety of different services to property
owners and vacationers, use different sales and marketing techniques to attract
new customers, utilize different fee structures and target different customer
segments. In addition, almost all of the Founding Companies operate in different
geographic markets with varying levels of competition, development plans and
local market dynamics. These differences increase the risk inherent in
successfully completing the integration of the Founding Companies.

RISKS ASSOCIATED WITH THE VACATION RENTAL AND PROPERTY MANAGEMENT INDUSTRY;
GENERAL ECONOMIC CONDITIONS

The Company's business, financial condition and results of operations will
be dependent upon various factors affecting the vacation rental and property
management industry. Adverse factors such as a reduction in demand for vacation
properties, particularly for beach and mountain resort properties, changes in
travel and vacation patterns, changes in governmental regulations or the tax
treatment of second homes and an oversupply of vacation properties could have a
material adverse effect on the Company's business, financial condition and
results of operations. Any downturn in the leisure travel and tourism industry
resulting from factors such as gasoline or airfare price increases, general
economic activities and inflation or deflation also could have a material
adverse effect on the Company's business, financial condition and results of
operations. In addition, all of the Company's rental properties are located in
destination resort communities which are attractive to vacationers primarily for
their outdoor recreational opportunities. As a result, adverse weather
conditions or natural disasters, such as hurricanes, could have a material
adverse effect on the Company's business, financial condition and results of
operations.

SEASONALITY AND QUARTERLY FLUCTUATIONS

The business of the Company is highly seasonal. The results of operations
of each of the Founding Companies have been subject to quarterly fluctuations
caused primarily by the seasonal variations in the vacation rental and property
management industry, with peak seasons dependent on whether the resort is
primarily a summer or winter destination. During 1997, the Company derived
approximately 38% of

<PAGE>

its pro forma revenues and 61% of its operating income in the first quarter and
25% of its pro forma revenues and 25% of its operating income in the third
quarter. Although the seasonality of the Company's revenues and earnings may be
partially mitigated by the geographic diversity of the Founding Companies and
companies that may be acquired in the future, there is likely to continue to be
a significant seasonal factor with respect to the Company's revenues and
earnings. The Company's quarterly results of operations may also be subject to
fluctuations as a result of the timing and cost of acquisitions, the timing of
real estate sales, changes in relationships with travel providers, extreme
weather conditions or other factors affecting leisure travel and the vacation
rental and property management industry. Unexpected variations in quarterly
results could also adversely affect the price of the Common Stock which in turn
could adversely effect the Company's proposed acquisition strategy. See
"Management's Discussion of Financial Condition and Results of Operations."

DEPENDENCE ON THIRD PARTIES

The properties managed by the Company are generally located in destination
resorts in which the development of new homes and condominiums, as well as
resort amenities such as golf courses and chair lifts, is dependent upon third
parties. As a result, the failure of such third parties to continue such
development or invest in resort facilities and amenities could have a material
adverse effect on the rental value of the Company's properties and,
consequently, on the Company's business, financial condition and results of
operations.

The Company also is dependent on travel agents, package tour providers and
wholesalers for a significant portion of its revenues. The Company estimates
that approximately 46% of its combined revenues for 1997 were derived from sales
made through or to travel agents, package tour providers and wholesalers. The
failure of travel agents, package tour providers and wholesalers to continue to
recommend or package the Company's vacation properties could have a material
adverse effect on the Company's business, financial condition and results of
operations.

FACTORS AFFECTING INTERNAL GROWTH

The Founding Companies have experienced revenue and earnings growth on a
pro forma combined basis over the past few years. There can be no assurance that
the Company will continue to experience internal growth. Factors affecting the
ability of the Company to continue to experience internal growth include, but
are not limited to, the ability to maintain existing relationships with property
owners, expand the number of properties under management and cross-sell among
the Founding Companies, as well as continued demand for such rentals. See
"Business -- Business Strategy" and "-- Growth Strategy."

RISKS OF GEOGRAPHIC CONCENTRATION OF OPERATIONS

Two of the Founding Companies manage properties at Hawaiian beach resorts,
and four of the Founding Companies manage properties at mountain resorts in
Colorado and Utah. For 1997, the Company derived approximately 37% of its
combined revenues from such Founding Companies located in Hawaii and
approximately 22% of its combined revenues from such Founding Companies located
in Colorado and Utah. Adverse events or conditions which affect those areas in
particular, such as economic recession, changes in regional travel patterns,
extreme weather conditions or natural disasters, would have a more significant
adverse effect on the operations of the Company, than if the Company's
operations were more geographically diverse.

RISKS ASSOCIATED WITH ACQUISITIONS

The Company intends to expand the markets it serves and increase the number
of properties it manages, in part through the acquisition of additional vacation
rental and property management companies. There can be no assurance that the
Company will be able to identify, acquire or profitably manage additional
businesses or successfully integrate acquired businesses into the Company
without substantial costs, delays or other operational or financial problems.
Increased competition for acquisition

<PAGE>

candidates may develop, in which event there may be fewer acquisition
opportunities available to the Company, as well as higher acquisition prices.
Further, acquisitions involve a number of special risks, including the failure
of acquired companies to achieve anticipated results, diversion of management's
attention, failure to retain key personnel, risks associated with unanticipated
events or liabilities and amortization of acquired intangible assets, some or
all of which could have a material adverse effect on the Company's business,
financial condition and results of operations. See "Business -- Growth
Strategy."

The Company intends to use shares of Common Stock to finance a portion of
the consideration for future acquisitions. In the event that the Common Stock
does not maintain a sufficient market value, or potential acquisition candidates
are otherwise unwilling to accept shares of Common Stock as part of the
consideration for the sale of their businesses, the Company may be required to
utilize more of its cash resources, if available, in order to implement its
acquisition strategy. If the Company has insufficient cash resources, its growth
could be limited unless it is able to obtain additional capital through debt or
equity financings. Although the Company has received a commitment for the Credit
Facility , there can be no assurance that the Company will be able to obtain the
Credit Facility, or other financing it may need, on terms it deems acceptable.
If the Company is unable to obtain financing sufficient for all of its desired
acquisitions, it may be unable to implement fully its acquisition strategy. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

MANAGEMENT OF GROWTH

The Company expects to grow internally and through acquisitions. The
Company expects to expend significant time and effort in expanding existing
businesses and in identifying, completing and integrating acquisitions. There
can be no assurance that the Company's systems, procedures and controls will be
adequate to support the Company's operations as they expand. Any future growth
also will impose significant added responsibilities on members of senior
management, including the need to identify, recruit and integrate new managers
and executives. There can be no assurance that such additional management will
be identified and retained by the Company. To the extent that the Company is
unable to manage its growth efficiently and effectively, or is unable to attract
and retain additional qualified management, the Company's business, financial
condition and results of operations could be materially adversely effected. See
"Business -- Business Strategy" and "Management."

RELIANCE ON KEY PERSONNEL

The Company's operations are dependent on the efforts and relationships of
David C. Sullivan, its Chairman and Chief Executive Officer, David L. Levine,
its President and Chief Operating Officer, Jeffery M. Jarvis, its Senior Vice
President and Chief Financial Officer, the other executive officers of the
Company and the senior management of the Founding Companies. Furthermore, the
Company will likely be dependent on the senior management of any businesses
acquired in the future. If any of these persons becomes unable to continue in
his or her role with the Company, or if the Company is unable to attract and
retain other qualified employees, the Company's business, financial condition
and results of operations could be materially adversely effected. Although the
Company or an individual Founding Company intends to enter into employment
agreements with and provide incentives intended to retain key personnel, there
can be no assurance that any individual will continue in his or her present
capacity with the Company or such Founding Company for any particular period of
time. See "Management."

SHORT-TERM RENTAL AND PROPERTY MANAGEMENT CONTRACTS

The Company provides its rental and property management services to
property owners pursuant to management contracts which generally have one year
terms. The majority of such contracts contain automatic renewal provisions but
also allow property owners to terminate the contract at any time. Non-renewal of
a significant number of management contracts or the inability of the Company to
attract additional property owners would have a material adverse effect on the
Company's business, financial condition and results of operations. In addition,
although most of the Company's contracts are exclusives,

<PAGE>

in certain geographic markets, industry standards dictate that rental services
be provided on a non-exclusive basis. Approximately 2% of the Company's revenues
for 1997 on a pro forma combined basis were derived from rental services
provided on a non-exclusive basis. The Company is unable to determine the
percentage of the national rental services market that is provided on a
non-exclusive basis. See "Business -- Services Offered to Condominium and Home
Owners."

RISKS ASSOCIATED WITH HOMEOWNERS' ASSOCIATION MANAGEMENT CONTRACTS

The Company currently provides homeowners' association management services
at numerous condominium developments pursuant to contracts with the homeowners'
association present at such developments. The Company frequently provides rental
management services for a significant percentage of the condominiums within such
developments. Providing management services for homeowners' associations
frequently leads the associations to request the Company to manage and control
the front desk operations, laundry facilities and other related services of the
condominium developments. Controlling these services often gives the Company a
competitive advantage over other vacation rental and property management
companies in retaining the condominiums it currently manages and in attracting
new property owners. There can be no assurance that a homeowners' association
will not terminate its management agreement with the Company. Termination of a
management agreement by a homeowners' association could result in the Company
losing the control or management of the front desk and related services, thereby
eliminating its competitive advantage and also possibly causing a reduction in
the number of properties under management and an increase in the expenses
required to retain and maintain the condominiums it manages at that site. Any
such termination could have a material adverse effect on the Company's business,
financial condition and results of operations.

COMPETITION

The vacation rental and property management industry is highly competitive
and has low barriers to entry. The industry has two distinct customer groups:
vacation property renters and vacation property owners. The Company competes for
vacationers and property owners primarily with local vacation rental and
property management companies located in the Company's markets. Some of these
competitors are affiliated with the owners or operators of resorts in which such
competitor provides its services. Certain of these competitors may have lower
cost structures and may be able to provide their services at lower rates. The
Company also competes for vacationers with large hotel and resort companies.
Many of these competitors are large companies with greater financial resources
than the Company, enabling them to finance acquisition and development
opportunities, pay higher prices for the same opportunities or develop and
support their own operations. In addition, many of these companies can offer
vacationers services not provided by vacation rental and property management
companies, and they may have greater name recognition among vacationers. If such
companies chose to compete in the vacation rental and property management
industry, such competition could have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business --
Competition."

CONTROL BY EXISTING MANAGEMENT AND STOCKHOLDERS

Following the completion of the Combinations and the Offering, the
executive officers and directors of the Company, the founders of RQI, the former
stockholders of the Founding Companies and the founders of the Company and
entities affiliated with them will beneficially own shares of Common Stock
representing approximately 57% of the total voting power of the Common Stock
(approximately 61% if all shares of Restricted Common Stock (as defined herein)
were converted into Common Stock). These persons, if acting in concert, will be
able to exercise control over the Company's affairs, to elect the entire Board
of Directors and to control the disposition of any matter submitted to a vote of
stockholders. See "Principal Stockholders" and "Description of Capital Stock --
Common Stock and Restricted Common Stock."

PORTION OF REVENUES DERIVED FROM REAL ESTATE SALES

Approximately 11% of the Company's revenues for 1997 on a combined basis
were derived from net real estate brokerage commissions. Any factors which
adversely affect real estate sales such as a

<PAGE>

downturn in general economic conditions or changes in interest rates, the tax
treatment of second homes or property values could have a material adverse
effect on the Company's business, financial condition and results of operations.

GOVERNMENT REGULATION OF VACATION RENTAL AND PROPERTY MANAGEMENT INDUSTRY

The Company's operations are subject to various federal, state and local
laws and regulations, including (i) licensing requirements applicable to real
estate operations, (ii) laws and regulations relating to consumer protection and
(iii) local ordinances. Many states have adopted specific laws and regulations
which regulate the Company's activities, such as real estate and travel services
provider license requirements; anti-fraud laws; telemarketing laws;
environmental laws; and labor laws. The Company believes that it is in material
compliance with all federal, state, local and foreign laws and regulations to
which it is currently subject. However, no assurance can be given that the cost
of qualifying under applicable regulations in all jurisdictions in which the
Company desires to conduct business will not be significant or that the Company
is in fact in compliance with all applicable federal, state, local and foreign
laws and regulations. Any substantial changes to existing laws and regulations
and/or failure to comply with applicable laws or regulations could have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business -- Governmental Regulation."

RELATIONSHIPS WITH FOUNDING COMPANY AFFILIATES; POTENTIAL CONFLICTS OF INTERESTS

Several lease agreements, management contracts and other agreements with
stockholders of the Founding Companies and entities controlled by them will
continue after the closing of the Combinations or have been entered into
effective upon the closing of the Combinations. In addition, the Company and
such persons may enter into similar agreements in the future. Although the
Company believes that the existing agreements are and anticipates that all
future agreements will be on terms no less favorable to the Company than it
could obtain in comparable contracts with unaffiliated third parties, conflicts
of interests may arise between the Company and such persons. For a description
of these agreements see "Certain Transactions -- Leases of Facilities," "--
Management Contracts" and "-- Other Transactions."

POTENTIAL EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE ON PRICE OF COMMON STOCK

The market price of the Common Stock may be adversely affected by the sale,
or availability for sale, of substantial amounts of Common Stock in the public
market following the Offering. The 5,800,000 shares of Common Stock being sold
in the Offering will be freely tradable unless acquired by affiliates of the
Company.

Upon the completion of the Offering, the holders of Common Stock who did
not purchase shares in the Offering will own 9,258,348 shares of Common Stock,
including (i) the stockholders of the Founding Companies who will receive, in
the aggregate, 6,123,718 shares in connection with the Combinations and (ii)
management and founders of RQI who own 3,134,630 shares. These shares have not
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), and, therefore, may not be sold unless registered under the Securities
Act or sold pursuant to an exemption from registration, such as the exemption
provided by Rule 144. Furthermore, the stockholders who will receive these
shares have agreed with the Company not to sell, transfer or otherwise dispose
of any of these shares for one year following the closing of the Offering.
However, the stockholders who will receive these shares also have certain demand
and piggyback registration rights with respect to these shares.

<PAGE>

written consent of Smith Barney Inc. on behalf of the Underwriters. The
foregoing restrictions will not apply: (i) in the case of the Company, to
options or shares of Common Stock issued pursuant to the Company's 1998
Long-Term Incentive Plan or in connection with acquisitions and (ii) in the case
of all holders shares of Common Stock disposed of as bona fide gifts, subject in
each case to any remaining portion of the one year or 180-day period, as
applicable to any shares so issued or transferred.

The Company plans to register an additional 3,000,000 shares of Common
Stock under the Securities Act after completion of the Offering for use by the
Company as consideration for future acquisitions. Upon such registration, these
shares will generally be freely tradable after issuance, unless the resale
thereof is contractually restricted or unless the holders thereof are subject to
the restrictions on resale provided in Rule 145 under the Securities Act. The
Company intends to contractually restrict the resale of these shares in
connection with future acquisitions accounted for using the purchase method of
accounting. The piggyback registration rights described above will not apply to
the registration statement to be filed with respect to these 3,000,000 shares.
See "Shares Eligible for Future Sale" and "Underwriting."

NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering, there has been no public market for the Common Stock
and there can be no assurance that an active trading market will develop and
continue subsequent to the Offering or that the market price of the Common Stock
will not decline below the initial public offering price. The initial public
offering price for the Common Stock will be determined by negotiation between
the Company and the representatives of the Underwriters and may bear no
relationship to the price at which the Common Stock will trade after the
Offering. See "Underwriting" for the factors to be considered in determining the
initial public offering price. After the Offering, the market price of the
Common Stock may be subject to significant fluctuations in response to numerous
factors, including variations in the annual or quarterly financial results of
the Company or its competitors, changes by financial research analysts in their
estimates of the earnings of the Company or the failure of the Company to meet
such estimates, conditions in the economy in general or in the vacation rental
and property management or leisure travel and tourism industries in particular,
unfavorable publicity or changes in applicable laws and regulations (or judicial
or administrative interpretations thereof) affecting the Company or the vacation
rental and property management industry. Moreover, from time to time, the stock
market experiences significant price and volume volatility that may affect the
market price of the Common Stock for reasons unrelated to the Company's
performance.

IMMEDIATE AND SUBSTANTIAL DILUTION

The purchasers of the shares of Common Stock offered hereby will experience
immediate and substantial dilution in the pro forma net tangible book value of
their shares of $10.63 per share. In the event the Company issues additional
Common Stock in the future, including shares issued in connection with future
acquisitions, purchasers of Common Stock in the Offering may experience further
dilution. See "Dilution."

ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER AND BY-LAW PROVISIONS

The Board of Directors of the Company is empowered to issue preferred stock
in one or more series without stockholder action. The existence of this
"blank-check" preferred stock could render more difficult or discourage an
attempt to obtain control of the Company by means of a tender offer, merger,
proxy contest or otherwise. Certain provisions of the General Corporation Law of
the State of Delaware (the "DGCL") may also discourage takeover attempts that
have not been approved by the Board of Directors. The Company's By-Laws contain
other provisions that may have an anti-takeover effect. See "Management --
Directors and Executive Officers" and "Description of Capital Stock."

FORWARD-LOOKING STATEMENTS

There are a number of statements in this Prospectus that address
activities, events or developments which the Company expects or anticipates will
or may occur in the future, including such matters as the Company's strategy for
internal growth and improved profitability, additional capital expenditures (in-

<PAGE>

cluding the amount and nature thereof), acquisitions of assets and businesses,
industry trends and other such matters. These statements are based on certain
assumptions and analyses made by the Company in light of its perception of
historical trends, current business and economic conditions and expected future
development as well as other factors it believes are reasonable or appropriate.
However, whether actual results and developments will conform with the Company's
expectations and predictions is subject to a number of risks and uncertainties,
including the risk factors discussed in this Prospectus; general economic,
market or business conditions; the business opportunities (or lack thereof) that
may be presented to and pursued by the Company; changes in laws or regulations
and other factors, most of which are beyond the control of the Company.
Consequently, there can be no assurance that the actual results or developments
anticipated by the Company will be realized or, even if substantially realized,
that they will have the expected consequences to or effects on the Company or
its business or operations.

<PAGE>

THE COMPANY

The Company will be the leading provider of vacation condominium and home
rentals at premier destination resorts throughout the United States. Through the
consolidation of leading vacation rental and property management companies, the
development of a national brand and marketing initiative and best practices
management systems, the Company intends to offer vacationers a branded network
of high quality, fully furnished, privately-owned condominium and home rentals,
while offering property owners superior management services designed to enhance
their rental income. Although it has conducted no operations to date, the
Company has entered into agreements to acquire, simultaneously with the closing
of the Offering, the Founding Companies, which together manage approximately
10,600 condominiums, homes and hotel rooms in eight states and Canada. The
Company's primary source of revenue is property rental fees, which are charged
as a percentage of the vacationers' total rental price. Fee percentages for
vacation condominiums and homes range from approximately 3% to over 40% of
rental rates for the various Founding Companies depending on the type of
services provided to the property owner and the type of rental unit managed. On
a pro forma basis for the year ended December 31, 1997, the Company generated
total revenues of approximately $56.8 million, which includes $30.5 million of
revenues from property rental fees, and net income of $7.0 million, which
includes an adjustment for the Compensation Differential of approximately $2.3
million. See "Selected Financial Data -- Pro Forma Combined Statement of
Operations Data." The following is a brief description of each of the Founding
Companies. Information presented regarding the number of rental units is at
January 31, 1998.

BEACH AND ISLAND RESORTS

ASTON HOTELS & RESORTS. Aston Hotels & Resorts, founded in 1967 from a
family business commenced in 1948, is the largest condominium resort management
company and a major hotel provider in the State of Hawaii. At a total of 29
resort properties located primarily in Waikiki and on the islands of Maui,
Hawaii and Kauai, Aston Hotels & Resorts manages 4,772 rental units, including
over 1,500 hotel rooms. Aston Hotels & Resorts' revenue sources for 1997 were
property management and service fees (84%) and other services (16%). In addition
to a wide range of hotel rooms and hotel-style condominium units in Waikiki, the
majority of Aston Hotels & Resorts' units are resort-based condominium rentals
situated near the beach and offering a broad array of amenities, including
pools, whirlpool spas, tennis courts and various other outdoor activities. Aston
Hotels & Resorts offers a variety of services, including homeowners' association
management, housekeeping and linen services, activities referrals, general
maintenance and accounting services. Aston Hotels & Resorts' revenues for 1997
were $19.6 million.

MAUI CONDOMINIUM AND HOME. Maui Condominium and Home Realty, Inc. ("Maui
Condominium and Home"), founded in 1988, is a leading provider of beach vacation
property rentals and management services in the Kihei and Wailea beach areas on
the Hawaiian island of Maui. Maui Condominium and Home manages 432 rental units
at 20 different properties. Almost all of Maui Condominium and Home's units are
located in resort-style complexes with swimming pools, hot tubs and convenient
beach access. Maui Condominium and Home's revenue sources for 1997 were property
rental fees (90%) and service fees (10%). Maui Condominium and Home offers a
variety of services, including housekeeping services, accounting services and
assistance with refurbishing. Maui Condominium and Home's revenues for 1997 were
$1.4 million.

BRINDLEY & BRINDLEY. Brindley & Brindley Realty and Development, Inc. and
B&B On The Beach Inc. (collectively, "Brindley & Brindley"), founded in 1985, is
a leading provider of beach vacation property rentals, management services and
sales on the Outer Banks of North Carolina. Brindley & Brindley manages 446
rental units. Located exclusively in Corolla, North Carolina, Brindley &
Brindley offers large, upscale homes well-suited for multiple or extended
families. Brindley & Brindley's revenue sources for 1997 were property rental
and service fees (90%) and net real estate brokerage commissions (10%). Brindley
& Brindley offers a variety of services, including general maintenance,
housekeeping and linen services. In addition to traditional management services,
Brindley & Brindley also offers pool/spa maintenance, small appliance sales and
other unique services to property owners. Brindley & Brindley's revenues for
1997 were $4.0 million.

<PAGE>

COASTAL RESORTS. Coastal Resorts Realty L.L.C. and Coastal Resorts
Management, Inc. (collectively, "Coastal Resorts"), founded in 1982, is a
leading provider of beach vacation property rentals, management services and
sales in the Bethany Beach area of Delaware. Bethany Beach is a popular beach
destination in the Mid-Atlantic region that offers full-scale resort facilities.
Coastal Resorts manages 549 rental units, including ocean side condominiums,
townhome communities with resort facilities and upscale free-standing homes.
Coastal Resorts' revenue sources for 1997 were property rental and service fees
(35%), net real estate brokerage commissions (53%) and other (12%). Coastal
Resorts offers a variety of services, including housekeeping and maintenance
services, 24 hour security and concierge services. Coastal Resorts' revenues for
1997 were $3.6 million.

THE MAURY PEOPLE. The Maury People, Inc. ("The Maury People"), whose
predecessor was founded in 1969, is a leading provider of beach vacation
property rentals and sales on the island of Nantucket off the coast of
Massachusetts. The Maury People provides non-exclusive rental services for
approximately 1,200 rental homes ranging from in-town residences to cottages and
large, upscale ocean and harbor-front homes. The Maury People's revenue sources
for 1997 were net property rental and service fees (30%) and net real estate
brokerage commissions (70%). The Maury People is an exclusive affiliate of
Sotheby's International Realty. The Maury People's revenues for 1997 were $1.2
million.

PRISCILLA MURPHY REALTY. Priscilla Murphy Realty, Inc. and Realty
Consultants Inc. (collectively, "Priscilla Murphy Realty"), founded in 1955, is
a leading provider of beach vacation property rentals, management services and
sales on the Florida islands of Sanibel and Captiva. Priscilla Murphy Realty
manages 902 rental units. Most of Priscilla Murphy Realty's properties are
condominium units designed to accommodate a wide range of budgets, from luxury,
oceanfront three- and four-bedroom units to more modest single-bedroom units
located a short distance from the beach. Priscilla Murphy Realty's revenue
sources for 1997 were property rental and service fees (69%) and net real estate
brokerage commissions (31%). Priscilla Murphy Realty offers a variety of
services, including general maintenance and subcontracted housekeeping and linen
services. Priscilla Murphy Realty's revenues for 1997 were $4.7 million.

TRUPP-HODNETT ENTERPRISES. Trupp-Hodnett Enterprises, Inc. and THE
Management Company (collectively, "Trupp-Hodnett Enterprises"), founded in 1987,
is the leading provider of beach vacation property rentals, management services
and sales on the island of St. Simons, off the coast of Georgia. St. Simon's
Island is a relatively uncommercial resort community located midway between
Savannah, Georgia and Jacksonville, Florida and connected to the mainland by a
causeway. Trupp-Hodnett Enterprises manages 435 rental units, ranging from
moderately priced hotel rooms, homes and cottages in a variety of island
locations to spacious, luxurious oceanfront condominium units with on-site
management and access to swimming pools, spas, tennis courts and golf courses.
Trupp-Hodnett Enterprises' revenue sources for 1997 were property rental and
service fees (78%) and net real estate brokerage commissions (22%).
Trupp-Hodnett Enterprises offers a variety of services, including homeowner's
association management, guest amenities and general maintenance and
housekeeping. Trupp-Hodnett Enterprises' revenues for 1997 were $4.1 million.

MOUNTAIN RESORTS

COLLECTION OF FINE PROPERTIES. Collection of Fine Properties, Inc. and Ten
Mile Holdings, Ltd. (collectively, "Collection of Fine Properties"), founded in
1985, is a leading provider of vacation property rental and management services
in the mountain resort town of Breckenridge, Colorado. Collection of Fine
Properties manages 472 rental units. Most of the units are situated in
condominium complexes with front desks and spa facilities and many of them are
situated directly on the slopes with "ski-in ski-out" access. Collection of Fine
Properties' revenue sources for 1997 were property rental and service fees (87%)
and other services (13%). Collection of Fine Properties offers a variety of
services, including association management, general maintenance, housekeeping
and linen services and ski equipment rentals. Collection of Fine Properties'
revenues for 1997 were $4.3 million.

HOUSTON AND O'LEARY. Houston and O'Leary Company ("Houston and O'Leary"),
founded in 1986, is a leading provider of luxury vacation property rentals and
sales in the mountain resort town of Aspen, Colorado. Houston and O'Leary
provides non-exclusive rental services for 127 rental units. Houston and

<PAGE>

O'Leary's rental and sale properties consist primarily of unique, free-standing
houses, ranging from smaller two-bedroom cottages located in Aspen proper to
10,000-plus square foot ranch-style houses overlooking Aspen. Houston and
O'Leary's revenue sources for 1997 were real estate brokerage commissions (73%),
property rental fees (19%) and other services (8%). Houston and O'Leary provides
a concierge service which arranges for a variety of services, including
housekeeping and linen services, activities referrals and general maintenance.
Houston and O'Leary's revenues for 1997 were $1.6 million.

RESORT PROPERTY MANAGEMENT. Resort Property Management, Inc. ("Resort
Property Management"), founded in 1978, is a leading provider of vacation
property rentals and management services in the Park City, Utah mountain resort
area. Resort Property Management manages 326 rental units. Resort Property
Management offers a variety of free-standing homes and condominium units at
various resorts, including Deer Valley, throughout the Park City region. A
majority of Resort Property Management's condominium units are located in the
town of Park City and range from luxury, three-bedroom units in the historic
town center to smaller, more affordable units in older condominium complexes.
Resort Property Management's revenue sources for 1997 were property rental and
service fees (100%). Resort Property Management offers a variety of services,
including general maintenance, housekeeping and linen services and complimentary
firewood. Resort Property Management's revenues for 1997 were $2.3 million.

TELLURIDE RESORT ACCOMMODATIONS. Telluride Resort Accommodations, Inc.
("Telluride Resort Accommodations"), founded in 1985, is a leading provider of
vacation property rentals and property management services in the Telluride,
Colorado mountain resort area. Telluride Resort Accommodations manages 447
rental units. Telluride Resort Accommodations' property offerings range from
smaller, one-bedroom units in town to large, luxury condominiums and
free-standing homes in Telluride's new Mountain Village. Telluride Resort
Accommodations' revenue sources for 1997 were property rental and service fees
(100%). Telluride Resort Accommodations offers a variety of services, including
general maintenance and housekeeping and linen services. Telluride Resort
Accommodation's revenues for 1997 were $4.3 million.

WHISTLER CHALETS. Whistler Chalets Limited ("Whistler Chalets"), founded in
1986, is a leading provider of vacation property rentals and management services
in the mountain resort village of Whistler, in British Columbia, Canada.
Whistler Chalets manages 444 rental units. Whistler Chalets offers a variety of
rental properties including condominium lodges, luxury townhomes and chalets
with village, slopeside, golf course and lakefront locations. Whistler Chalets'
revenue sources for 1997 were property rental and service fees (95%) and other
(5%). Whistler Chalets offers a variety of services, including housekeeping and
linen services, general maintenance, accounting services and payment processing.
Whistler Chalets' revenues for 1997 were $2.1 million.

SOFTWARE SALES AND SERVICES

FIRST RESORT. First Resort Software, Inc. ("First Resort"), founded in
1985, is the leading provider of software services to vacation rental and
property management companies. First Resort software allows vacation rental and
property management companies to automate and computerize the three key areas of
the vacation rental and property management business: reservations, rental
management and owner accounting. First Resort also offers additional modules and
interfaces, including a work order generator, activities management system,
credit card interface and world wide web-enabled reservations. Most purchasers
of First Resort software also enter into annual software service contracts.
Currently, First Resort has more than 650 clients. All First Resort software is
Year 2000 compliant. First Resort's revenue sources for 1997 were software sales
(46%), software service (49%) and other (5%). First Resort's revenues for 1997
were $2.9 million.

THE COMBINATIONS

The aggregate purchase consideration being paid by RQI to acquire the
Founding Companies consists of approximately $55.1 million in cash, 6,123,718
shares of Common Stock, and the assumption of approximately $5.3 million in
outstanding indebtedness of the Founding Companies. The closing of each
Combination is subject to customary conditions. These conditions include, among
others, the accu-

<PAGE>

racy on the closing date of the Combinations of the representations and
warranties made by the Founding Companies, their principal stockholders and by
the Company; the performance of each of their respective covenants included in
the agreements relating to the Combinations; and the absence of any material
adverse change in the business, financial condition or results of operations of
each Founding Company. No assurance can be given that the conditions to the
closing of all the Combinations will be satisfied or waived or that each
Combination will close. See "Certain Transactions."

The Company's executive offices are located at 1355-B Lynnfield Road, Suite
245, Memphis, TN 38119, and its telephone number is (901) 818-5445.

<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 5,800,000 shares of
Common Stock offered hereby (after deducting underwriting discounts and
commissions and estimated offering expenses), are estimated to be approximately
$55.3 million ($64.2 million if the Underwriters' over-allotment option is
exercised in full). The net proceeds, together with $4.6 million of indebtedness
to be incurred under the Credit Facility, will be used to pay the cash portion
of the purchase price for the Founding Companies ($55.1 million) and to repay
debt assumed in the Combinations ($4.8 million). All of the cash portion of the
purchase price for the Founding Companies will be paid directly or indirectly to
former stockholders of the Founding Companies who will become officers,
directors, key employees or holders of more than 5% of the Common Stock of the
Company. See "Certain Transactions -- Organization of the Company."

If the Underwriters' over-allotment option is exercised in full,
approximately $8.9 million of remaining net proceeds will be used to pay amounts
to be outstanding under the Credit Facility, for working capital and other
general corporate purposes, which are expected to include future acquisitions.
The Company has reviewed various strategic acquisition opportunities and has
held preliminary discussions with several of such acquisition candidates. The
Company currently has no agreements to effect any acquisitions at this time. See
"Certain Transactions -- Other Transactions." Pending such uses, the net
proceeds will be invested in short-term, interest-bearing, investment grade
securities.

The Company intends to finance future acquisitions through internally
generated cash flow, borrowing from the Credit Facility and in certain instances
through the issuance of Common Stock to the owners of businesses to be acquired.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations."

DIVIDEND POLICY

The Company intends to retain all of its earnings, if any, to finance the
expansion of its business and for general corporate purposes, including future
acquisitions, and does not anticipate paying any cash dividends on its Common
Stock for the foreseeable future. In addition, it is expected that the Company's
credit facility will include restrictions on the ability of the Company to pay
dividends without the consent of the lender.

<PAGE>

CAPITALIZATION

The following table sets forth the short-term debt and current maturities
of long-term obligations and the capitalization of the Company as of March 31,
1998 (i) on a pro forma basis to give effect to the Combinations and (ii) as
further adjusted to give effect to the Offering and the application of the
estimated net proceeds therefrom. See "Use of Proceeds." This table should be
read in conjunction with the Unaudited Pro Forma Combined Financial Statements
of the Company and the related notes thereto included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
MARCH 31, 1998
------------------------------
PRO FORMA (1) AS ADJUSTED
--------------- ------------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt, including current maturities of long-term obliga-
tions ............................................................ $ 820 $ 17
======= =======
Long-term obligations, less current maturities .................... $ 4,468 $ 5,029
Stockholders' equity:
Preferred Stock: $0.01 par, 10,000,000 shares authorized; none is-
sued or outstanding ............................................ -- --
Common Stock: $0.01 par, 50,000,000 shares authorized; 9,258,348
shares outstanding, pro forma; and 15,058,348 shares outstand-
ing, pro forma as adjusted (2) ................................. 93 151
Additional paid-in capital ....................................... 33,297 88,781
Retained earnings ................................................ 4,297 4,297
------- -------
Total stockholders' equity ..................................... 37,687 93,229
------- -------
Total capitalization .......................................... $41,155 $98,258
======= =======
</TABLE>

- ----------
(1) Combines the respective accounts of RQI and the Founding Companies at March
31, 1998 and gives effect to the reclassification of the Founding
Companies' common stock as additional paid-in capital.

(2) Includes 3,134,630 shares of Restricted Common Stock, including 518,369
shares issued to management and an aggregate of 2,616,261 shares issued to
Alpine Consolidated II, LLC and Capstone Partners, LLC and certain other
stockholders. See "Description of Capital Stock -- Common Stock and
Restricted Common Stock." Excludes 1,641,000 shares of Common Stock subject
to options to be granted concurrently with the Offering at an exercise
price equal to the initial public offering price. See "Management -- 1998
Long-Term Incentive Plan."

<PAGE>

DILUTION

The deficit in pro forma net tangible book value of the Company as of March
31, 1998 was approximately $50.0 million, or approximately $(5.40) per share of
Common Stock. The pro forma net tangible book value per share represents the
Company's pro forma total tangible assets less its total liabilities, divided by
the number of shares of Common Stock to be outstanding after giving effect to
the Combinations. After giving effect to the sale of the 5,800,000 shares of
Common Stock offered hereby, and after deducting underwriting discounts and
commissions and estimated offering expenses payable by the Company, the
Company's pro forma net tangible book value as of March 31, 1998 would have been
approximately $5.5 million, or approximately $0.37 per share, based on an
assumed initial public offering price of $11.00 per share. This represents an
immediate increase in pro forma net tangible book value of approximately $5.77
per share to existing stockholders and an immediate dilution of approximately
$10.63 per share to new investors purchasing the shares in the Offering. The
following table illustrates this pro forma dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share ........................ $ 11.00
-------
Pro forma deficit in net tangible book value per share before the
Offering ............................................................ $(5.40)
Increase in pro forma net tangible book value per share attributable
to new investors .................................................... 5.77
------
Pro forma net tangible book value per share after the Offering ......... 0.37
-------
Dilution in net tangible book value per share to new investors ......... $ 10.63
=======
</TABLE>

The following table sets forth, on a pro forma combined basis to give
effect to the Combinations at December 31, 1997, the number of shares of Common
Stock purchased from the Company, the total consideration paid and the average
price per share paid by existing stockholders and the new investors purchasing
shares of Common Stock from the Company in the Offering:

<TABLE>

<CAPTION>
SHARES PURCHASED AVERAGE
------------------------ TOTAL PRICE
NUMBER PERCENT CONSIDERATION (1) PER SHARE
------------ --------- ------------------ ----------
<S> <C> <C> <C> <C>
Existing Shareholders ......... 9,258,348 61.5% $ (50,022,000) $ (5.40)
New Investors ................. 5,800,000 38.5 63,800,000 11.00
--------- ----- -------------
Total ......................... 15,058,348 100.0% $ 13,778,000
========== ===== =============
</TABLE>

- ----------

(1) Total consideration paid by existing stockholders represents the combined
stockholders' equity, including the stockholders' equity of the Founding
Companies, before the Offering, adjusted to reflect: (i) the payment of
$55.1 million in cash to the stockholders of the Founding Companies as part
of the consideration for the Combinations and to repay debt assumed in the
Combinations, (ii) the transfer of certain non-operating assets to and the
assumption or retirement of certain liabilities of certain stockholders of
the Founding Companies in the net amount of approximately $5.1 million in
connection with the Combinations; and (iii) the payment of the working
capital adjustment in connection with the Combinations of approximately
$232,000. See "Use of Proceeds" and "Capitalization."

<PAGE>

SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

RQI will consummate the Combinations with the Founding Companies
simultaneously with and as a condition to the consummation of the Offering. For
financial statement presentation purposes, however, Aston Hotels & Resorts, one
of the Founding Companies, has been designated as the "accounting acquiror." The
following selected historical financial data of Aston Hotels & Resorts at
December 31, 1996 and 1997 and for each of the three years in the period ended
December 31, 1995, 1996 and 1997 have been derived from the audited financial
statements of Aston Hotels & Resorts, included elsewhere in this Prospectus. The
following selected historical financial data for Aston Hotels & Resorts at
December 31, 1993, 1994 and 1995 and at March 31, 1998 and for the years ended
December 31, 1993 and 1994 and for the three months ended March 31, 1997 and
1998, have been derived from unaudited financial statements of Aston Hotels &
Resorts, which have been prepared on the same basis as the audited financial
statements and, in the opinion of Aston Hotels & Resorts, reflect all
adjustments, consisting of normal recurring adjustments necessary for a fair
presentation of such data. The selected unaudited pro forma combined financial
data present data for the Company, adjusted for (i) the effects of the
Combinations on a historical basis; (ii) the effects of certain pro forma
adjustments to the historical financial statements described below; and (iii)
the consummation of the Offering and the application of the net proceeds
therefrom. See the Unaudited Pro Forma Combined Financial Statements and the
Notes thereto and the historical Financial Statements of Aston Hotels & Resorts
and certain of the Founding Companies and the Notes thereto included elsewhere
in the Prospectus.

<TABLE>

<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
--------------------------------------------------------------- ---------------------
1993 1994 1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
ASTON HOTELS & RESORTS
Revenues ....................... $15,575 $20,421 $19,048 $19,460 $ 19,554 $ 5,581 $ 5,693
Operating expenses ............. 9,924 12,406 10,550 10,401 8,908 2,377 2,422
General and administra-
tive expenses ................ 3,651 5,444 5,434 5,574 5,475 1,149 1,389
------- ------- ------- ------- -------- ------- -------
Income from operations ......... 2,000 2,571 3,064 3,485 5,171 2,055 1,882
Interest expense, net .......... 93 246 771 342 86 168 185
------- ------- ------- ------- -------- ------- -------
Income from continuing
operations ................... $ 1,907 $ 2,325 $ 2,293 $ 3,143 $ 5,085 $ 1,887 $ 1,697
======= ======= ======= ======= ======== ======= =======
</TABLE>
<TABLE>
<CAPTION>

YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
-------------- -----------------------------
1997 1997 1998
-------------- -------------- --------------
<S> <C> <C> <C>
PRO FORMA COMBINED STATEMENT OF OPERATIONS DATA (1):
Revenue:
Property rental fees ................................. $ 30,483 $ 12,542 $ 13,754
Service fees ......................................... 12,583 3,263 4,087
Other ................................................ 13,753 3,015 3,480
----------- ----------- -----------
56,819 18,820 21,321
Operating expenses (2) ................................. 27,680 7,327 7,949
General and administrative expenses (2) ................ 12,383 2,574 3,602
Depreciation and amortization (3) ...................... 3,760 998 998
----------- ----------- -----------
Income from operations ................................. 12,996 7,921 8,772
Interest and other income, net ......................... (39) (36) 143
----------- ----------- -----------
Income before income taxes ............................. 12,957 7,885 8,915
Provision for income taxes ............................. 6,077 3,396 3,703
----------- ----------- -----------
Net income ............................................. $ 6,880 $ 4,489 5,212
=========== =========== ===========
Net income per share ................................... $ 0.46 $ 0.30 $ 0.35
=========== =========== ===========
Shares used in computing pro forma income per share (4) 15,058,348 15,058,348 15,058,348
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
ASTON HOTELS & RESORTS
----------------------------------------------------------------------- COMBINED COMPANIES
DECEMBER 31, MARCH 31, 1998
----------------------------------------------------------- MARCH 31, -------------------------------
1993 1994 1995 1996 1997 1998 PRO FORMA (5) AS ADJUSTED (6)
----------- ----------- ----------- ----------- ----------- ------------ -------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital surplus
(deficit) (7) .......... $ (1,248) $ (3,919) $ (3,581) $ (1,933) $ (4,588) $ (3,581) $ (52,699) $ 3,404
Total assets (8) ......... 5,310 9,373 13,904 13,470 15,062 12,019 130,567 130,803
Long-term debt ........... 1,844 2,396 2,133 2,816 2,804 2,301 4,468 5,029
Stockholders' equity
(deficit) .............. (395) (395) (395) 105 105 105 37,687 93,229
</TABLE>

- ----------
(1) The unaudited pro forma combined statement of operations data assume that
the Combinations and the Offering were consummated on January 1, 1997 and
are not necessarily indicative of the results the Company would have
obtained had these events actually then occurred or of the Company's future
results. During the period presented above, the Founding Companies were not
under common control or management and, therefore, the data presented may
not be comparable to or indicative of post-combination results to be
achieved by the Company. The pro forma combined statement of operations
data are based on preliminary estimates, available information and certain
assumptions that management deems appropriate and should be read in
conjunction with the other financial statements and notes thereto included
elsewhere in this Prospectus. Following the Combinations, the Company
expects to realize certain savings as a result of (i) volume purchasing and
national contracts for telecommunications, credit card fees, advertising,
printing, housekeeping supplies and other operating expenses and (ii)
consolidation of insurance, employee benefits and other general and
administrative expenses. The Company cannot quantify these savings
accurately at this time. It is anticipated that these savings will be
partially offset by the costs of being a publicly traded company and the
incremental costs related to the Company's new management team. However,
these costs, like the savings that they offset, cannot be quantified
accurately at this time. Neither these anticipated savings nor these
anticipated costs have been included in the pro forma combined financial
information of the Company.

(2) The pro forma combined statement of operations data includes the
Compensation Differential and excludes the effect of the exclusion of
certain non-operating assets and the assumption or retirement of certain
liabilities that will be retained by certain stockholders of the Founding
Companies. For the year ended December 31, 1997 and the three months ended
March 31, 1997 and 1998, the Compensation Differential was approximately
$2.3 million, $299,000 and $690,000, respectively.

(3) Reflects amortization of the goodwill (which is not deductible for tax
purposes) to be recorded as a result of the Combinations over a 40-year
period except for the goodwill related to First Resort, which will be
amortized over a 15-year period, and computed on the basis described in the
notes to the Unaudited Pro Forma Combined Financial Statements.

(6) Adjusted for the sale of 5,800,000 shares of Common Stock offered hereby
(less estimated underwriting discount and offering expenses) and the
application of the net proceeds therefrom.

(8) Reflects (i) the creation of approximately $87.7 million of goodwill in and
(ii) a reduction of net assets, including certain non-operating assets and
the assumption of or retirement of certain liabilities of approximately
$5.3 million that will be excluded from the Combinations and retained by
certain stockholders of the Founding Companies.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read with "Selected Financial Data" and
the Founding Companies' Financial Statements and related Notes thereto appearing
elsewhere in this Prospectus.

INTRODUCTION

The Company was established to become the leading provider of vacation
condominium and home rentals in premier destination resorts throughout the
United States. Through the consolidation of leading vacation rental and property
management companies, the development of a national brand and marketing
initiative and best practices management systems, the Company intends to offer
vacationers a branded network of high quality, fully furnished, privately-owned
condominium and home rentals while offering property owners superior management
services designed to enhance their rental income. Upon consummation of the
Offering, the Company will acquire the 13 Founding Companies which manage
approximately 10,600 condominiums, homes and hotel rooms nationwide and in
Canada. These condominiums and homes are located in beach and island resorts
such as the Hawaiian Islands; Bethany Beach, DE; Nantucket, MA; the Outer Banks,
NC; Sanibel and Captiva Islands, FL; and St. Simons Island, GA; and mountain
resorts such as Aspen, Breckenridge and Telluride, CO; Park City, UT; and
Whistler, B.C. Six of the Founding Companies also offer real estate brokerage
services. First Resort Software, one of the Founding Companies, is the leading
provider of integrated management services and reservations and accounting
software for the vacation rental and property management industry.

The Company's revenues are derived primarily from property rental fees on
vacation condominium and home rentals, and service fees from additional services
provided to vacationers and property owners. The Company receives property
rental fees when the properties are rented, which are generally a percentage of
the rental price of the vacation condominium or home ranging from approximately
3% to over 40% based upon the type of services provided by the Company to the
property owner and the type of rental unit managed. Revenues are recognized by
the Company on the property rental fees received from property owners, not on
the total rental price of the vacation condominium or home, and generally are
recognized ratably over the rental period. On a pro forma basis for the year
ended December 31, 1997, the Company recognized $30.5 million of property rental
fees, representing 54% of the Company's total 1997 revenues. Additional services
provided to vacationers, such as reservations, housekeeping, trip cancellation
insurance and long-distance telephone, are charged separately and recorded as
service fees revenue by the Company. During 1997, the Company recognized $12.6
million of service fees, representing 22% of the Company's total 1997 pro forma
revenues. The Company's remaining $13.8 million of 1997 pro forma revenues are
derived from other sources, including management of homeowners' associations,
the sale and service of vacation rental and property management software, net
broker commissions on real estate sales, and a food & beverage facility. The
Company does not view the sources of other revenues as a significant area of
future growth, but only as a means to retain and increase the number of rental
units under Company management.

Operating expenses include direct compensation, telecommunications
expenses, housekeeping supplies, printing, marketing and food & beverage costs.
Compensation includes salary, wages, bonus and benefits for employees involved
with the rental or maintenance of the rental units, housekeeping, reservations,
marketing and the food & beverage facility. Telecommunications costs result
primarily from the cost of toll-free numbers maintained by each of the Founding
Companies, as well as the cost of telephone service provided by the Company to
property owners in certain markets. General and administrative expenses consist
primarily of salary, wages, bonus and benefits for owners as well as other non-
operations personnel, fees for professional services, depreciation, rent and
other general office expenses.

The Founding Companies have operated throughout the periods presented as
independent, privately-owned entities, and their results of operations reflect
varying tax structures (S Corporations or C Corporations) which have influenced
the historical level of owners' compensation. The owners and key employees of
the Founding Companies have agreed to certain, and in some cases substantial,
reductions in their salary, bonus and benefits in connection with the
Combinations (the "Compensation Differential"). The Compen-

<PAGE>

sation Differentials for the three months ended March 31, 1998 and 1997, and for
the year ended December 31, 1997, were $690,000, $299,000 and $2.3 million,
respectively, and have been reflected as pro forma adjustments in the Unaudited
Pro Forma Combined Statement of Operations of the Company.

Following the Combinations, the Company expects to realize certain savings
as a result of (i) volume purchasing and national contracts for
telecommunications, credit card fees, advertising, printing, housekeeping
supplies and other operating expenses and (ii) consolidation of insurance,
employee benefits and other general and administrative expenses. The Company
cannot quantify these savings accurately at this time. It is anticipated that
these savings will be partially offset by the costs of being a publicly traded
company and the incremental costs related to the Company's new management team.
However, these costs, like the savings that they offset, cannot be quantified
accurately at this time. Neither these anticipated savings nor these anticipated
costs have been included in the pro forma combined financial information of the
Company.

In July 1996, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 97 ("SAB 97") relating to business combinations
immediately prior to an initial public offering. SAB 97 requires that these
combinations be accounted for using the purchase method of acquisition
accounting. Under the purchase method, one of the companies must be designated
as the accounting acquiror. Aston Hotels & Resorts has been identified as the
accounting acquiror for financial statement presentation purposes. For the
remaining companies, $68.6 million, representing the excess of the fair value of
the Merger consideration received over the fair value of the net assets to be
acquired, will be recorded as "goodwill" on the Company's balance sheet. In
addition, goodwill of $19.1 million will be recorded and attributed to the
Restricted Common Stock issued to management of and consultants to RQI. Goodwill
will be amortized as a non-cash charge to the income statement over a 40-year
period for goodwill, other than that associated with the acquisition of First
Resort, which will be amortized over a 15-year period. The pro forma impact of
this amortization expense, which is non-deductible for tax purposes, is $2.4
million per year on an after-tax basis. The amount of goodwill to be recorded
and the related amortization expenses will depend in part on the actual initial
public offering price of the shares of Common Stock offered hereby. See "Certain
Transactions -- Organization of the Company."

SEASONALITY AND QUARTERLY FLUCTUATIONS

The business of the Founding Companies is highly seasonal. The results of
operations of each of the Founding Companies have been subject to quarterly
fluctuations caused primarily by the seasonal variations in the vacation rental
and property management industry, with peak seasons dependent on whether the
resort is primarily a summer or winter destination. During 1997, the Company
derived approximately 38% of its pro forma revenues and 61% of its operating
income in the first quarter and 25% of its pro forma revenues and 25% of its
operating income in the third quarter. Although the seasonality of the Company's
revenues and earnings may be partially mitigated by the geographic diversity of
the Founding Companies and companies that may be acquired in the future, there
is likely to continue to be a significant seasonal factor with respect to the
Company's revenues and earnings. The Company's quarterly results of operations
may also be subject to fluctuations as a result of the timing and cost of
acquisitions, the timing of real estate sales, changes in relationships with
travel providers, extreme weather conditions or other factors affecting leisure
travel and the vacation rental and property management industry. Unexpected
variations in quarterly results could also adversely affect the price of the
Common Stock which in turn could adversely effect the Company's proposed
acquisition strategy.

INFLATION

Inflation did not have a significant effect on the combined results of
operations of the Founding Companies for 1995, 1996 or 1997 or the three months
ended March 31, 1998.

PRO FORMA COMBINED STATEMENT OF OPERATIONS DATA

Results of Operations

The Founding Companies' pro forma combined results of operations for the
periods presented give effect to the Combinations and Offering as if they had
occurred on January 1, 1997.

<PAGE>

The following table sets forth the pro forma combined results of operations
of the Founding Companies on a pro forma basis and as a percentage of pro forma
revenues for the periods indicated. See the Unaudited Pro Forma Combined
Statement of Operations for the year ended December 31, 1997 and for the three
month periods ended March 31, 1997 and March 31, 1998, respectively, appearing
on pages F-6 through F-11 of the Financial Statements.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
------------------------------- ---------------------------------------------------
1997 1997 1998
------------------------------- ------------------------ ------------------------
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues ................... $56,819 100.0% $18,820 100.0% $21,321 100.0%
Operating expenses ......... 27,680 48.7 7,327 38.0 7,949 37.3
------- ----- ------- ----- ------- -----
$29,139 51.3% $11,493 61.1% 13,372 62.7
======= ===== ======= ===== ======= =====
</TABLE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

Revenues. Pro forma combined revenues increased $2.5 million, or 13.3%,
from $18.8 million in 1997 to $21.3 million in 1998, primarily due to an
increase in service and management fees resulting from a higher number of units
under management.

Operating Expenses. Pro forma combined operating expenses increased
$622,000, or 8.5%, from $7.3 million in 1997 to $7.9 million in 1998. As a
percentage of revenues, operating expenses decreased from 38.9% in 1997 to 37.3%
in 1998, primarily due to increased salaries, commissions and benefits.

TWELVE MONTHS ENDED DECEMBER 31, 1997

Revenues. Pro forma combined revenues of $56.8 million are comprised of
rental operations of $30.5 million (53.7%), service revenues of $13.7 million
(24.0%), and other revenues of $12.6 million (22.2%).

Operating Expenses. Pro forma combined operating expenses include salaries
and benefits of management and service personnel, facilities maintenance and
goods and services primarily related to rental operations.

COMBINED FOUNDING COMPANIES

Results of Operations

The Founding Companies' combined results of operations for the periods
presented do not represent combined results of operations presented in
accordance with generally accepted accounting principles, but are a summation of
the revenues and operating expenses of the individual Founding Companies on a
historical basis. The historical combined results of operations exclude the
effect of pro forma adjustments and may not be comparable to, and may not be
indicative of, the Company's post-combination results of operations because: (i)
the Founding Companies were not under common control or management during the
periods presented; (ii) the Company will incur incremental costs related to its
new corporate management team and the costs of being a publicly traded company;
and (iii) the combined data do not reflect potential benefits and cost savings
the Company expects to realize when operating as a combined entity.

The following table sets forth the combined results of operations of the
Founding Companies on a historical basis and as a percentage of revenues for the
periods indicated. See the Unaudited Pro Forma Combined Statement of Operations
for the year ended December 31, 1997 and for the three month periods ended March
31, 1997 and March 31, 1998, respectively, appearing on pages F-6 through F-11
of the Financial Statements.

<PAGE>

<S> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues ................... $49,980 100.0% $56,027 100.0% $18,540 100.0% $19,831 100.0%
Operating expenses ......... 29,352 58.7 28,095 50.1 7,427 40.0 7,994 40.3
------- ----- ------- ----- ------- ----- ------- -----
$20,628 41.3% $27,932 49.9% $11,113 60.0% $11,837 62.7%
======= ===== ======= ===== ======= ===== ======= =====
</TABLE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

Revenues. Revenues increased $1.3 million, or 13.3%, from $18.5 million in
1997 to $20.0 million in 1998, primarily due to an increase in real estate
commissions, and service and management fees resulting from a higher number of
units under management.

Operating Expenses. Operating expenses increased $567,000, or 7.6%, from
$7.4 million in 1997 to $8.0 million in 1998. As a percentage of revenues,
operating expenses increased from 40.0% in 1997 to 40.3% in 1998, primarily due
to increased salaries and benefits.

Liquidity and Capital Resources

The Company is a holding company that conducts all of its operations
through its subsidiaries (the Founding Companies). Accordingly, the primary
internal source of the Company's liquidity is through the cash flows of its
subsidiaries. The Company generated historical combined cash flows from
operating activities of $6.2 million in 1998, primarily due to $1.8 million of
net income from continuing operations. Historical combined cash flows used in
investing activities by the Company was $2.6 million in 1998. The Company's 1997
cash used in financing activities totalled $0.2 million, which included $3.9
million of distributions to stockholders and $684,000 net advance from long-term
debt. At March 31, 1998, the Company had working capital of $189,000 and $12.9
million of outstanding long-term debt and other long-term liabilities.

After the consummation of the Combinations and the Offering, the Company
will have approximately $23.1 million in cash, cash equivalents and cash held in
trust, of which $14.0 million represents cash held in trust, and approximately
$5.1 million of outstanding indebtedness. The cash held in trust is released at
varying times in accordance with state regulations, generally based upon the
guest stay. Certain assets, including real estate, personal property,
receivables and cash, that are not used in the operations of certain Founding
Companies will be excluded from the Combinations and retained by the respective
stockholders of such Founding Companies. Certain non-operating assets and the
assumption of certain debt, of approximately $5.1 million, will be excluded from
the combinations and retained by certain stockholders of the Founding Companies.
These exclusions have been reflected in the pro forma combined balance sheet of
the Company at March 31, 1998.

At March 31, 1998, Aston Hotels & Resorts had guaranteed or co-signed debts
of its principal stockholder in the aggregate amount of approximately $16.4
million. These debts will be fully collateralized with real estate, cash or cash
equivalents, pledged either to the lenders of such debt or Aston Hotels &
Resorts to secure such debt. The principal stockholder also has agreed to cause
Aston Hotels & Resorts' guarantee of such debt to be released as soon as
practicable.

The Company has received a commitment from NationsBank N.A. for the Credit
Facility, which bears interest at an annual rate of LIBOR plus 125 to 200 basis
points and will require the Company to comply with various restrictive loan
covenants. The Credit Facility is available to fund acquisitions, working
capital, capital expenditures, and other general corporate purposes. The Company
will use the Credit Facility and the net proceeds of the Offering to fund the
cash portion of the purchase price of the Founding Companies and for the
repayment of debt incurred in the acquisition of the Founding Companies. Upon
completion of the Offering, the Company will have $4.6 million outstanding under
its Credit Facility. If the Underwriters' over-allotment option is exercised in
full, approximately $8.9 million of remaining net proceeds will be used to pay
amounts outstanding under the Credit Facility and for working capital and other
general corporate purposes.

<PAGE>

The Company anticipates that its cash flow from operations will provide
cash in excess of the Company's normal working capital needs, debt service
requirements and planned capital expenditures for the foreseeable future. Total
capital expenditures for 1998 are anticipated to be between $1.5 million and $2
million, of which approximately $200,000 will be for software development, with
the balance going to furniture, fixtures and equipment. The Company made capital
expenditures of approximately $480,000 for the three months ended March 31,
1998.

The Company intends to pursue attractive acquisition opportunities. The
timing, size or success of any acquisition effort and the associated potential
capital commitments are unpredictable. The Company expects to fund future
acquisitions primarily through a combination of cash flow from operations and
borrowings, including borrowings under the proposed credit facility, as well as
issue additional equity. The Company intends to register an additional 3,000,000
shares of its Common Stock under the Securities Act for issuance to the owners
of businesses to be acquired in the future.

TWELVE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1996

Revenues. Revenues increased $6.0 million, or 10.8%, from $50.0 million in
1996 to $56.0 million in 1997, primarily due to an increase in property rental
and service fees resulting from a higher number of units under management and
higher average rental rates.

Operating Expenses. Operating expenses remained relatively constant at
$29.4 million in 1996 and $28.1 million in 1997. As a percentage of net
revenues, operating expenses decreased from 58.7% in 1996 to 50.1% in 1997,
primarily due to the increase in revenues, leverage from higher average rental
rates, and cost controls.

Liquidity and Capital Resources

The Company generated cash flows from operating activities of $11.5 million
in 1997, primarily due to $11.2 million of net income from continuing
operations. Cash flows used in investing activities by the Company was $8.9
million in 1997 and was primarily used for acquisition of assets, repayments of
advances of affiliates and purchase of property and equipment. The Company's
1997 cash flows from financing activities totaled $917,000 which included $6.1
million of distributions to shareholders and a $4.8 million net advance from
long-term debt. As of December 31, 1997, the Company had a working capital
deficit of $5.1 million and $14.0 million of outstanding long-term debt, other
long-term liabilities and net liabilities of discontinued operations. The
Company made capital expenditures of approximately $1.4 million in 1997.

<PAGE>
ASTON HOTELS & RESORTS

Results of Continuing Operations

Aston Hotels & Resorts is the largest condominium resort management company
and a major hotel provider in the state of Hawaii. Aston Hotels & Resorts'
principal revenue sources for 1997 were property rental fees (41%) and service
fees (43%). Aston Hotels & Resorts has decided to discontinue its hotel leasing
and operating business and such business is not reflected in the results of
continuing operations. Results of operations for the hotel leasing and operating
business are reflected as discontinued operations. The following table sets
forth the results of continuing operations for Aston Hotels & Resorts on a
historical basis and as a percentage of net revenues for the periods indicated.

<TABLE>

<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
1995 1996 1997
---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues ......................... $19,048 100.0% $19,460 100.0% $19,554 100.0%
Operating expenses ............... 10,550 55.4 10,401 53.4 8,908 45.6
General and administrative ex-
penses .......................... 5,434 28.5 5,574 28.6 5,475 28.0
------- ----- ------- ----- ------- -----
Income from operations ........... $ 3,064 16.1% $ 3,485 17.9% $ 5,171 26.4%
======= ===== ======= ===== ======= =====
Compensation Differential ........ $ 380 $ 282 $ 282
======= ======= =======
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-------------------------------------------
1997 1998
--------------------- ---------------------
(unaudited)
<S> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues ......................... $5,581 100.0% $5,693 100.0%
Operating expenses ............... 2,377 42.6 2,422 42.5
General and administrative ex-
penses .......................... 1,149 20.6 1,389 24.4
------ ----- ------ -----
Income from operations ........... $2,055 36.8% $1,882 33.1%
====== ===== ====== =====
Compensation Differential ........ $ 73 $ 70
====== ======
</TABLE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

Revenues. Revenues increased $112,000 or 2%, from $5.6 million in 1997 to
$5.7 million in 1998, due to an increase in service fees resulting from a higher
number of units under management.

Operating Expenses. Operating expenses remained relatively constant at $2.4
million for 1997 and 1998.

General and Administrative Expenses. General and administrative expenses
increased $240,000 or 20.9%, from $1.1 million for 1997 to $1.4 million for
1998. As a percentage of revenues, general and administrative expenses increased
from 20.6% in 1997 to 24.4% in 1998, primarily due to higher salary and
benefits. As a percentage of revenues, excluding the Compensation Differential
of $73,000 in 1997 and $70,000 in 1998, operating income increases from 36.8% to
38.1% in 1997 and from 33.1% to 34.3% in 1998.

Liquidity and Capital Resources

Aston Hotels & Resorts generated cash flows from operating activities of
$510,000 in 1998 primarily due to $1.7 million of net income from continuing
operations. Cash provided by investing activities by Aston Hotels & Resorts was
$497,000 in 1998, due primarily to an increase in security deposits. At March
31, 1998, advances to stockholders and affiliates totaled $6.4 million. Aston
Hotels & Resorts' 1998 cash used in financing activities totaled $1.4 million,
which included a $3.3 million distribution to stockholders and $1.3 million in
payments of other long-term obligations offset by $3.2 million of repayment of
advances to stockholder and affiliates. At March 31, 1998, Aston Hotels &
Resorts had a working capital deficit of $3.6 million and $4.4 million of
outstanding long-term debt, capital leases and net liabilities of discontinued
operations.

Aston Hotels & Resorts has provided guarantees for, or is the cosigner on,
personal debts of its principal stockholder. At March 31, 1998, the personal
debts totaled $16.4 million. These debts will be collateralized as explained in
"-- Combined Founding Companies -- Three Months Ended March 31, 1998 Compared to
Three Months Ended March 31, 1998 -- Liquidity and Capital Resources." In
addition, Aston Hotels & Resorts' principal stockholder has personally
guaranteed certain of Aston Hotels & Resorts debt and capital lease obligations.
At March 31, 1998, the guaranteed obligations totaled $2.8 million.

<PAGE>

TWELVE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1996

Revenues. Revenues were flat year over year.

Operating Expenses. Operating expenses decreased approximately $1.5
million, or 14.4%, from $10.4 million in 1996 to $8.9 million in 1997. As a
percentage of revenues, operating expenses decreased from 53.4% in 1996 to 45.6%
in 1997, primarily due to a reduction in salaries, bonuses, and promotional and
marketing expenses.

General and Administrative Expenses. General and administrative expenses in
total and as a percentage of revenues were relatively flat year over year. As a
percentage of revenues, excluding the Compensation Differential of $282,000 in
1996 and 1997, operating income increases from 17.9% to 19.4% in 1996 and from
26.4% to 27.9% in 1997.

TWELVE MONTHS ENDED DECEMBER 31, 1996 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1995

Revenues. Revenues increased $412,000, or 2.2%, from $19.0 million in 1995
to $19.5 million in 1996.

Operating Expenses. Operating expenses decreased $149,000, or 1.4%, from
$10.6 million in 1995 to $10.4 million in 1996. As a percentage of net revenues,
operating expenses decreased from 55.4% to 53.4%, primarily due to higher
revenues.

General and Administrative Expenses. General and administrative expenses
decreased $140,000, or 2.6%, from $5.4 million in 1995 to $5.6 million in 1996.
As a percentage of revenues, general and administrative expenses increased from
28.5% in 1995 to 28.6% in 1996, primarily due to higher revenues. As a
percentage of revenues, excluding the Compensation Differential of $380,000 and
$282,000 in 1995 and 1996, respectively, operating income increases from 16.1%
to 18.1% in 1995 and from 17.9% to 19.4% in 1996.

Liquidity and Capital Resources

Aston Hotels & Resorts generated cash flows from operating activities of
$5.9 million in 1997 primarily due to $5.1 million of net income from continuing
operations. Aston Hotels & Resorts' cash provided by investing activities was
$346,000 in 1997 and was primarily generated from the proceeds from sale of an
asset of a partnership. As of December 31, 1997, advances to stockholder and
affiliates totaled $9.5 million. Aston Hotels & Resorts' 1997 cash used in
financing activities totaled $6.8 million, which included a $3.6 million
distribution to a stockholder, $2.2 million of advances to affiliates and
stockholder and $744,000 in payments of other long-term obligations. As of
December 31, 1997, Aston Hotels & Resorts had a working capital deficit of $4.6
million, and $5.5 million of outstanding long-term debt, capital leases and net
liabilities of discontinued operations.

Aston Hotels & Resorts has provided guarantees for, or is the cosigner on,
personal debts of its principal stockholder. At December 31, 1997, the personal
debts totaled $17.4 million. In addition, Aston Hotels & Resorts' principal
stockholder has personally guaranteed certain of Aston Hotels & Resorts debt and
capital lease obligations. As of December 31, 1997, the guaranteed obligations
totalled $2.8 million.

<PAGE>
COLLECTION OF FINE PROPERTIES

Results of Operations

Collection of Fine Properties is a leading provider of vacation property
rentals and management services in the ski and mountain resort town of
Breckenridge, Colorado. Collection of Fine Properties' principal revenue source
for 1997 was property rental fees (82%). The following table sets forth the
combined results of operations for Collection of Fine Properties on a historical
basis and as a percentage of revenues for the periods indicated.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
1995 1996 1997
--------------------- --------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues ..................... $3,500 100.0% $4,141 100.0% $4,303 100.0%
Operating expenses ........... 2,621 74.9 2,777 67.1 2,830 65.8
General and administrative ex-
penses ...................... 923 26.4 948 22.9 893 20.8
------ ----- ------ ----- ------ -----
Income from operations ....... $ (44) ( 1.3)% $ 416 10.0% $ 580 13.4%
====== ===== ====== ===== ====== =====
Compensation Differential .... $ 64 $ 74 $ 94
====== ====== ======
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1997 1998
--------------------- ---------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues ..................... $2,714 100.0% $2,689 100.0%
Operating expenses ........... 1,021 37.6 930 34.6
General and administrative ex-
penses ...................... 238 8.8 224 8.3
------ ----- ------ -----
Income from operations ....... $1,455 53.6% $1,535 57.1%
====== ===== ====== =====
Compensation Differential .... $ 30 $ 21
====== ======
</TABLE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

Revenues. Revenues remained relatively constant at $2.7 million.

Operating Expenses. Operating expenses decreased $91,000, or 8.9%, from
$1.0 million in 1997 to $.9 million in 1998. This decrease was due to lower
commissions paid in 1998, and the receipt by Collection of Fine Properties of a
marketing credit in 1998, which offset the related expense.

General and Administrative Expenses. General and administrative expenses
remained constant at $0.2 million. As a percentage of revenues, general and
administrative expenses decreased from 8.8% in 1997 to 8.3% in 1998. As a
percentage of revenues, excluding the Compensation Differential of $30,000 and
$21,000 in 1997 and 1998, respectively, operating income increases from 53.6% to
54.7% in 1997 and from 57.1% to 57.9% in 1998.

Liquidity and Capital Resources

Collection of Fine Properties cash used in operating activities was
$879,000 in 1998, primarily due to a decrease in customer deposits and deferred
revenue which was partially offset by net income of $1.6 million. Cash used in
investing activities was $18,000 in 1998, and was used for the purchases of
property and equipment. Collection of Fine Properties' 1998 cash used in
financing activities totaled $93,000 which included repayments on their line of
credit and notes payable, and distributions to stockholders. As of March 31,
1998, Collection of Fine Properties had working capital of $1.1 million and had
$923,000 of long-term debt outstanding. In addition, at March 31, 1998,
Collection of Fine Properties had $750,000 available under its line of credit.

TWELVE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1996

Revenues. Revenues increased $162,000, or 3.9%, from $4.1 million in 1996
to $4.3 million in 1997, primarily due to an increase in property rental fees
resulting primarily from higher average rental rates.

Operating Expenses. Operating expenses remained relatively constant at $2.8
million. As a percentage of revenues, operating expenses decreased from 67.1% in
1996 to 65.8% in 1997, primarily due to slightly higher revenues.

General and Administrative Expenses. General and administrative expenses
decreased $55,000, or 5.8%, from $948,000 in 1996 to $893,000 in 1997. As a
percentage of revenues, general and administrative expenses decreased from 22.9%
in 1996 to 20.8% in 1997. As a percentage of revenues, excluding the
Compensation Differential of $74,000 and $94,000 in 1996 and 1997, respectively,
operating income increases from 10.0% to 11.8% in 1996 and from 13.5% to 15.7%
in 1997.

34
<PAGE>

TWELVE MONTHS ENDED DECEMBER 31, 1996 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1995

Revenues. Revenues increased $641,000, or 18.3%, from $3.5 million in 1995
to $4.1 million in 1996, primarily due to an increase in management fees
resulting primarily from higher occupancy.

Operating Expenses. Operating expenses increased $156,000, or 6.0%, from
$2.6 million in 1995 to $2.8 million in 1996. As a percentage of revenues,
operating expenses decreased from 74.9% in 1995 to 67.1% in 1996, primarily due
to increased revenues.

General and Administrative Expenses. General and administrative expenses
increased $25,000, or 2.7%, from $923,000 in 1995 to $948,000 in 1996. As a
percentage of revenues, general and administrative expenses decreased from 26.4%
in 1995 to 22.9% in 1996 primarily due to increased revenues. As a percentage of
revenues, excluding the Compensation Differential of $64,000 and $74,000 in 1995
and 1996, respectively, operating income increases from (1.3)% to 0.6% in 1995
and from 10.0% to 11.8% in 1996.

Liquidity and Capital Resources

Collection of Fine Properties generated cash flows from operating
activities of $1,204,000 in 1997 primarily due to $713,000 of net income. Cash
used in investing activities by Collection of Fine Properties was $136,000 in
1997 and was primarily used for the purchases of furniture and equipment.
Collection of Fine Properties' 1997 cash used in financing activities totalled
$1,019,000 which included repayments on their line of credit and notes payable,
and distributions to stockholders. As of December 31, 1997, Collection of Fine
Properties had a working capital deficit of $871,000 and had $299,000 of
long-term debt outstanding. In addition, at December 31, 1997, Collection of
Fine Properties had $653,000 available under its line of credit.

PRISCILLA MURPHY

Results of Operations

Priscilla Murphy is a leading provider of beach vacation property rentals,
management services and sales on the Florida islands of Sanibel and Captiva.
Priscilla Murphy's revenue sources for 1997 were property rental and service
fees (69%) and net real estate brokerage commissions (31%). Priscilla Murphy was
acquired by its current owners in January 1997. The following table sets forth
the results of operations for Priscilla Murphy and its predecessor on a
historical basis and as a percentage of revenues for the periods indicated.

YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
1995 1996 1997
--------------------- --------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues ..................... $4,316 100.0% $4,721 100.0% $4,740 100.0%
Operating expenses ........... 1,319 30.6 1,314 27.8 1,184 25.0
General and administrative ex-
penses ...................... 2,257 52.3 2,125 45.0 1,866 39.4
------ ----- ------ ----- ------ -----
Income from operations ....... $ 740 17.1% $1,282 27.2% $1,690 35.7%
====== ===== ====== ===== ====== =====
Compensation Differential .... $ 250 $ 320 $ 31
====== ====== ======
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-------------------------------------------
1997 1998
---------------------- --------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues ..................... $1,959 100.0% $2,275 100.0%
Operating expenses ........... 283 14.4 318 14.0
General and administrative ex-
penses ...................... 485 24.8 635 27.9%
------ ----- ------ -----
Income from operations ....... $1,191 60.8% $1,322 58.1%
====== ===== ====== =====
Compensation Differential .... $ 8 $ 29
====== ======
</TABLE>

<PAGE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

Revenues. Revenues increased $316,000 or 16.1% from $2.0 million in 1997 to
$2.3 million in 1998. The increase is attributable to an increase in real estate
commissions from more closings in the period and an increase in service fees due
to new services provided in 1998.

Operating Expenses. Operating expenses remained constant at $300,000. As a
percentage of revenues, operating expenses decreased from 14.4% in 1997 to 14.0%
in 1998, primarily due to better cost control measures since the acquisition,
resulting in lower salaries and benefits.

35
<PAGE>

General and Administrative Expenses. General and administrative expenses
increased $150,000, or 30.9%, from $485,000 in 1997 to $635,000 in 1998. As a
percentage of revenues, general and administrative expenses increased from 24.8%
in 1997 to 27.9% in 1998, primarily due to increases in employee salaries and
benefits. As a percentage of revenues, excluding the Compensation Differential
of $8,000 and $29,000 in 1997 and 1998, respectively, operating income increases
from 60.8% to 61.2% in 1997 and from 58.1% to 59.4% in 1998.

Liquidity and Capital Resources

Priscilla Murphy generated cash flows from operating activities of $1.4
million in 1998, primarily due to $1.3 million of net income. Cash used in
investing activities by Priscilla Murphy was $54,000 in 1998. Priscilla Murphy's
1998 cash from financing activities totalled $134,000. At March 31, 1998,
Priscilla Murphy had working capital of $1.4 million, and had $4.1 million of
long-term debt outstanding.

TWELVE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1996

Revenues. Revenues were relatively flat year over year.

Operating Expenses. Operating expenses decreased 130,000, or 9.9%, from
$1.3 million in 1996 to $1.2 million in 1997, primarily due to improved cost
control resulting in lower salaries and benefits. As a percentage of revenues,
operating expenses decreased from 27.8% in 1996 to 25.0% in 1997, primarily due
to lower costs.

General and Administrative Expenses. General and administrative expenses
decreased $259,000, or 12.2%, from $2.1 million in 1996 to $1.9 million in 1997.
As a percentage of revenues, general and administrative expenses decreased from
45.0% in 1996 to 39.4% in 1997. As a percentage of revenues, excluding the
Compensation Differential of $320,000 and $31,000 in 1996 and 1997,
respectively, operating income increases from 27.2% to 33.9% in 1996 and from
35.7% to 36.3% in 1997.

TWELVE MONTHS ENDED DECEMBER 31, 1996 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1995

Revenues. Revenues increased $405,000, or 9.4%, from $4.3 million in 1995
to $4.7 million in 1996, primarily due to an increase in commissions on real
estate sales resulting from the increased number of vacation properties sold and
slightly higher property rental fees resulting primarily from higher average
rental rates.

Operating Expenses. Operating expenses were flat year over year. As a
percentage of revenues, operating expenses decreased from 30.6% in 1995 to 27.8%
in 1996, primarily due to higher revenues.

General and Administrative Expenses. General and administrative expenses
decreased $132,000, or 5.8%, from $2.3 million in 1995 to $2.1 million in 1996.
As a percentage of revenues, general and administrative expenses decreased from
52.3% in 1995 to 45.0% in 1996. As a percentage of revenues, excluding the
Compensation Differential of $250,000 and $320,000 in 1995 and 1996,
respectively, operating income increases from 17.1% to 22.9% in 1995 and from
27.2% to 33.9% in 1996.

Liquidity and Capital Resources

Priscilla Murphy generated cash flows from operating activities of $1.9
million in 1997, primarily due to $1.5 million of net income and $203,000 of
non-cash depreciation expense. Cash used in investing activities by Priscilla
Murphy was $5.8 million in 1997 and was used for the January 1997 acquisition.
Priscilla Murphy's 1997 cash from financing activities totalled $4.8 million,
which included $5.8 million in bank financing for the acquisition, offset by
$1.2 million in long-term debt repayments. At December 31, 1997, Priscilla
Murphy had a working capital deficit of $105,000, and had $3.9 million of
long-term debt outstanding.

COASTAL RESORTS

Results of Operations

Coastal Resorts is a leading provider of beach vacation property rentals,
management services and sales in the Bethany Beach area of Delaware. Coastal
Resorts' revenue sources for 1997 were net real estate commissions (53%) and
property rental and service fees (35%). The following table sets forth the
combined results of operations for Coastal Resorts on a historical basis and as
a percentage of revenues for the periods indicated.

<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
------------------------------------------- -----------------------------------------
1996 1997 1997 1988
--------------------- --------------------- ------------------- ---------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues .......................... $1,917 100.0% $3,615 100.0% $424 100.0% $ 577 100.0%
Operating expenses ................ 837 43.7 1,788 49.5 296 69.8 435 75.4
General and administrative ex-
penses ........................... 477 24.9 644 17.8 125 29.5 158 27.4
------ ----- ------ ----- ---- ----- ----- -----
Income from operations ............ $ 603 31.4% $1,183 32.7% $ 3 0.7% $ (16) ( 2.8)%
====== ===== ====== ===== ==== ===== ===== =====
Compensation Differential ......... $ -- $ -- $ -- $ --
====== ====== ==== =====
</TABLE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

Revenues. Revenues increased $153,000, or 36.1%, from $424,000 in 1997 to
$577,000 in 1998, primarily due to an increase in real estate brokerage
commissions resulting from the increased number of vacation properties sold, and
increased services fees due to a higher number of properties under management
and higher occupancy.

Operating Expenses. Operating expenses increased $139,000, or 47.0%, from
$296,000 in 1997 to $435,000 in 1998. As a percentage of revenues, operating
expenses increased from 69.8% in 1997 to 75.4% in 1998, primarily due to higher
property rental activities.

General and Administrative Expenses. General and administrative expenses
remained relatively constant at $150,000. As a percentage of revenues, general
and administrative expenses decreased from 29.5% in 1997 to 27.4% in 1998,
primarily due to the increased revenues in 1998. There were no Compensation
Differentials for this period in 1997 or 1998.

Liquidity and Capital Resources

Coastal Resorts used cash in operating activities of $260,000 in 1998
primarily due to an increase in accounts receivables and cash held in escrow.
Coastal Resorts' 1998 cash from financing activities totaled $1.1 million,
primarily due to a decrease in receivables from related parties. At March 31,
1998, Coastal Resorts had working capital of $1.0 million.

TWELVE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1996

Revenues. Revenues increased $1.7 million, or 88.6%, from $1.9 million in
1996 to $3.6 million in 1997, primarily due to an increase in real estate
brokerage commissions resulting from the increased number of vacation properties
sold and increased services fees due to a higher number of properties under
management and higher occupancy.

Operating Expenses. Operating expenses increased $951,000, or 113.6%, from
$837,000 in 1996 to $1.8 million in 1997. As a percentage of revenues, operating
expenses increased from 43.7% in 1996 to 49.5% in 1997, primarily due to higher
property rental activities.

General and Administrative Expenses. General and administrative expenses
increased $167,000, or 35.0%, from $477,000 in 1996 to $644,000 in 1997. As a
percentage of revenues, general and administrative expenses decreased from 24.9%
in 1996 to 17.8% in 1997, primarily due to the significant increase in net
revenue in 1997. There were no Compensation Differentials for this period in
1996 or 1997.

Liquidity and Capital Resources

Coastal Resorts generated cash flows from operating activities of $1.3
million in 1997, primarily due to $1.1 million in net income offset by a $1.1
million increase in receivables from related parties. Cash used in investing
activities by Coastal Resorts was $146,000 in 1997 and was primarily used to
purchase furniture and equipment. Coastal Resorts' 1997 cash used in financing
activities totalled $995,000. As December 31, 1997, Coastal Resorts had working
capital of $980,000 and had a $715,000 note payable to a related party.

<PAGE>

TRUPP-HODNETT ENTERPRISES

Results of Operations

Trupp-Hodnett Enterprises is the leading provider of beach vacation
property rentals, management services and sales on the island of St. Simons, off
the coast of Georgia. Trupp-Hodnett Enterprises' revenue sources for 1997 were
property rental and service fees (78%) and real estate sales commissions (22%).
The following table sets forth the results of operations for Trupp-Hodnett
Enterprises on a historical basis and as a percentage of revenues for the
periods indicated.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
------------------------------------------- -----------------------------------------
1996 1997 1997 1998
--------------------- --------------------- ------------------- ---------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues .......................... $3,431 100.0% $4,061 100.0% $767 100.0% $1,254 100.0%
Operating expenses ................ 1,652 48.1 1,838 45.3 388 50.6 519 41.4
General and administrative ex-
penses ........................... 1,653 48.2 2,024 49.8 354 46.1 650 51.8
------ ----- ------ ----- ---- ----- ------ -----
Income from operations ............ $ 126 3.7% $ 199 4.9% $ 25 3.3% $ 85 6.8%
====== ===== ====== ===== ==== ===== ====== =====
Compensation Differential ......... $ 865 $1,143 $ 74 $ 463
====== ====== ==== ======
</TABLE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

Revenues. Revenues increased $487,000, or 63.5%, from $767,000 in 1997 to
$1.3 million in 1998, primarily due to an increase in real estate brokerage
commissions resulting from the increased number of vacation properties sold, and
an increase in property rental fees resulting primarily from higher average
rental rates.

Operating Expenses. Operating expenses increased $131,000, or 33.8%, from
$388,000 in 1997 to $519,000 in 1998. As a percentage of revenues, operating
expenses decreased from 50.6% in 1997 to 41.4% in 1998. This increase was
primarily due to relatively constant level of salaries, commissions and other
expenses, while reserves increased.

General and Administrative Expenses. General and administrative expenses
increased $296,000, or 83.6%, from $354,000 in 1997 to $650,000 in 1998,
primarily due to increased salaries and benefits. As a percentage of revenues,
general and administrative expenses increased from 46.1% in 1997 to 51.8% in
1998. As a percentage of revenues, excluding the Compensation Differential of
$74,000 and $463,000 in 1997 and 1998, respectively, operating income increases
from 3.3% to 12.9% in 1997 and from 6.8% to 43.7% in 1998.

Liquidity and Capital Resources

Trupp-Hodnett Enterprises' cash used in operating activities was $99,000 in
1998, primarily due to the increase in cash held in trust and accounts
receivable. Cash used in investing activities by Trupp-Hodnett Enterprises was
$49,000 in 1998 and was primarily used for the purchase of property and
equipment. Trupp-Hodnett Enterprises' 1998 cash provided by financing activities
totalled $32,000 which related to proceeds from short-term debt. At March 31,
1998, Trupp-Hodnett Enterprises had working capital of $302,000 and had no
long-term debt outstanding. In addition, Trupp-Hodnett Enterprises had $130,000
in unused lines of credits.

TWELVE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1996

Revenues. Revenues increased $630,000, or 18.4%, from $3.4 million in 1996
to $4.1 million in 1997, primarily due to an increase in real estate brokerage
commissions resulting from the increased number of vacation properties sold and
an increase in property rental fees resulting primarily from higher average
rental rates.

<PAGE>

Operating Expenses. Operating expenses increased $186,000, or 11.3%, from
$1.7 million in 1996 to $1.8 million in 1997. As a percentage of revenues,
operating expenses decreased from 48.1% in 1996 to 45.3% in 1997, primarily due
to higher revenues and higher average rental rates.

General and Administrative Expenses. General and administrative expenses
increased $371,000, or 22.4%, from $1.7 million in 1996 to $2.0 million in 1997.
As a percentage of revenues, general and administrative expenses increased from
48.2% in 1996 to 49.8% in 1997. As a percentage of revenues, excluding the
Compensation Differential of $865,000 and $1.1 million in 1996 and 1997,
respectively, operating income increases from 3.7% to 28.4% in 1996 and from
4.9% to 33.0% in 1997.

Liquidity and Capital Resources

Trupp-Hodnett Enterprises generated cash flows from operating activities of
$314,000 in 1997 primarily due to $186,000 of net income and non-cash
depreciation expense of $85,000. Cash used in investing activities by
Trupp-Hodnett Enterprises was $74,000 in 1997 and was primarily used for the
purchase of property and equipment. Trupp-Hodnett Enterprises' 1997 cash used in
financing activities totalled $91,000, which included borrowings and repayments
to banks and distributions to stockholders. At December 31, 1997, Trupp-Hodnett
Enterprises had a working capital surplus of $265,000 and had no long-term debt
outstanding. In addition, Trupp-Hodnett Enterprises had $130,000 in unused lines
of credits.

BRINDLEY & BRINDLEY

Results of Operations

Brindley & Brindley is a leading provider of beach vacation property
rentals, management services and sales on the outer banks of North Carolina.
Brindley & Brindley's revenue sources for 1997 were property rental and services
fees (90%) and net real estate brokerage commissions (10%). Brindley & Brindley
currently manages approximately 450 rental units. Located exclusively in
Corolla, North Carolina, Brindley & Brindley offers large, upscale homes
well-suited for multiple or extended families.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
-------------------------------------------- --------------------------------------------------
1997 1997 1998
-------------------------------------------- ------------------------ -------------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues .......................... $4,021 100.0% $ 269 100.0% $ 257 100.0%
Operating expenses ................ 3,028 75.3 412 153.2 678 263.8
General and administrative ex-
penses ........................... 482 12.0 128 ( 47.6) 123 ( 47.9)
------ ----- ------ ------ ------- ------
Income from operations ............ $ 511 12.7% $ (271) (100.1)% $ (544) (211.7)%
====== ===== ====== ====== ======= ======
Compensation Differential ......... $ 69 $ -- $ --
====== ====== =======
</TABLE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

Revenues. Revenues remained constant at $300,000.

Operating Expenses. Operating expenses increased $266,000 or 64.6%, from
$412,000 in 1997 to $678,000 in 1998. As a percentage of revenues, operating
expenses increased from 153.2% in 1997 to 263.8% in 1998, primarily due to
increased salaries and benefits.

General and Administrative Expenses. General and administrative expenses
remained relatively constant at $100,000. As a percentage of revenues, general
and administrative expenses increased from 47.69% to 47.9%, due to an increase
in salaries and benefits. There were no Compensation Differentials for this
period in 1997 or 1998.

Liquidity and Capital Resources

Brindley & Brindley generated cash from operating activities of $680,000 in
the three months ended March 31, 1998. Cash used in investing activities of
$34,000 in 1998 resulted primarily from purchases of property and equipment. In
1998, cash used in financing activities was $162,000, primarily as a result of
distrubutions to stockholders. At March 31, 1998, Brindley & Brindley had a
working capital deficit of $698,000.

<PAGE>

TWELVE MONTHS ENDED DECEMBER 31, 1997

Revenues. Revenues of $4.0 million were comprised of $2.6 million (65%)
related to rental operations, $1.0 million (25%) related to services, and
$401,000 (10%) related to real estate commissions.

Operating Expenses. Operating expenses were primarily comprised of salaries
and benefits for cleaning and maintenance personnel, and cleaning supplies and
other similar costs.

General and Administrative Expenses. General and administrative expenses
include rent and salaries and benefits for support staff and managerial
personnel.

Liquidity and Capital Resources

Brindley & Brindley generated cash flows from operating activities of
$581,000, which was primarily due to net income of $553,000 in 1997. Cash flows
used in investing activities by Brindley & Brindley of $83,000 in 1997 were
primarily used for purchases of property and equipment. Brindley & Brindley's
1997 cash used in financing activities totalled $508,000 which included $527,000
in distributions to stockholders. At December 31, 1997, Brindley & Brindley had
a working capital deficit of $4,000 and had $22,000 of long-term debt
outstanding.

FIRST RESORT SOFTWARE

Results of Operations

First Resort is the leading provider of software services to vacation
rental and property management companies. First Resort allows vacation rental
and property management companies to automate and computerize the three key
areas of the vacation rental and property management business: reservations,
rental management and owner accounting. First Resort's primary revenue sources
for 1996 were software sales (46%) and software service (49%). First Resort also
offers additional modules and interfaces, including a work order generator,
activities management system, credit card interface and world wide web-enabled
reservations.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
-------------------------------------------- ---------------------------------------
1997 1997 1998
-------------------------------------------- ------------------- -------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues .................................... $2,864 100.0% $578 100.0% $828 100.0%
Operating expenses .......................... 1,704 59.5 374 64.7 448 54.1
General and administrative expenses ......... 417 14.6 96 16.6 126 15.2
------ ----- ---- ----- ---- -----
Income from operations ...................... $ 743 25.9% $108 18.7% $254 30.7%
====== ===== ==== ===== ==== =====
Compensation Differential ................... $ (42) $ -- $ --
====== ==== ====
</TABLE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

Revenues. Revenues increased $250,000, or 43.2%, from $578,000 in 1997 to
$828,000 in 1998. This increase was due to increased sales of new management
systems, along with increased sales of support agreements and consulting
services to existing clients.

Operating Expenses. Operating expenses increased $74,000, or 19.8% from
$374,000 in 1997 to $448,000 in 1998, primarily due to increased advertising
expenses. As a percentage of revenues, operating expenses declined from 64.7% to
54.1% primarily to increased revenues.

General and Administrative Expenses. General and administrative expenses
remained relatively constant at $100,000. As a percentage of revenues, general
and administrative expenses decreased from 16.6% to 15.2%. There were no
Compensation Differentials for this period in 1997 or 1998.

Liquidity and Capital Resources

First Resort generated cash flows from operating activities of $409,000 in
the three months ended March 31, 1998. Cash used in investing activities was
approximately $37,000 in 1998, principally for purchases of property and
equipment. Cash used in financing activities was $290,000 in 1998, including
payments on line-of-credit of $125,000 and net distributions to stockholders of
$165,000. At March 31, 1998, First Resort had a working capital deficit of
$92,000 and no long-term debt outstanding.

<PAGE>

TWELVE MONTHS ENDED DECEMBER 31, 1997

Revenues. Revenues of $2.9 million were comprised of $1.3 million (45%)
related to software sales, $1.4 million (48%) related to services and $156,000
(7%) related to other revenues.

Operating Expenses. Operating expenses are primarily comprised of salaries,
commissions and benefits for sales people.

General and Administrative Expenses. General and administrative expenses
include salaries and benefits for support staff and managerial personnel, and
include rent expense.

Liquidity and Capital Resources

First Resort generated cash flows from operating activities of $805,000,
which was primarily due to net income of $768,000 in 1997. Cash used in
investing activities by First Resort was $183,000 in 1997 and was primarily used
for purchases of property and equipment. First Resort's 1997 cash used in
financing activities totaled $606,000 which included $567,000 in distributions
to stockholders. At December 31, 1997, First Resort had a working capital
deficit of $39,000 and no long-term debt outstanding.

HOUSTON AND O'LEARY

Results of Operations

Houston and O'Leary is a leading provider of luxury vacation property
rentals and sales in the mountain resort town of Aspen, Colorado. Houston and
O'Leary's principal revenue sources for 1997 were real estate brokerage
commissions (73%) and property rental fees (19%). Currently, Houston and O'Leary
provides non-exclusive rental services for 127 rental units. Houston and
O'Leary's rental and sale properties consist primarily of unique, free-standing
houses, ranging from smaller two-bedroom cottages located in Aspen proper to
10,000-plus square foot ranch-style houses overlooking Aspen.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
---------------------------------------------- --------------------------------------
1997 1997 1998
---------------------------------------------- ------------------- ------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues .................................... $1,596 100.0% $484 100.0% $421 100.0%
Operating expenses .......................... 494 30.1 5 1.0 3 0.7
General and administrative expenses ......... 322 20.2 173 35.8 324 77.0
------ ----- ---- ----- ---- -----
Income from operations ...................... $ 780 48.9% $306 63.2% $ 94 22.3%
====== ===== ==== ===== ==== =====
Compensation Differential ................... $ 58 $ 15 $ 29
====== ==== ====
</TABLE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

Revenues. Revenues decreased $63,000 or 13.0% from $484,000 in 1997 to
$421,000 in 1998 primarily due to timing of real estate sales.

General and Administrative Expenses. General and administrative expenses
increased $151,000, or 87.3%, from $173,000 in 1997 to $324,000 in 1998. As a
percentage of revenues, general and administrative expenses increased from 35.8%
in 1997 to 77.0% in 1998. The increase was primarily due to salary and benefit
increases and increased professional fees. As a percentage of revenues,
excluding the Compensation Differential of $15,000 and $29,000 in 1997 and 1998,
respectively, operating income increases from 63.2% to 66.3% in 1997 and 22.3%
to 29.2% in 1998.

Liquidity and Capital Resources

Houston and O'Leary generated cash flows from operating activities of
$35,000, which was primarily due to $89,000 in net income offset by a decrease
in deferred revenue for the three months ended March 31, 1998. Cash generated
from investing activities was $86,000 in 1998 primarily from the sale of
property and equipment. Cash used in financing activities was $172,000 in 1998,
which was primarily due to payments on long-term debt. At March 31, 1998,
Houston and O'Leary had working capital of $107,000 and no long-term debt.

<PAGE>

TWELVE MONTHS ENDED DECEMBER 31, 1997

Revenues. Revenues of $1.6 million were comprised of $298,000 (19%) related
to rental operations, $1.2 million (75%) related to services and real estate
commissions, and $128,000 (6%) related to other revenues.

Operating Expenses. Operating expenses are primarily comprised of salaries
for operational personnel.

General and Administrative Expenses. General and administrative expenses
are primarily related to rent expense.

Liquidity and Capital Resources

Houston and O'Leary generated cash flows from operating activities of
$811,000, which was primarily due to net income of $765,000 in 1997. Cash used
in investing activities by Houston and O'Leary was $57,000 in 1997 and was
primarily used for purchases of property and equipment. Houston and O'Leary's
1997 cash financing activities totalled $672,000, which was primarily related to
distributions to stockholders. At December 31, 1997, Houston and O'Leary had
working capital of $28,000 and no long-term debt outstanding.

THE MAURY PEOPLE

Results of Operations

The Maury People is a leading provider of beach vacation property rentals
and sales on the island of Nantucket off the coast of Massachusetts. The Maury
People's revenue sources for 1997 were net real estate brokerage commissions
(70%) and net property rental and service fees (30%). Currently, The Maury
People provides non-exclusive rental services for approximately 1,200 rental
homes, ranging from in-town residences to cottages and large, upscale ocean and
harbor-front homes.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
---------------------------------------------- ---------------------------------------
1997 1997 1998
---------------------------------------------- ------------------- -------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues .......................... $1,183 100.0% $370 100.0% $338 100.0%
Operating expenses ................ 211 17.8 57 15.4 66 19.5
General and administrative ex-
penses ........................... 682 57.7 100 27.0 195 57.7
------ ----- ---- ----- ---- -----
Income from operations ............ $ 290 24.5% $213 57.6% $ 77 22.8%
====== ===== ==== ===== ==== =====
Compensation Differential ......... $ 142 $ 19 $ --
====== ==== ====
</TABLE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

Revenues. Revenues decreased $32,000, or 8.6%, from $370,000 in 1997 to
$338,000 in 1998. This decrease was due to timing of real estate sales.

Operating Expenses. Operating expenses remained relatively constant at
$60,000 in both periods. As a percentage of revenues, operating expenses
increased from 15.4% to 19.5%.

General and Administrative Expenses. General and administrative expenses
increased $95,000, or 95.0% from $100,000 in 1997 to $195,000 in 1998. As a
percentage of revenues, general and administrative expenses increased from 27.0%
to 57.7%, due to an increase in leased equipment and rent expense and an
increase in salaries and benefits. As a percentage of revenues, excluding the
Compensation Differential of $19,000 for 1997, operating income increases from
57.6% to 62.7%. There was no Compensation Differential for this period in 1998.

<PAGE>

Liquidity and Capital Resources

The Maury People generated cash from operating activities of $281,000 in
the three months ended March 31, 1998. In the three months ended March 31, 1998,
cash used in financing activities was $188,000, as a result of distributions to
the stockholders. At March 31, 1998, The Maury People had a working capital
deficit of $113,000 and had no long-term debt outstanding.

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997

Revenues. Revenues of $1.2 million are comprised of $354,000 (30%) related
to rental operations and $829,000 (70%) related to real estate commissions.

Operating Expenses. Operating expenses are primarily comprised of direct
marketing expenses.

General and Administrative Expenses. General and administrative expenses
include rent and salaries and benefits for support staff and managerial
personnel.

Liquidity and Capital Resources

The Maury People generated cash flows from operating activities of
$373,000, which was primarily due to net income of $318,000 in 1997. Cash used
in investing activities by The Maury People was $77,000 in 1997 and was
primarily used for purchase of property and equipment. The Maury People used
cash in financing activities of $147,000, comprised primarily of distributions
to stockholders. At December 31, 1997, the Maury People had a working capital
deficit of $11,000 and no long-term debt outstanding.

RESORT PROPERTY MANAGEMENT

Results of Operations

Resort Property Management is a leading provider of vacation property
rentals and management services in the Park City, Utah mountain resort area.
Resort Property Management's revenue sources for 1997 were comprised of property
rental and service fees. Resort Property Management currently manages
approximately 330 rental units. Resort Property Management offers a variety of
free-standing homes and condominium units at various resorts throughout the Park
City region, including Deer Valley. A majority of Resort Property Management's
condominium units are located in the town of Park City and range from luxury,
three-bedroom units in the historic town center to smaller, more affordable
units in condominium complexes.

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, SIX MONTHS ENDED MARCH 31,
----------------------- -------------------------------------------------
1997 1997 1998
----------------------- ----------------------- -----------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues .................................... $2,295 100.0% $2,042 100.0% $2,018 100.0%
Operating expenses .......................... 1,560 68.0 1,003 49.1 977 48.4
General and administrative expenses ......... 627 27.3 348 17.0 322 15.9
------ ----- ------ ----- ------ -----
Income from operations ...................... 108 4.7% $ 691 33.9% $ 719 35.7%
====== ===== ====== ===== ====== =====
Compensation Differential ................... $ 186 $ -- $ --
====== ====== ======
</TABLE>

SIX MONTHS ENDED MARCH 31, 1998 COMPARED TO SIX MONTHS ENDED MARCH 31, 1997

Revenues. Revenues remained relatively constant at $2.0 million.

Operating Expenses. Operating expenses remained relatively constant at $1.0
million.

General and Administrative Expenses. General and administrative expenses
remained relatively constant at $300,000. As a percent of revenues, general and
administrative expenses decreased from 17.0% in 1997 to 15.9% in 1998. There
were no Compensation Differentials for this period in 1997 or 1998.

<PAGE>

Liquidity and Capital Resources

Resort Property Management generated cash flows from operating activities
of $1.1 million in the six months ended March 31, 1998. Cash used in investing
activities was approximately $192,000 in 1998, for purchases of property and
equipment. In the six months ended March 31, 1998, cash used in financing
activities was $224,000, primarily as a result of payments on debt. At March 31,
1998, Resort Property Management had working capital of $189,000 and $116,000 of
long-term debt outstanding.

TWELVE MONTHS ENDED SEPTEMBER 30, 1997

Revenues. Revenues of $2.3 million are comprised of $1.9 million (83%)
related to rental operations and $365,000 (17%) related to services.

Operating Expenses. Operating expenses are primarily comprised of salaries
and benefits for cleaning and maintenance personnel, and cleaning supplies and
other similar costs.

General and Administrative Expenses. General and administrative expenses
includes rent, salaries and benefits for support staff and managerial personnel.

Liquidity and Capital Resources

Resort Property Management generated cash flows from operating activities
of $46,000, which was primarily due to net income of $250,000, which was offset
by a gain on sale of land of $210,000 in 1997. Cash provided by investing
activities by Resort Property Management was $102,000 in 1997, primarily due to
proceeds from the sale of office equipment, vehicles and land of $335,000, which
was offset by purchases of property and equipment of $179,000. Resort Property
Management's 1997 cash provided by financing activities totalled $32,000,
primarily as a result of net proceeds from long-term debt. At September 30,
1997, Resort Property Management had a working capital deficit of $194,000 and
long-term debt of $310,000 outstanding.

TELLURIDE

Results of Operations

Telluride Resort Accommodations is a leading provider of vacation property
rentals and property management services in the Telluride, Colorado mountain
resort area. Telluride Resorts Accommodations' revenues for 1997 were derived
from property rental and service fees. Telluride Resort Accommodations currently
manages approximately 450 rental units. Telluride Resort Accommodations'
property offerings range from smaller, one-bedroom units in town to large,
luxury condominiums and free-standing homes in Telluride's new Mountain Village.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
--------------------------- -------------------------------------------
1997 1997 1998
--------------------------- --------------------- ---------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues .......................... $4,313 100.0% $2,135 100.0% $2,342 100.0%
Operating expenses ................ 3,037 70.4 967 45.3 1,066 45.5
General and administrative ex-
penses ........................... 1,030 23.9 257 12.0 361 15.4
------ ----- ------ ----- ------ -----
Income from operations ............ $ 246 5.7% $ 911 42.7% $ 915 39.1%
====== ===== ====== ===== ====== =====
Compensation Differential ......... $ -- $ -- $ --
====== ====== ======
</TABLE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

Revenues. Revenues increased $207,000, or 9.7%, from $2.1 in 1997 to $2.3
million in 1998, primarily due to an increase in other revenues.

Operating Expenses. Operating expenses increased $99,000, or 10.2%, from
$1.0 million in 1997 to $1.1 million in 1998. As a percentage of revenues,
operating expenses increased from 45.3% in 1997 to 45.5% in 1998.

<PAGE>

General and Administrative Expenses. General and administrative expenses
increased $104,000 or 40.5% from $257,000 in 1997 to $361,000 in 1998. As a
percentage of revenues, general and administrative expenses increased from 12.0%
in 1997 to 15.4% in 1998. This increase resulted from higher salary and wages.
There were no Compensation Differentials for this period in 1997 or 1998.

Liquidity and Capital Resources

Telluride Resort Accommodations used cash in operating activities of
$224,000, which was primarily due to the decrease in customer deposits and
deferred revenue. The decrease was partially offset by $927,000 in net income
for the three months ended March 31, 1998. Cash used in financing activities was
$194,000 for payments on the line of credit. At March 31, 1998, Telluride Resort
Accommodations had working capital of $446,000 and no long-term debt.

TWELVE MONTHS ENDED DECEMBER 31, 1997

Revenues. Revenues of $4.3 million are comprised of $3.2 million (74%)
related to rental operations and $1.1 million (26%) related to services.

Operating Expenses. Operating expenses are primarily comprised of salaries
and benefits for cleaning and maintenance personnel, and includes marketing
expenses.

General and Administrative Expenses. General and administrative expenses
include salaries and benefits for support staff and managerial personnel.

LIQUIDITY AND CAPITAL RESOURCES

Telluride Resort Accommodations generated cash flows from operating
activities of $721,000, which was primarily due to an increase in accounts
payable and accrued liabilities of $299,000 and net income of $277,000 in 1997.
Cash used in investing activities was $25,000 in 1997 and was primarily used for
purchase of property and equipment. Telluride Resort Accommodation's 1997 cash
used in financing activities totalled $207,000 due to distributions to
stockholders of $300,000 offset by $93,000 in proceeds from Telluride Resort
Accommodation's line of credit. At December 31, 1997, Telluride had a working
capital deficit of $480,000 and had no long-term debt outstanding.

<PAGE>

BUSINESS

GENERAL

Upon consummation of the Offering, the Company will be the leading provider
of vacation condominium and home rentals in premier destination resorts
throughout the United States. Through the consolidation of leading vacation
rental and property management companies, the development of a national brand
and marketing initiative and best practices management systems, the Company
intends to offer vacationers a branded network of high quality, fully furnished,
privately-owned condominium and home rentals while offering property owners
superior management services designed to enhance their rental income. Currently,
most vacationers seeking to rent a condominium or home at a popular destination
resort must use a local vacation rental and property management firm to inquire
about availability and make reservations. Vacationers typically make rental
choices with limited information and, as a result, face great uncertainty
concerning the quality of their rental. To address this need, the Company
intends to provide vacationers with consistent quality and service, increased
information and easy access to a broad array of high quality desirable
condominium and home rentals in premier destination resorts.

Upon consummation of the Offering, the Company will acquire the 13 Founding
Companies which manage approximately 8,900 condominiums and homes nationwide and
in Canada. These condominiums and homes are located in beach and island resorts
such as the Hawaiian Islands; Bethany Beach, DE; Nantucket, MA; the Outer Banks,
NC; Sanibel and Captiva Islands, FL; and St. Simons Island, GA; and mountain
resorts such as Aspen, Breckenridge and Telluride, CO; Park City, UT, and
Whistler, B.C. The Company also manages 11 hotels aggregating approximately
1,650 hotel rooms located primarily in the Hawaiian Islands.

The Company's primary source of revenue is property rental fees, which are
charged to the property owners as a percentage of the vacationers' total rental
rate. Fee percentages for vacation condominiums and homes range from
approximately 3% to over 40% of rental rates for the various Founding Companies
depending on the type of services provided to the property owner and the type of
rental unit managed. On a pro forma basis for the year ended December 31, 1997,
the Company generated total revenues of approximately $56.8 million, which
includes $30.5 million of revenues from property rental fees and net income of
$7.0 million. In addition, in many markets, the Company provides traditional
real estate brokerage services for property owners seeking to sell their
condominiums and homes. The Company believes that a national brand and superior
management services, which are designed to enhance rental income for property
owners, will provide it with a competitive advantage in attracting additional
high quality condominiums and homes in its markets.

INDUSTRY OVERVIEW

Destination resort vacationers primarily have three alternatives for
overnight accommodations: commercial lodging establishments, time share resorts
and privately owned vacation condominiums and homes. Commercial lodging consists
principally of hotels and motels in which a room is rented on a nightly or
weekly basis. Vacation ownership or timeshare interests are purchased by the
vacationer and

<PAGE>

typically entitle the buyer to use a furnished vacation residence at a
particular resort generally for a one-week period each year, in perpetuity.
Lastly, privately-owned vacation condominiums and homes are typically second
homes available for rent by property owners seeking incremental income. The
domestic vacation rental and property management industry in 1996 generated over
$10 billion in total revenues from over 20 million vacation condominium and home
rentals. Industry revenues grew 8.7% from 1995 to 1996, and the Company believes
that this growth has been, and will continue to be, driven by two primary
factors: the overall growth in the leisure travel and tourism industry, which
reflected a 16.1% increase in revenues from 1995 to 1997 and the increasing
number of vacationers seeking to rent vacation condominiums and homes.

For many vacationers, particularly those with families, a lengthy stay at a
quality commercial lodging establishment can be expensive. Vacation condominium
and home rentals generally offer families greater space and convenience than a
resort hotel room, including separate living, sleeping and eating quarters. As a
result, families generally have more privacy and greater flexibility in a
vacation condominium or home. Furthermore, with full kitchens available in most
properties, vacationers can also save on dining costs in a vacation condominium
or home rental. In addition, vacation condominium and home rentals frequently
include access to private yards, swimming pools, tennis courts and other
recreational facilities, and generally offer a greater variety of locations,
accommodations and price ranges within a market to meet a vacationer's desires.

Vacation property rentals are also a less expensive and more flexible
alternative to timeshare interests. Unlike vacation property rentals, timeshare
interests require the purchase of an ownership interest in a vacation residence
and continuing annual maintenance payments. A timeshare owner has the right to
use the same vacation residence for the same length of time each year. Subject
to availability and the payment of a membership fee and a variable exchange fee
to join a timeshare exchange program, a timeshare owner may request that his
timeshare interval be exchanged for a timeshare interval at another
participating resort. Owners are generally limited to timeshare intervals at
participating resorts and to those units which have been assigned an equal or
lower rating by the exchange program based on the location, size and quality of
the unit, the quality of the resort and the time of year requested.

Most vacation condominiums and homes are second homes owned by individuals
who reside in different locations and are unable to easily manage the rental
process. Vacation rental and property management companies facilitate the rental
process by handling all interaction with vacationers, including accepting
reservations, rental payments and security deposits; operating check-in and
check-out locations; and arranging for inspections, security and maintenance.
The publishing of catalogs, print advertising and other marketing activities of
a successful vacation rental and property management company also can enhance
the vacation condominium or home's occupancy rate and increase rental income to
the property owner.

The vacation rental and property management industry is highly fragmented,
with an estimated 3,000 vacation rental and property management companies in the
United States. Presently, most vacation rental condominiums and homes are
managed by and booked through local vacation rental and property management
firms, whose principal means of attracting property owners and vacationers is by
referral, word of mouth, limited local advertising and direct mailings. There is
no central reservations service for vacationers or travel agents to obtain
information regarding condominium or home rental opportunities at popular
destination resorts across the country or for booking such rentals once a
destination is selected. As a result, the Company believes the vacation rental
and property management industry is highly inefficient and presents a
significant market opportunity for a well-capitalized company offering a
national network of high quality vacation condominiums and homes with superior
levels of customer service.

BUSINESS STRATEGY

The Company's objective is to enhance its position as the leading provider
of premier destination resort condominium and home rentals by pursuing the
following business strategies:

DEVELOP A NATIONAL BRAND IN PREMIER DESTINATION RESORT CONDOMINIUM AND HOME
RENTALS. The Company intends to create the first national brand in vacation
condominium and home rentals. To date, there has been no national brand for
vacation condominium and home rentals, no industry standards for

<PAGE>

quality and a general lack of access to reliable information regarding rental
opportunities for vacationers. By providing an extensive network of high quality
condominiums and homes in premier destination resorts throughout the United
States, the Company intends to increase the information available to vacationers
and develop a brand which provides greater confidence and ease to vacationers in
making their rental arrangements. In order to ensure high quality, the Company
intends to implement a comprehensive quality assurance program which includes
the company-wide rating of individual condominiums and homes to assure
vacationers that rental accommodations will meet their expectations, as well as
customer satisfaction surveys and follow-up calls.

OFFER VACATIONERS SUPERIOR CUSTOMER SERVICE. Management believes that
maintaining superior levels of customer service is critical to developing a
reputation for high quality condominiums and homes and attracting new customers.
Vacationers typically rent vacation condominiums and homes for greater space and
flexibility, but these customers also frequently desire many of the amenities
and services of hotel accommodations. As a result, the Company emphasizes
customer service by offering conveniently located check-in locations, efficient
check-in and check-out procedures, extended front desk hours, a commitment to
clean units and access to emergency contact and maintenance personnel. The
Company also strives to offer maximum flexibility to meet the varied needs of
its vacationers and in most markets can arrange for services such as golf tee
times, rental bicycles, ski lift tickets, grocery delivery or restaurant
reservations. By offering the convenience and accommodations of a condominium or
home while providing many of the amenities and services of a hotel, the Company
believes it will continue to strengthen the loyalty of its existing customers
and attract new vacationers into the vacation condominium and home rental
market.

ENHANCE VALUE FOR CONDOMINIUM AND HOME OWNERS. Through effective national
marketing, a recognized brand and implementation of strategies designed to
increase occupancy and rental rates, the Company plans to enhance the rental
income for vacation condominium and home owners. Since substantially all of the
condominiums and homes managed by the Company are second homes with absentee
owners, the Company offers a range of high quality vacation rental and property
management services designed to meet the broad real estate needs of these
owners. In most markets, the Company will assume broad responsibility for the
condominium or home, from marketing and handling all aspects involved in renting
the individual condominium or home to managing the common properties and
homeowners' association. In addition, the Company provides owners with concise,
timely and accurate monthly statements and payments for the rental and
management of their condominiums and homes. The Company believes that its
reputation for high quality, comprehensive management services will be a key
competitive advantage in increasing the number of condominiums and homes under
its management within its existing markets.

CAPITALIZE ON THE EXPERIENCE OF SENIOR MANAGEMENT. The Company intends to
capitalize on the industry experience of members of its senior management. David
C. Sullivan, the Chairman and Chief Executive Officer is the former Chief
Operating Officer of Promus Hotel Corporation, where he was primarily
responsible for the creation and expansion of the Hampton Inn, Homewood Suites
and Embassy Suites lines. David L. Levine, President and Chief Operating
Officer, is the former President and Chief Operating Officer of Equity Inns,
Inc., a real estate investment trust specializing in hotel acquisitions. Jeffery
M. Jarvis, Senior Vice President and Chief Financial Officer, is the former Vice
President, Controller and Principal Accounting Officer of Promus Hotel
Corporation and Jules S. Sowder, Senior Vice President of Marketing, is the
former Vice President of Marketing of Promus Hotel Corporation. In addition, W.
Michael Murphy will serve as Senior Vice President of Development. Mr. Murphy
has over 20 years experience in the hotel and resort industries, with particular
experience in planning and development.

MAINTAIN LOCAL RELATIONSHIPS AND EXPERTISE. The management teams of the
Founding Companies each have extensive experience in their respective resort
areas, and many of the individuals are very active in the local community. The
Company believes that the management teams have a valuable understanding of
their respective markets and businesses and have developed strong local
relationships. These relationships are critical in attracting additional
condominiums and homes for rental and enable the Company to provide additional
concierge-type services to its vacationers. Accordingly, the Company

<PAGE>

intends to operate with a decentralized management strategy and allow local
managers to utilize their knowledge and expertise about the condominiums and
homes available for rent, the offerings of local competitors and the desires of
vacationers in their areas to provide superior customer service.

GROWTH STRATEGY

The Company intends to enhance its position as the leading provider of
vacation condominium and home rentals in premier destination resorts by pursuing
the following growth strategies:

IMPLEMENT A NATIONAL MARKETING STRATEGY. The Company intends to implement a
national marketing program designed to increase vacationer awareness of its
rental condominiums and homes and establish a nationally recognized high quality
name and image, while promoting the unique characteristics of its individual
resorts. In addition, the Company will market to existing customers of the
Founding Companies to capitalize on cross-selling opportunities and increase
customer loyalty. Through its collection of approximately 10,600 beach and
mountain resort rental properties and hotel rooms and the databases of customer
information maintained by the Founding Companies, the Company intends to offer
customers of each Founding Company similar properties and services in its other
resorts. The Company believes the integrated marketing efforts of the Founding
Companies will increase customer awareness of the Company's condominiums and
homes, lead to an increased demand for the Company's rentals and result in
higher occupancy and rental rates for its condominium and home owners. The
Company also believes that the anticipated increase in rental income for owners
will ultimately be a competitive advantage in attracting new property owners.

CAPITALIZE ON TECHNOLOGY. Management believes that investment in technology
will be critical in building its national brand and will create a significant
competitive advantage. The Company intends to utilize the technological
expertise of First Resort, a Founding Company, to enhance the ease and
convenience for vacationers of accessing information and making reservations for
vacation rentals. The Company's strategy is to create a comprehensive web site
that presents all of the Company's condominium, home and hotel room rentals,
including photographs and detailed floor plans, and allows vacationers to make
reservations and payments. Several of the Founding Companies already provide
photographs and rate and availability information for condominiums and homes
over the world wide web, and the Company intends to leverage these capabilities
to implement a central reservation system with world wide web functionality. In
addition to facilitating the ability to provide one-stop shopping, the Company
intends to link the Founding Companies' and future acquired companies' databases
in order to enhance its cross-selling and direct marketing efforts.

INCREASED USE OF ADDITIONAL MARKETING CHANNELS. Currently, most vacationers
locate vacation condominiums and homes through referrals, word-of-mouth, limited
local advertising and direct mailings. The Company believes there are
significant opportunities to expand the use of additional marketing channels.
The Company intends to capitalize on its extensive market presence by increasing
the use of other marketing channels such as the world wide web, travel agents
and national print media, which are difficult for local vacation rental and
property management companies to use in a cost-effective manner. Given the
Company's size and presence in premier destination resorts, the Company believes
it will be an attractive partner to travel agents, tour package operators and
other travel providers. These relationships should be a significant source of
new customers and, in particular, will be a valuable marketing channel for
off-peak seasons. Lastly, the Company plans to focus greater marketing efforts
on European and other international travelers through a more extensive use of
international print media, wholesalers and packaged tour companies.

EXPAND MARKET SHARE OF CONDOMINIUM AND HOME RENTALS IN EXISTING MARKETS. A
key element of the Company's growth strategy is to increase its selection of
condominium and homes in order to expand its market share and strengthen the
local brands of each of the Founding Companies. The Company intends to attract
new property owners by achieving high occupancy rates through effective national
marketing, cross-selling and by offering additional incentives to property
owners, such as participation in a rental exchange program. In addition, in
order to capture a higher portion of the rental business from new condominiums
and homes being built in its markets, the Company will focus on building and
strengthening its relationships with both local and national developers as well
as real estate brokerage companies.

<PAGE>

PURSUE OPPORTUNITIES FOR PROFIT MARGIN EXPANSION VIA COST SAVINGS AND
ADDITIONAL REVENUE SOURCES. Through the implementation of best practices, the
Company believes there are numerous opportunities to improve the margins of the
Founding Companies. First, the Company will strive to improve the efficiency of
certain basic services such as reservations, housekeeping and laundry. The
Company also believes that larger inventories of condominiums and homes in its
markets will provide certain economies of scale in advertising, check-in
locations, management, housekeeping and other services. In addition, several of
the Founding Companies have developed unique additional revenue opportunities,
such as assisting property owners in refurbishing their properties, offering
trip cancellation insurance and charging fees for certain concierge-type
services, several of which are adaptable at other Founding Companies. The
Company believes that enhanced efficiency and economies of scale will reduce
overall operating costs and allow the Company to achieve increased margins by
spreading operating and corporate overhead costs over a larger revenue base.

BUILD NATIONAL MARKET PRESENCE THROUGH STRATEGIC ACQUISITIONS. The vacation
rental and property management industry is highly fragmented, with over 3,000
geographically dispersed companies in the United States. The Company believes
that such fragmentation provides significant opportunities for consolidation.
The Company intends to aggressively pursue both domestic and international
acquisitions in order to gain a presence in additional premier destination
resort locations as well as expand its market share in existing resorts. The
Company will seek companies with strong reputations and a commitment to high
quality condominiums and homes and customer service. While the Company will seek
to acquire the leading companies in each new market, the Company also plans to
pursue tuck-in acquisitions through which it can expand its selection of
condominiums and homes available for rent in its existing markets. Many
acquisition candidates utilize First Resort's software, which the Company
believes will enhance its ability to integrate such companies upon acquisition.

The Company expects to offer acquisition candidates: (i) affiliation with a
national brand; (ii) the ability to cross-sell to customers of other vacation
rental and property management companies; (iii) the ability to increase
liquidity as a result of the Company's financial strength as a public company;
and (iv) the ability to increase profitability as a result of the Company's
centralization of certain administrative functions and other economies of scale.

MARKETS

The Company currently manages condominiums and homes in many popular beach
and mountain resorts in the United States and Canada. Through the implementation
of its acquisition strategy, the Company plans to establish an international
network of vacation condominiums and homes in every major type of premier
destination resort market, including beach, mountain, golf and tennis resorts.

<PAGE>

The following table sets forth certain information regarding the Founding
Companies, with the exception of First Resort, at January 31, 1998:

<TABLE>
<CAPTION>
DATE NUMBER OF NUMBER OF
FOUNDED (1) CONDOMINIUMS(2) HOMES TOTAL UNITS
------------- ----------------- ---------- -----------------
<S> <C> <C> <C> <C>
BEACH AND ISLAND RESORTS

HAWAII
Aston Hotels & Resorts .................. 1948 4,771 1 4,772
Maui Condominium and Home ............... 1988 430 2 432

THE OUTER BANKS, NC
Brindley & Brindley ..................... 1985 49 397 446

BETHANY BEACH, DE
Coastal Resorts ......................... 1982 545 4 549

NANTUCKET, MA
The Maury People(3) ..................... 1969 -- 1,200 1,200

SANIBEL AND CAPTIVA ISLANDS, FL
Priscilla Murphy Realty ................. 1955 669 233 902

ST. SIMONS ISLAND, GA
Trupp-Hodnett Enterprises ............... 1987 381 54 435

MOUNTAIN RESORTS

BRECKENRIDGE, CO
Collection of Fine Properties ........... 1985 462 10 472

ASPEN, CO
Houston and O'Leary(3) .................. 1986 7 120 127

PARK CITY, UT
Resort Property Management .............. 1978 280 46 326

TELLURIDE, CO
Telluride Resort Accommodations ......... 1985 433 14 447

WHISTLER, BRITISH COLUMBIA
Whistler Chalets ........................ 1986 432 12 444
----- ----- -----
Total .................................. 8,459 2,093 10,552 (2)
===== ===== ======

</TABLE>

- ----------
(1) Includes predecessors.

(2) Includes 1,545 hotel rooms at Aston Hotels & Resorts, 33 hotel rooms at
Collection of Fine Properties and 74 hotel rooms at Trupp-Hodnett
Enterprises.

(3) Houston and O'Leary and The Maury People are the only Founding Companies
which have non-exclusive rental agreements for their rental properties.

SERVICES OFFERED

SERVICES OFFERED TO VACATIONERS. The Company provides services to
vacationers during all stages of the rental transaction from the selection and
reservation of a condominium or home to the vacationers' arrival and throughout
their stay. To make the selection and reservation process as simple and
convenient as possible, the Company currently provides vacationers with catalogs
containing color photographs and descriptions of available condominiums or
homes, and reservations are taken over the phone by reservation agents at each
of its resort communities who are familiar with the specific condominiums and
homes available. Many of the Founding Companies use a rating system to ensure
that vacationers' expectations are met by the condominium or home selected and
several of the Founding Companies also have world wide web sites where
vacationers can obtain price and availability information.

For the vacationers' arrival, the Company offers conveniently located
check-in and check-out locations, many of which are located on-site at the front
desk of the Company's condominium properties. Off-site check-in locations are
typically conveniently located and easily accessible in their respective

<PAGE>

resort communities. In most destination resort communities, the Company
maintains more than one conveniently located check-in facility. During their
stay, vacationers at most locations are offered frequent cleaning and
housekeeping services and access to emergency contact and maintenance personnel.
In most locations, the Company offers more specialized "concierge" services such
as bicycle and ski equipment rentals, ski lift tickets sales, shuttles to ski
areas, golf tee times and restaurant reservations. The Company typically
receives a fee for the provision of such services.

SERVICES OFFERED TO CONDOMINIUM AND HOME OWNERS. The Company provides
condominium and home owners a wide range of high-quality vacation rental and
property management services designed to meet their broad real estate needs. In
most markets, the Company will assume complete responsibility for the
condominium or home, including marketing, renting and maintaining the specific
property as well as providing security and managing the common properties and
homeowners' association. The Company currently engages in extensive marketing
activities, including direct catalog mailings to prior and prospective
vacationers and direct solicitations of travel agents, wholesalers and package
tour operators. The Company also handles all interaction with vacationers,
including accepting rental payments and security deposits, operating check-in
and check-out locations and offering linen, housekeeping and other services.
Property owners are paid rental income each month for rental activity in the
preceding month and are given a concise, timely and accurate monthly statement
which details the rental activity and management of their condominiums and
homes.

Property maintenance services are provided by both Company employees and
third party independent contractors. Services are either regularly scheduled, or
provided on an "as needed" basis, depending on the service and the location. In
most markets, after each annual or semi-annual inspection, the Company makes
recommendations to property owners for maintenance, refurbishments and
renovations necessary to maintain the quality of their condominiums and homes.
In several of its destination resort markets, the Company provides professional
interior design and refurbishment services to property owners to assist with the
upkeep and appearance of their condominiums and homes. The Company includes
routine maintenance services, such as replacing light bulbs or broken china, as
part of an all inclusive commission structure in certain locations. In other
markets, the Company collects fees from property owners for maintenance services
through service and maintenance agreements and fee for service arrangements.

For owners desiring to sell their vacation condominium or home, many of the
Founding Companies provide traditional real estate brokerage services, including
listing and showing the property. In 1997, net real estate sales commissions
represented approximately 11% of combined revenues. The relative amount of such
revenue varies by Founding Company but is more significant in those markets
where the Company primarily offers free-standing homes, rather than
condominiums, such as Aspen and Nantucket. The Company believes that the
provision of real estate brokerage services provides it with a competitive
advantage in identifying and securing properties for its rental management
services and allowing it to meet all of the needs of vacation property owners.

MARKETING

The marketing efforts of traditional vacation rental and property
management companies, including the Founding Companies, are primarily through
word of mouth referrals from satisfied customers (both vacationers and property
owners), print advertising primarily in local newspapers and regional magazines
and direct mail solicitations and catalogs sent to prior customers. Potential
customers call as a result of a referral or in response to an advertisement or
other promotion and are assisted by reservation agents in selecting the
appropriate vacation property and making the reservation. In addition to these
efforts, several of the Founding Companies also market their rental inventories
to travel agents, tour package operators and other travel providers. Tour
package operators typically combine transportation to a destination resort with
the Company's vacation condominiums and homes and a car rental. Tour packages
are distributed almost exclusively through travel agents. The Company markets to
travel agents and package tour operators primarily through advertisements in
trade publications, such as the Hotel and Travel Index, and attendance at
national and regional travel industry trade shows. Several of the Founding
Companies also have sites on the world wide web that are actively updated to
increase the

<PAGE>

probability of meeting vacationers' search criteria for lodging in their
destination resort communities. Vacation rentals for those companies
attributable to initial contacts through their web sites have increased
significantly over the past three years. The Company estimates that combined
revenues for 1997 were derived 50% from traditional direct marketing, 30% from
package tour operators and wholesalers, 16% from travel agents and 4% from world
wide web inquiries.

The Company believes that a national marketing campaign should increase the
effectiveness of the Founding Companies and companies to be acquired in the
future, and expand the universe of potential customers for each resort location
in which the Company operates. The Company plans to leverage the reputations of
the Founding Companies to establish a nationally recognized high quality brand.
The extensive databases regarding previous and potential vacationers maintained
by the Founding Companies will be used to aggressively cross-sell vacation
opportunities in other destination resorts through direct solicitations. Similar
condominiums and homes and services in other leading markets will be offered to
customers of each Founding Company.

The Company also intends to capitalize on its extensive market presence and
increase its use of the world wide web, travel agents and the print media. The
Company plans to leverage the technology and expertise of First Resort to create
a central reservations system easily accessible on the world wide web which
vacationers ultimately can use to view photographs and detailed floor plans of
the condominiums and homes, and make reservations and payments. The Company also
believes that its extensive selection of vacation condominiums and homes will
make it an attractive partner to travel agents, tour package operators and other
travel providers. These relationships should be a significant source of new
customers and, in particular, will be a valuable marketing channel for off-peak
seasons. Lastly, the Company plans to focus greater marketing efforts on
European and other international travelers through a more extensive use of
international print media, wholesalers and packaged tour companies.

TECHNOLOGY

First Resort, one of the Founding Companies, is the leading provider of
integrated management, reservations and accounting software for the vacation
rental and property management industry. Nine of the Founding Companies and over
650 other vacation rental and property management companies use First Resort's
software programs. First Resort's software programs were developed to overcome
problems encountered by rental property managers in attempting to utilize
software programs developed for the hotel industry. First Resort's basic
software allows vacation rental and property management companies to automate
and computerize their reservations, billings, rental management and accounting
tasks. Vacation rental and property management companies can use the software to
generate current rates on individual condominium and homes and call up specific
descriptions of those condominiums and homes for potential customers. The
software also allows companies to generate monthly revenue reports for property
owners and to coordinate maintenance and housekeeping schedules. First Resort
also offers additional modules and interfaces, including a work order generator,
activities management system, credit card interface and world wide web enabled
reservations. While the Company plans to use First Resort's resources and
expertise to enhance the technological capabilities of the other Founding
Companies, First Resort will continue to market its software products to
independent vacation rental and property management companies and provide
service and technical support.

The Company intends to rely extensively on the products and management
expertise of First Resort to implement its technology strategy. Management
believes that investment in technology will be critical in building a national,
branded vacation rental and property management company for premier destination
resorts and will be a significant competitive advantage in the future. The
Company plans to utilize First Resort software to implement a central
reservations system with world wide web functionality to allow vacationers to
make their rental arrangements at any of the Company's properties. First Resort
also is developing a JAVA Client/Server based graphical reservations application
that will allow users of its software to completely integrate their reservations
systems with the world wide web, as well as a JAVA Client/Server based version
of all of its existing software applications. First Resort's software also will
allow the Company to quickly link the Founding Companies' and future acquired
companies' databases. The Company intends to develop proprietary data mining
tools in order to enhance its cross-selling and direct marketing efforts.

<PAGE>

COMPETITION

The vacation rental and property management industry is highly competitive
and has low barriers to entry. The industry has two distinct customer groups:
vacation property renters and vacation property owners. The Company believes
that the principal competitive factors in attracting vacation property renters
are: (i) market share and visibility; (ii) quality, cost and breadth of services
and properties provided; and (iii) long-term customer relationships. The
principal competitive factors in attracting vacation property owners are: (i)
the ability to generate higher rental income and (ii) comprehensive management
services at competitive prices. The Company competes for vacationers and
property owners primarily with approximately 3,000 owner-operated companies that
typically operate in a limited geographic area. Some of the Company's
competitors are affiliated with the owners or operators of resorts in which such
competitor provides its services. Certain of these smaller competitors may have
lower overhead cost structures and may be able to provide their services at
lower rates.

The Company also competes for vacationers with large hotel and resort
companies. Many of these competitor companies have greater financial resources
than the Company enabling them to finance acquisition and development
opportunities, to pay higher prices for the same opportunities or to develop and
support their own operations. In addition, many of these companies can offer
vacationers services not provided by vacation rental and property management
companies, and they may have greater name recognition among vacationers. These
companies might be willing to sacrifice profitability to capture a greater
portion of the market for vacationers or pay higher prices than the Company for
the same acquisition opportunities. Consequently, the Company may encounter
significant competition in its efforts to achieve its internal and acquisition
growth objectives as well as its operating strategies focused on increasing the
profitability of the Founding Companies and subsequently acquired companies.

EMPLOYEES

Upon consummation of the Offering, the Company will have approximately
1,200 employees. The Company relies significantly on temporary employees to meet
peak season demands. In the course of performing service and maintenance work,
the Company also utilizes the services of independent contractors. The Company
believes its relationships with its employees and independent contractors are
good.

LEGAL PROCEEDINGS

The Company is involved in various legal actions arising in the ordinary
course of business. The Company believes that none of these actions will have a
material adverse effect on its business, financial condition or results of
operations.

FACILITIES

All of the Company's facilities will be leased although two of the Founding
Companies, Collection of Fine Properties and Whistler Chalets, currently own
their facilities. Prior to the Combinations, these Founding Companies are
transferring ownership of their facilities and certain other properties to their
stockholders or to entities controlled by their stockholders who will enter into
leases with the Company for such facilities. The Company intends whenever
possible to require acquired companies that own facilities to also transfer
those facilities to their owners prior to acquisition. The Company currently has
53 leased and owned properties consisting principally of offices, maintenance,
laundry and storage facilities, of which 46 of these are leased under leases
with remaining terms from two months to ten years. Some of the facilities
currently operated by the Company are, or will be after the Combinations, leased
from related parties. See "Certain Transactions -- Leases of Facilities."

GOVERNMENTAL REGULATION

The Company's operations are subject to various federal, state and local
laws and regulations, including (i) licensing requirements applicable to real
estate operations and (ii) laws and regulations relating to consumer protection.
On a federal level, the Federal Trade Commission has taken the most

<PAGE>

active regulatory role through the Federal Trade Commission Act, which prohibits
unfair or deceptive acts or competition in interstate commerce. Other federal
legislation to which the Company is or may be subject includes the Real Estate
Settlement Procedures Act, the Fair Debt Collection Practices Act, the
Interstate Land Sales Full Disclosure Act, Telephone Consumer Protection Act,
Telemarketing and Consumer Fraud and Abuse Prevention Act, Fair Housing Act and
the Civil Rights Acts of 1964 and 1968. Many state and local regulations
governing real estate services require permits and licenses to be held by
individuals. In some cases, a required permit or license held by a single
individual may be sufficient to authorize specified activities for all the
Company's employees who work in the state or county that issued the permit or
license. In addition, certain international laws and regulations may also be
applicable to the Company's international operations. The Company believes that
it is in material compliance with all federal, state, local and foreign laws and
regulations to which it is currently subject.

<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information concerning the Company's
directors, executive officers and certain key employees, and those persons who
will become directors and executive officers of the Company upon consummation of
the Offering.

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------- ----- ----------------------------------------------------
<S> <C> <C>
David C. Sullivan ............... 58 Chairman and Chief Executive Officer, Director
David L. Levine ................. 50 President and Chief Operating Officer, Director
Jeffery M. Jarvis ............... 42 Senior Vice President and Chief Financial Officer
W. Michael Murphy ............... 52 Senior Vice President, Development
Jules S. Sowder ................. 41 Senior Vice President, Marketing
John K. Lines ................... 38 Senior Vice President, General Counsel and Secre-
tary
Frederick L. Farmer ............. 48 Senior Vice President and Chief Information Officer
Luis Alonso ..................... 34 CEO-Collection of Fine Properties; Director
Douglas R. Brindley ............. 40 President-Brindley & Brindley; Director
Paul T. Dobson .................. 43 Vice President-Maui Condominium and Home;
Director
Sharon Benson Doucette .......... 60 President-The Maury People; Director
Evan H. Gull .................... 51 Vice President-First Resort; Director
Heidi O'Leary Houston ........... 45 President-Houston and O'Leary; Director
Daniel L. Meehan ................ 48 President-Resort Property Management; Director
J. Patrick McCurdy .............. 50 President-Whistler Chalets; Director
Andre S. Tatibouet .............. 57 CEO-Aston Hotels & Resorts; Director
Hans F. Trupp ................... 58 Chairman-Trupp-Hodnett Enterprises; Director
Park Brady ...................... 50 Director
Joshua M. Freeman ............... 33 Director
Charles O. Howey ................ 70 Director
Michael D. Rose ................. 56 Director
Joseph V. Vittoria .............. 63 Director
Theodore L. Weise ............... 54 Director
Elan J. Blutinger ............... 42 Director
D. Fraser Bullock ............... 43 Director
Leonard A. Potter ............... 36 Advisory Director
</TABLE>

DAVID C. SULLIVAN will become the Chairman and Chief Executive Officer and
a director of the Company upon the consummation of the Offering. From April 1995
to December 1997, Mr. Sullivan was the Executive Vice President and Chief
Operating Officer, and a director, of Promus Hotel Corporation, a publicly
traded hotel franchisor, manager and owner of hotels whose brands include
Hampton Inn, Homewood Suites and Embassy Suites. From 1993 to 1995, Mr. Sullivan
was the Executive Vice President and Chief Operation Officer of the Hotel
Division of The Promus Companies Incorporated ("PCI"). He was the Senior Vice
President of Development and Operations of the Hampton Inn/Homewood Suites Hotel
Division of PCI from 1991 to 1993. From 1990 to 1991, Mr. Sullivan was the Vice
President of Development of the Hampton Inn Hotel Division of PCI.

DAVID L. LEVINE will become the President and Chief Operating Officer and a
director of the Company upon the consummation of the Offering. Mr. Levine was
President and Chief Operating Officer of Equity Inns, Inc., a real estate
investment trust that specializes in hotel acquisitions, from June

<PAGE>

1994 to April 1998. Mr. Levine was also President and Chief Operations Officer
of Trust Management Inc., which operated Equity Inns properties, from June 1994
until November 1996. Prior to that, he was President of North American
Hospitality, Inc., a hotel management and consulting company, which he formed in
1985.

JEFFERY M. JARVIS will become Senior Vice President and Chief Financial
Officer of the Company upon the consummation of the Offering. From April 1995 to
January 1998, Mr. Jarvis was the Vice President, Controller and Principal
Accounting Officer of Promus Hotel Corporation. From September 1994 to April
1995, Mr. Jarvis was the Director of Special Projects for PCI. He was the
Director of Finance of Harrah's St. Louis Riverport from June of 1994 to
September 1994, and was the Assistant Controller of PCI from 1992 to 1994. From
1979 to 1992, Mr. Jarvis was a Senior Audit Manager of Arthur Andersen LLP.

W. MICHAEL MURPHY will become the Senior Vice President of Development of
the Company upon the consummation of the Offering. Mr. Murphy was President of
Footprints International, a company involved in the planning of resort
properties in the Bahamas, from 1996 to 1997. From 1994 to 1996, he was a Senior
Managing Director of Geller & Co., a Chicago-based hotel advisory and asset
management firm. Prior to joining Geller & Co. he acted as a hotel consultant
from 1992 to 1994. Mr. Murphy was a founding partner of the hotel investment
firm of Moeckel Murphy (1990-1992) and a founding general partner of Metric
Partners (1981-1990), a real estate investment company that was a joint venture
between the partners of The Fox Group and Metropolitan Life Insurance Company.
Prior to that time, he was the Director of Real Estate for Holiday Inns, Inc.
from 1973 to 1981.

JULES S. SOWDER will become the Senior Vice President of Marketing of the
Company upon the consummation of the Offering. Ms. Sowder was Vice President of
Marketing for Promus Hotel Corporation from 1995 to January 1998. From 1993 to
1995, she served as the Vice President of Marketing for the Hampton Inn division
of Promus Hotel Corporation. She served as Director of Marketing for the Hampton
Inn division from 1990 to 1993. Ms. Sowder has been recognized by Travel Agent
Magazine as one of the Top 10 most successful women in the hotel industry.

JOHN K. LINES will become Senior Vice President, General Counsel and
Secretary of the Company upon the consummation of the Offering. Mr. Lines was
General Counsel and Secretary of Insignia Financial Group, Inc., a fully
integrated real estate services company from 1994 until March 1998. He also
served as Vice President and Secretary of Insignia Properties Trust from 1996
until March 1998. From May 1993 until June 1994, Mr. Lines was employed as
Assistant General Counsel and Vice President of Ocwen Financial Corporation, a
unitary thrift holding company. From October 1991 until April 1993, Mr. Lines
was employed as Senior Attorney of Banc One Corporation in Columbus, Ohio.

FREDERICK L. FARMER will become Senior Vice President and Chief Information
Officer of the Company upon the consummation of the Offering. Mr. Farmer was
Senior Vice President for Internet and Desktop Services of Marriott
International from November 1996 to April 1998. He also served as Vice President
of Data Resources & Services for Marriott International from March 1992 to
November 1996.

LUIS ALONSO will become a director of the Company after the consummation of
the Offering. Mr. Alonso has served as the Chief Executive Officer and President
of Collection of Fine Properties since January 1997, when Tyra Management
Company and two other management companies merged into the newly formed
Collection of Fine Properties. Mr. Alonso was the President of Tyra Management
Company from 1985 until the merger. Mr. Alonso is a member of the Breckenridge
Town Council and is Vice Chairman of the Breckenridge Central Reservation Board.

DOUGLAS R. BRINDLEY will become a director of the Company after the
consummation of the Offering. Mr. Brindley and his wife Betty Shotton Brindley
are co-founders of both B&B On The Beach, Inc. and Brindley & Brindley Realty &
Development, Inc. Mr. Brindley is a director and President of both companies.

PAUL T. DOBSON will become a director of the Company after the consummation
of the Offering. Mr. Dobson is a co-founder of Maui Condominium and Home and has
served as the company's Vice President since 1991. Mr. Dobson is the current
President of the Vacation Rental Managers Association, a trade organization
representing over 300 vacation rental and property management companies in North
America.

<PAGE>

SHARON BENSON DOUCETTE will become a director of the Company after the
consummation of the Offering. Ms. Doucette has been the President and/or
Treasurer of The Maury People since its incorporation in 1990. Prior to that
time, Ms. Doucette was a partner in and subsequently the sole proprietor of a
predecessor real estate company, beginning in the late 1970s.

EVAN H. GULL will become a director of the Company after the consummation
of the Offering. Mr. Gull is a co-founder of First Resort and is currently a
director and the Vice President of Software Development, a position he has held
since April 1995. Mr. Gull was the Chief Operating Officer of the company from
1993 to 1995. He also served as the Department Manager for Sales and
Administration during that same time period. He is the principal developer of
First Resort's software products.

HEIDI O'LEARY HOUSTON will become a director of the Company after the
consummation of the Offering. Ms. Houston formed Houston and O'Leary in 1986 and
has served as President and principal broker since the company's formation.

DANIEL L. MEEHAN will become a director of the Company after the
consummation of the Offering. Mr. Meehan is the co-founder and has served as
President of Resort Property Management since 1982. Mr. Meehan has over 23 years
of experience in the property management industry, the last 19 of them in Park
City.

J. PATRICK MCCURDY will become a director of the Company after the
consummation of the Offering. Mr. McCurdy has served as the President and
Secretary of Whistler Chalets, since he founded the company in 1986. Mr. McCurdy
is a director and a former Vice-President of the Vacation Rental Managers
Association.

ANDRE S. TATIBOUET will become a director of the Company after the
consummation of the Offering. Mr. Tatibouet has been the Chairman and Chief
Executive Officer of Aston Hotels & Resorts since 1969. Mr. Tatibouet is a
director of the Hawaii Hotel Association, the Hawaii Visitors Bureau and the
American Hotel & Motel Association.

HANS F. TRUPP will become a director of the Company after the consummation
of the Offering. Mr. Trupp has served as the Chairman of Trupp-Hodnett
Enterprises since 1987. He was also Chairman of Trupp-McGinty Realty, Inc. from
1984 to 1987 and Trupp McGinty Realtors/Insurers, which was formed in 1978.

PARK BRADY will become a director of the Company after the consummation of
the Offering. Mr. Brady is a founder of Telluride Resort Accommodations, and has
served as the President and a director of the company since June 1997. He has
served as Director of Sales and Marketing for Telluride Resort Accommodations
from 1989 to 1994, and as General Manager from 1987 to 1989. From 1994 to 1997,
Mr. Brady developed real estate projects in the Telluride area. Mr. Brady is a
former member of the Telluride Town Council and is also former Chairman of the
Telluride Chamber Resort Association.

JOSHUA M. FREEMAN will become a director of the Company after the
consummation of the Offering. Mr. Freeman has served since 1996 as President and
Managing Member of Coastal Resorts Realty L.L.C. and as President and a director
of Coastal Resorts Management, Inc. Mr. Freeman has served as the President and
Chief Operating Officer of Carl M. Freeman Associates, Inc., a real estate
development and management company, since 1992.

CHARLES O. HOWEY will become a director of the Company after the
consummation of the Offering. Mr. Howey has served as Chairman of Priscilla
Murphy Realty since January 1997. Mr. Howey has also been President of C.O.
Management Services, a regional property management company, since the 1950's.
He is the founder and past president of Howey & Associates, Inc., an independent
insurance agency.

MICHAEL D. ROSE will become a director of the Company after the
consummation of the Offering. Mr. Rose served as Chairman of the Board of Promus
Hotel Corporation from April 1995 to December 1997. From June 1995 to December
1996, he was Chairman of the Board of Harrah's Entertainment, Inc. Prior to
that, Mr. Rose served as Chairman of the Board (1989-1995) and Chief Executive
Officer and President (1989-1991) of The Promus Companies, Inc. and Chairman of
the Board (1984-1990) and

<PAGE>

President and Chief Executive Officer (1988-1990) of Holiday Corporation. Mr.
Rose is also a director of Ashland, Inc., Darden Restaurants, Inc., First
Tennessee National Corporation, General Mills, Inc., Promus Hotel Corporation
and Stein Mart, Inc.

JOSEPH V. VITTORIA will become a director of the Company after the
consummation of the Offering. Mr. Vittoria has been the Chairman and Chief
Executive Officer of Travel Services International, Inc., a leading single
source distributor of specialized leisure travel services, since July 1997. From
September 1987 to February 1997 Mr. Vittoria was the Chairman and Chief
Executive Officer of Avis, Inc., a multinational auto rental company. Mr.
Vittoria serves on the Board of Directors of United Air Lines, Inc., Transmedia
Europe, Transmedia Asia and various non-profit associations.

THEODORE L. WEISE will become a director of the Company after the
consummation of the Offering. Since February 1998, Mr. Weise has been the
President and Chief Executive Officer of Federal Express Corporation, the
world's largest transportation company. He was previously Executive Vice
President and Chief Operating Officer of Federal Express Corporation from
February 1996 to January 1998. From August 1991 to February 1996 he served as
Senior Vice President of Air Operations.

ELAN J. BLUTINGER has been a director of the Company since its formation in
September 1997. He is a co-founder and Managing Director of Alpine Consolidated
II, LLC, a consolidator of highly fragmented businesses. He was a co-founder of
Travel Services International, Inc. and is currently a director of the company
and Chairman of its Compensation Committee. From 1996 until December 1997, he
was a co-founder and Managing Director of Alpine Consolidated LLC. From 1987
until its acquisition in 1995, he was the Chief Executive Officer of Shoppers
Express, which became "OnCart" in 1997, an electronic retailing service in the
grocery industry, and served as a director until December 1997. From 1983 until
its acquisition in 1986 by IDI, Mr. Blutinger was Chief Executive Officer of
DSI, a pioneer in wholesale software distribution. Mr. Blutinger is an investor
in Capstone Partners, LLC.

D. FRASER BULLOCK has been a director of the Company since its formation in
September 1997. Mr. Bullock is a Managing Director of Alpine Consolidated II,
LLC. He was a co-founder of Travel Services International, Inc. and is currently
a director of the company and Chairman of its Audit Committee. From its
inception in 1994 to 1996, he was the President and Chief Operating Officer of
VISA Interactive, a wholly-owned subsidiary of VISA International. In 1993, Mr.
Bullock became the President and Chief Operating Officer of U.S. Order, Inc., a
provider of remote electronic transaction processing, until it was acquired by
VISA International in 1994. From 1991 to 1992, Mr. Bullock was the Senior Vice
President of U.S. Order, Inc. From 1986 to 1991, he was the Chief Financial
Officer and Executive Vice President of World Corp., Inc., a holding company
with various operating subsidiaries including World Airways, Inc. Mr. Bullock
was a founding partner of Bain Capital, a Manager of Bain and Company, and a
founder of MediVision, Inc., a consolidation of eye surgery centers.

LEONARD A. POTTER has been a director of the Company since its formation in
September 1997. After the Offering, he will be an Advisory Director to the
Board. Mr. Potter is a co-founder and Managing Director of Capstone Partners,
LLC, a venture firm specializing in consolidation transactions. He was a
co-founder of Travel Services International, Inc. and is currently an advisory
director to its board of directors. Capstone Partners, LLC was a co-sponsor of
Staffmark, Inc., a consolidation of six staffing service companies in September
1996 with a simultaneous initial public offering. Prior to forming Capstone
Partners, LLC in April 1996, Mr. Potter was an attorney at Morgan, Lewis &
Bockius LLP for more than five years practicing in the areas of mergers and
acquisitions and securities law. While at Morgan, Lewis & Bockius he represented
a number of public companies in connection with their creation and subsequent
implementation of consolidation strategies similar to the Company's, including
U.S. Office Products, F.Y.I., Inc. and Cotelligent Group.

BOARD OF DIRECTORS

BOARD COMMITTEES. The Company expects that the Board of Directors will
establish an Executive Committee, Audit Committee and a Compensation Committee,
effective upon the closing of the Offering. The Executive Committee will be
granted such authority as may be determined from time to time by a majority of
the Board of Directors. The Audit Committee will review the results and scope of
the

<PAGE>

audit and other services provided by the Company's independent accountants. The
Compensation Committee will approve salaries and certain incentive compensation
for management and key employees of the Company and will administer the 1998
Long-Term Incentive Plan.

DIRECTOR COMPENSATION. Directors who are also employees of the Company or
one of its subsidiaries will not receive additional compensation for serving as
directors. Each director who is not an employee of the Company or one of its
subsidiaries will receive $2,000 for attendance at each Board of Directors
meeting and $1,000 for each committee meeting (unless held on the same day as a
Board of Directors meeting). In addition, under the Company's 1998 Long-Term
Incentive Plan, each non-employee director will automatically receive an option
to acquire 10,000 shares of Common Stock upon such person's initial election as
a director and, subject to a certain exception, an annual option to acquire
5,000 shares at each annual meeting of the Company's stockholders thereafter at
which such director is re-elected or remains a director. See "-- 1998 Long-Term
Incentive Plan." Directors also will be reimbursed for out-of-pocket expenses
incurred in attending meetings of the Board of Directors or committees thereof,
in their capacity as directors.

The Advisory Director will attend meetings of the Board of Directors,
consult with officers and directors of the Company and provide guidance, but not
direction, concerning management and operation of the Company's business. The
Advisory Director is not a director of the Company and, accordingly, will not
have a right to vote as a director.

All officers serve at the discretion of the Board of Directors.

EXECUTIVE COMPENSATION; EMPLOYMENT AGREEMENTS; COVENANTS-NOT-TO-COMPETE

The Company was incorporated in September 1997, has conducted no operations
and generated no revenues to date and did not compensate any of its executive
officers for services rendered in 1997. The Company anticipates that during 1998
its most highly compensated executive officers will be Messrs. Sullivan, Levine,
Jarvis, Murphy, Farmer, Lines and Ms. Sowder. The Company will grant Messrs.
Sullivan, Levine, Jarvis, Murphy, Farmer, Lines and Ms. Sowder options to
purchase 100,000, 75,000, 50,000, 50,000, 75,000, 25,000 and 25,000 shares of
Common Stock, respectively, at the initial public offering price per share.
These options will vest in equal installments on each of the four anniversaries
of the date of the consummation of the Offering.

Messrs. Sullivan, Levine, Jarvis, Murphy, Farmer, Lines and Ms. Sowder have
entered into employment agreements with the Company, effective upon the
consummation of the Offering, providing for annual base salaries of $200,000,
$162,500, $150,000, $150,000, $125,000, $125,000 and $125,000, respectively.
Each of these agreements are for a term of three years (the "Initial Term"). In
addition, certain executive officers of the Founding Companies, including each
representative of the Founding Companies serving as a director of the Company,
other than Messrs. Brady, Freeman and Howey, will enter into employment
agreements for an Initial Term of three years, effective upon the consummation
of the Offering. Unless terminated or not renewed by the Company or the
employee, the term will continue after the Initial Term on a year-to-year basis
on the same terms and conditions existing at the time of renewal. Each
employment agreement will contain a covenant not to compete (the "Covenant")
with the Company for a period of two years immediately following termination of
employment or, in the case of a termination by the Company without cause in the
absence of a change in control, for a period of one year following termination
of employment. Under the Covenant, the executive officer generally is prohibited
from: (i) engaging in any hotel management or non-commercial property
management, rental or sales business in direct competition with the Company
within defined geographic areas in which the Company or its subsidiaries does
business; (ii) enticing a managerial employee of the Company away from the
Company; (iii) calling upon any person or entity which is, or has been, within
one year prior to the date of termination, a customer of the Company; or (iv)
calling upon a prospective acquisition candidate which the employee knew was
approached or analyzed by the Company, for the purpose of acquiring the entity.
The Covenant may be enforced by injunctions or restraining orders and shall be
construed in accordance with the changing location of the Company.

Each of these employment agreements will provide that, in the event of a
termination of employment by the Company without cause during the Initial Term
the employee will be entitled to receive from the Company an amount equal to his
or her then current salary for the remainder of the Initial

<PAGE>

Term or for one year, whichever is greater. In the event of a termination of
employment without cause after the Initial Term of the employment agreement, the
employee will be entitled to receive an amount equal to his or her then current
salary for one year. In the event of a change in control of the Company (as
defined in the agreement) during the Initial Term, if the employee is not given
at least five days' notice of such change in control and the successor's intent
to be bound by such employment agreement, the employee may elect to terminate
his or her employment and receive in one lump sum three times the amount he or
she would receive pursuant to a termination without cause during the Initial
Term. The employment agreements also state, that in the event of a termination
without cause by the Company or a change in control, the employee may elect to
waive the right to receive severance compensation and, in such event, the
noncompetition provisions of the employment agreement will not apply. In the
event the employee is given at least five days' notice of such change in
control, the employee may elect to terminate his or her employment agreement and
receive in one lump sum two times the amount he or she would receive pursuant to
a termination without cause during the Initial Term. In such an event, the
noncompetition provisions of the employment agreement would apply for two years
from the effective date of termination.

Each Agreement and Plan of Organization also contains a covenant
prohibiting the former owners of the Founding Companies from competing with the
Company for a period of three years following the consummation of the Offering.
These noncompetition provisions will not apply with respect to a former owner of
a Founding Company who has entered into an employment agreement with the Company
in the event the former owner is terminated without cause and elects to waive
the right to receive severance compensation.

1998 LONG-TERM INCENTIVE PLAN

No stock options were granted to, or exercised by or held by any executive
officer in 1997. In March 1998, the Board of Directors and the Company's
stockholders approved the Company's 1998 Long-Term Incentive Plan (the "Plan").
The purpose of the Plan is to provide a means by which the Company can attract
and retain executive officers, employee directors, other key employees,
non-employee and advisory directors and consultants of and other service
providers to the Company and its subsidiaries and to compensate such persons in
a way that provides additional incentives and enables such persons to acquire or
increase a proprietary interest in the Company. Individual awards under the Plan
may take the form of one or more of: (i) either incentive stock options ("ISOs")
or non-qualified stock options ("NQSOs"); (ii) stock appreciation rights
("SARs"); (iii) restricted or deferred stock; (iv) dividend equivalents; (v)
bonus shares and awards in lieu of Company obligations to pay cash compensation;
(vi) non-employee directors' deferred shares; and (vii) other awards the value
of which is based in whole or in part upon the value of the Common Stock.

The Plan will generally be administered by a committee (the "Committee"),
which will initially be the Compensation Committee of the Board of Directors,
except that the Board of Directors will itself perform the Committee's functions
under the Plan for purposes of grants of awards to non-employee directors, and
may perform any other function of the Committee as well. The Committee generally
is empowered to select the individuals who will receive awards and the terms and
conditions of those awards, including exercise prices for options and other
exercisable awards, vesting and forfeiture conditions (if any), performance
conditions, the extent to which awards may be transferable and periods during
which awards will remain outstanding. Awards may be settled in cash, shares,
other awards or other property, as determined by the Committee.

The Company has reserved 1,807,000 shares of Common Stock for use in
connection with the Plan. The maximum number of shares of Common Stock that may
be subject to outstanding awards under the Plan will not exceed 12% of the
aggregate number of shares of Common Stock outstanding, minus the number of
shares previously issued pursuant to awards granted under the Plan. Shares of
Common Stock which are attributable to awards which have expired, terminated or
been canceled or forfeited are available for issuance or use in connection with
future awards.

The Plan provides for: (i) the automatic grant to each non-employee
director and advisory director (a "Non-Employee Director") serving at the
commencement of the Offering of an option to purchase 10,000 shares; and
thereafter (ii) the automatic grant to each Non-Employee Director of an option
to

<PAGE>

purchase 10,000 shares upon such person's initial election as a director or
appointment as an advisory director. In addition, the Plan provides for an
automatic annual grant to each Non-Employee Director of an option to purchase
5,000 shares at each annual meeting of stockholders following the Offering;
provided, however, that if the first annual meeting of stockholders following a
person's initial election as a non-employee director or appointment by the Board
as an advisory director is within three months of the date of such election or
appointment, such person will not be granted an option to purchase 5,000 shares
of Common Stock at such annual meeting. These options will have an exercise
price per share equal to the fair market value of a share at the date of grant.
Options granted under the Plan will expire at the earlier of 10 years from the
date of grant or one year after termination of service as a director or advisory
director, and options will be immediately exercisable. In addition, the Plan
permits Non-Employee Directors to elect to receive, in lieu of cash directors'
fees, shares, or credits representing "deferred shares" that may be settled at
future dates, as elected by the Non-Employee Directors. The number of shares or
deferred shares received will be equal to the number of shares which, at the
date the fees would otherwise be payable, will have an aggregate fair market
value equal to the amount of such fees. At the commencement of the Offering, the
Non-Employee Directors will be Messrs. Blutinger, Brady, Bullock, Freeman,
Howey, Potter, Rose, Vittoria and Weise.

The Plan will remain in effect until terminated by the Board of Directors.
The Plan may be amended by the Board of Directors without the consent of the
stockholders of the Company, except that any amendment, although effective when
made, will be subject to stockholder approval if required by any federal or
state law or regulation or by the rules of any stock exchange or automated
quotation system on which the Common Stock may then be listed or quoted. The
number of shares reserved or deliverable under the Plan, the annual
per-participant limits, the number of shares subject to options automatically
granted to non-employee directors and the number of shares subject to
outstanding awards are subject to adjustment in the event of stock splits, stock
dividends and other extraordinary corporate events.

In connection with the Offering, options in the form of NQSOs to purchase a
total of 480,000 shares of Common Stock of the Company will be granted to
management of the Company, including 100,000 shares to Mr. Sullivan, 75,000
shares to Mr. Levine, 50,000 shares to Mr. Jarvis, 50,000 shares to Mr. Murphy,
75,000 shares to Mr. Farmer, 25,000 shares to Ms. Sowder, 25,000 shares to Mr.
Lines, an aggregate of 250,000 shares to Alpine Consolidated II, LLC and
Capstone Partners, LLC and an aggregate of 911,000 shares to the employees of
the Company and the Founding Companies. Each of the foregoing option grants will
have an exercise price equal to the initial public offering price per share in
the Offering, and will vest as to 25% each on the date that is 12 months, 24
months, 36 months and 48 months after the closing of the Offering. Unvested
options generally will be forfeited upon a termination of employment that is
voluntary by the participant. Upon a change of control of the Company (as
defined in the Plan), vesting will be accelerated. The options generally will
expire on the earlier of 10 years after the date of grant or three months after
termination of employment (immediately in the event of a termination for cause),
unless otherwise determined by the Committee.

<PAGE>

CERTAIN TRANSACTIONS

ORGANIZATION OF THE COMPANY

RQI was formed in September 1997. RQI was initially capitalized by Alpine
Consolidated II, LLC, of which Elan J. Blutinger and D. Fraser Bullock, each a
Director of the Company, are Managing Directors, and Capstone Partners, LLC, of
which Leonard A. Potter, an Advisory Director of the Company, is a Managing
Director. As a result of a 8,834.76-for-one stock split effected in the form of
a stock dividend on March 9, 1998, the 293.9481 shares of Common Stock initially
issued to Alpine Consolidated II, LLC and Capstone Parnters, LLC will aggregate
2,596,961 shares on the closing of the Offering.

In January and February of 1998, the Company issued a total of 518,369
shares of Common Stock (post-split) at $.01 (pre-split) per share to the
following directors and members of management: Mr. Sullivan -- 289,202 shares,
Mr. Levine -- 40,000 shares, Mr. Jarvis -- 40,000 shares, Mr. Murphy -- 40,000
shares, Ms. Sowder -- 25,000 shares, Mr. Lines -- 25,000 shares, Mr. Farmer --
25,000 shares, Mr. Dobson -- 2,000 shares, Mr. Brindley -- 1,167 shares and
Allen Williams -- 31,000 shares. In November and December of 1997 the Company
issued 19,300 shares (post-split) of Common Stock at $.01 per share (pre-split)
to certain consultants to the Company during the same period, none of whom was
or is an affiliate of the Company. The aggregate cash consideration received by
the Company for these shares was $0.61.

VPI Funding, LLC ("VPIF"), a Delaware limited liability company, has agreed
to lend to RQI from time to time an amount equal to the legal, accounting and
other transactional costs, expenses and disbursements incurred by RQI in
connection with the Combinations and the Offering. The member managers of VPIF
are Alpine Consolidated II, LLC and Capstone Partners, LLC. Any amounts loaned
by VPIF to RQI with respect to the foregoing will be repaid without interest by
the Company from the gross proceeds of the offering at the time of the
Combinations. As of March 31, 1998, VPIF had loaned $1.0 million to RQI.

The aggregate consideration to be paid by RQI in the Combinations consists
of (i) approximately $55.1 million in cash (ii) 6,123,718 shares of Common
Stock. The Company also will assume an aggregate of approximately $5.3 million
of indebtedness of the Founding Companies in connection with the Combinations.
The consideration to be paid for each of the Founding Companies was determined
through arm's-length negotiations between RQI and representatives of each
Founding Company. The factors considered by the Company in determining the
consideration to be paid included, among others, the historical operating
results, the net worth, the amount and type of indebtedness and the future
prospects of the Founding Companies. Each Founding Company was represented by
independent counsel in the negotiation of the terms and conditions of the
Combinations.

The aggregate total consideration to be paid by RQI for each of the
Founding Companies by the Company are as follows:

<TABLE>
<CAPTION>
SHARES OF DEBT
COMPANY CASH COMMON STOCK ASSUMED
- ----------------------------------------- -------------- -------------- ------------
<S> <C> <C> <C>
Aston Hotels & Resorts .................. $29,500,000 1,708,333 $ 30,000
Brindley & Brindley ..................... 2,000,000 195,000 --
Coastal Resorts ......................... -- 816,667 --
Collection of Fine Properties ........... 4,850,000 404,167 252,000
First Resort ............................ 2,854,800 290,767 --
Houston and O'Leary ..................... 2,470,000 248,167 --
Maui Condominium and Home ............... 1,375,000 166,667 --
The Maury People ........................ 2,000,000 150,000 --
Priscilla Murphy Realty ................. 1,148,098 4,842,000
Resort Property Management .............. 1,200,000 108,333 153,000
Telluride Resort Accommodations ......... 3,013,762 125,103 --
Trupp-Hodnett Enterprises ............... 5,000,000 627,833 --
Whistler Chalets ........................ 800,000 134,583 11,000
----------- --------- ----------
$55,063,562 6,123,718 $5,288,000
=========== ========= ==========
</TABLE>

The purchase price of certain of the Founding Companies will be increased
by working capital adjustments based on cash and receivable balances at March
31, 1998 of the respective Founding Companies. In addition, net assets of
approximately $5.3 million, including certain real estate which will be

<PAGE>

leased or managed by the Company, certain non-operating assets and the
assumption or retirement of certain liabilities, will be excluded from the
Combinations and retained by certain former stockholders of the Founding
Companies. See "Certain Transactions -- Leases of Facilities" and "-- Management
Agreements."

The closing of each of the Combinations is subject to customary conditions.
These conditions include, among others, the accuracy on the closing date of the
representations and warranties made by the Founding Companies, their principal
stockholders and by the Company; the performance of each of their respective
covenants included in the agreements relating to the Combinations; and the
nonexistence of a material adverse change in the business, financial condition
or results of operations of each Founding Company. There can be no assurance
that the conditions of the Combinations will be satisfied or waived or that the
agreements relating to the Combinations will not be terminated prior to
consummation. If any of the Combinations is terminated for any reason, the
Company likely will not consummate the Offering on the terms described herein.

Pursuant to the agreements to be entered into in connection with the
Combinations, substantially all of the stockholders of the Founding Companies
have agreed not to compete with the Company for three years, commencing on the
date of closing of the Offering.

In connection with the Combinations, and as consideration for their
ownership interests in the Founding Companies, certain executive officers,
directors and holders of more than 5% of the outstanding shares of Common Stock
of the Company, together with their spouses and trusts for the benefit of their
immediate families will receive, directly or indirectly, cash and shares of
Common Stock of the Company as follows:

<TABLE>
<CAPTION>
SHARES OF
CASH COMMON STOCK
-------------------- -------------
<S> <C> <C>
Luis Alonso .................... $ 1,525,000 121,250
Park Brady ..................... 304,763 31,041
Douglas R. Brindley ............ 2,000,000 195,000
Paul T. Dobson ................. 687,500 83,334
Sharon Benson Doucette ......... 2,000,000 150,000
Joshua M. Freeman .............. -- 803,519
Evan H. Gull ................... 1,057,333 88,111
Charles O. Howey ............... 1,888,380 (1) 426,401
Heidi O'Leary Houston .......... 2,470,000 248,167
Daniel L. Meehan ............... 1,200,000 98,333
J. Patrick McCurdy ............. 800,000 134,583
Andre S. Tatibouet ............. 20,930,000 1,708,333
Hans F. Trupp .................. 1,000,000 386,692
</TABLE>

- ----------
(1) Represents estimated amount of the pro rata portion of indebtedness of
Priscilla Murphy Realty to be retired at the time of the Combinations.

LEASES OF FACILITIES

ASTON HOTELS & RESORTS. Approximately 980 square feet of office space,
which is part of a space leased by Aston Hotels & Resorts, is used by a minority
stockholder and the corporate secretary of Aston Hotels & Resorts. Mr. Tatibouet
has agreed to assume responsibility for the approximately $33,000 annual rent
allocable for this space and will either reimburse such amount to Aston Hotels &
Resorts or will have the existing lease amended so that a new lease of space is
issued for the minority stockholder and Aston Hotels & Resorts is released from
any obligation with respect to such space.

BRINDLEY & BRINDLEY. During 1995, 1996 and 1997, Brindley & Brindley leased
office space and facilities for its property management and real estate
brokerage activities from Douglas R. Brindley and his wife, Betty Shotton
Brindley, pursuant to two oral agreements, each on a month-to-month basis. The
aggregate annual rent paid by Brindley & Brindley to the Brindleys was $63,800,
$70,800 and $103,500 in 1995, 1996 and 1997, respectively. Brindley & Brindley
entered into two written lease agreements with

<PAGE>

the Brindleys for these facilities that commenced on January 1, 1998. The terms
of these leases expire December 31, 2002, with options to extend for two 5-year
periods at the end of the lease periods and provide for aggregate annual rental
payments of approximately $133,500.

COASTAL RESORTS. Coastal Resorts leases office space and facilities under
three separate lease agreements from Carl M. Freeman Associates, Inc. ("CMFA").
Joshua M. Freeman is the President and a stockholder of CMFA, and his father is
the controlling stockholder of CMFA. The aggregate annual rent paid by Coastal
Resorts to CMFA under these leases was approximately $69,000 and $77,000 in 1996
and 1997, respectively. The leases terminate on December 31, 1998, December 31,
1999 and May 21, 2002.

COLLECTION OF FINE PROPERTIES. Certain commercial office space owned by
Collection of Fine Properties will be distributed to an entity or entities
controlled by the stockholders thereof, including Luis Alonso, prior to the
Combinations and then leased to the Company. Lease agreements for these
properties will be entered into prior to the Combinations. The leases for such
property will provide for aggregate annual rentals of approximately $73,000.

THE MAURY PEOPLE. It is presently contemplated that in early 1999, The
Maury People will transfer its offices to new facilities owned by a trust of
which Sharon Doucette is the primary beneficiary. The lease for the new
facilities will begin in April 1999 and terminate on March 31, 2004, with one
option to extend for an additional five years. The annual base rental payments
on the lease will be $185,400 for the first year, and increase each year
thereafter by the amount of increase, if any, in the Consumer Price Index,
subject to a 6% annual ceiling on increases.

PRISCILLA MURPHY REALTY. Priscilla Murphy Realty has leased office space
and facilities since August 25, 1997, from trusts affiliated with Charles O.
Howey, under three separate lease agreements. The aggregate rent paid in 1997 by
Priscilla Murphy Realty to Mr. Howey's affiliated trusts under these lease
agreements was approximately $45,000. Two of the leases terminate on June 30,
2001 and the remaining lease terminates on December 31, 2002. Priscilla Murphy
Realty entered into a fourth lease with the same trusts on January 28, 1998, to
rent an additional office property for an annual rent payment of $12,000. This
lease also terminates on December 31, 2002.

RESORT PROPERTY MANAGEMENT. Resort Property Management plans to move into
new office space that is owned by Daniel L. Meehan and his wife, Kimberlie
Meehan, in June 1998. It is anticipated that the term of the lease will be for
ten years with two options to extend the lease for five years each and that the
estimated annual rent for the new facilities will be approximately $100,000,
with annual increases equal to the increase in the Consumer Price Index. A lease
agreement will be entered into prior to the Combinations.

TRUPP-HODNETT ENTERPRISES. Trupp-Hodnett Enterprises leases office space
and facilities that are co-owned by Hans F. Trupp for its management and real
estate brokerage activities, under four separate lease agreements. Trupp-Hodnett
Enterprises made aggregate annual rent payments of $57,313, $92,713 and $109,513
for these properties in 1995, 1996 and 1997, respectively. Two of the leases
terminate on December 31, 2009, one terminates on December 31, 2008 and the
fourth terminates on April 30, 2007.

WHISTLER CHALETS. Office space owned by Whistler Chalets will be
distributed to an entity controlled by J. Patrick McCurdy prior to the
Combinations and then leased to the Company. The lease for such property will
have a term of 5 years, with 3 renewal options of 5 years each, and will provide
for annual rentals of approximately $21,000. The lease agreement will be entered
into prior to the Combinations.

MANAGEMENT AGREEMENTS

ASTON HOTELS & RESORTS. Since 1994, Aston Hotels & Resorts has managed two
hotels owned by Andre S. Tatibouet. The aggregate management fees received by
Aston Hotels & Resorts for the management of these properties were $243,000,
$501,000 and $506,000 in 1995, 1996 and 1997, respectively. The management
agreements for these hotels terminate on December 31, 2003. In addition Aston
Hotels & Resorts currently is a party to two lease and management agreements for
two hotels dated February 1, 1996 and February 21, 1991, respectively. Prior to
the Combinations, Aston Hotels & Re-

<PAGE>

sorts will transfer the lease and management agreements to AST Holdings, Inc.
and simultaneously enter into management agreements with AST Holdings, Inc. to
manage these properties. AST Holdings, Inc. is owned by Mr. Tatibouet.

COLLECTION OF FINE PROPERTIES. Prior to the Combinations, Collection of
Fine Properties will distribute to Luis Alonso and another stockholder eight
condominiums currently owned and managed by Collection of Fine Properties.
Subsequently, Collection of Fine Properties will manage several of these
properties, pursuant to its standard management agreement.

TRUPP-HODNETT ENTERPRISES. Pursuant to an agreement dated January 1, 1994,
Trupp-Hodnett Enterprises provides management services for a 74-room hotel that
is co-owned by Hans F. Trupp, for $42,000 a year. The management agreement
terminates on December 31, 1999. Trupp-Hodnett Enterprises also manages several
vacation condominiums owned or co-owned by Mr. Trupp pursuant to its standard
management agreement. Trupp-Hodnett Enterprises has received aggregate property
management fees related to Mr. Trupp's ownership of these properties of $53,480,
$48,290 and $44,233 for 1995, 1996 and 1997, respectively.

WHISTLER CHALETS. Prior to the Combinations, Whistler Chalets will
distribute to J. Patrick McCurdy six vacation condominiums currently owned and
managed by Whistler Chalets. Subsequently, Whistler Chalets will manage these
properties, together with one additional vacation condominium owned by Mr.
McCurdy that it currently manages, pursuant to its standard management
agreement. Additionally, Whistler Chalets paid management fees to Whistler
Blackcomb Central Reservations, Inc. ("Whistler Blackcomb") for the management
services of Mr. McCurdy in the amount of $359,730, $376,023 and $20,720 for
1995, 1996 and 1997, respectively. Mr. McCurdy is the President and owner of
Whistler Blackcomb. As of December 31, 1997, Whistler Chalets was indebted to
Whistler Blackcomb in the amount of $330,268 for unpaid management fees. These
fees will be paid prior to the Combinations. No management fees will be payable
to Whistler Blackcomb after the Combinations.

OTHER TRANSACTIONS

ASTON HOTELS & RESORTS. Since July 22, 1997, Aston Hotels & Resorts has
provided administrative services to AST International, LLC ("AST
International"), an entity controlled by Andre S. Tatibouet, under an oral
agreement, and will continue to perform these services after the Combinations
under a written agreement. AST International has been billed $419,730 by Aston
Hotels & Resorts for its services since July 22, 1997.

Aston Hotels & Resorts receives sales representation and accounting
services from HCP, Inc. ("HCP"), a company owned by Mr. Tatibouet. Aston Hotels
& Resorts paid HCP $390,000, $481,000 and $476,000 in 1995, 1996 and 1997,
respectively, for these services. This arrangement will not continue after the
Combinations. Employees of HCP providing these services will be transferred to a
new subsidiary of Aston Hotels & Resorts at the time of or immediately after the
Combinations.

Under the terms of an oral agreement, Aston Hotels & Resorts provides
management and clerical personnel for AST Development, Inc. ("AST Development")
in return for consulting and support services. AST Development is owned by Mr.
Tatibouet. The costs incurred by Aston Hotels & Resorts relative to AST
Development were $125,000, $125,000 and $126,000 for 1995, 1996 and 1997,
respectively. This agreement will continue in a limited form pursuant to a
written agreement after the Combinations.

Aston Hotels & Resorts has oral consulting agreements with Mr. Tatibouet's
wife and Mr. Tatibouet's mother, who received annual aggregate compensation from
Aston Hotels & Resorts of $229,000, $221,000 and $232,000 in 1995, 1996 and
1997, respectively. These agreements will not continue after the Combinations.
Additionally, Aston Hotels & Resorts has executed three promissory notes, each
payable to Mr. Tatibouet's wife, in the aggregate amount of $285,000. These
notes are each dated January 31, 1997 and each comes due on February 28, 1999.
These notes will be paid prior to the Combinations.

Mr. Tatibouet currently owes Aston Hotels & Resorts an aggregate amount of
$7.7 million. In addition, the Coral Reef Hotel, the Waikiki Beachside Hotel,
AST International and HCP, Inc., all entities owned or controlled by Mr.
Tatibouet, in the aggregate owe Aston Hotels & Resorts a total of $1,797,243. No
interest is being charged on these receivables, of which $4 million will remain
outstanding after the Combinations.

<PAGE>

The remaining $4 million balance will bear interest at the Prime Rate less 0.5,
with a minimum of 6% and maximum of 10%, to be paid within ten years. The $4
million debt will be fully collateralized by real estate and cash or cash
equivalents of Mr. Tatibouet (the "Qualifying Collateral") pledged to the
Company or by Mr. Tatibouet's personal guarantee (not to exceed $1 million).
Additionally, at December 31, 1997, Aston Hotels & Resorts had guaranteed or
cosigned on personal debts and obligations of Mr. Tatibouet in the aggregate
amount of $17,374,000 which primarily relate to two hotels managed by Aston
Hotels & Resorts. These personal debts of Mr. Tatibouet will be fully
collateralized by Qualifying Collateral, pledged either to the lenders of such
debt or to Aston Hotels & Resorts to secure the guarantee by it of such debt.
Mr. Tatibouet also has agreed to use his reasonable efforts to cause Aston
Hotels & Resorts' guarantee of such debt to be released as soon as practicable.

Aston Hotels & Resorts leased storage space in a shopping center complex
from a limited partnership, Waikiki International Plaza, in which Mr. Tatibouet
and Aston Hotels & Resorts are each general partners with respective 45% and 5%
partnership interests. The shopping center, including the leased storage space,
was sold to an unrelated third party in December 1997. The aggregate annual rent
paid by Aston Hotels & Resorts to Waikiki International Plaza was $128,000,
$114,000 and $110,000 in 1995, 1996 and 1997, respectively.

Aston Hotels & Resorts has entered into a 20-year royalty free license
agreement with AST Brands, LLC, an entity wholly-owned by Mr. Tatibouet, for use
of the name Aston Hotels & Resorts.

BRINDLEY & BRINDLEY. Brindley & Brindley receives real estate sales
commissions from Outer Banks Ventures, Inc. ("Outer Banks Ventures") pursuant to
an exclusive listing agreement giving Brindley & Brindley the right to sell all
land developed by the company. Douglas R. Brindley is the Vice President of
Outer Banks Ventures and his father is the owner and President of Outer Banks
Ventures. Brindley & Brindley received commissions from Outer Banks Ventures in
the amount of $7,200, $23,800 and $69,800 in 1995, 1996 and 1997, respectively.

COASTAL RESORTS. Coastal Resorts purchased all the assets of Interstate
Realty Co., Inc. ("Interstate Realty") from CMF Properties, Inc. ("CMF
Properties") on December 30, 1996 for $700,000. Coastal Resorts purchased all
the outstanding stock of Sea Colony Management, Inc., a wholly owned subsidiary
of CMF Properties on December 30, 1996 for $100,000. CMF Properties was a
majority owned subsidiary of CMFA. These acquisitions were financed by loans
from CMFA to Coastal Resorts in the aggregate amount of $675,000 which were paid
in full on January 13, 1998.

On December 31, 1997, Coastal Resorts sold the service mark "Sea Colony" to
Sea Colony Development Corporation, Inc. ("Sea Colony Development") for $115,000
and a ten year license to use the service mark at no charge under the terms of a
license agreement. Sea Colony Development is owned by Joshua M. Freeman.

Pursuant to an exclusive listing agreement with Sea Colony Development
dated January 1, 1997, Coastal Resorts receives a real estate sales commission
of 6.5% of the purchase price of each new home sold at the Sea Colony
condominium community in Bethany Beach, Delaware. Under the agreement, Coastal
Resorts is also required to develop a marketing plan, at its own expense, to
promote home sales in the Sea Colony community. Coastal Resorts earned
commissions in the amount of $1,244,000 for 1997. As of December 31, 1997,
Coastal Resorts had a net receivable from Sea Colony Development of $673,707,
consisting of a receivable of $1,244,000 for home sales commissions and a
payable of $570,435 for commissions, marketing and advertising expenses paid by
Sea Colony Development on behalf of Coastal Resorts. This agreement terminates
on December 31, 1999.

Pursuant to an agreement dated January 1, 1997, Coastal Resorts receives
sales commissions of 6% for selling properties developed by Cove Resort Limited
Partnership ("Cove Resort"). CMFA is the general partner and a 70% owner of Cove
Resort. Under the agreement, Coastal Resorts is also required to develop a
marketing plan, at its own expense, to promote home sales in The Cove community.
Coastal Resorts was paid $18,750 under this agreement in 1997. The agreement
terminates on December 31, 1999.

Coastal Resorts has a management agreement with CMF Fitness, Inc. ("CMF
Fitness") dated June 1, 1996, to manage the Sea Colony Fitness Center for $5,834
a month. CMF Fitness is a wholly owned

<PAGE>

subsidiary of CMFA. CMF Fitness paid Coastal Resorts $40,838 and $70,000 in 1996
and 1997, respectively, under the agreement. The agreement terminates on the
earlier of (i) December 31 of the year in which the last new home in the Sea
Colony development is sold or (ii) December 31, 2005.

Pursuant to an agreement with Sea Colony Water Company, L.L.C. ("Sea Colony
Water") dated January 1, 1997, Coastal Resorts was appointed exclusive agent for
and manager of the Sea Colony Water Plant. Sea Colony Water is a wholly owned
subsidiary of CMFA. Under the terms of the agreement, Coastal Resorts is
entitled to retain all revenue collected by the water plant, less costs and
expenses and certain payments to Sea Colony Water. Coastal Resorts received net
revenues of $143,488 in 1997 from its management of the water plant. This
agreement terminates on December 31, 2001 or upon the sale of the water plant.
Coastal Resorts has also entered into an agreement with Sea Colony Water dated
January 1, 1997 to provide construction supervision services for an upgrade to
the water plant for two years. Coastal Resorts' fee for the services is the
direct costs it incurs plus 5%. Coastal Resorts did not receive any payments
under this agreement in 1997.

Pursuant to an agreement with CMF Paymaster, Inc. ("Paymaster") dated
January 1, 1997, Paymaster provides administrative services relating to payroll
and employee benefit matters to Coastal Resorts, at a cost of $2 per pay period
per employee. Paymaster is indirectly owned by Mr. Freeman. Coastal Resorts did
not make any payments to Paymaster under this agreement in 1997. This agreement
terminates on December 31, 1999.

COLLECTION OF FINE PROPERTIES. Pursuant to an oral agreement, Collection of
Fine Properties performs accounting and bookkeeping services for L&D Development
Company ("L&D Development"). Luis Alonso owns 30% of L&D Development. The annual
amounts paid to Collection of Fine Properties from L&D Development were $60,000,
$57,000 and $75,000 in 1995, 1996 and 1997, respectively.

Collection of Fine Properties had obligations under a mortgage note of
$125,000 at December 31, 1997 at an interest rate of the Prime Rate plus 0.5%,
which is guaranteed by Mr. Alonso and others and will be assumed by them prior
to the Combinations.

In addition, at December 31, 1997, the Company had receivables in the
amount of $633,509 from Mr. Alonso and persons affiliated with him.

FIRST RESORT. First Resort purchased the rights to software designed by
Evan H. Gull under the terms of a purchase agreement dated January 1, 1987. The
agreement gave Mr. Gull the right to receive royalty payments through 1997. The
royalties paid by First Resort to Mr. Gull were $61,800 , $57,040 and $24,307 in
1995, 1996 and 1997, respectively.

HOUSTON AND O'LEARY. Effective January 1, 1998 a stockholder of Houston and
O'Leary redeemed his stock and took on certain liabilities of Houston and
O'Leary in return for receiving certain assets of Houston and O'Leary, including
several notes receivable to Houston & O'Leary from the stockholder and Heidi
O'Leary Houston, in the aggregate amount of $297,000.

PRISCILLA MURPHY REALTY. Charles O. Howey loaned $200,000 to Priscilla
Murphy Realty on December 31, 1997 at an interest rate of 7.95%. At December 31,
1997, the balance on this loan was $155,000. The note does not have a set
maturity date. At December 31, 1997, Priscilla Murphy Realty also was indebted
to C.O. Condominium Corporation for $2,063,000 under the terms of a promissory
note issued to C.O. Condominium Corporation, dated January 3, 1997. The interest
rate on the note is 7.95%. C.O. Condominium Corporation is owned by Mr. Howey.

RESORT PROPERTY MANAGEMENT. Daniel L. Meehan loaned Resort Property
Management $50,000 on May 25, 1997 and $60,000 on September 29, 1997, both loans
at an interest rate of 9.5%. The loans were both paid on November 10, 1997. Mr.
Meehan also maintains a bank revolving credit agreement for $250,000 at a 10.25%
interest rate, under which he draws funds which he loans to Resort Property
Management for cash flow purposes. Resort Property Management makes interest and
principal payments on the loan directly to the bank. At the present time, the
balance on the revolving credit is zero.

TELLURIDE RESORT ACCOMMODATIONS. Park Brady will enter into a consulting
agreement with the Company, effective upon the consummation of the Offering. The
term of the agreement shall be for one year, during which time Mr. Brady will
provide up to ten hours of consulting services per week for a nominal
consideration.

<PAGE>

TRUPP-HODNETT ENTERPRISES. In 1997, Trupp-Hodnett Enterprises sold a
building, the related land (with a total book value of $135,000) and the related
$124,000 mortgage note payable to the stockholders of Trupp-Hodnett Enterprises,
including Hans F. Trupp, for $11,000 in cash.

WHISTLER CHALETS. As of December 31, 1997, Res - Resort Services Inc.
("Resort Services") was indebted to Whistler Chalets in the amount of $58,547
for various expenses paid by Whistler Chalets on behalf of Resort Services.
Resort Services is owned by J. Patrick McCurdy. Mr. McCurdy is currently
indebted to Whistler Chalets in the amount of $101,098 for advances against his
management fees and expenses. Both of these debts will be paid prior to the
Combinations.

PUT-CALL AGREEMENT

The Company has entered into a put-call agreement with Scottsdale Resort
Accommodations, L.L.C. ("Scottsdale Resort Accommodations") and its stockholders
(the "Stockholders") dated December 22, 1997. The majority stockholder of
Scottsdale Resort Accommodations is a principal stockholder of Telluride Resort
Accomodations. Pursuant to the agreement, if Scottsdale Resort Accommodations
achieves earnings before incomes taxes of $300,000 for any trailing twelve-month
period, the Stockholders can require the Company to purchase the outstanding
stock of Scottsdale Resort Accommodations. Conversely, the Company has the right
to purchase the outstanding stock of Scottsdale Resort Accommodations if
Scottsdale Resort Accommodations achieves earnings before income taxes of
$500,000 for a similar period. The purchase price will be seven times Scottsdale
Resort Accommodations' earnings before income taxes for the relevant
twelve-month period.

COMPANY POLICY

In the future, any transactions with officers, directors and holders of
more than 5% of the Common Stock will be approved by a majority of the Board of
Directors, including a majority of the disinterested members of the Board of
Directors.

<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock of the Company, after giving effect to the
Combinations and the Offering, by: (i) each person known to beneficially own
more than 5% of the outstanding shares of Common Stock; (ii) each of the
Company's directors and persons who have consented to be named as directors
("named directors"); (iii) each named executive officer; and (iv) all executive
officers, directors and named directors as a group. All persons listed have an
address in care of the Company's principal executive offices and have sole
voting and investment power with respect to their shares unless otherwise
indicated.

<TABLE>
<CAPTION>
PERCENTAGE OWNED
----------------------------
NAMES AND ADDRESS BEFORE
OF BENEFICIAL OWNER SHARES OFFERING AFTER OFFERING
- ------------------------------------------------ ------------ ---------- ---------------
<S> <C> <C> <C>
David C. Sullivan ....................... 289,202 3.1 1.9
David L. Levine(1) ...................... 50,000 * *
Jeffery M. Jarvis ....................... 40,000 * *
W. Michael Murphy ....................... 40,000 * *
Jules S. Sowder ......................... 25,000 * *
John K. Lines ........................... 25,000 * *
Frederick L. Farmer ..................... 25,000
Luis Alonso ............................. 121,250 1.3 *
Park Brady (2) .......................... 41,041 * *
Douglas R. Brindley (3) ................. 196,167 2.1 1.3
Paul T. Dobson .......................... 85,334 * *
Sharon Benson Doucette .................. 150,000 1.6 1.0
Joshua M. Freeman (2)(4) ................ 813,519 8.8 5.4
Evan H. Gull ............................ 88,111 * *
Charles O. Howey (2)(5) ................. 469,267 5.1 3.1
Heidi O'Leary Houston ................... 248,167 2.7 1.6
Daniel L. Meehan ........................ 98,333 1.1 *
J. Patrick McCurdy ...................... 134,583 1.4 *
Andre S. Tatibouet ...................... 1,708,333 18.5 11.3
Hans F. Trupp ........................... 386,692 4.2 2.6
Michael D. Rose (2)(6) .................. 55,455 * *
Joseph V. Vittoria (2)(7) ............... 35,000 * *
Theodore L. Weise (2)(8) ................ 12,500 * *
Elan J. Blutinger (2)(9) ................ 1,741,307 18.8 11.6
D. Fraser Bullock (2)(9) ................ 1,741,307 18.8 11.6
Alpine Consolidated, II, LLC ............ 1,731,307 18.7 11.5
Capstone Partners, LLC (10) ............. 865,654 9.4 5.8
All Directors and Executive Officers as a
Group (25 persons) ..................... 7,754,915 83.6 51.5
</TABLE>

- ----------
* Less than 1.0%
(1) Includes 10,000 shares which Mr. Levine will purchase in the Offering at
the initial offering price.
(2) Includes 10,000 shares which may be acquired upon the exercise of options.
(3) Includes 97,500 shares owned by Betty Shotton Brindley, his spouse.
(4) Includes 468,195 shares owned by CMF Coastal Resorts L.L.C., in which Mr.
Freeman has a 98% membership interest.
(5) Includes 103,335 shares beneficially owned by Dolores Howey, his spouse.
(6) Includes 45,455 shares which Mr. Rose will purchase in the Offering at the
initial offering price.
(7) Includes 25,000 shares which Mr. Vittoria will purchase in the Offering at
the initial offering price.
(8) Includes 2,500 shares Mr. Weise will purchase in the Offering at the
initial offering price.
(9) Includes for each of Messrs. Blutinger and Bullock 1,731,307 shares held by
Alpine Consolidated II, LLC., Elan J. Blutinger and D. Fraser Bullock as
Managing Directors of Alpine Consolidated II, LLC.
(10) Leonard A. Potter, an Advisory Director, is a Managing Director of Capstone
Partners, LLC.

<PAGE>

DESCRIPTION OF CAPITAL STOCK

GENERAL

The Company's authorized capital stock consists of 50,000,000 shares of
Common Stock, par value $.01 per share of which 3,134,630 shares shall be
designated restricted stock (the "Restricted Common Stock"), and 10,000,000
shares of undesignated preferred stock, par value $.01 per share (the "Preferred
Stock"). After giving effect to the Combinations and the completion of the
Offering, the Company will have outstanding 15,058,348 shares of Common Stock
(of which 3,134,630 are shares of Restricted Common Stock) and no shares of
Preferred Stock. See "Shares Eligible for Future Sale."

The following statements are brief summaries of certain provisions with
respect to the Company's capital stock contained in its Certificate of
Incorporation and By-Laws, copies of which have been filed as exhibits to the
Registration Statement of which this Prospectus is a part. The following is
qualified in its entirety by reference thereto.

COMMON STOCK AND RESTRICTED COMMON STOCK

All of the rights, privileges and obligations of the Common Stock and
Restricted Common Stock are the same, except for voting rights. The holders of
Common Stock are entitled to one vote for each share on all matters voted upon
by stockholders, including the election of directors. The holders of Restricted
Common Stock are entitled to one half of one vote for each share held on all
matters. Subject to the rights of any then outstanding shares of Preferred
Stock, the holders of Common Stock are entitled to such dividends as may be
declared in the discretion of the Board of Directors out of funds legally
available therefor. See "Dividend Policy." Holders of Common Stock are entitled
to share ratably in the net assets of the Company upon liquidation after payment
or provision for all liabilities and any preferential liquidation rights of any
Preferred Stock then outstanding. The holders of Common Stock have no preemptive
rights to purchase shares of stock of the Company. Shares of Common Stock are
not subject to any redemption provisions and are not convertible into any other
securities of the Company, except as provided in the following paragraph. All
outstanding shares of Common Stock are, and the shares of Common Stock to be
issued pursuant to the Offering will be upon payment therefor, fully paid and
non-assessable.

Each share of Restricted Common Stock will automatically convert to Common
Stock on a share for share basis: (a) in the event of a disposition of such
share of Restricted Common Stock by the holder thereof (other than a disposition
which is a distribution by a holder to its partners or beneficial owners or a
transfer to a related party of such holder (as defined in Sections 267, 707, 318
and/or 4946 of the Code)); (b) in the event any person acquires beneficial
ownership of 15% or more of the outstanding shares of Common Stock of the
Company; or (c) in the event any person makes a bona fide offer to acquire 15%
or more of the outstanding shares of Common Stock of the Company. At December
31, 2000, the Company may elect to convert any outstanding shares of Restricted
Common Stock into shares of Common Stock in the event 80% or more of the
outstanding shares of Restricted Common Stock have been converted into shares of
Common Stock.

The Common Stock has been approved for listing on the New York Stock
Exchange subject to official notice of issuance under the symbol "___".

PREFERRED STOCK

The Preferred Stock may be issued from time to time by the Board of
Directors in one or more series. Subject to the provisions of the Company's
Certificate of Incorporation and limitations prescribed by law, the Board of
Directors is expressly authorized to adopt resolutions to issue the shares, to
fix the number of shares and to change the number of shares constituting any
series and to provide for or change the voting powers, designations, preferences
and relative, participating, optional or other special rights, qualifications,
limitations or restrictions thereof, including dividend rights (including
whether dividends are cumulative), dividend rates, terms of redemption
(including sinking fund provisions), re-

<PAGE>

demption prices, conversion rights and liquidation preferences of the shares
constituting any series of the Preferred Stock, in each case without any further
action or vote by the stockholders. The Company has no current plans to issue
any shares of Preferred Stock.

One of the effects of undesignated Preferred Stock may be to enable the
Board of Directors to render more difficult or to discourage an attempt to
obtain control of the Company by means of a tender offer, proxy contest, merger
or otherwise, and thereby to protect the continuity of the Company's management.
The issuance of shares of the Preferred Stock pursuant to the Board of
Directors' authority described above may adversely affect the rights of the
holders of Common Stock. For example, Preferred Stock issued by the Company may
rank prior to the Common Stock as to dividend rights, liquidation preference or
both, may have full or limited voting rights and may be convertible into shares
of Common Stock. Accordingly, the issuance of shares of Preferred Stock may
discourage bids for the Common Stock or may otherwise adversely affect the
market price of the Common Stock.

STATUTORY BUSINESS COMBINATION PROVISION

Upon the consummation of the Offering, the Company will be subject to the
provisions of Section 203 of the DGCL ("Section 203"). Section 203 provides,
with certain exceptions, that a Delaware corporation may not engage in any of a
broad range of business combinations with a person or an affiliate or associate
of such person, who is an "interested stockholder" for a period of three years
from the date that such person became an interested stockholder unless: (i) the
transaction resulting in a person becoming an interested stockholder, or the
business combination, is approved by the Board of Directors of the corporation
before the person becomes an interested stockholder; (ii) the interested
stockholder acquired 85% or more of the outstanding voting stock of the
corporation in the same transaction that makes such person an interested
stockholder (excluding shares owned by persons who are both officers and
directors of the corporation, and shares held by certain employee stock
ownership plans); or (iii) on or after the date the person becomes an interested
stockholder, the business combination is approved by the corporation's board of
directors and by the holders of at least 66% of the corporation's outstanding
voting stock at an annual or special meeting, excluding shares owned by the
interested stockholder. Under Section 203, an "interested stockholder" is
defined as any person who is (i) the owner of 15% or more of the outstanding
voting stock of the corporation or (ii) an affiliate or associate of the
corporation and who was the owner of 15% or more of the outstanding voting stock
of the corporation at any time within the three-year period immediately prior to
the date on which it is sought to be determined whether such person is an
interested stockholder.

The Company's stockholders, by adopting an amendment to the Certificate of
Incorporation, may elect not to be governed by Section 203, which election would
be effective 12 months after such adoption. The provisions of Section 203 could
delay or frustrate a change in control of the Company, deny stockholders the
receipt of a premium on their Common Stock and have an adverse effect on the
Common Stock. The provisions also could discourage, impede or prevent a merger
or tender offer, even if such event would be favorable to the interests of
stockholders.

LIMITATION ON DIRECTORS' LIABILITIES

Limitation on Liability. Pursuant to the Company's Certificate of
Incorporation and as permitted by Section 102(b)(7) of the DGCL, directors of
the Company are not liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty, except for liability in connection with a
breach of duty of loyalty, for acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, for dividend
payments or stock repurchases that are illegal under Delaware law or for any
transaction in which a director has derived an improper personal benefit.

Indemnification. To the maximum extent permitted by law, the Certificate of
Incorporation provides for mandatory indemnification of directors and officers
of the Company against any expense, liability and loss to which they become
subject, or which they may incur as a result of having been a director or
officer of the Company. In addition, the Company must advance or reimburse
directors and officers for expenses incurred by them in connection with certain
claims.

<PAGE>

ADVANCE NOTICE REQUIREMENTS FOR DIRECTOR NOMINEES.

The Company's By-Laws establish an advance notice procedure with regard to
the nomination of candidates for election as directors at any meeting of
stockholders called for the election of directors. The procedure provides that a
notice relating to the nomination of directors must be timely given in writing
to the Chairman of the Board of Directors of the Company prior to the meeting.
To be timely, notice relating to the nomination of directors must be delivered
not less than 90 days prior to any such meeting of stockholders called for the
election of directors.

Notice to the Company from a stockholder who proposes to nominate a person
at a meeting for election as a director must be accompanied by each proposed
nominee's written consent and contain the name, address and principal occupation
of each proposed nominee. Such notice must also contain the total number of
shares of capital stock of the Company that will be voted for each of the
proposed nominees, the name and address of the notifying stockholder and the
number of shares of capital stock of the Company owned by the notifying
stockholder.

Although the Company's By-Laws do not give the Board of Directors any power
to approve or disapprove stockholder nominations for the election of directors
or of any other business desired by stockholders to be conducted at an annual or
any other meeting, the Company's By-Laws (i) may have the effect of precluding a
nomination for the election of directors or precluding the conduct of business
at a particular meeting if the proper procedures are not followed or (ii) may
discourage or deter a third party from conducting a solicitation of proxies to
elect its own slate of directors or otherwise attempting to obtain control of
the Company, even if the conduct of such solicitation or such attempt might be
beneficial to the Company and its stockholders.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is American Stock
Transfer & Trust Company.

<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

After the Offering, the Company will have outstanding 15,058,348 shares of
Common Stock. The 5,800,000 shares sold in the Offering (plus any additional
shares sold upon exercise of the Underwriters' over-allotment option) will be
freely tradable without restriction unless acquired by affiliates of the
Company. None of the remaining 9,258,348 outstanding shares of Common Stock
(including 3,134,630 shares of Restricted Common Stock beneficially owned by the
Company's officers, directors and certain other stockholders) has been
registered under the Securities Act, which means that they may be resold
publicly only upon registration under the Securities Act or in compliance with
an exemption from the registration requirements of the Securities Act, including
the exemption provided by Rule 144 thereunder.

In general, under Rule 144 as currently in effect, if one year has elapsed
since the later of the date of the acquisition of the restricted shares of
Common Stock from either the Company or any affiliate of the Company, the
acquiror or subsequent holder thereof may sell, within any three-month period
commencing 90 days after the date of the Prospectus relating to the Offering, a
number of shares that does not exceed the greater of one percent of the then
outstanding shares of the Common Stock, or the average weekly trading volume of
the Common Stock on the New York Stock Exchange during the four calendar weeks
preceding the date on which notice of the proposed sale is sent to the
Commission. Sales under Rule 144 are also subject to certain manner of sale
provisions, notice requirements and the availability of current public
information about the Company. If two years have elapsed since the later of the
date of the acquisition of restricted shares of Common Stock from the Company or
any affiliate of the Company, a person who is not deemed to have been an
affiliate of the Company at any time for 90 days preceding a sale would be
entitled to sell such shares under Rule 144 without regard to the volume
limitations, manner of sale provisions or notice requirements.

Upon the completion of the Offering, the holders of Common Stock who did
not purchase shares in the Offering will own an aggregate of 9,258,348 shares of
Common Stock, including the stockholders of the Founding Companies, who will
receive in the aggregate 6,123,718 shares in connection with the Combinations,
and management and founders of RQI, who own an aggregate of 3,134,630 shares.
These shares have not been registered under the Securities Act and, therefore,
may not be sold unless registered under the Securities Act or sold pursuant to
an exemption from registration, such as the exemption provided by Rule 144.
Furthermore, these stockholders have separately agreed with the Company not to
sell, transfer or otherwise dispose of any of these shares for one year
following the closing of the Offering. These stockholders also have certain
demand and piggyback registration rights with respect to these shares.

The Company has agreed not to offer, sell, contract to sell or otherwise
dispose of any shares of Common Stock, or any securities convertible into or
exercisable or exchangeable for Common Stock, for a period of 180 days after the
date of this Prospectus without the prior written consent of Smith Barney Inc.
on behalf of the Underwriters. The holders of all shares outstanding prior to
the Offering, the stockholders of the Founding Companies who will receive shares
of Common Stock in exchange for their stock in the Founding Companies and
certain non-employee directors have agreed not to offer, sell, contract to sell
or otherwise dispose of any shares of Common Stock, or any securities
convertible into or exercisable or exchangeable for Common Stock for a period of
one year from the date of this Prospectus without the prior written consent of
Smith Barney Inc. on behalf of the Underwriters. The foregoing restrictions will
not apply: (i) in the case of the Company, to options or shares of Common Stock
issued pursuant to the Company's 1998 Long-Term Incentive Plan or in connection
with acquisitions and (ii) in the case of all holders shares of Common Stock
disposed of as bona fide gifts, subject in each case to any remaining portion of
the one year or 180-day period, as applicable, to any shares so issued or
transferred. In evaluating any request for a waiver of the one year or 180-day
lock-up period, as applicable, Smith Barney Inc. will consider, in accordance
with its customary practice, all relevant facts and circumstances at the time of
the request, including, without limitation, the recent trading market for the
Common Stock, the size of the request and, with respect to a request by the
Company to issue additional equity securities, the purpose of such an issuance.
See "Underwriting."

<PAGE>

The 3,000,000 shares of Common Stock to be registered by the Company for
use as consideration in future acquisitions will be, upon issuance thereof,
freely tradable unless acquired by parties to the acquisition or affiliates of
such parties, other than the issuer, in which case they may be sold pursuant to
Rule 145 under the Securities Act. Rule 145 permits such persons to resell
immediately securities acquired in transactions covered under the Rule, provided
such securities are resold in accordance with the public information, volume
limitations and manner of sale requirements of Rule 144. If a period of one year
has elapsed since the date such securities were acquired in such transaction and
if the issuer meets the public information requirements of Rule 144, Rule 145
permits a person who is not an affiliate of the issuer to freely resell such
securities. The Company intends to contractually restrict the resale of these
shares in connection with future acquisitions accounted for using the purchase
method of accounting. The piggyback registration rights described above will not
apply to the registration statement to filed with respect to these 3,000,000
shares.

Sales, or the availability for sale of, substantial amounts of the Common
Stock in the public market could adversely affect prevailing market prices and
the ability of the Company to raise equity capital in the future.

<PAGE>

UNDERWRITING

The Underwriters named below (the "Underwriters") represented by Smith
Barney Inc., NationsBanc Montgomery Securities LLC and Furman Selz LLC (the
"Representatives"), have severally agreed, subject to the terms and conditions
in the underwriting agreement (the "Underwriting Agreement") by and between the
Company and the Underwriters, to purchase from the Company the number of shares
of Common Stock indicated below opposite its name, at the public offering price
less the underwriting discount set forth on the cover page of this Prospectus.
The Underwriting Agreement provides that the obligations of the Underwriters are
subject to certain conditions precedent and that the Underwriters are committed
to purchase all of the shares of Common Stock, if they purchase any.

NUMBER OF
UNDERWRITERS SHARES
---------------------------------------------------- ----------
Smith Barney Inc. .............................
NationsBanc Montgomery Securities LLC .........
Furman Selz LLC ...............................
Total ...................................... 5,800,000
=========

The Representatives have advised the Company that the Underwriters propose
initially to offer the shares of Common Stock to the public on the terms set
forth on the cover page of this Prospectus. The Underwriters may allow selected
dealers a concession of not more than $ per share; and the Underwriters may
allow, and such dealers may reallow, a concession of not more than $ per share
to certain other dealers. After the initial public offering, the public offering
price and other selling terms may be changed by the Representatives. The Common
Stock is offered subject to receipt and acceptance by the Underwriters, and to
certain other conditions, including the right to reject orders in whole or in
part.

The Company has granted to the Underwriters an option, exercisable for the
30-day period after the date of this Prospectus, to purchase up to a maximum of
870,000 additional shares of Common Stock to cover over-allotments, if any, at
the same price per share as the initial shares to be purchased by the
Underwriters. To the extent that the Underwriters exercise such over-allotment
option, the Underwriters will be committed, subject to certain conditions, to
purchase such additional shares in approximately the same proportion as set
forth in the above table. The Underwriters may purchase such shares only to
cover over-allotments made in connection with the Offering.

The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act, or will contribute to payments the Underwriters may be required
to make in respect thereof.

<PAGE>

apply: (i) in the case of the Company to options or shares of Common Stock
issued pursuant to the Company's 1998 Long-Term Incentive Plan or in connection
with acquisitions and (ii) in the case of all holders shares of Common Stock
disposed of as bona fide gifts, subject in each case to any remaining portion of
the one year or 180-day period, as applicable, to any shares so issued or
transferred. In evaluating any request for a waiver of the 180-day lock-up
period, Smith Barney Inc. will consider, in accordance with its customary
practice, all relevant facts and circumstances at the time of the request,
including, without limitation, the recent trading market for the Common Stock,
the size of the request and, with respect to a request by the Company to issue
additional equity securities, the purpose of such an issuance. See "Shares
Eligible for Future Sale."

At the Company's request, the Underwriters and the Representatives have
reserved up to 580,000 shares of Common Stock (the "Directed Shares") for sale
at the initial public offering price to persons who are directors, officers or
employees of, or otherwise associated with, the Company and the Founding
Companies and who have advised the Company of their desire to participate in its
future growth. Of such maximum number of Directed Shares, it is expected that up
to 273,000 shares will be purchased by Non-Employee Directors. Each purchaser of
Directed Shares who is a Non-Employee Director will be required to agree to
restrictions on resale similar to those described in the immediately preceding
paragraph applicable to stockholders of the Founding Companies. However, the
Underwriters and the Representatives are not obligated to sell any shares to any
persons. The number of shares of Common Stock available for sale to the general
public will be reduced to the extent of sales of Directed Shares to any of the
persons for whom they have been reserved. Any shares not so purchased will be
offered by the Underwriters and the Representatives on the same basis as all
other shares offered hereby.

In connection with the Offering, certain Underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock.
Such transactions may include stabilization transactions effected in accordance
with Rule 104 of Regulation M under the Securities Exchange Act of 1934,
pursuant to which such persons may bid for or purchase Common Stock for the
purpose of stabilizing its market price. The Underwriters also may create a
short position for the account of the Underwriters by selling more Common Stock
in connection with the Offering than they are committed to purchase from the
Company and, in such case, may purchase Common Stock in the open market
following completion of the Offering to cover all or a portion of such short
position. The Underwriters may also cover all or a portion of such short
position, up to 870,000 shares of Common Stock, by exercising the Underwriters'
over-allotment option referred to above. In addition, Smith Barney Inc., on
behalf of the Underwriters, may impose "penalty bids" under contractual
arrangements with the Underwriters whereby it may reclaim from an Underwriter
(or dealer participating in the Offering) for the account of the other
Underwriters, the selling concession with respect to Common Stock that is
distributed in the Offering but subsequently purchased for the account of the
Underwriters in the open market. Any of the transactions described in this
paragraph may result in the maintenance of the price of the Common Stock at a
level above that which might otherwise prevail in the open market. None of the
transactions described in this paragraph is required, and, if any such
transactions are undertaken, they may be discontinued at any time.

Prior to the Offering, there has been no public trading market for the
Common Stock. Consequently, the initial public offering price will be determined
by negotiations between the Company and the Representatives. Among the factors
expected to be considered in such negotiations are the history of and the
prospects for the industry in which the Company competes, an assessment of the
Company's management, the past and present earnings of the Founding Companies
and the trend of such earnings, the prospects for future earnings of the
Company, the present state of the Company's development, the general condition
of the economy and the securities markets at the time of the Offering and the
market price of and demand for publicly traded stock of comparable companies in
recent periods.

NationsBank N.A., an affiliate of NationsBanc Montgomery Securities LLC, is
the lead agent for the Credit Facility. In connection with the Credit Facility,
in addition to interest payments based on outstanding amounts from time to time,
NationsBank N.A. will be entitled to receive an indeterminate upfront fee and a
$100,000 arrangement fee, each payable at or prior to closing, administrative
fees of $20,000 per year and an adjustable quarterly commitment fee, based on a
ratio of outstanding amounts to net earnings.

<PAGE>

LEGAL MATTERS

The validity of the issuance of the shares of Common Stock offered by this
Prospectus will be passed upon for the Company by Akin, Gump, Strauss, Hauer &
Feld, L.L.P., Washington, D.C. Certain legal matters related to the Offering
will be passed upon for the Underwriters by Kramer, Levin, Naftalis & Frankel,
New York, New York. The Company has agreed with Akin, Gump, Strauss, Hauer &
Feld, L.L.P. to discount part of its legal fees unless the Offering is
consummated, in which event the Company will pay the entire amount of such fees
as well as a bonus amount.

EXPERTS

The audited financial statements of ResortQuest International, Inc., Hotel
Corporation of the Pacific, Inc., Brindley & Brindley Realty Development, Inc.
and B&B On The Beach Inc., Coastal Resorts Management, Inc. and Coastal Resorts
Realty L.L.C., Interstate Realty Co., Inc. and Sea Colony Management, Inc.,
First Resort Software, Inc., Houston and O'Leary Company, The Maury People,
Inc., Howey Acquisition, Inc. and Priscilla Murphy Realty, Inc., Resort Property
Management, Inc., Telluride Resort Accomodations, Inc., and Trupp-Hodnett
Enterprises, Inc. and THE Management Company, included elsewhere in this
Prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports. The audited financial statements of Collection of Fine Properties,
Inc., included elsewhere in this Prospectus have been audited by Morrison,
Brown, Argiz and Company, independent auditors, as indicated in their report
with respect thereto, and in reliance upon the authority of said firm as experts
in giving said report.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement on Form S-1 with respect to the
shares of Common Stock offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information pertaining to the Company and the
shares of Common Stock offered hereby, reference is made to such Registration
Statement, including the exhibits, financial statements and schedules filed
therewith. Statements contained in this Prospectus as to the contents of any
contract or any other document are not necessarily complete, and, in each
instance, reference is made to the copy of such contract or document filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference. The Registration Statement, including the
exhibits and schedules thereto, may be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza Building,
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and its regional
offices located at 7 World Trade Center, 13th Floor, New York, New York 10048
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such materials can be obtained from the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission maintains an Internet web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. The address of such Internet web
site is http://www.sec.gov.

<PAGE>

INDEX TO FINANCIAL STATEMENTS

UNAUDITED PRO FORMA COMBINED FINANCIAL DATA AND
HISTORICAL FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
RESORTQUEST INTERNATIONAL, INC. PRO FORMA:
Basis of Presentation ................................................... F-3
Unaudited Pro Forma Combined Balance Sheets ............................. F-4
Unaudited Pro Forma Combined Statements of Operations ................... F-6
Notes to Unaudited Pro Forma Combined Financial Statements .............. F-12

RESORTQUEST INTERNATIONAL, INC.:
Report of Independent Public Accountants ................................ F-15
Balance Sheets .......................................................... F-16
Notes to Financial Statements ........................................... F-20

HOTEL CORPORATION OF THE PACIFIC, INC.:
Report of Independent Public Accountants ................................ F-23
Balance Sheets .......................................................... F-24
Statements of Operations ................................................ F-25
Statements of Changes in Stockholders' Equity (Deficit) ................. F-26
Statements of Cash Flows ................................................ F-27
Notes to Financial Statements ........................................... F-28

BRINDLEY & BRINDLEY:
Report of Independent Public Accountants ................................ F-38
Combined Balance Sheets ................................................. F-39
Combined Statements of Operations ....................................... F-40
Combined Statements of Changes in Stockholders' Equity (Deficit) ........ F-41
Combined Statements of Cash Flows ....................................... F-42
Notes to Combined Financial Statements .................................. F-43

COASTAL RESORTS MANAGEMENT, INC. AND
COASTAL RESORTS REALTY, L.L.C.:
Report of Independent Public Accountants ................................ F-47
Combined Balance Sheets ................................................. F-49
Combined Statements of Operations ....................................... F-50
Statements of Changes in Stockholders' and Members' Equity .............. F-51
Combined Statements of Cash Flows ....................................... F-52
Notes to Combined Financial Statements .................................. F-54

COLLECTION OF FINE PROPERTIES, INC.:
Independent Auditor's Report ............................................ F-60
Consolidated Balance Sheets ............................................. F-61
Consolidated Statements of Operations ................................... F-62
Consolidated Statements of Changes in Stockholders' Equity .............. F-63
Consolidated Statements of Cash Flows ................................... F-64
Notes to Consolidated Financial Statements .............................. F-66

FIRST RESORT SOFTWARE, INC.:
Report of Independent Public Accountants ................................ F-72
Balance Sheets .......................................................... F-73
Statements of Operations ................................................ F-74
Statements of Changes in Stockholders' Equity (Deficit) ................. F-75
Statements of Cash Flows ................................................ F-76
Notes to Financial Statements ........................................... F-77
</TABLE>

F-1

<PAGE>

<TABLE>
<CAPTION>
PAGE
------
<S> <C>
HOUSTON AND O'LEARY COMPANY:
Report of Independent Public Accountants ........................... F-80
Balance Sheets ..................................................... F-81
Statements of Operations ........................................... F-82
Statements of Changes in Stockholders' Equity ...................... F-83
Statements of Cash Flows ........................................... F-84
Notes to Financial Statements ...................................... F-85

THE MAURY PEOPLE, INC.:
Report of Independent Public Accountants ........................... F-88
Balance Sheets ..................................................... F-89
Statements of Operations ........................................... F-90
Statements of Changes in Stockholders' Equity (Deficit) ............ F-91
Statements of Cash Flows ........................................... F-92
Notes to Financial Statements ...................................... F-93

HOWEY ACQUISITION, INC.
d.b.a PRISCILLA MURPHY REALTY, INC.:
Reports of Independent Public Accountants .......................... F-98
Consolidated Balance Sheets ........................................ F-99
Consolidated Statements of Operations .............................. F-100
Consolidated Statements of Changes in Stockholders' Equity ......... F-101
Consolidated Statements of Cash Flows .............................. F-102
Notes to Consolidated Financial Statements ......................... F-104

RESORT PROPERTY MANAGEMENT, INC.:
Report of Independent Public Accountants ........................... F-108
Balance Sheets ..................................................... F-109
Statements of Operations ........................................... F-110
Statements of Changes in Stockholders' Equity (Deficit) ............ F-111
Statements of Cash Flows ........................................... F-112
Notes to Financial Statements ...................................... F-113

TELLURIDE RESORT ACCOMMODATIONS, INC.:
Report of Independent Public Accountants ........................... F-117
Balance Sheets ..................................................... F-118
Statements of Operations ........................................... F-119
Statements of Changes in Stockholders' Equity (Deficit) ............ F-120
Statements of Cash Flows ........................................... F-121
Notes to Financial Statements ...................................... F-122

TRUPP HODNETT COMPANY:
Report of Independent Public Accountants ........................... F-125
Combined Balance Sheets ............................................ F-126
Combined Statements of Operations .................................. F-127
Combined Statements of Changes in Stockholders' Equity ............. F-128
Combined Statements of Cash Flows .................................. F-129
Notes to Financial Statements ...................................... F-131

</TABLE>

F-2

<PAGE>

RESORTQUEST INTERNATIONAL, INC., AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
BASIS OF PRESENTATION

The following unaudited pro forma combined financial statements give effect
to the acquisitions by ResortQuest International, Inc. ("RQI" or the "Company"),
of the outstanding capital stock of Hotel Corporation of the Pacific, Inc.
("Aston") and Brindley & Brindley Realty, Inc. and B&B on the Beach, Inc.
(collectively "Brindley and Brindley"), Coastal Resorts Management, Inc. and
Coastal Resorts Realty, L.L.C. (collectively "Coastal Resorts"), Collection of
Fine Properties, Inc. ("CFP"), First Resort Software, Inc. ("FRS"), Houston and
O'Leary Company ("H&O"), Maui Condo & Home Realty, Inc. ("Maui"), The Maury
People, Inc. ("Maury"), Howey Acquisition, Inc. and Priscilla Murphy Realty,
Inc. (collectively "PMR"), Resort Property Management, Inc. ("RPM"), Telluride
Resort Accommodations, Inc. ("TRA"), Trupp-Hodnett Enterprises, Inc. and THE
Management Company (collectively "THE"), and Whistler Chalets Limited
("Whistler"), (collectively the "Founding Companies"). These acquisitions (the
"Combinations") will occur simultaneously with the closing of RQI's initial
public offering (the "Offering") and will be accounted for using the purchase
method of accounting. Aston, one of the Founding Companies has been designated
as the accounting acquiror in accordance with Securities and Exchange Commission
Staff Accounting Bulletin No. 97 (SAB 97) which states that the combining
company which receives the largest portion of voting rights in the combined
corporation is presumed to be the acquiror for accounting purposes unless other
evidence clearly indicates that another company is the acquiror. Management has
analyzed the factors as set forth in SAB 97 that may indicate Aston should not
be deemed to be accounting acquiror, including (1) the existing conversion
rights of the Restricted Common Stock, (2) Aston's level of representation on
the Board and in the holding company management team and (3) the market value of
the shares held by Aston and the existing shareholder group. Management has
concluded that none of these factors, either individually, or in the aggregate,
is sufficient to rebut the presumption that the shareholders of Aston should be
deemed the accounting acquiror.

The unaudited pro forma combined balance sheets give effect to the
Combinations and the Offering as if they had occurred on December 31, 1997. The
unaudited pro forma combined statement of operations gives effect to these
transactions as if they had occurred on January 1, 1997.

Following the Combinations, the Company expects to realize certain savings
as a result of (i) volume purchasing and national contracts for
telecommunications, credit fees, advertising, printing, housekeeping supplies
and other operating expenses and (ii) consolidation of insurance, employee
benefits and other general and administrative expenses. The Company cannot
quantify these savings accurately at this time. It is anticipated that these
savings will be partially offset by the costs of being a publicly traded company
and the incremental costs related to the Company's new management team. However,
these costs, like the savings that they offset, cannot be quantified accurately.
Neither these anticipated savings nor these anticipated costs have been included
in the pro forma combined financial information of the Company. To the extent
the owners and certain key employees of the Founding Companies have agreed
prospectively to reductions in salary, bonuses and benefits, these reductions
have been reflected in the unaudited pro forma combined statement of operations.
Additionally, the effects of the exclusion of certain non-operating assets and
the assumption of or retirement of certain liabilities that will be retained by
the stockholders of the Founding companies have been eliminated in the unaudited
pro forma financial statements.

The pro forma adjustments are based on preliminary estimates, available
information and certain assumptions and may be revised as additional information
becomes available. In management's opinion, the pro forma information presented
herein should not materially change from the preliminary estimates. The
unaudited pro forma financial data do not purport to represent what the
Company's financial position or results of operations would actually have been
if such transactions in fact had occurred on those dates and are not necessarily
representative of the Company's financial position or results of operations for
any future period. Since the Founding Companies were not under common control or
management, historical combined results may not be comparable to, or indicative
of, future performance. The unaudited pro forma combined financial statements
should be read in conjunction with the other financial statement and notes
thereto included elsewhere in the Prospectus. See "Risk Factors" included
elsewhere herein.

F-3

<PAGE>
PAGE 1 OF 2

RESORTQUEST INTERNATIONAL, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED BALANCE SHEET - MARCH 31, 1998
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
BRINDLEY &
RQI ASTON BRINDLEY
----------- --------- ------------
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents ........................... $ -- $ 1,208 $ 508
Cash held in trust .................................. -- -- 707
Trade and other receivables, net of allowance ....... -- 2,138 50
Other current assets ................................ 2,725 310 201
--------- ------- ------
Total current assets ............................... 2,725 3,656 1,466
Property and equipment, net ......................... -- 1,667 137
Goodwill ............................................ -- -- --
Other assets ........................................ -- 6,696 --
--------- ------- ------
Total assets ....................................... $ 2,725 $12,019 $1,603
========= ======= ======
Current Liabilities:
Current maturities of long-term debt ................ $ -- $ 594 $ 11
Customer deposits, deferred revenues ................ -- -- 2,122
Accounts payable, and accrued liabilities ........... 3,275 6,216 31
Payables to Founding Companies' Stockholders ........ -- -- --
Other current liabilities ........................... -- 427 --
--------- ------- ------
Total current liabilities .......................... 3,275 7,237 2,164
--------- ------- ------
Long-term debt, net of current maturities ............ -- 2,301 31
Other long-term liabilities .......................... -- 2,376 --

Stockholders' Equity:
Common stock (3,134,630 shares outstanding (RQI),
9,258,348 shares outstanding (pro forma com-
bined), 15,058,348 shares outstanding (pro forma
as adjusted) ....................................... -- 100 0
Additional paid-in-capital .......................... 5,132 5 --
Retained earnings (deficit) ......................... (5,682) -- (592)
--------- ------- ------
Total stockholders's equity ........................ (550) 105 (592)
--------- ------- ------
Total liabilities and stockholder's equity ......... $ 2,725 $12,019 $1,603
========= ======= ======
<CAPTION>
COASTAL
RESORTS CFP FRS H&O MAURY
--------- --------- --------- ------- --------
<S> <C> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents ........................... $1,021 $1,723 $ 208 $208 $ 390
Cash held in trust .................................. 779 -- -- -- 17
Trade and other receivables, net of allowance ....... 518 1,171 290 70 --
Other current assets ................................ -- 268 230 251 --
------ ------ ------ ---- -----
Total current assets ............................... 2,318 3,162 728 529 407
Property and equipment, net ......................... 275 1,905 300 59 92
Goodwill ............................................ 705 50 -- -- --
Other assets ........................................ -- -- -- -- --
------ ------ ------ ---- -----
Total assets ....................................... $3,298 $5,117 $1,028 $588 $ 499
====== ====== ====== ==== =====
Current Liabilities:
Current maturities of long-term debt ................ $ -- $ 138 $ -- $150 $ --
Customer deposits, deferred revenues ................ 1,001 664 530 173 3
Accounts payable, and accrued liabilities ........... 323 1,287 290 99 517
Payables to Founding Companies' Stockholders ........ -- -- -- -- --
Other current liabilities ........................... -- -- -- -- --
------ ------ ------ ---- -----
Total current liabilities .......................... 1,324 2,089 820 422 520
------ ------ ------ ---- -----
Long-term debt, net of current maturities ............ -- 923 -- -- --
Other long-term liabilities .......................... -- -- -- -- --

F-4
<PAGE>

PAGE 2 OF 2
RESORTQUEST INTERNATIONAL, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED BALANCE SHEET - MARCH 31, 1998
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
PMR RPM TRA THE MAUI WHISTLER
--------- --------- --------- --------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents ........................... $ 2,375 $ 865 $1,672 $ 177 $ 290 $1,663
Cash held in trust .................................. 6,570 -- -- 922 1,329 --
Trade and other receivables, net of allowance ....... 98 4 414 350 121 250
Other current assets ................................ -- 293 78 36 131 29
------- ------ ------ ------ ------ ------
Total current assets ............................... 9,043 1,162 2,164 1,485 1,871 1,942
Property and equipment, net ......................... 105 355 63 286 24 1,452
Goodwill ............................................ 5,402 -- -- -- 20 --
Other assets ........................................ 185 -- -- -- 25 --
------- ------ ------ ------ ------ ------
Total assets ....................................... $14,735 $1,517 $2,227 $1,771 $1,940 $3,394
======= ====== ====== ====== ====== ======
Current Liabilities:
Current maturities of long-term debt ................ $ 803 $ 77 $ -- $ -- $ -- $ --
Customer deposits, deferred revenues ................ 6,570 166 468 890 1,329 --
Accounts payable, and accrued liabilities ........... 259 603 1,250 261 162 1,569
Payables to Founding Companies' Stockholders ........ -- -- -- -- -- --
Other current liabilities ........................... -- 127 -- 32 52 --
------- ------ ------ ------ ------ ------
Total current liabilities .......................... 7,632 973 1,718 1,183 1,543 1,569
------- ------ ------ ------ ------ ------
Long-term debt, net of current maturities ............ 4,059 116 -- -- -- 1,271
Other long-term liabilities .......................... -- 3 -- -- -- --

Stockholders' Equity (Deficit):
Common stock 3,134,630 shares outstanding (RQI),
9,258,348 shares outstanding (pro forma com-
bined), 15,058,348 shares outstanding (pro forma
as adjusted) ....................................... 100 -- 216 13 1 --
Additional paid-in-capital .......................... 150 26 -- 4 1 --
Retained earnings (deficit) ......................... 2,794 399 293 571 395 554
------- ------ ------ ------ ------ ------
Total stockholders's equity ........................ 3,044 425 509 588 397 554
------- ------ ------ ------ ------ ------
Total liabilities and stockholder's equity ......... $14,735 $1,517 $2,227 $1,771 $1,940 $3,394
======= ====== ====== ====== ====== ======
<CAPTION>
PRO
PRO FORMA FORMA OFFERING AS
COMBINED ADJUSTMENTS COMBINED ADJUSTMENTS ADJUSTED
---------- ------------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents ........................... $12,308 $ (3,366) $ 8,942 $ 236 $ 9,178
Cash held in trust .................................. 10,324 3,639 13,963 -- 13,963
Trade and other receivables, net of allowance ....... 5,474 (664) 4,810 -- 4,810
Other current assets ................................ 4,552 1,067 5,619 -- 5,619
------- -------- -------- ---------- --------
Total current assets ............................... 32,658 676 33,334 236 33,570
Property and equipment, net ......................... 6,720 (1,387) 5,333 -- 5,333
Goodwill ............................................ 6,177 81,532 87,709 -- 87,709
Other assets ........................................ 6,906 (2,715) 4,191 -- 4,191
------- -------- -------- ---------- --------
Total assets ....................................... $52,461 $ 78,106 $130,567 $ 236 $130,803
======= ======== ======== ========== ========
Current Liabilities:
Current maturities of long-term debt ................ $ 1,773 $ (953) $ 820 $ (803) $ 17
Customer deposits, deferred revenues ................ 13,916 -- 13,916 -- 13,916
Accounts payable, and accrued liabilities ........... 16,142 (547) 15,595 -- 15,595
Payables to Founding Companies' Stockholders ........ -- 55,064 55,064 (55,064) --
Other current liabilities ........................... 638 -- 638 -- 638
------- -------- -------- ---------- --------
Total current liabilities .......................... 32,469 53,564 86,033 (55,867) 30,166
------- -------- -------- ---------- --------
Long-term debt, net of current maturities ............ 8,701 (4,233) 4,468 561 5,029
Other long-term liabilities .......................... 2,379 -- 2,379 -- 2,379
Stockholders' Equity (Deficit):
Common stock 3,134,630 shares outstanding (RQI),
9,258,348 shares outstanding (pro forma com-
bined), 15,058,348 shares outstanding (pro forma
as adjusted) ....................................... 1,247 (1,154) 93 58 151
Additional paid-in-capital .......................... 6,193 27,104 33,297 55,484 88,781
Retained earnings (deficit) ......................... 1,472 2,825 4,297 -- 4,297
------- -------- -------- ---------- --------
Total stockholders's equity ........................ 8,912 28,775 37,687 55,542 93,229
------- -------- -------- ---------- --------
Total liabilities and stockholder's equity ......... $52,461 $ 78,106 $130,567 $ 236 $130,803
======= ======== ======== ========== ========
</TABLE>

F-5

<PAGE>

PAGE 1 OF 2

RESORTQUEST INTERNATIONAL, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997

(IN THOUSANDS)

<TABLE>
<CAPTION>
BRINDLEY &
RQI ASTON BRINDLEY
----- ---------- ------------
<S> <C> <C> <C>
Revenues ...................................................... $-- $19,554 $4,021
Operating expenses ............................................ -- 8,908 3,028
General and administrative expenses ........................... -- 5,081 395
Depreciation and amortization ................................. -- 394 87
--- ------- ------
Income (loss) from operations ................................ -- 5,171 511
Interest (expense) and other income, net ...................... -- (86) 42
--- ------- ------
Income (loss) before income taxes ............................. -- 5,085 553
Provision for income taxes .................................... -- -- --
--- ------- ------
Net income (loss) ............................................. $-- $ 5,085 $ 553
=== ======= ======
PRO FORMA DATA (unaudited):
Historical net income (loss) before pro forma provision for in-
come taxes ................................................... $-- $ 5,085 $ 553
Less pro forma provision for income taxes ..................... -- 2,034 221
--- ------- ------
PRO FORMA NET INCOME (LOSS) ................................... $-- $ 3,051 $ 332
=== ======= ======
<CAPTION>

COASTAL
RESORTS CFP FRS H&O MAURY
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Revenues ...................................................... $3,615 $4,303 $2,864 $1,596 $1,183
Operating expenses ............................................ 1,788 2,830 1,704 494 211
General and administrative expenses ........................... 559 586 372 274 654
Depreciation and amortization ................................. 85 307 45 48 28
------ ------ ------ ------ ------
Income (loss) from operations ................................ 1,183 580 743 780 290
Interest (expense) and other income, net ...................... (47) 133 25 (15) 28
------ ------ ------ ------ ------
Income (loss) before income taxes ............................. 1,136 713 768 765 318
Provision for income taxes .................................... -- -- -- -- --
------ ------ ------ ------ ------
Net income (loss) ............................................. $1,136 $ 713 $ 768 $ 765 $ 318
====== ====== ====== ====== ======
PRO FORMA DATA (unaudited):
Historical net income (loss) before pro forma provision for in-
come taxes ................................................... $1,136 $ 713 $ 768 $ 765 $ 318
Less pro forma provision for income taxes ..................... 454 285 307 306 127
------ ------ ------ ------ ------
PRO FORMA NET INCOME (LOSS) ................................... $ 682 $ 428 $ 461 $ 459 $ 191
====== ====== ====== ====== ======
</TABLE>

The accompanying notes are an integral part of these
unaudited pro forma combined financial statements.

F-6

<PAGE>

PAGE 2 OF 2

RESORTQUEST INTERNATIONAL, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT SHARE AND PURCHASE DATA)

<TABLE>
<CAPTION>
PMR RPM TRA THE MAUI
--------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Revenues ........................................ $4,740 $2,295 $4,313 $4,061 $1,422
Operating expenses .............................. 1,184 1,560 3,037 1,838 366
General and administrative expenses ............. 1,663 548 982 1,939 954
Depreciation and amortization ................... 203 79 48 85 25
------ ------ ------ ------ -------
Income (loss) from operations .................. 1,690 108 246 199 77
Interest (expense) and other income, net ........ (182) 217 31 47 (1)
------ ------ ------ ------ -------
Income (loss) before income taxes .............. 1,508 325 277 246 76
Provision for income taxes ..................... -- 75 -- 60 21
------ ------ ------ ------ --------
Net income (loss) .............................. $1,508 $ 250 $ 277 $ 186 $ 55
====== ====== ====== ====== ========
Pro forma data (unaudited):
Historical net income (loss) before pro forma
provision for income taxes ..................... $1,508 $ 325 $ 277 $ 246 $ 76
Less: pro forma provision for income taxes ...... 603 130 111 98 30
------ ------ ------ ------ --------
Pro forma net income (loss) ..................... $ 905 $ 195 $ 166 $ 148 $ 46
====== ====== ====== ====== ========
Net income per share ............................
Shares used in computing net income per share
(Note 5) .......................................

PRO FORMA
ADJUSTMENTS PRO
WHISTLER COMBINED (NOTE 4) FORMA
------------ ------------ ----------------- --------------
<S> <C> <C> <C> <C>
Revenues ........................................ $2,060 $56,027 $ 792 (a) $ 56,819
Operating expenses .............................. 1,147 28,095 (415)(a) 27,680
General and administrative expenses ............. 729 14,736 (2,353)(a) 12,383
Depreciation and amortization ................... 85 1,519 2,241 (b) 3,760
------ ------- ---------- ------------
Income (loss) from operations .................. 99 11,677 1,319 12,996
Interest (expense) and other income, net ........ (8) 184 92 (a) (39)
-------- ------- ---------- ------------
(315)(c)
Income (loss) before income taxes .............. 91 11,861 1,096 12,957
Provision for income taxes ..................... (18) 138 1,335 (d) 1,473
------- ------- ---------- ------------
Net income (loss) .............................. $ 109 $11,723 $ (239) $ 11,484
======= ======= ========== ============
Pro forma data (unaudited):
Historical net income (loss) before pro forma
provision for income taxes ..................... $ 91 $11,861 $ 1,096 $ 12,957
Less: pro forma provision for income taxes ...... 36 4,742 1,335 6,077
------- ------- ---------- ------------
Pro forma net income (loss) ..................... $ 55 $ 7,119 $ (239) $ 6,880
======= ======= ========== ============
Net income per share ............................ $ 0.46
============
Shares used in computing net income per share
(Note 5) ....................................... 15,058,348
============
</TABLE>

The accompanying notes are an integral part of these
unaudited pro forma combined financial statements.

F-7

<PAGE>

PAGE 1 OF 2
RESORTQUEST INTERNATIONAL, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998

(IN THOUSANDS)

<TABLE>
<CAPTION>
BRINDLEY &
RQI ASTON BRINDLEY
----------- --------- ------------
<S> <C> <C> <C>
Revenues ................................................. $ -- $5,693 $ 257
Operating expenses ....................................... -- 2,422 678
General and administrative expenses ...................... 5,682 1,301 101
Depreciation and amortization ............................ 88 22
------ ------
Income (loss) from operations ........................... (5,682) 1,882 (544)
-------- ------ ------
Interest (expense) and other income, net ................. -- (185) 16
-------- ------ ------
Income (loss) before income tax expense .................. (5,682) 1,697 (528)
-------- ------ ------
Provision (benefit) for income taxes ..................... -- -- --
-------- ------ ------
Net income (loss) ........................................ $ (5,682) $1,697 $ (528)
======== ====== ======
PRO FORMA DATA (UNAUDITED):
Historical net income (loss) before pro forma provi-
sion for income taxes ................................... $ (5,682) $1,697 $ (528)
Less: pro forma provision (benefit) for income taxes ..... (2,272) 679 (211)
-------- ------ ------
PRO FORMA NET INCOME (LOSS) .............................. $ (3,410) $1,018 $ (317)
======== ====== ======

COASTAL
RESORTS CFP FRS H&O MAURY
----------- --------- ------- ---------- ------
<S> <C> <C> <C> <C> <C>
Revenues ................................................. $577 $2,689 $828 $421 $338
Operating expenses ....................................... 435 930 448 3 66
General and administrative expenses ...................... 137 147 114 312 188
Depreciation and amortization ............................ 21 77 12 12 7
---- ------ ---- ---- ----
Income (loss) from operations ........................... (16) 1,535 254 94 77
---- ------ ---- ---- ----
Interest (expense) and other income, net ................. -- 49 8 (5) 2
---- ------ ---- ------ ----
Income (loss) before income tax expense .................. (16) 1,584 262 89 79
---- ------ ---- ----- ----
Provision (benefit) for income taxes ..................... -- -- -- -- --
---- ------ ---- ----- ----
Net income (loss) ........................................ $(16) $1,584 $262 $89 $ 79
==== ====== ==== ===== ====
PRO FORMA DATA (UNAUDITED):
Historical net income (loss) before pro forma provi-
sion for income taxes ................................... $(16) $1,584 $262 $89 $ 79
Less: pro forma provision (benefit) for income taxes ..... (6) 634 105 36 32
------- ------ ---- ----- ----
PRO FORMA NET INCOME (LOSS) .............................. $(10) $ 950 $157 $53 $ 47
====== ====== ==== ===== ====
</TABLE>

F-8

<PAGE>

PAGE 2 OF 2
RESORTQUEST INTERNATIONAL, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998

(IN THOUSANDS)

<TABLE>
<CAPTION>
PMR RPM TRA THE MAUI
--------- --------- --------- --------- ------
<S> <C> <C> <C> <C> <C>
Revenues ................................................... $2,275 $1,468 $2,342 $1,254 $554
Operating expenses ......................................... 318 488 1,066 519 85
General and administrative expenses ........................ 584 133 349 628 204
Depreciation and amortization .............................. 51 40 12 22 6
------ ------ ------ ------ ----
Income (loss) from operations ............................. 1,322 807 915 85 259
------ ------ ------ ------ ----
Interest (expense) and other income, net ................... 36 20 12 -- 9
Income (loss) before income tax expense .................... 1,358 827 927 85 268
------ ------ ------ ------ ----
Provision (benefit) for income taxes ....................... -- 9 -- 21 50
------ ------ ------ ------ ----
Net income (loss) .......................................... $1,358 $ 818 $ 927 $ 64 $218
====== ====== ====== ====== ====
Pro Forma Data (unaudited)
Historical net income (loss) before pro forma provi-
sion for income taxes ..................................... $1,358 $ 827 $ 927 $ 85 $268
Less: pro forma provision (benefit) for income taxes ....... 543 331 371 34 107
------ ------ ------ ------ ----
Pro Forma Net Income (loss) ................................ $ 815 $ 496 $ 556 $ 51 $161
====== ====== ====== ====== ====
Net income per share .......................................
Shares used in computing net income per share (Note 5).

PRO FORMA AS
WHISTLER COMBINED ADJUSTMENTS ADJUSTED
---------- ---------- ------------------ --------------
<S> <C> <C> <C> <C>
Revenues ................................................... $1,135 $19,831 $ 1,490 (a) $ 21,321
Operating expenses ......................................... 536 7,994 ( 45)(a) 7,949
General and administrative expenses ........................ 76 9,956 (672)(a) 3,602
(5,682)(e)
Depreciation and amortization .............................. 22 392 606 (b) 998
------ ------- ------ ------
Income (loss) from operations ............................. 501 1,489 7,283 8,772
------ ------- ------ ------
Interest (expense) and other income, net ................... 28 (10) (79)(c) 143
232 (a)
Income (loss) before income tax expense .................... 529 1,479 7,436 8,915
------ ------- ------ ------
Provision (benefit) for income taxes ....................... -- 80 3,109(d) 3,189
------ ------- ------ ------
Net income (loss) .......................................... $ 529 $ 1,399 4,327 5,726
====== ======= ====== ======
Pro Forma Data (unaudited)
Historical net income (loss) before pro forma provi-
sion for income taxes ..................................... $ 529 $ 1,479 $ 7,436 $ 8,915
Less: pro forma provision (benefit) for income taxes ....... 211 594 3,109 3,703
------ ------- ---------- ------------
Pro Forma Net Income (loss) ................................ $ 318 $ 885 $ 4,327 $ 5,212
====== ======= ========== ============
Net income per share ....................................... $ 0.35
============
Shares used in computing net income per share (Note 5). 15,058,348
============
</TABLE>

F-9

<PAGE>

PAGE 1 OF 2
RESORTQUEST INTERNATIONAL, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997

(IN THOUSANDS)

<TABLE>
<CAPTION>
BRINDLEY &
RQI ASTON BRINDLEY
------- ---------- ------------
<S> <C> <C> <C>
Revenues ...................................... $ -- $ 5,581 $ 269
Operating expenses ............................ -- 2,377 412
General and administrative expenses ........... -- 1,061 106
Depreciation and amortization ................. -- 88 22
---- ------- -------
Income (loss) from operations ................ -- 2,055 (271)
---- ------- -------
Interest (expense) and other income, net ...... -- (168) --
---- ------- -------
Income (loss) before income tax expense ....... -- 1,887 (271)
---- ------- -------
Provision (benefit) for income taxes .......... -- -- --
---- ------- -------
Net income (loss) ............................. $ -- $ 1,887 $ (271)
==== ======= =======
PRO FORMA DATA (UNAUDITED):
HISTORICAL NET INCOME (LOSS) BEFORE
PRO FORMA PROVISION FOR INCOME
TAXES ........................................ $ -- $ 1,887 $ (271)
LESS: PRO FORMA PROVISION (BENEFIT) FOR
INCOME TAXES ................................. -- 755 (108)
---- ------- -------
PRO FORMA NET INCOME (LOSS) ................... $ -- $ 1,132 $ (163)
==== ======= =======

COASTAL
RESORTS CFP FRS H&O MAURY
----------- --------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
Revenues ...................................... $424 $ 2,714 $ 578 $484 $ 370
Operating expenses ............................ 296 1,021 374 5 57
General and administrative expenses ........... 123 161 84 161 93
Depreciation and amortization ................. 21 77 12 12 7
----- ------- ----- ----- -----
Income (loss) from operations ................ (16) 1,455 108 306 213
----- ------- ----- ----- -----
Interest (expense) and other income, net ...... -- 54 7 (5) 2
----- ------- ----- ----- -----
Income (loss) before income tax expense ....... (16) 1,509 115 301 215
----- ------- ----- ----- -----
Provision (benefit) for income taxes .......... -- -- -- -- --
----- ------- ----- ----- -----
Net income (loss) ............................. $(16) $ 1,509 $ 115 $301 $ 215
===== ======= ===== ===== =====
PRO FORMA DATA (UNAUDITED):
HISTORICAL NET INCOME (LOSS) BEFORE
PRO FORMA PROVISION FOR INCOME
TAXES ........................................ $(16) $ 1,509 $ 115 $301 $ 215
LESS: PRO FORMA PROVISION (BENEFIT) FOR
INCOME TAXES ................................. (6) 604 44 120 86
------- ------- ----- ----- -----
PRO FORMA NET INCOME (LOSS) ................... $(10) $ 905 $ 71 $181 $ 129
====== ======= ===== ===== =====
</TABLE>

F-10

<PAGE>

PAGE 2 OF 2
RESORTQUEST INTERNATIONAL, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997

(IN THOUSANDS)

PMR RPM TRA THE MAUI
---------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Revenues ................................................... $ 1,959 $ 1,606 $ 2,135 $ 767 $ 462
Operating expenses ......................................... 283 673 967 388 64
General and administrative expenses ........................ 434 133 245 332 196
Depreciation and amortization .............................. 51 40 12 22 6
------- ------- ------- ----- -----
Income (loss) from operations ............................. 1,191 760 911 25 196
Interest (expense) and other income, net ................... (22) 22 19 36 8
------- ------- ------- ----- -----
Income (loss) before income taxes .......................... 1,169 782 930 61 204
Provision (benefit) for income taxes ....................... -- 19 -- 17 46
------- ------- ------- ----- -----
Net income (loss) .......................................... $ 1,169 $ 763 $ 930 $ 44 $ 158
======= ======= ======= ===== =====
PRO FORMA DATA (UNAUDITED)
HISTORICAL NET INCOME (LOSS) BEFORE
PRO FORMA PROVISION FOR INCOME
TAXES ..................................................... $ 1,169 $ 782 $ 930 $ 61 $ 204
LESS: PRO FORMA PROVISION (BENEFIT) FOR
INCOME TAXES .............................................. 468 313 372 24 82
------- ------- ------- ----- -----
PRO FORMA NET INCOME (LOSS) ................................ $ 701 $ 469 $ 558 $ 37 $ 122
======= ======= ======= ===== =====
Net income per share .......................................
Shares used in computing net income per share (Note 5).

PRO FORMA AS
WHISTLER COMBINED ADJUSTMENTS ADJUSTED
---------- ------------- --------------- --------------
<S> <C> <C> <C> <C>
Revenues ................................................... $ 1,191 $18,540 $ 280 (a) $ 18,820
Operating expenses ......................................... 510 7,427 100 (a) 7,327
General and administrative expenses ........................ 92 3,221 647 (a) 2,574
Depreciation and amortization .............................. 22 392 (606)(b) 998
------- -------- ------- ------------
Income (loss) from operations ............................. 567 7,500 421 7,921
46 (a)
Interest (expense) and other income, net ................... 44 (3) (79)(c) (36)
------- -------- ------- ------------
Income (loss) before income taxes .......................... 611 7,497 388 7,885
Provision (benefit) for income taxes ....................... -- 82 398 (d) 480
------- -------- ------- ------------
Net income (loss) .......................................... $ 611 $ 7,415 $ (10) $ 7,405
======= ======== ======= ============
PRO FORMA DATA (UNAUDITED)
HISTORICAL NET INCOME (LOSS) BEFORE
PRO FORMA PROVISION FOR INCOME
TAXES ..................................................... $ 611 $ 7,497 $ 388 $ 7,885
LESS: PRO FORMA PROVISION (BENEFIT) FOR
INCOME TAXES .............................................. 244 2,998 398 3,396
------- -------- ------- ------------
PRO FORMA NET INCOME (LOSS) ................................ $ 367 $ 4,499 $ (10) $ 4,489
======= ======== ======= ============
Net income per share ....................................... $ 0.30
============
Shares used in computing net income per share (Note 5). 15,058,348
============
</TABLE>

F-11

<PAGE>

RESORTQUEST INTERNATIONAL, INC. AND FOUNDING COMPANIES

NOTES TO UNAUDITED PRO FORMA
COMBINED FINANCIAL STATEMENTS

1. GENERAL:

ResortQuest International, Inc. ("RQI"), was formed to create a leading
single provider of vacation property rental, management and real estate
services. RQI has conducted no operations to date and will acquire substantially
all of the assets of the Founding Companies concurrently with the consummation
of the Offering.

The historical financial statements reflect the financial position and
results of operations of RQI and the Founding Companies as of March 31, 1998,
and for the year ended December 31, 1997, and the three months ended March 31,
1997 and 1998, and were derived from the respective RQI and Founding Company
financial statements where indicated. The audited historical financial
statements included elsewhere herein have been included in accordance with
Securities and Exchange Commission Staff Accounting Bulletin No. 80.

2. ACQUISITION OF FOUNDING COMPANIES:

Concurrent with the closing of the Offering, RQI will acquire all of the
outstanding capital stock of the Founding Companies. The Combinations will be
accounted for using the purchase method of accounting with Aston being
designated as the accounting acquiror.

The following table sets forth the consideration to be paid (a) in cash,
(b) in shares of Common Stock to the stockholders of each of the Founding
Companies and (c) in debt assumed by RQI. The consideration to be paid for each
of the Founding Companies was determined through arm's-length negotiations
between RQI and representatives of each Founding Company. The factors considered
by the Company in determining the consideration to be paid included, among
others, the historical operating results, the net worth, the amount and type of
indebtedness and the future prospects of the Founding Companies. For purposes of
computing the estimated purchase price for accounting purposes, the value of the
shares is determined using an estimated fair value of $9.90 per share, which
represents a discount of 10 percent from the assumed initial public offering
price of $11 per share due to restrictions on the sale and transferability of
the shares issued. The purchase price for the Acquisitions is subject to certain
working capital adjustments at closing. See "Certain Transactions - Organization
of the Company."

<TABLE>
<CAPTION>
SHARES OF DEBT
CASH COMMON STOCK ASSUMED
---------------- -------------- ---------------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C>
Aston Hotels & Resorts ................. $ 29,500 1,708,333 $ 30
Brindley & Brindley .................... 2,000 195,000 --
Coastal Resorts ........................ -- 816,667 --
Collection of Fine Properties .......... 4,850 404,167 252
First Resort ........................... 2,855 290,767 --
Houston and O'Leary .................... 2,470 248,167 --
Maui Condominium and Home .............. 1,375 166,667 --
The Maury People ....................... 2,000 150,000 --
Priscilla Murphy Realty ................ -- 1,148,098 4,842
Resort Property Management ............. 1,200 108,333 153
Telluride Resort Accomodations ......... 3,014 125,103 --
Trupp-Hodnett Enterprises .............. 5,000 627,833 --
Whistler Chalets ....................... 800 134,583 11
-------- --------- ------
$ 55,064 6,123,718 $5,288
======== ========= ======

</TABLE>

F-12

<PAGE>

RESORTQUEST INTERNATIONAL, INC. AND FOUNDING COMPANIES

NOTES TO UNAUDITED PRO FORMA - (CONTINUED )

3. UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS:

The following table summarizes unaudited pro forma combined balance sheet
adjustments (in thousands):

<TABLE>
<CAPTION>
(A) (B) (C)
----------- ------------ ------------
<S> <C> <C> <C>
Cash and cash equivalents ....................... $ -- $ (3,366) --
Cash held in trust .............................. -- 3,639 --
Trade and other receivables ..................... -- (664) --
Other current assets ............................ -- (388) --
Property and equipment, net ..................... (1,387) -- --
Goodwill ........................................ (6,177) -- 68,636
Other assets .................................... (2,715) -- --
Current maturities on long-term debt ............ 953 -- --
Accounts payable, and accrued liabilities ....... -- 547 --
Payable to Founding Companies' stockholders ..... -- -- (55,064)
Long-term debt .................................. 4,233 -- --
Other long-term liabilities ..................... -- -- --
Common stock .................................... -- 675 (61)
Additional paid-in capital ...................... -- -- (13,511)
Retained earnings ............................... 5,093 (443) $ --
--------- -------- ----------
$ -- $ -- $ --
========= ======== ==========

PRO FORMA
(D) (E) (F) ADJUSTMENTS
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Cash and cash equivalents ....................... -- -- $ -- $ (3,366)
Cash held in trust .............................. -- -- -- 3,639
Trade and other receivables ..................... -- -- -- (664)
Other current assets ............................ -- -- 1,455 1,067
Property and equipment, net ..................... -- -- -- (1,387)
Goodwill ........................................ -- 19,073 -- 81,532
Other assets .................................... -- -- -- (2,715)
Current maturities on long-term debt ............ -- -- -- 953
Accounts payable, and accrued liabilities ....... -- -- -- 547
Payable to Founding Companies' stockholders ..... -- -- -- (55,064)
Long-term debt .................................. -- -- -- 4,233
Other long-term liabilities ..................... -- -- -- --
Common stock .................................... 540 -- -- 1,154
Additional paid-in capital ...................... 5,480 (19,073) -- (27,104)
Retained earnings ............................... $ (6,020) $ -- (1,455) (2,825)
-------- ---------- --------- ---------
$ -- $ -- $ -- $ --
======== ========== ========= =========
</TABLE>

<TABLE>
<CAPTION>
OFFERING
(G) (H) ADJUSTMENTS
----------- -------------- ------------
<S> <C> <C> <C>
Cash and cash equivalents .................... $ 55,300 $ (55,064) $ 236
Current maturities of long-term debt ......... 803 -- (3,797)
Payables to Founding Companies' stockholders -- 55,064 55,064
Long-term debt ............................... (561) -- 4,039
Common stock ................................. (58) -- (58)
Additional paid-in capital ................... (55,484) -- (55,484)
--------- ---------- ---------
$ -- $ -- $ --
========= ========== =========
</TABLE>

(a) Reflects a reduction of net assets of approximately $5.1 million
including certain non-operating assets and the assumption of or
retirement of certain liabilities that will be excluded from the
Combinations and retained by certain stockholders of the Founding
Companies.

(b) Reflects certain working capital adjustments of approximately $232,000
in connection with the Combination.

(c) Reflects the Combinations of the Founding Companies including: (i) the
liability for cash consideration to be paid of $55.1 million; (ii) the
issuance of 6,123,787 shares of common stock to the stockholders of
the Founding Companies at $9.90 per share (or $43.7 million); and
(iii) the creation of approximately $68.7 million of goodwill.

(d) Reflects the elimination of the Founding Companies' common stock and
retained earnings due to the Combinations.

(e) Reflects the goodwill related to the issuance of common stock to
founders and consultants of RQI.

(f) Reflects the deferred income tax asset attributable to the temporary
differences between financial reporting and income tax bases of assets
and liabilities currently held in S Corporations.

F-13

<PAGE>

RESORTQUEST INTERNATIONAL, INC. AND FOUNDING COMPANIES

NOTES TO UNAUDITED PRO FORMA - (CONTINUED )

(g) Reflects the proceeds from the issuance of 5,800,000 shares of common
stock ($63.8 million), together with $4.6 million to be drawn in debt
from the Credit Facility which will be used to pay the cash portion of
the purchase price for the Founding Companies ($55.1 million) to repay
debt assumed in the Combinations ($4.8 million) and to pay estimated
offering expenses of $8.5 million (based on an assumed initial public
offering price of $11 per share).

(h) Reflects the cash portion of the consideration to be paid to the
Founding Companies in connection with the Combinations.

4. UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS ADJUSTMENTS:

(a) Reflects (i) a reduction in salaries, bonuses and benefits derived
from contractual agreements which establish the compensation of the
owners and certain key employees of the Founding Companies subsequent
to the Offering and (ii) the effect of the exclusion of certain
non-operating assets and the assumption of or retirement of certain
liabilities (including interest expense) that will be retained by
certain stockholders of the Founding Companies.

The reduction in salaries, bonuses and benefits reflects the
difference between historical combined management compensation of
approximately $1.2 million, $762,000 and $4.1 million as compared to
the contractual compensation of $463,000, $463,000 and $1.9 million,
respectively, for the three months ended March 31, 1998 and 1997, and
the year ended December 31, 1997, respectively. See "Summary
Individual Founding Company Financial Data -- Compensation
Differential". These contractual agreements are for an initial term of
three years and thereafter on a year-to-year basis.

(b) Reflects the amortization of goodwill using a 40-year estimated life
for the goodwill associated with the acquisitions, other than First
Resort Software, Inc., which will be amortized over a 15-year
estimated life.

(c) Reflects the interest expense on the $4.6 million outstanding under
the credit facility, used to fund a portion of the estimated offering
costs.

(d) Reflects the provision for federal and state income taxes relating to
the other statement of operations pro forma adjustments.

(e) Reflects the reduction in compensation expense and management
recruitment expense in the three months ended March 31, 1998, relating
to the non-recurring, non-cash compensation charge of $5.6 million
related to Common Stock issued to management and founders of RQI, and
other costs.

5. NET INCOME PER SHARE

The shares used in computing net income per share include: (i) 3,134,630
shares issued to management of and founders of RQI; (ii) 6,123,718 shares to be
issued to the stockholders of the Founding Companies in connection with the
Combinations; and (iii) 5,800,000 shares to be issued in connection with the
Offering necessary to pay the $55.1 million cash portion of the consideration
for the Combinations. Excludes 1,807,000 shares of Common Stock reserved for
issuance pursuant to the Company's 1998 Long-Term Incentive Plan, of which
options to purchase 1,641,000 shares will be granted by the Company concurrently
with the Offering at an exercise price equal to the initial public offering
price.

F-14

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To ResortQuest International, Inc.:

We have audited the accompanying balance sheet of ResortQuest
International, Inc., as of December 31, 1997. This financial statement is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of ResortQuest International, Inc., as
of December 31, 1997, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Houston, Texas
March 11, 1998

F-15

<PAGE>

RESORTQUEST INTERNATIONAL, INC.

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
-------------- ----------
(UNAUDITED)
<S> <C> <C>

ASSETS

CASH AND CASH EQUIVALENTS ............................................................. $ -- $ --
DEFERRED OFFERING COSTS ............................................................... 244 2,725
---- --------
Total Assets ....................................................................... $244 $ 2,725
==== ========
LIABILITIES AND STOCKHOLDERS' EQUITY

ACCRUED LIABILITIES AND AMOUNTS DUE TO VPI FUNDING, LLC ............................... $244 $ 3,275
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par, 10,000,000 authorized, none outstanding................... -- --
Common stock, $0.01 par, 50,000,000 shares authorized, and 2,616,261 and 3,134,630
shares outstanding, respectively ................................................... -- --
Additional paid in capital ........................................................... -- 5,132
Retained deficit ..................................................................... -- (5,682)
---- --------
Total stockholders' equity ......................................................... -- (550)
---- --------
Total liabilities and stockholders' equity ......................................... $244 $ 2,725
==== ========
Reflects a 8,834.76-for-one stock split effective on March 9, 1998

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-16

<PAGE>

RESORTQUEST INTERNATIONAL, INC.

STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED)
(IN THOUSANDS)

Revenues .................................... $ --
General and Administrative Expenses ......... 5,682
--------
Loss before income taxes ................... (5,682)
Income Tax Benefit .......................... --
--------
Net Loss .................................... $ (5,682)
========

The accompanying notes are an integral part of this financial statement.

F-17

<PAGE>

RESORTQUEST INTERNATIONAL, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1998

(IN THOUSANDS, EXCEPT SHARE DATA)

ADDITIONAL RETAINED
PAID-IN EARNINGS
COMMON STOCK CAPITAL (DEFICIT) TOTAL
--------------------- ------------ ----------- -----------
SHARES AMOUNT
----------- -------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1997 .................. 2,616,261 $-- $ -- $ -- $ --
Common stock issuances (unaudited) ......... 518,369 -- 5,132 5,132
Net loss (unaudited) ....................... -- -- -- (5,682) (5,682)
--------- --- ------ -------- --------
BALANCE, March 31, 1998 (unaudited) ......... 3,134,630 $-- $5,132 $ (5,682) $ (550)
========= === ====== ======== ========
</TABLE>

Reflects a 8,834.76-for-one stock split effective on March 9, 1998

The accompanying notes are an integral part of this financial statement.

F-18

<PAGE>

RESORTQUEST INTERNATIONAL, INC.

STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED)

(IN THOUSANDS)

<TABLE>
<S> <C>
Cash Flows From Operating Activities:

Net loss ........................................................ $ (5,682)

Adjustments to reconcile net loss to cash flows from operating
activities ....................................................

Compensation expense related to issuance of management
common stock shares .......................................... 5,132

Increase in accrued liabilities and amounts due to VPI Fund-
ing, LLC ..................................................... 400

Cash flows from operating activities ............................. --

Cash flows from investing activities ............................. --

Cash flows from financing activities ............................. --

Increase in cash and cash equivalents ............................ --

Cash and cash equivalents, beginning of period ................... --

Cash and cash equivalents, end of period ......................... $ --
========
Supplemental disclosure of non-cash activity --

Increase in deferred offering costs and accrued liabilities and
amounts due to RQI Funding, LLC .............................. $ 2,481
========
</TABLE>

The accompanying notes are an integral part of this financial statement.

F-19

<PAGE>

RESORTQUEST INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS

1. GENERAL:

ResortQuest International, Inc., a Delaware Corporation, ("RQI" or the
"Company"), formerly Vacation Properties International, Inc., was founded on
September 12, 1997 to create the leading single provider of vacation property
rental, management and real estate services. RQI intends to acquire
substantially all of the assets of thirteen companies (the "Founding Companies")
(the "Combinations") and complete an initial public offering (the "Offering") of
its common stock.

RQI has not conducted any operations, and all activities to date have
related to the Offering and the Combinations. Cash of $200 was provided from the
initial capitalization of the Company (see Note 2). All other expenditures are
being funded by VPI Funding, LLC, a Delaware limited liability company whose
member managers are owners of the Company. Accordingly, statements of
operations, changes in stockholders' equity and cash flows for the period from
inception (September 12, 1997 through December 31, 1997) would not provide
meaningful information and have been omitted. As of March 31, 1998 and December
31, 1997, costs of approximately $2,725,000 (unaudited) and $244,000,
respectively, have been incurred by VPI Funding, LLC in connection with the
Offering. The Company is dependent upon the Offering to execute the pending
Combinations. There is no assurance that the pending Combinations will be
completed or that RQI will be able to generate future operating revenues.

2. STOCKHOLDERS' EQUITY:

Interim Financial Statements

The interim financial statements as of March 31, 1998, and for the three
months ended March 31, 1998, are unaudited, and certain information and footnote
disclosures, normally included in financial statements prepared in accordance
with generally accepted accounting principles, have been omitted. In the opinion
of management, all adjustments, consisting only of normal recurring adjustments,
necessary to fairly present the financial position, results of operations and
cash flows with respect to the interim financial statements, have been included.
The results of operations for the interim periods are not necessarily indicative
of the results for the entire fiscal year.

Common Stock and Preferred Stock

In connection with the organization and initial capitalization of RQI, the
Company issued 293.9481 shares of common stock ("Common Stock") at $.01 per
share to Capstone Partners, LLC ("Capstone"), Alpine Consolidated II, LLC
("Alpine"). Additionally, certain other stockholders were issued 2.1844 share of
Common Stock at $.01 per share. On March 1, 1998 Capstone and Alpine contributed
28.297 shares of Common Stock to VPI Funding, LLC.

In February 1998, the Company issued 58.6738 shares of Common Stock to
management at $.01 per share. As a result, the Company recorded for financial
statement purposes a non-recurring, non-cash compensation charge of $5,682,000
(unaudited) for the three months ended March 31, 1998, representing the
difference between the consideration paid and the estimated fair value of the
shares at the date of sale.

RQI effected a 8,834.76-for-one stock split (unaudited) on March 9, 1998
for each share of Common Stock then outstanding. In addition, the Company
increased the number of authorized shares of Common Stock to 50,000,000 and
authorized 10,000,000 shares of $.01 par value preferred stock. The effects of
Common Stock split and the increase in the shares of authorized Common Stock
have been retroactively reflected in the accompanying financial statements and
related notes.

Restricted Common Stock

In March 1998, the stockholders exchanged 3,134,630 shares of Common Stock
for an equal number of shares of restricted voting common stock ("Restricted
Common Stock"). The Common Stock and the Restricted Common Stock are identical
except that the holders of Restricted Common Stock are only entitled to one-half
of one vote for each share on all matters.

F-20

<PAGE>

RESORTQUEST INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS- (CONTINUED )

Long-Term Incentive Plan

In March 1998, the Board of Directors and the Company's stockholders
approved the Company's 1998 Long-Term Incentive Plan (the "Plan"). The purpose
of the Plan is to provide a means by which the Company can attract and retain
executive officers, employee directors, other key employees, non-employee and
advisory directors and consultants of and other service providers to the Company
and its subsidiaries and to compensate such persons in a way that provides
additional incentives and enables such persons to acquire or increase a
proprietary interest in the Company. Individual awards under the Plan may take
the form of one or more of: (i) either incentive stock options ("ISOs") or
non-qualified stock options ("NQSOs"); (ii) stock appreciation rights ("SARs");
(iii) restricted or deferred stock; (iv) dividend equivalents; (v) bonus shares
and awards in lieu of Company obligations to pay cash compensation; (vi)
non-employee directors' deferred shares; and (vii) other awards the value of
which is based in whole or in part upon the value of the Common Stock.

In connection with the Offering, options in the form of NQSOs to purchase a
total of 480,000 shares of Common Stock of the Company will be granted to
management of the Company. Each of the foregoing option grants will have an
exercise price equal to the initial public offering price per share in the
Offering, and will vest at a rate of 25% per year. The options generally will
expire on the earlier of 10 years after the date of grant or three months after
termination of employment (immediately in the event of a termination for cause),
unless otherwise determined by the Committee. The Plan will remain in effect
until terminated by the Company's Board of Directors.

3. STOCK BASED COMPENSATION

Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting
for Stock-Based Compensation," allows entities to choose between a new fair
value based method of accounting for employee stock options or similar equity
instruments and the current intrinsic, value-based method of accounting
prescribed by Accounting Principles Board Opinion No. 25 ("APB No. 25").
Companies electing to remain with the accounting in APB Opinion No. 25 must make
pro forma disclosure of net income and earnings per share as if the fair value
method of accounting had been applied. The Company will provide pro forma
disclosure of net income and net income per share, as applicable, in the notes
to future consolidated financial statements.

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, Earnings Per Share ("SFAS No. 128").
For the Company, SFAS No. 128 was effective for the year ended December 31,
1997. SFAS No. 128 simplified the standards required under previous accounting
rules for computing earnings per share and replaced the presentation of primary
earnings per share and fully diluted earnings per share with a presentation of
basic earnings per share ("basic EPS") and diluted earnings per share ("diluted
EPS"). Basic EPS excludes dilution and is determined by dividing income
available to common stockholders by the weighted average number of common shares
outstanding during the period. Diluted EPS reflects the potential dilution that
could occur if securities and other contracts to issue common stock were
exercised or converted into common stock.

F-21

<PAGE>

RESORTQUEST INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS- (CONTINUED )

4. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

(UNAUDITED)

RQI has signed definitive agreements to acquire all of the Common Stock and
ownership interests of Founding Companies to be consummated simultaneously with
the closing of the Offering. The companies to be acquired are:

Aston Hotels & Resorts
Brindley & Brindley
Coastal Resorts
Collection of Fine Properties
First Resort
Houston and O'Leary
Maui Condominium and Home
The Maury People
Priscilla Murphy Realty
Resort Property Management
Telluride Resort Accommodations
Trupp-Hodnett Enterprises
Whistler Chalets

The aggregate consideration that will be paid by RQI to acquire the
Founding Companies is, subject to certain working capital adjustments,
approximately $55.1 million in cash and 6,123,718 shares of Common Stock and the
assumption of $5.3 million in outstanding indebtedness of the Founding
Companies.

The Company has received a commitment from NationsBank N.A. for a $40
million senior revolving credit facility and is negotiating the definitive terms
of the agreement.

In March, 1998, RQI filed a registration statement on Form S-1 for the sale
of its Common Stock. An investment in shares of Common Stock offered by this
Prospectus involves a high degree of risks, including, among others, absence of
a combined operating history, risks relating to the Company's acquisition
strategy, risks relating to acquisition financing, reliance on key personnel and
a substantial portion of the proceeds from the offering payable to affiliates of
the Founding Companies. See "Risk Factors" included elsewhere in this
Prospectus. The above acquisitions are contingent upon RQI successfully
completing the initial public offering of its Common Stock and the successful
acquisition of the Founding Companies is a condition to closing the initial
public offering.

F-22

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Hotel Corporation of the Pacific, Inc.:

We have audited the accompanying balance sheets of Hotel Corporation of the
Pacific, Inc. (a Hawaii corporation), as of December 31, 1996 and 1997, and the
related statements of operations, changes in stockholders' equity (deficit) and
cash flows for each of the three years in the period ended December 31, 1997.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Hotel Corporation of the
Pacific, Inc., as of December 31, 1996 and 1997, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Houston, Texas
February 6, 1998

F-23

<PAGE>

HOTEL CORPORATION OF THE PACIFIC, INC.

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
--------------------- ------------
1996 1997 1998
--------- --------- ------------
(UNAUDITED)
<S> <C> <C> <C>

ASSETS

CURRENT ASSETS:
Cash and cash equivalents ..................................... $ 2,118 $ 1,632 $ 1,208
Accounts receivable, less allowance of $97 and $75 for doubtful
accounts .................................................... 1,448 1,195 2,138
Inventories ................................................... 41 46 44
Prepaid expenses and other assets ............................. 102 83 266
------- ------- -------
Total current assets ........................................ 3,709 2,956 3,656
ADVANCES TO STOCKHOLDER ........................................ 7,611 7,735 5,719
ADVANCES TO AFFILIATES, net .................................... -- 1,799 637
SECURITY DEPOSITS .............................................. 712 641 161
PREPAID EXPENSES AND OTHER ASSETS .............................. 178 155 25
PROPERTY AND EQUIPMENT, net .................................... 1,186 1,776 1,667
NET ASSETS OF DISCONTINUED OPERATIONS .......................... 74 -- 154
------- ------- -------
Total assets ................................................ $13,470 $15,062 $12,019
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current portion of notes payable .............................. $ 61 $ 12 $ 12
Current portion of capital lease obligations .................. 260 409 427
Current portion of other long-term obligations ................ 591 585 582
Accounts payable and accrued liabilities ...................... 4,730 6,538 6,216
------- ------- -------
Total current liabilities ................................... 5,642 7,544 7,237
SECURITY DEPOSITS .............................................. 326 270 307
EXCESS OF LOSSES OVER INVESTMENT IN PARTNER-
SHIP .......................................................... 346 -- --
ADVANCES FROM AFFILIATES ....................................... 1,235 -- --
NOTES PAYABLE .................................................. 2,816 2,804 2,301
CAPITAL LEASE OBLIGATIONS ...................................... 882 1,325 1,215
OTHER LONG-TERM OBLIGATIONS .................................... 2,118 1,611 854
NET LIABILITIES OF DISCONTINUED OPERATIONS ..................... -- 1,403 --
------- ------- -------
Total liabilities ........................................... 13,365 14,957 11,914

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $10 par value, 100,000 shares authorized,
10,000 shares outstanding ................................... 100 100 100
Paid-in surplus ............................................... 5 5 5
Retained earnings ............................................. -- -- --
------- ------- -------
Total stockholders' equity .................................. 105 105 105
------- ------- -------
Total liabilities and stockholders' equity .................. $13,470 $15,062 $12,019
======= ======= =======

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-24

<PAGE>

HOTEL CORPORATION OF THE PACIFIC, INC.

STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------- -------------------
1995 1996 1997 1997 1998
--------- --------- ----------- --------- ---------
(UNAUDITED)

REVENUES:
Property management fees ............................ $ 7,036 $ 7,540 $ 8,079 $2,843 $2,715
Service fees ........................................ 8,896 8,442 8,338 1,951 2,357
Other ............................................... 3,116 3,478 3,137 787 621
------- ------- -------- ------ ------
Total revenues ................................... 19,048 19,460 19,554 5,581 5,693
OPERATING EXPENSES ................................... 10,550 10,401 8,908 2,377 2,422
------- ------- -------- ------ ------
GENERAL AND ADMINISTRATIVE EXPENSES .................. 5,434 5,574 5,475 1,149 1,389
------- ------- -------- ------ ------
Income from operations ........................... 3,064 3,485 5,171 2,055 1,882
OTHER INCOME (EXPENSE):
Interest expense, net ............................... (406) (736) (763) (168) (185)
Gain on sales of assets ............................. -- 394 677 -- --
Arbitration expense ................................. (365) -- -- -- --
------- ------- -------- ------ ------
Total other income (expense) ........................ (771) (342) (86) (168) (185)
------- ------- -------- ------ ------
INCOME FROM CONTINUING OPERATIONS .................... 2,293 3,143 5,085 1,887 1,697
------- ------- -------- ------ ------
INCOME (LOSS) FROM DISCONTINUED OPERA-
TIONS ............................................... (32) 455 (1,328) 647 1,557

LOSS ON DISPOSAL OF DISCONTINUED OPERA-
TIONS ............................................... -- -- (166) -- --
------- ------- -------- ------ ------
NET INCOME ........................................... $ 2,261 $ 3,598 $ 3,591 $2,534 $3,254
======= ======= ======== ====== ======
PRO FORMA DATA
(unaudited -- Note 13)
Historical net income before income taxes and discon-
tinued operations ................................. $ 2,293 $ 3,143 $ 5,085 $1,887 $1,697
Less: pro forma provision for income taxes .......... 917 1,257 2,034 755 679
------- ------- -------- ------ ------
PRO FORMA NET INCOME FROM
CONTINUING OPERATIONS ............................... $ 1,376 $ 1,886 $ 3,051 $1,132 $1,018
======= ======= ======== ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-25

<PAGE>

HOTEL CORPORATION OF THE PACIFIC, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK RETAINED
-------------------- PAID-IN EARNINGS
SHARES AMOUNT SURPLUS (DEFICIT) TOTAL
--------- -------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1994 .................. 100,000 $100 $ 5 $ (500) $ (395)
Net income ................................. -- -- -- 2,261 2,261
Distributions .............................. -- -- -- (2,261) (2,261)
------- ---- --- -------- --------
BALANCE, December 31, 1995 .................. 100,000 100 5 (500) (395)
Net income ................................. -- -- -- 3,598 3,598
Distributions .............................. -- -- -- (3,098) (3,098)
------- ---- --- -------- --------
BALANCE, December 31, 1996 .................. 100,000 100 5 -- 105
Net income ................................. -- -- -- 3,591 3,591
Distributions .............................. -- -- -- (3,591) (3,591)
------- ---- --- -------- --------

BALANCE, December 31, 1997 .................. 100,000 100 5 -- 105
Net income (unaudited) ..................... -- -- -- 3,254 3,254
Distributions (unaudited) .................. -- -- -- (3,254) (3,254)
------- ---- --- -------- --------
BALANCE, March 31, 1998 (unaudited) ......... 100,000 $100 $ 5 $ -- $ 105
======= ==== === ======== ========

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-26

<PAGE>

HOTEL CORPORATION OF THE PACIFIC, INC.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------------- -------------------------
1995 1996 1997 1997 1998
------------ ------------ ----------- ------------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ................................................. $ 2,261 $ 3,598 $ 3,591 $ 2,534 $ 3,254
(Income) loss from discontinued operations ............... 32 (455) 1,328 (647) (1,557)
Loss on disposal of discontinued operations .............. -- -- 166 -- --
-------- -------- -------- -------- --------
Income from continuing operations ....................... 2,293 3,143 5,085 1,887 1,697

Adjustments to reconcile net income to net cash provided
by operating activities-
Depreciation and amortization ............................ 257 326 394 88 129
Deferred rent expense .................................... (7) (7) (14) -- --
Gain on sale of fixed assets ............................. -- (394) -- -- --
Gain on sale of principal asset of partnership ........... -- -- (677) -- --
Loss (gain) of investment in partnership ................. (7) 45 -- -- --

Changes in operating assets and liabilities-
Accounts receivable ...................................... (334) (236) 253 (164) (943)
Prepaid expenses and other assets ........................ (309) 258 37 (85) (51)
Accounts payable and accrued liabilities ................. 648 258 918 (137) (322)
Reservation and security deposits ........................ 245 (459) (56) -- --
--------- --------- -------- -------- --------
Cash provided by continuing operations .................. 2,786 2,934 5,940 1,589 510
Cash flows from discontinued operations .................... 249 (253) (17) 1,005 --
--------- --------- -------- -------- --------
Net cash provided by operating activities ............... 3,035 2,681 5,923 2,594 510
--------- --------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of principal asset of partnership ..... -- -- 331 -- --
Proceeds from sale of property and equipment ............. -- 398 -- 50 --
Purchase of property and equipment ....................... -- -- (56) -- (20)
Increase (decrease) in security deposits ................. (618) (94) 71 3 517
--------- --------- -------- -------- --------
Net cash (used in) provided by investing activities ..... (618) 304 346 53 497
--------- --------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
(Increase in advances) proceeds from repayment of
advances to affiliates .................................. (430) 3,625 (2,144) (1,304) 1,162
Increase in advances to stockholder ...................... (1,572) (886) (124) (511) 2,016
Increase in distributions payable to stockholder ......... -- 465 64 -- --
Distributions to stockholders ............................ (2,261) (3,098) (3,591) (2,534) (3,254)
Repayment of notes and mortgage payable .................. (283) (637) (61) (2) (503)
Increase (payment) of other long-term obligations ........ 305 (1,160) (563) (150) (760)
Principal payments under capital leases .................. (111) (241) (336) (66) (92)
Proceeds from notes payable .............................. 3,000 -- -- -- --
--------- --------- -------- --------- --------
Net cash provided by (used in) financing activities ..... (1,352) (1,932) (6,755) (4,567) (1,431)
--------- --------- -------- --------- --------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS ................................................ 1,065 1,053 (486) (1,920) (424)
CASH AND CASH EQUIVALENTS, beginning of period............... -- 1,065 2,118 2,118 1,632
--------- --------- -------- --------- --------
CASH AND CASH EQUIVALENTS, end of period .................... $ 1,065 $ 2,118 $ 1,632 $ 198 $ 1,208
========= ========= ======== ========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest ..................................... $ 339 $ 556 $ 628 $ 148 $ 154
========= ========= ======== ========= ========
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:

Capital lease obligations ................................ $ 388 $ 912 $ 928 $ 66 $ 378
========= ========= ======== ========= ========

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-27

<PAGE>

HOTEL CORPORATION OF THE PACIFIC, INC.
NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

Hotel Corporation of the Pacific, Inc. (the Company), is a Hawaii
corporation which does business under the trade names "Aston Hotels & Resorts,"
"Aston Property Management" and "Aston." The Company provides hotel and resort
management and condominium association management services in the state of
Hawaii. Hotel and resort management services are provided to either individual
condominium unit owners, owners of multiple units within single condominium
projects (resort rental programs), or single-owner projects or hotel properties.
Condominium association management services are provided to associations of
apartment owners. In many instances, the Company manages both the condominium
association and a resort rental program within the same project. The Company
maintains a portfolio of approximately 5,000 units in its rental program.

Hotel and resort condominium rental program management services include
centralized sales and marketing, reservations, accounting, human resources,
electronic data processing, telephone equipment support and management of
on-site personnel. The Company also operates food and beverage facilities
located in two resorts managed by the Company. As of December 31, 1996 and 1997,
the Company provided resort and hotel management services to 28 and 29
condominium resorts or hotels, respectively, and provided condominium management
services to 17 and 16 condominium associations, respectively.

The Company also leases and operates hotel properties. The Company has
begun to implement its plan to discontinue the leasing of the leased properties
during the second quarter of 1998 as discussed in Note 5, "Discontinued
Operations and Disposition of Assets and Liabilities." Consequently, the
financial statements present the net assets (liabilities), results of operations
and cash flows of these leased properties as discontinued operations.

The Company had a working capital deficit at December 31, 1997. The Company
has funded operations with cash flows from operations and short-term borrowings
from lenders. Management expects that operations will generate sufficient cash
flows from operations to meet the Company's working capital needs during 1998.

The Company and its stockholders intend to enter into a definitive
agreement with ResortQuest International, Inc. (RQI), pursuant to which all of
the outstanding stock of the Company will be exchanged for cash and shares of
RQI common stock concurrent with the consummation of the initial public offering
(the Offering) of the common stock of RQI.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Statements

The interim financial statements as of March 31, 1998, and for the three
months ended March 31, 1998 and 1997, are unaudited, and certain information and
footnote disclosures, normally included in financial statements prepared in
accordance with generally accepted accounting principles, have been omitted. In
the opinion of management, all adjustments, consisting only of normal recurring
adjustments, necessary to fairly present the financial position, results of
operations and cash flows with respect to the interim financial statements, have
been included. The results of operations for the interim periods are not
necessarily indicative of the results for the entire fiscal year.

Revenue Recognition

The Company records property rental and management fees on the accrual
basis of accounting ratably over the term of guest stays, as earned. Other
revenues include food and beverage sales of $2,302,000, $2,185,000 and
$2,271,000 for the years 1995, 1996 and 1997 respectively.

F-28

<PAGE>

HOTEL CORPORATION OF THE PACIFIC, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED )

Operating Expenses

Operating expenses include expenses related to reservations, marketing and
advertising, accounting and other costs associated with rental and management.
Operating expenses also include food and beverage cost of sales and operating
expenses as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
Reservations, marketing, accounting and other expenses ......... $ 8,382 $ 8,289 $6,956
Food and beverage cost of sales and operating expenses ......... 2,168 2,112 1,952
------- ------- ------
Total operating expenses .................................... $10,550 $10,401 $8,908
======= ======= ======

</TABLE>

Cash and Cash Equivalents

For the purposes of the balance sheets and statements of cash flows, the
Company considers all investments with original maturities of three months or
less to be cash equivalents.

Inventories

Inventories consist primarily of food and beverage items and are stated at
the lower of cost (first-in, first-out method) or market.

Property and Equipment

Property and equipment are stated at cost or, in the case of equipment
acquired under capital leases, the present value of future lease payments.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets or the remaining lease terms.

Expenditures for repairs and maintenance are charged to expense when
incurred. Expenditures for major renewals and betterments which extend the
useful lives of existing equipment are capitalized and depreciated. Upon
retirement or disposition of property and equipment, the cost and related
accumulated depreciation are removed from the accounts and any resulting gain or
loss is recognized in the statements of operations.

Income Taxes

The Company has elected S Corporation status as defined by the Internal
Revenue Code and state tax statutes, whereby the Company is not subject to
taxation for federal or state purposes. Under S Corporation status, the
stockholders report their share of the Company's taxable earnings or losses in
their personal tax returns.

Concentration of Financial Instrument Assets

Concentrations of financial instrument assets primarily consist of cash
deposits and accounts receivable. The Company's policy is to deposit its cash
with high-quality financial institutions. At December 31, 1996 and 1997, the
Company's cash was deposited in demand and short-term interest-bearing accounts
with three of the larger banks in Hawaii.

Advertising Costs

All advertising and promotion costs are expensed as incurred.

Investment in Partnership

The Company was a 5 percent general partner in a limited partnership whose
principal asset was a commercial shopping mall. The Company's principal
stockholder was the other general partner and held a 45% partnership interest.
The Company used the equity method to account for its interest in the

F-29

<PAGE>

HOTEL CORPORATION OF THE PACIFIC, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED )

partnership. At December 31, 1996, the excess of the Company's cumulative equity
in net losses over its investment is reflected as a noncurrent liability. The
partnership's investment in the mall was sold during 1997. The Company's
proceeds resulted in a gain on the sale of $677,000. The partnership is expected
to be liquidated with no anticipated loss to the Company.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Concentration of Risk

The Company's operations are exclusively located in the state of Hawaii and
are subject to negative events that affect travel patterns of visitors.

3. ADVANCES TO AFFILIATES:

Advances to affiliates represent advances to companies controlled by the
Company's principal stockholder. The advances have no scheduled repayment, and
the Company suspended the accrual of interest. In 1996, one affiliate made a
$2,000,000 repayment, $112,500 of which was recognized as previously unrecorded
interest. The remaining receivable balance has been guaranteed by the Company's
principal stockholder.

4. ADVANCES TO STOCKHOLDER:

Advances to stockholder relate to advances to the Company's principal
stockholder. Such advances have largely been utilized relative to the
stockholder's investment in two hotels managed by the Company. The advances are
noninterest-bearing and have no scheduled repayments.

5. DISCONTINUED OPERATIONS:

The Company has decided that it will no longer continue or enter into
leasing arrangements for lodging facilities and will assign such leases to AST
Holdings, Inc., a corportion owned by the principal stockholder. The Company
will enter into management agreements on such properties with AST Holdings, Inc.
The Company has a plan in place to dispose of its other existing leased property
during the second quarter of 1998. This plan will eliminate the Company's future
obligation to make lease payments to owners of these facilities. The Company
plans to primarily focus its efforts on renting and managing condominiums, hotel
rooms and homes for the owners on a fee basis. Accordingly, for all periods
presented in the accompanying financial statements, the financial position,
results of operations and cash flows of the leased assets are reflected as
discontinued operations. Summarized financial information of the discontinued
operations is presented in the following tables.

F-30

<PAGE>

HOTEL CORPORATION OF THE PACIFIC, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED )

Net assets (liabilities) of discontinued operations are as follows (in
thousands):

DECEMBER 31,
-----------------------
1996 1997
----------- -----------
Current assets ...................... $ 2,857 $ 2,955
Advances to affiliates .............. 1,304 1
Other assets ........................ 202 193
Property and equipment .............. 418 197
-------- --------
Total assets ....................... 4,781 3,346
Current liabilities ................. (3,412) (4,119)
Capital lease obligations ........... (247) (53)
Other long-term obligations ......... (1,048) (577)
-------- --------
Net assets (liabilities) ............ $ 74 $ (1,403)
======== ========

Income (loss) from discontinued operations are as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1995 1996 1997
------------ ---------- ------------
<S> <C> <C> <C>
Revenue ........................................ $4,911 $29,945 $ 30,848
Operating expenses ............................. 3,609 22,833 24,826
General and administrative expenses ............ 1,326 6,631 7,317
------ ------- --------
Operating income (loss) ....................... (24) 481 (1,295)
Other expense .................................. (8) (26) (33)
-------- ------- --------
Net income (loss) from discontinued operations . $ (32) $ 455 $ (1,328)
======= ======= ========
</TABLE>

In addition to the loss from discontinued operations, the Company's
operating results for the year ended December 31, 1997, include a charge of
$166,000 for expected loss resulting from the disposal of discontinued
operations.

6. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Accounts receivable consisted of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1997
--------- ---------
<S> <C> <C>
Receivables from managed properties ........... $1,007 $ 610
Other ......................................... 538 660
------ ------
1,545 1,270
Less- Allowance for doubtful accounts ......... (97) (75)
------ ------
$1,448 $1,195
====== ======

</TABLE>

F-31

<PAGE>

HOTEL CORPORATION OF THE PACIFIC, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED )

Property and equipment consist of the following (in thousands):

<TABLE>
<CAPTION>
ESTIMATED DECEMBER 31,
USEFUL LIFE ----------------------
IN YEARS 1996 1997
------------ ---------- -----------
<S> <C> <C> <C>
Leasehold interests ..................................... 3-7 $ 49 $ 91
Furniture, fixtures and equipment ....................... 3-10 842 938
Leased property ......................................... 3-7 1,255 2,305
------ --------
2,146 3,334
Less- Accumulated depreciation and amortization ......... (960) (1,558)
------ --------
Property and equipment, net ........................... $1,186 $ 1,776
====== ========
</TABLE>

Accounts payable and accrued liabilities consisted of the following (in
thousands):

DECEMBER 31,
---------------------
1996 1997
--------- ---------
<S> <C> <C>
Accounts payable ......................................... $2,616 $3,311
Accrued payroll .......................................... 1,289 1,214
Other accrued liabilities ................................ 825 2,013
------ ------
Total accounts payable and accrued liabilities ......... $4,730 $6,538
====== ======

</TABLE>

7. NOTES PAYABLE:

At December 31, 1996 and 1997, notes payable consist of the following (in
thousands):

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
Notes payable, collateralized by 586 shares of the principal stockholder's 7,500 com-
mon shares and real property in San Francisco, California, owned by the stockholder-
Interest only payable monthly at 10%, due May 11, 1999 ................................ $1,000 $1,000
Interest only payable monthly at 7.5% through February 1996, and at 15% thereafter,
due January 31, 1999(1) ............................................................. 500 500
Note payable, interest only payable monthly at 7.5% through February 1996 and at
15% thereafter, due January 31, 1999, guaranteed by principal stockholder(1) .......... 500 500
Note payable, interest only payable monthly at 20% plus contingent interest, as defined,
commencing May 31, 1996, due May 31, 2000, secured by lease deposit in same
amount(2) ............................................................................. 500 500
Notes payable to spouse of principal stockholder, unsecured-
Interest only payable quarterly at 10% and 12%, due February 28, 1999 ................. 285 285
Note payable to bank in monthly installments of $1,242 including interest at 10.25%
adjusted annually, due May 4, 2000 .................................................... 42 31
Note payable, interest at 12%, payable upon demand, collateralized by certain fixtures
and equipment ......................................................................... 50 --
------ ------
Total ............................................................................... 2,877 2,816
Less- Current portion .................................................................. (61) (12)
------ ------
Noncurrent portion .................................................................. $2,816 $2,804
====== ======
</TABLE>

F-32

<PAGE>

HOTEL CORPORATION OF THE PACIFIC, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED )

Annual maturities of long-term debt are as follows (in thousands):

1998 ................... $ 12
1999 ................... 2,299
2000 ................... 505
------
Total .................. $2,816
======

- ----------
(1) In addition to the stated interest on two of the notes described above, the
Company is required to pay additional interest on each note equal to the
lesser of 10 percent of distributable income (as defined in the agreement)
of one of the leased hotels or $50. Such additional interest amounted to
$92 and $100 for the years ended December 31, 1996 and 1997, respectively.

(2) No contingent interest was accrued in 1996 or 1997.

8. OTHER LONG-TERM OBLIGATIONS:

At December 31, 1996 and 1997, other long-term obligations consisted of the
following (in thousands):

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
Distributions payable to stockholder (Note 11) ...................................... $ 465 $ 529
Severance payable to former senior executives and employees, at present value with
imputed interest rates ranging between 8.50% and 10.25% (unamortized imputed
interest of $62 and $42) ........................................................... 593 347
Termination payable to the owners of a hotel managed prior to 1992, interest at prime
rate (8.50% at December 31, 1997) .................................................. 850 500
Other accrued liabilities (Note 9) .................................................. 801 820
------ ------
Total ............................................................................ $2,709 $2,196
Less- Current portion ............................................................... (591) (585)
------ ------
Noncurrent portion ............................................................... $2,118 $1,611
====== ======
</TABLE>

Future annual payments of severance and termination payables are as follows
(in thousands):

1998 ........... $585
1999 ........... 262
----
$847
====

9. LEASES:

Operating Leases

The Company leases its principal offices under an operating lease with the
initial term expiring in July 31, 2002, and with two five-year options to extend
the agreement. The lease provides for an initial period of free rent and also
specifies scheduled rent increases over the lease term.

Effective February 1, 1996, the Company entered into a noncancelable
operating lease for a hotel property on Maui with terms extending through
January 31, 1999. The lease provides for scheduled rent and security deposits
that increase over the term. In conjunction with this lease, the Company is
obligated to pay an annual retainer fee and a business referral and marketing
fee to an unrelated party who arranged the lease. The retainer fee is payable in
quarterly installments. Under the terms of the business referral and marketing
agreement, the Company is required to pay a percentage of the net profits
derived from the hotel property. The Company accrued $239,000 and $196,000 for
these fees for the periods ended December 31, 1996 and 1997, respectively. This
lease is included in the discontinued operations.

F-33

<PAGE>

HOTEL CORPORATION OF THE PACIFIC, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED )

Both the Maui hotel property lease and the office lease aggregate rental
payments over the life of the lease are being recognized as rent expense on a
straight-line basis over the terms of the leases. Accruals representing prorated
future payments under the leases are included in other long-term obligations as
of December 31, 1996 and 1997.

The Company is obligated under a noncancelable operating lease for a resort
facility on Maui with terms extending through December 31, 2000. Under terms of
the lease, the Company pays annual rent equivalent to the net operating profits,
as defined, of the facility up to a defined amount per year. No rent was
incurred in 1995 or 1996. In 1997, rent of $231,000 was incurred. This lease is
included in discontinued operations.

In addition to operating leases for office space and hotel properties, the
Company has entered into certain noncancelable operating leases for equipment
and operating space and for individual condominium units within its managed
properties. The terms of these condominium leases usually coincide with the
management agreements under which the Company manages rental pools within the
respective condominium projects. Under the terms of the front desk and operating
space leases, the Company pays the respective apartment owners association a
percentage of the room revenue generated from the rental pool. Under the terms
of the condominium leases, the Company pays individual condominium owners a
fixed monthly lease rent and, in return, is allowed to place the unit into the
respective rental pool.

At December 31, 1997, future minimum lease commitments under all
noncancelable operating leases are as follows (in thousands):

CONTINUING DISCONTINUED
OPERATIONS OPERATIONS
------------ -------------
1998 ...................... $ 823 $2,620
1999 ...................... 844 328
2000 ...................... 844 120
2001 ...................... 795 --
Thereafter ................ 332 --
------ ------
Total ..................... $3,638 $3,068
====== ======

Under terms of the leases, the Company is generally required to pay all
taxes, insurance and maintenance. Rent expense for the years ended December 31,
1995, 1996 and 1997, aggregated approximately $2,300,000, $4,750,000 and
$5,300,000, respectively.

Capital Leases

Capital leases consist principally of leases for office furnishings and
equipment and for automotive equipment. Future minimum lease payments for assets
under capital leases at December 31, 1997, are as follows (in thousands):

CONTINUING DISCONTINUED
OPERATIONS OPERATIONS
------------ -------------
<S> <C> <C>
1998 .................................................. $ 583 $ 58
1999 .................................................. 508 41
2000 .................................................. 447 16
2001 .................................................. 337 --
Thereafter ............................................ 285 --
------ -----
Total minimum lease payments .......................... 2,160 115
Less- Amount representing interest .................... (416) (10)
------ -----
Present value of minimum lease payment (current portion
of $471) ............................................ $1,744 $ 105
====== =====

</TABLE>

F-34

<PAGE>

HOTEL CORPORATION OF THE PACIFIC, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED )

The capitalized cost of leased equipment totaled $1,975,000 and $2,610,000
at December 31, 1996 and 1997, respectively. The related accumulated
depreciation totaled $604,000 and $921,000 at December 31, 1996 and 1997,
respectively.

As an accommodation to certain of the managed properties, the Company
assists in obtaining leases of operating equipment. In some instances, this
assistance includes entering into the leases as the technical lessee. The
managed properties perform all obligations under the leases, including the
making of lease payments and the provision of insurance coverage. The Company
remains contingently liable under the leases until completion of the lease
terms. Because the Company undertakes the role of a technical lessee simply as
an accommodation to the managed properties and because the leased equipment is
used only for and by the managed properties, these leases have not been recorded
on the Company's books.

10. COMMITMENTS AND CONTINGENCIES:

Guarantees

The Company's principal stockholder has personally guaranteed certain of
the Company's debt and capital lease obligations. As of December 31, 1997, the
guaranteed obligations totaled $2,789,000.

The Company has provided guarantees for, or is the cosigner on, personal
debts of its principal stockholder. At December 31, 1997, these personal debts
totaled $17,374,000.

The Company's management agreements are obtained through negotiations with
the respective owners and are impacted by the normal market pressures of a
highly competitive industry. Contract clauses as to the management fees and
reimbursements received by the Company vary greatly.

Certain of the Company's management agreements contain provisions for
guaranteed levels of returns to owners. These agreements also contain force
majeure clauses to protect the Company from forces or occurrences beyond the
control of management. During 1995, 1996 and 1997, the Company made payments in
excess of the management fees earned on these guaranteed agreements of $620,000,
$643,000 and $793,000, respectively.

Litigation

The Company is involved in various legal actions arising in the ordinary
course of business. Management does not believe that the outcome of such legal
actions will have a material adverse effect on the Company's financial position
or results of operations.

Insurance

The Company carries a broad range of insurance coverage, including general
and business auto liability, commercial property, workers' compensation and a
general umbrella policy. The Company has not incurred significant claims or
losses on any of its insurance policies during the periods presented in the
accompanying financial statements.

Benefit Plans

The Company has a 401(k) profit-sharing plan for its employees and for the
employees of certain of its managed resort rental and hotel properties. Under
the terms of the plan, any nonunion employee with one year of service and 1,000
credited hours of service is eligible to participate. Managed property employees
may participate as approved by the owners of the individual managed properties.
Employees of managed properties are considered employees of the Company only for
purposes of participation in the 401(k) plan.

F-35

<PAGE>

HOTEL CORPORATION OF THE PACIFIC, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED )

Participating employees may defer up to 15 percent of their eligible
compensation. During 1997, the employer, either the Company or the managed
property, provided a matching contribution ranging from 37.5 percent to 50.0
percent of the employee's contribution up to the first 6 percent of the eligible
compensation. During 1996, the employer, either the Company or the managed
property, provided a matching contribution ranging from 25 percent to 50 percent
of the employee's contribution up to the first 6 percent of eligible
compensation. In 1995, the employer, either the Company or the managed property,
provided a matching contribution of 25 percent of the employee's contribution up
to 5 percent of the eligible compensation. Company contributions to the 401(k)
plan were $53,000, $107,000 and $184,000 in 1995, 1996 and 1997, respectively.

The Company has applied for qualification of a second 401(k) profit-sharing
plan for employees at one of the leased hotels with the same qualifications as
the first plan.

11. RELATED-PARTY TRANSACTIONS:

Beginning in 1997, the Company provides administrative services to ASTV
International LLC., an affiliate. The Company incurred $420,000 related to these
services in 1997.

The Company manages two hotels owned by its principal stockholder.
Centralized services (cooperative sales and marketing, reservations, accounting
services and other reimbursements) and management fees charged to these two
hotels approximated $501,000 and $506,000 in 1996 and 1997, respectively. The
Company leases certain office space and parking spaces in one of these hotels.
Rent expense approximated $14,000 in 1996 and 1997 for these spaces.

The Company also paid HCP, Inc., a company that is wholly owned by the
Company's principal stockholder, $390,000, $481,000 and $476,000 in 1995, 1996
and 1997, respectively, for sales representation and related accounting
services. The Company was named as a party in an arbitration related to certain
hotel properties managed by HCP, Inc., prior to 1991. The Company incurred legal
fees and other expenses totaling $365,000 in 1995 related to the arbitration
which was resolved favorably for the Company during 1995.

The Company leased storage space from a limited partnership in which the
Company was a 5 percent general partner and the Company's principal stockholder
was the other general partner. During 1995, 1996 and 1997, the Company incurred
$128,000, $114,000 and $110,000, respectively, in lease rent related to this
space. The building within which such space is located was sold to an unrelated
third party in 1997.

The Company has unwritten consulting agreements with family members of the
Company's principal stockholder. Consulting services include assistance in
community and governmental affairs. During 1995, 1996 and 1997, the Company
incurred $229,000, $221,000 and $232,000, respectively, relative to these
consulting arrangements. The Company also provides certain management and
clerical personnel for a development company owned by the Company's principal
stockholder. During 1995, 1996 and 1997, the Company incurred $125,000, $125,000
and $126,000, respectively, in salaries and benefits costs relative to this
development company. In return, the Company receives certain consulting and
support services.

At December 31, 1997, the Company was obligated to the spouse of the
principal stockholder on notes payable due February 28, 1999, totaling $285,000
(see Note 7).

12. SUBSEQUENT EVENTS (UNAUDITED):

Effective February 1, 1998, the Company's management agreement with a hotel
in Waikiki was terminated due to the sale of the property. Management fees
earned on this property were approximately $330,000 during 1997. On February 1,
1998, the Company entered into a new management contract with a hotel property
in downtown Honolulu.

F-36

<PAGE>

HOTEL CORPORATION OF THE PACIFIC, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED )

13. PRO FORMA ADJUSTMENTS TO FINANCIAL STATEMENT PRESENTATION
(UNAUDITED)

In conjunction with the planned merger with RQI, the Company will change
from an S Corporation to a C Corporation for federal and state income tax
reporting purposes, which will require the Company to recognize the tax
consequences of operations in its statements of operations. The supplemental pro
forma information included in the accompanying statements of operations reflect
the estimated impact of recognizing income tax expense as if the Company had
been a C Corporation for tax reporting purposes for the three months ended March
31, 1997 and 1998, and for the year ended December 31, 1997.

14. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

On February 28, 1998, the Company's lease arrangement with a hotel in
Waikiki was terminated due to the sale of the property. The hotel had gross
revenues of approximately $5,347,000 and net income of approximately $371,000
during 1997. On March 6, 1998, the Company entered into a new management
contract with a condominium hotel on Maui.

The Company and its stockholders have entered into a definitive agreement
with RQI pursuant to which all of the outstanding stock of the Company will be
acquired by RQI. This transaction is subject to, and will be in conjunction
with, RQI successfully completing the Offering. In connection with the Offering,
certain liabilities will be retained by one of the stockholders. In connection
with the Offering, one stockholder has agreed to reductions in salary and
benefits which would have reduced general and administrative expenses by
$380,000, $282,000 and $282,000 for 1995, 1996 and 1997, respectively. In
addition, certain stockholders will retain non-operating assets and assume or
retire certain liabilities that will be excluded from the Combinations. This
transaction is subject to, and will be executed in conjunction with, RQI
successfully completing the Offering.

F-37

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Brindley & Brindley Realty Development, Inc.
and B&B On The Beach Inc.:

We have audited the accompanying combined balance sheets of Brindley &
Brindley consisting of Brindley & Brindley Realty and Development, Inc., and B&B
On The Beach Inc., both North Carolina corporations, as of December 31, 1997,
and the related combined statements of operations, changes in stockholders'
equity and cash flows for the year then ended. These combined financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these combined financial statements
based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Brindley &
Brindley, as of December 31, 1997, and the results of their operations and their
cash flows for the year ended December 31, 1997 in conformity with generally
accepted accounting principles.

ARTHUR ANDERSEN LLP

Houston, Texas
January 30, 1998

F-38

<PAGE>

BRINDLEY & BRINDLEY

COMBINED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

DECEMBER 31, MARCH 31,
1997 1998
-------------- ------------
(UNAUDITED)
<S> <C> <C>

ASSETS

CURRENT ASSETS:
Cash and cash equivalents ................................. $ 24 $ 508
Cash held in trust ........................................ 3,895 707
Accounts receivable ....................................... 62 50
Prepaid expenses and other current assets ................. 37 201
------ ------
Total current assets ................................... 4,018 1,466
PROPERTY AND EQUIPMENT, net ................................. 125 137
------ ------
Total assets ........................................... $4,143 $1,603
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current portion of long-term debt ......................... $ 19 $ 11
Customer deposits and deferred revenue .................... 3,895 2,122
Accounts payable and accrued liabilities .................. 108 31
------ ------
Total current liabilities .............................. 4,022 2,164
LONG-TERM DEBT, net of current maturities ................... 22 31

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, $1 par; 200,000 shares authorized; 200 shares
outstanding .............................................. -- --
Retained earnings (deficit) ............................... 99 (592)
------ ------
Total stockholders' equity (deficit) ................... 99 (592)
------ ------
Total liabilities and stockholders' equity (deficit) ... $4,143 $1,603
====== ======

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-39

<PAGE>

BRINDLEY & BRINDLEY

COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, ------------------
1997 1997 1998
------------- ------------------
(UNAUDITED)
<S> <C> <C> <C>

REVENUES:
Property rental fees ..................................... $2,642 $ 41 $ 19
Service fees ............................................. 978 106 123
Real estate commissions, net ............................. 401 122 115
------ ------ ------
Total revenues ........................................ 4,021 269 257
OPERATING EXPENSES ........................................ 3,028 412 678
------ ------ ------
GENERAL AND ADMINISTRATIVE EXPENSE ........................ 482 128 123
------ ------ ------
Income from operations ................................ 511 (271) (544)
------ ------ ------
OTHER INCOME:
Interest income, net ..................................... 42 -- 16
------ ------ ------
NET INCOME (LOSS) ......................................... $ 553 $ (271) $ (528)
====== ====== ======
PRO FORMA DATA (unaudited -- Note 6)
Historical net income (loss) before income taxes ......... $ 553 $ (271) $ (528)
------ ------ ------
Less: pro forma provision (benefit) for income taxes 221 (108) (211)
------ ------ ------
PRO FORMA NET INCOME (LOSS) ............................... $ 332 $ (163) $ (317)
====== ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-40

<PAGE>

BRINDLEY & BRINDLEY

COMBINED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK
------------------- RETAINED
SHARES AMOUNT EARNINGS TOTAL
(DEFICIT)
-------- -------- ---------- ---------

<S> <C> <C> <C> <C>
BALANCE, December 31, 1996 .................. 200 $ -- $ 73 $ 73
Net income ................................. -- -- 553 553
Distributions .............................. -- -- (527) (527)
--- ---- ------- ------
BALANCE, December 31, 1997 .................. 200 -- 99 99
Net loss (unaudited) ....................... -- -- (528) (528)
Distributions (unaudited) .................. -- -- (163) (163)
--- ---- ------- ------
BALANCE, March 31, 1998 (unaudited) ......... 200 $ -- $ (592) $ (592)
=== ==== ======= ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-41

<PAGE>

BRINDLEY & BRINDLEY

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, -------------------------
1997 1997 1998
------------- -------------------------
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ................................................ $ 553 $ (147) $ (528)
Adjustments to reconcile net income to net cash provided by
operating activities-
Depreciation ............................................ 87 22 22
Changes in operating assets and liabilities-
Accounts receivable ..................................... (33) (8) (50)
Prepaid expenses and other current assets ............... (30) (4) 3,086
Accounts payable and accrued liabilities ................ 4 512 (1,850)
------ -------- --------
Net cash provided by operating activities .............. 581 375 680
------ -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ........................ (83) (59) (34)
------
Net cash used in investing activities .................. (83) (59) (34)
------ -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from long-term debt .......................... 19 -- 1
Distributions to stockholders ............................. (527) -- (163)
------ -------- --------
Net cash used in financing activities .................. (508) -- (162)
------ -------- --------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS ............................................... (10) 316 484
CASH AND CASH EQUIVALENTS, beginning of period ............. 34 34 24
------ -------- --------
CASH AND CASH EQUIVALENTS, end of period ................... $ 24 $ 350 $ 508
====== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest ................................. $ 3 $ -- $ 1
====== ======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-42

<PAGE>

BRINDLEY & BRINDLEY
NOTES TO COMBINED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

Brindley & Brindley Realty & Development, Inc. and B&B On The Beach, Inc.
(collectively "Brindley & Brindley" or the "Company") both North Carolina
companies, are leading providers of beach vacation property rentals, management
services and sales in the outer banks of North Carolina. Brindley and Brindley
manages approximately 450 rental homes. The Company provides its management
services to property owners pursuant to management contracts, which are
generally one year in length. The majority of such contracts contain automatic
renewal provisions but also allow property owners to terminate the contract at
any time. Brindley & Brindley's operations are seasonal, with peaks during the
first and fourth quarters of the year.

The Company and its stockholders intend to enter into a definitive
agreement with ResortQuest International, Inc. ("RQI"), pursuant to which all of
the outstanding stock of the Company will be exchanged for cash and shares of
RQI common stock concurrent with the consummation of the initial public offering
(the "Offering") of the common stock of RQI.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Statements

The interim financial statements at March 31, 1998, and for the three
months ended March 31, 1998 and 1997, are unaudited, and certain information and
footnote disclosures, normally included in financial statements prepared in
accordance with generally accepted accounting principles, have been omitted. In
the opinion of management, all adjustments, consisting only of normal recurring
adjustments, necessary to fairly present the financial position, results of
operations and cash flows with respect to the interim financial statements, have
been included. The results of operations for the interim periods are not
necessarily indicative of the results for the entire fiscal year.

Revenue Recognition

The Company records property rental fees on the accrual basis of
accounting, ratably over the term of guest stays, as earned. The Company
requires a deposit equal to 50% of the rental fee at the time reservations are
booked and the remaining 50% of the rental fee 30 days prior to the expected
arrival date. These deposits are non-refundable and are recorded as customer
deposits and deferred revenue in the accompanying combined financial statements
until the guest stay commences. The Company records revenue for cancellations as
they occur.

Service fees are recorded for a variety of services and are recognized as
the service is provided, including housekeeping, reservations and pool services.

Commissions on real estate sales are recognized at closing and are recorded
net of the related commission expense. The Company recognized commission
revenues of $1,189,000 and commission expense of $788,000 in 1997.

Operating Expenses

Operating expenses include rental agent commissions, employees salaries,
marketing and advertising expense, and other costs associated with property
sales, rental and management.

Cash and Cash Equivalents

For the purposes of the balance sheets and statements of cash flows, the
Company considers all investments with original maturities of three months or
less to be cash equivalents.

F-43

<PAGE>

BRINDLEY & BRINDLEY

NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED )

Property and Equipment

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the estimated useful lives of the assets.

Expenditures for repairs and maintenance are charged to expense when
incurred. Expenditures for major renewals and betterments, which extend the
useful lives of existing equipment, are capitalized and depreciated. Upon
retirement or disposition of property and equipment, the cost and related
accumulated depreciation are removed from the accounts and any resulting gain or
loss is recognized in the combined statements of operations.

Income Taxes

The Company has elected S Corporation status as defined by the Internal
Revenue Code and state tax statutes, whereby the Company is not subject to
taxation for federal or state purposes. Under S Corporation status, the
stockholders report their shares of the Company's taxable earnings or losses in
their personal tax returns.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions by
management in determining the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Concentration of Risk

The Company's operations are exclusively in the Corolla, North Carolina
area and are subject to significant changes due to weather conditions.

3. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Property and equipment consisted of the following (in thousands):

ESTIMATED
USEFUL LIVES DECEMBER 31,
IN YEARS 1997
-------------- -------------

Buildings and improvements ............. 5-40 $ 7
Office equipment and vehicles .......... 3-7 338
------
345
Less - Accumulated depreciation ........ (220)
------
Property and equipment, net ........... $ 125
======

Accounts payable and accrued liabilities consisted of the following (in
thousands):

DECEMBER 31,
1997
-------------

Accrued compensation and benefits ................... $ 28
Accounts payable and other accrued liabilities ...... 80
----
Total accounts payable and accrued liabilities ..... $108
====

F-44
<PAGE>

BRINDLEY & BRINDLEY

NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)

At December 31, 1997, maturities of long-term debt were as follows (in
thousands):

<TABLE>

<S> <C>
Year ending December 31,
1998 ................................................... $19
1999 ................................................... 8
2000 ................................................... 9
2001 ................................................... 5
---
$41
===

</TABLE>

4. COMMITMENTS AND CONTINGENCIES:

Litigation

Insurance

The Company carries a broad range of insurance coverage, including general
and business auto liability, commercial property, workers' compensation and a
general umbrella policy. The Company has not incurred significant claims or
losses on any of its insurance policies during the period presented in the
accompanying combined financial statements.

Benefit Plans

The Company's 401(k) retirement plan is available to substantially all of
the Company's full-time salaried employees. The Company's contribution to the
plan is based upon a percentage of employee contributions. The cost of this plan
to the Company was approximately $14,000 in 1997.

5. RELATED PARTIES:

During 1997, the Company paid approximately $104,000 or approximately
$8,700 per month to one of the owners for rent of the office building and local
warehouse pursuant to two oral agreements, each on a month-to-month basis.
Brindley & Brindley entered into two written lease agreements with the Brindleys
for these facilities that commenced on January 1, 1998. The terms of these
leases expire December 31, 2002, with options to extend for two 5-year periods
at the end of the lease periods and provide for aggregate annual rental payments
of approximately $133,500.

During 1997, the Company received real estate sales commissions of $70,000
from Outer Banks Ventures, Inc., an affiliate.

6. PRO FORMA ADJUSTMENTS TO FINANCIAL STATEMENT PRESENTATION
(UNAUDITED)

F-45

<PAGE>

BRINDLEY & BRINDLEY

NOTES TO COMBINED FINANCIAL STATEMENTS - (C0NTINUED)

7. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

In connection with the Offering, the owner and certain key employees have
agreed to reductions in salary and benefits which would have reduced general and
administrative expenses by approximately $69,000 in 1997. In addition, certain
stockholders will retain non-operating assets and assume or retire certain
liabilities that will be excluded from the Combinations. This transaction is
subject to, and will be executed in conjuction with, RQI sucessfully completing
the Offering.

F-46

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(COMBINED SUCCESSOR COMPANIES REPORT)

To the Shareholders of Coastal Resorts Management, Inc. and
the Members of Coastal Resorts Realty L.L.C.:

We have audited the accompanying combined balance sheets of Coastal Resorts
Management, Inc. (a Delaware corporation) and Coastal Resorts Realty L.L.C. (a
Delaware limited liability company) (collectively, the "Company") as of December
31, 1996 and 1997, and the related combined statements of operations, changes in
stockholders' and members' equity and cash flows for the period December 30,
1996 (inception) to December 31, 1996 and for the year ended December 31, 1997.
These combined financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these combined
financial statements based on our audits.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Coastal
Resorts Management, Inc., and Coastal Resorts Realty L.L.C. as of December 31,
1996 and 1997, and the results of their combined operations and cash flows for
the period December 30, 1996 (inception) to December 31, 1996 and for the year
ended December 31, 1997, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Washington, D.C.
January 29, 1998

F-47

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(COMBINED PREDECESSOR COMPANIES REPORT)

To the Shareholders of Interstate Realty Co., Inc. and
Sea Colony Management, Inc.:

We have audited the accompanying combined statements of operations and cash
flows of Interstate Realty Co., Inc. (a Maryland corporation) and Sea Colony
Management, Inc. (a Delaware Corporation) (collectively, the "Company") for the
period January 1, 1996 through December 30, 1996. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the results of the combined operations and
cash flows of Interstate Realty Co., Inc. and Sea Colony Management, Inc. for
the period January 1, 1996 through December 30, 1996, in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Washington D.C.
January 29, 1998

F-48

<PAGE>

COASTAL RESORTS MANAGEMENT, INC.
AND
COASTAL RESORTS REALTY L.L.C.
(COMBINED SUCCESSOR COMPANIES)

COMBINED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- MARCH 31,
1996 1997 1998
--------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ......................................... $ 6 $ 203 $ 1,021
Cash held in escrow ............................................... 198 442 779
Accounts receivable ............................................... 143 117 518
Receivables from related parties .................................. 48 1,130 --
------ ------ -------
Total current assets ............................................ 395 1,892 2,318

PROPERTY AND EQUIPMENT, net ........................................ 68 278 275
GOODWILL AND OTHER INTANGIBLE ASSETS, net .......................... 859 718 705
------ ------ -------
Total assets .................................................... $1,322 $2,888 $ 3,298
====== ====== =======
LIABILITIES AND STOCKHOLDERS' AND MEMBERS' EQUITY

CURRENT LIABILITIES:
Customer deposits and deferred revenue ............................ $ 163 $ 212 $ 1,001
Payable to property owners ........................................ 163 258 --
Accounts payable and accrued liabilities .......................... 196 395 323
Accounts payable and accrued liabilities-related parties .......... -- 47 --
------ ------ -------
Total current liabilities ....................................... 522 912 1,324

NOTE PAYABLE TO RELATED PARTY ...................................... 675 715 --

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' AND MEMBERS' EQUITY:
Common stock, $0.01 par; 100,000 shares authorized; 25,000
issued and outstanding .......................................... -- -- --
Capital in excess of par value .................................... 25 25 25
Members' equity ................................................... 100 100 100
Retained earnings ................................................. -- 1,136 1,849
------ ------ -------
Total stockholders' and members' equity ......................... 125 1,261 1,974
------ ------ -------
Total liabilities and stockholders' and members' equity ......... $1,322 $2,888 $ 3,298
====== ====== =======

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-49

<PAGE>

COASTAL RESORTS MANAGEMENT, INC.
AND
COASTAL RESORTS REALTY L.L.C.
(COMBINED SUCCESSOR COMPANIES)

COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
COMBINED PREDECESSOR COMBINED SUCCESSOR THREE MONTHS
COMPANIES COMPANIES ENDED MARCH 31,
---------------------- -------------------- -----------------------
PERIOD JANUARY 1, YEAR
1996 THROUGH ENDED
DECEMBER 30, 1996 DECEMBER 31, 1997 1997 1998
---------------------- -------------------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES:
Property rental fees ................................ $ 630 $ 908 $ 186 $ 263
Real estate commissions, net including related party
commissions of $0, $1,244, $0, and $86, respec-
tively ............................................ 1,058 1,905 222 240
Water plant ......................................... -- 462 -- --
Service fees ........................................ 229 340 16 74
------ ------ ----- -----
Total revenues .................................... 1,917 3,615 424 577

OPERATING EXPENSES ................................... 837 1,788 296 435
------ ------ ----- -----
GENERAL AND ADMINISTRATIVE EXPENSES................... 477 644 144 158
------ ------ ----- -----
Income (loss) from operations ..................... 603 1,183 (16) (16)

INTEREST INCOME (EXPENSE) ............................ 121 (47) -- --
------ ------ ----- -----
Income (loss) before income taxes ................. 724 1,136 (16) (16)

PROVISION FOR INCOME TAXES ........................... 304 -- -- --
------ ------ ----- -----
NET INCOME (LOSS) .................................... $ 420 $1,136 $(16) $ (16)
====== ====== ===== =====
PRO FORMA DATA (unaudited -- Note 8)
Historical net income (loss) before income taxes .... $ 724 $1,136 $(16) $ (16)
Less: pro forma provision (benefit) for income taxes. 290 454 (6) (6)
------ ------ ------- -----
PRO FORMA NET INCOME (LOSS) .......................... $ 434 $ 682 $(10) $ (10)
====== ====== ====== =====
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-50

<PAGE>

COASTAL RESORTS MANAGEMENT, INC.
AND
COASTAL RESORTS REALTY L.L.C.
(COMBINED SUCCESSOR COMPANIES)

STATEMENTS OF CHANGES IN STOCKHOLDERS' AND MEMBERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
----------------- PAID-IN MEMBERS' RETAINED
SHARES AMOUNT CAPITAL EQUITY EARNINGS TOTAL
-------- -------- ----------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Initial Capitalization -- CRR,
December 30, 1996 .......................... -- $ -- $ -- $100 $ -- $ 100
Initial Capitalization -- CRM,
December 30, 1996 .......................... 25,000 -- 25 -- -- 25
Net Income ............................... -- -- -- -- -- --
------ ---- ---- ---- ------ ------
BALANCE, December 31, 1996 .................. 25,000 -- 25 100 -- 125
Net Income ............................... -- -- -- -- 1,136 1,136
------ ---- ---- ---- ------ ------
BALANCE, December 31, 1997 .................. 25,000 -- 25 100 1,136 1,261
Net income (loss) (unaudited) ............ -- -- -- -- (16) (16)
Contributions (unaudited) ................ -- -- -- -- 729 729
------ ---- ---- ---- ------ ------
BALANCE, March 31, 1998 (unaudited) ......... 25,000 $ -- $ 25 $100 $1,849 $1,974
====== ==== ==== ==== ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-51

<PAGE>

COASTAL RESORTS MANAGEMENT, INC.
AND
COASTAL RESORTS REALTY L.L.C.
(COMBINED SUCCESSOR COMPANIES)

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
COMBINED
PREDECESSOR THREE MONTHS ENDED
COMPANIES COMBINED SUCCESSOR COMPANIES MARCH 31,
-------------- ---------------------------- -------------------
JANUARY 1 - INCEPTION - JANUARY 1 -
DECEMBER 31, DECEMBER 31, DECEMBER 30,
1996 1996 1997 1997 1998
-------------- -------------- ------------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ................................... $ 420 $ -- $1,136 $ (16) $ (16)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities--
Depreciation and amortization ...................... 28 -- 85 21 22
Gain on sale of assets ............................. -- -- (8) -- --
Changes in operating assets and liabilities--
Escrow accounts ..................................... 102 -- (244) -- (337)
Accounts receivable ................................. (32) -- 26 (103) (401)
Commission receivable ............................... (71) -- -- (103) --
Due to/from related party ........................... (334) -- -- --
Prepaid insurance and income taxes .................. 63 -- -- (18) 13
Customer deposits and deferred revenue .............. (127) 574 49 574 789
Payable to property owners .......................... -- -- 95 (163) (258)
Accounts payable and accrued liabilities ............ (16) -- 199 115 (72)
------ ---- ------- ------ ------
Net cash provided by (used in) operating activi-
ties .............................................. 33 574 1,338 307 (260)
------ ---- ------- ------ ------

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-52

<PAGE>

COASTAL RESORTS MANAGEMENT, INC.
AND
COASTAL RESORTS REALTY L.L.C.
(COMBINED SUCCESSOR COMPANIES)

COMBINED STATEMENTS OF CASH FLOWS -- (CONTINUED)
(IN THOUSANDS)

<TABLE>
<CAPTION>
COMBINED
PREDECESSOR THREE MONTHS ENDED
COMPANIES COMBINED SUCCESSOR COMPANIES MARCH 31,
-------------- ---------------------------- ------------------
JANUARY 1 - INCEPTION - JANUARY 1
DECEMBER 30, DECEMBER 31, DECEMBER 31,
1996 1996 1997 1997 1998
-------------- -------------- ------------- -------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of businesses, net of cash acquired ........... $ -- $ (119) $ -- $ -- $ --
Purchase of property and equipment ..................... (33) -- (261) (65) --
Proceeds from sale of assets ........................... -- -- 115 -- (19)
------- ------ -------- ----- ------
Net cash used in investing activities ................. (33) (119) (146) (65) (19)
------- ------ -------- ----- ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Receivables from related parties ....................... -- -- (1,082) 48 1,130
Accounts payable and accrued liabilities -- related
parties ............................................... -- -- 47 -- (47)
Proceeds from note payable to related party ............ -- -- 200 -- --
Payments on note payable to related party .............. -- -- (160) -- (715)
Capital contributions .................................. -- 125 -- -- 729
------- ------ -------- ----- ------
Net cash provided by (used in) financing activities. -- 125 (995) 48 1,097
------- ------ -------- ----- ------
NET INCREASE IN CASH AND CASH EQUIVA-
LENTS .................................................. -- 580 197 290 818
CASH AND CASH EQUIVALENTS, beginning of
period ................................................. 6 -- 6 6 203
------- ------ -------- ----- ------
CASH AND CASH EQUIVALENTS, end of period................. $ 6 $ 580 $ 203 $ 296 $1,021
======= ====== ======== ===== ======
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Fair value of assets acquired, net of cash ............. $ -- $ 885 $ -- -- --
Less: Cash paid ........................................ -- 119 $ -- -- --
Seller provided financing .............................. -- 675 -- -- --
Liabilities incurred ................................... -- 91 -- -- --

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest ................................. $ -- $ -- $ -- $ -- $ --
======= ====== ======== ===== ======
Cash paid for taxes .................................... $25,500 $ -- $ -- $ -- $ --
======= ====== ======== ===== ======

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-53

<PAGE>

COASTAL RESORTS MANAGEMENT, INC.
AND
COASTAL RESORTS REALTY L.L.C.
(COMBINED SUCCESSOR COMPANIES)

NOTES TO COMBINED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

Coastal Resorts Management, Inc. ("CRM"), incorporated on September 26,
1996, and Coastal Resorts Realty L.L.C. ("CRR"), formed on August 28, 1996,
(collectively the "Companies" or the "Company") are a Delaware corporation and a
Delaware limited liability company, respectively. CRM provides property
management services to homeowner associations as well as other related service
companies. CRR provides property rental services to owners of vacation
properties and acts as an agent for sales of new and used vacation properties.
The Company manages approximately 550 rental units in Bethany Beach, Delaware.
CRR and CRM purchased their operations from Interstate Realty Co., Inc.
("Interstate") and Sea Colony Management, Inc. ("SCM"), respectively, on
December 30, 1996 (See Note 4). The Company provides its management services to
property owners pursuant to management contracts, which range in length from one
to five years. The majority of such contracts allow property owners to terminate
the contract only for cause. The Company's operations are seasonal, with peaks
during the second and third quarters of the year.

The Companies and their stockholders and members intend to enter into a
definitive agreement with ResortQuest International, Inc. ("RQI"), pursuant to
which all of the outstanding stock of the Companies will be exchanged for shares
of RQI common stock concurrent with the consummation of the initial public
offering (the "Offering") of the common stock of RQI.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Statements

Basis of Combination and Financial Statement Presentation

The accompanying financial statements of CRM and CRR (the "Successor
Companies") have been prepared on a combined basis as the Companies are under
common control and are expected to be the subject of a consolidation with and
into RQI.

The accompanying financial statements of Interstate and SCM (the
"Predecessor Companies") have been prepared on a combined basis as the
Predecessor Companies were under common control and were the subject of an
acquisition by the Successor Companies. The financial statements of the
Predecessor Companies are presented for the purpose of complying with the rules
and regulations of the Securities and Exchange Commission.

The combined statement of operations of the Companies for the period from
December 30, 1996 (inception) to December 31, 1996, has not been presented due
to the nominal level of operations.

Revenue Recognition

The Company records property rental fees on the accrual basis of
accounting, ratably over the term of guest stays, as earned. The Company
requires a deposit equal to 33% of the rental fee 10 days after the reservation
is booked. These deposits are non-refundable and are recorded as customer
deposits and deferred revenue in the accompanying combined financial statements.
The Company records revenue for cancellations as they occur.

F-54

<PAGE>

COASTAL RESORTS MANAGEMENT, INC.
AND
COASTAL RESORTS REALTY L.L.C.
(COMBINED SUCCESSOR COMPANIES)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Service fees are recorded for a variety of services and are recognized as
the service is provided, including processing and inspection fees.

Commissions on real estate sales are recognized at closing and are recorded
net of the related commission expense. The Company recognized commission
revenues of $1,507,000 and $3,002,000 for the years 1996 and 1997 and commission
expense of $449,000 and $1,097,000 for the years 1996 and 1997.

Operating Expenses

Operating expenses include rental agent commissions, salaries, marketing
and advertising expense, and other costs associated with sales, rental and
management.

Cash and Cash Equivalents

For purposes of the balance sheets and statements of cash flows, the
Company considers all cash held and investments held with maturities of less
than 3 months as cash and cash equivalents.

Property and Equipment

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the estimated useful lives of the assets.

Income Taxes

CRM has elected S Corporation status as defined by the Internal Revenue
Code and state tax statutes, whereby the Company is not subject to taxation for
federal or state tax purposes. Under S Corporation status, the stockholders
report their share of CRM's taxable earnings or losses in their personal tax
returns. CRR is a Limited Liability Company and is taxed as a Partnership.
Accordingly, the Company is not subject to taxation for federal or state
purposes. The members report their share of CRR's taxable earnings or losses in
their personal tax returns.

The Predecessor Companies were C Corporations and accounted for their
income taxes under the provisions of Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes" ("SFAS No. 109"). Under SFAS No. 109, the
current provision for income taxes represents actual or estimated amounts
payable or refundable on tax returns filed or to be filed for each year.
Deferred tax assets and liabilities are recorded for estimated future tax
effects of: (a) temporary differences between the tax bases of assets and
liabilities and amounts reported in the consolidated balance sheets, and (b)
operating loss and tax credit carry forwards. The overall change in deferred tax
assets and liabilities for the period measures the deferred tax expense for the
period. Effects of changes in enacted tax laws on deferred tax assets and
liabilities are reflected as adjustments to tax expense in the period of the
enactment. The measurement of deferred tax assets may be reduced by a valuation
allowance based on judgmental assessment of available evidence if deemed more
likely than not that some or all of the deferred tax assets will not be
realized.

F-55

<PAGE>

COASTAL RESORTS MANAGEMENT, INC.
AND
COASTAL RESORTS REALTY L.L.C.
(COMBINED SUCCESSOR COMPANIES)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Use of Estimates

Concentration of Risk

The Companies' operations are exclusively in the Bethany Beach, Delaware
area and are subject to significant changes due to weather conditions.

In 1997, 26 percent of gross revenues were attributable to commissions on
new homes sales which were built by Sea Colony Development Corporation, Inc., a
related party.

3. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following (in thousands):

<TABLE>
<CAPTION>
ESTIMATED DECEMBER 31,
USEFUL LIVES ---------------
IN YEARS 1996 1997
------------- ------ -------
<S> <C> <C> <C>
Computer equipment ................... 5 $60 $ 88
Furniture and fixtures ............... 7 8 241
Total ............................. 68 329
--- -----
Less -- Accumulated depreciation ..... -- (51)
--- -----
Property and equipment, net .......... $68 $ 278
=== =====

</TABLE>

4. PURCHASE:

On December 30, 1996, CRR entered into an agreement to purchase the assets
and assume certain liabilities of Interstate (a related party) for the purchase
price of $759,000. CRR borrowed $600,000 from a related party entity to finance
the purchase. The fair value of the net assets purchased totaled $2,000,
resulting in the recognition of goodwill of $642,000 and a trademark of
$115,000. The trademark was sold in 1997 (see Note 6).

On December 30, 1996, CRM entered into an agreement to purchase the common
stock of SCM (a related party) for the purchase price of $132,000. CRM borrowed
$75,000 from a related party entity to finance the purchase. The fair value of
the net assets purchased totaled $30,000, resulting in the recognition of
intangible assets, totaling $102,000.

The goodwill is being amortized over a period of 40 years.

The trademark was subsequently sold to another related party for
approximately $115,000 pursuant to an agreement effective December 31, 1997. The
trademark was being amortized over a period of 15 years.

The intangible assets associated with the purchase of SCM are being
amortized over a period of 10 years.

F-56

<PAGE>

COASTAL RESORTS MANAGEMENT, INC.
AND
COASTAL RESORTS REALTY L.L.C.
(COMBINED SUCCESSOR COMPANIES)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

5. COMMITMENTS AND CONTINGENCIES:

Litigation

The Companies are involved in various legal actions arising in the ordinary
course of business. Management does not believe that the outcome of such legal
actions will have a material adverse effect on the Companies' combined financial
position or results of operations.

Insurance

Through policies secured by a related party, the Companies are covered by a
broad range of insurance policies, including general and business auto
liability, commercial property, workers' compensation and a general umbrella.
The cost of these policies has not been allocated to the Companies in the
accompanying financial statements. The Companies expect to incur insurance
expense in future years.

Benefit Plans

A related party's 401(k) retirement plan (the "Plan") is available to
substantially all of the Company's employees. The Plan is 100% employee funded
and the Companies have no current or future obligations related to the Plan. The
Companies currently pay a fee for the related administration costs.

Future Minimum Lease Payments

The Company rents office space and equipment under operating leases. Rental
expense related to these leases was approximately $69,000 and $111,000 in 1996
and 1997, respectively. Rental expense related to leases with related parties
was approximately $69,000 and $77,000 in 1996 and 1997, respectively.

Minimum future lease payments under these noncancelable operating leases in
effect at December 31, 1997 are as follows (in thousands):

<TABLE>
<CAPTION>
YEAR AMOUNT
- ---- ------
<S> <C>
1998 .............................................. $132
1999 .............................................. 107
2000 .............................................. 85
2001 .............................................. 90
2002 .............................................. 38
----
Total ............................................. $452
====

</TABLE>

6. RELATED PARTIES:

Related Party Agreements

Effective June 1, 1996, one of the Predecessor Entities entered into an
agreement with CMF Fitness, Inc., a related party. The agreement appointed the
Predecessor Entity as the manager of, and exclusive agent for, the Sea Colony
Fitness Center located in Bethany Beach, Delaware. The agreement is effective
from June 1, 1996 until December 31 of the calendar year in which the last new
home in the Sea Colony community is sold, but in no event later than December
31, 2005. CMF Fitness, Inc. paid the Company $41,000 and $70,000 in 1996 and
1997, respectively, under this agreement.

F-57

<PAGE>

COASTAL RESORTS MANAGEMENT, INC.
AND
COASTAL RESORTS REALTY L.L.C.
(COMBINED SUCCESSOR COMPANIES)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

CRM receives a management fee of approximately $6,000 per month for its
services. CRM and the Predecessor Entity earned approximately $41,000 and
$70,000 in 1996 and 1997, respectively, in relation to this management
agreement.

Effective January 1, 1997, CRM entered into an agreement with Sea Colony
Water Company, L.L.C., ("SCWC"), a related party. The agreement appointed CRM as
the manager of and exclusive agent for the Sea Colony Water Plant located in
Bethany Beach, Delaware. The agreement is effective from January 1, 1997 until
December 31, 2001 or the sale of the property. CRM is entitled to retain all
revenue collected by the water plant, less the following: (1) an annual payment
to SCWC of $100,000, (2) an annual payment to SCWC equal to 12.5% of the
cumulative value of capital improvements made to the water plant after January
1, 1997, and (3) all costs and expenses associated with the operation of the
property except capital improvements and expenditures, costs of compliance with
laws and regulations, and costs of insurance. CRM earned approximately $463,000
in revenue from the operation of the water plant in 1997. Operating expenses
plus the additional costs described above incurred by CRM related to the water
plant were approximately $319,000.

Effective January 1, 1997, CRR entered into an agreement with Sea Colony
Development Corporation, Inc. ("SCDC"), a related party. The agreement requires
CRR to develop a marketing plan to promote new homes in the Sea Colony
community. The agreement also appointed CRR as the sole and exclusive agent for
sale of new homes at Sea Colony from January 1, 1997 until December 31, 1999.
The agreement states that CRR shall receive a commission of 6.5% of the full
purchase price on all new homes sold at Sea Colony. CRR earned approximately
$1,244,000 in new home sales commissions under this agreement in 1997 and
$86,000 for the three months ended March 31, 1998. At December 31, 1997, in
connection with this agreement the Company has a net receivable of approximately
$674,000 from SCDC consisting of a receivable of approximately $1,244,000 for
commissions on new home sales in 1997 and a related payable of approximately
$570,000 for commissions, marketing and advertising expenses paid by SCDC on
behalf of CRR.

Effective January 1, 1997, the Companies entered into an agreement with CMF
Paymaster, Inc., a related party, to receive administrative services relating to
payroll and other employee matters. The agreement is effective from January 1,
1997 through December 31, 1999, and requires the Companies to pay $2.00 per pay
period per employee of the Companies.

The trademark purchased on December 30, 1996 for $115,000 was sold to SCDC
pursuant to an agreement effective December 31, 1997. As of December 31, 1997,
the Company has recorded a receivable from SCDC for $115,000 related to this
sale. A gain of $4,000 was recognized on the sale and is included in other
revenues.

Note Payable to Related Party

In connection with the purchase of Interstate and SCM on December 30, 1996
the Companies borrowed $675,000 from a related party. The loan has an effective
interest rate of 7.25% and is due December 31, 2001. During 1997 the Companies
received additional advances of $200,000 and made principal payments of
$160,000. Accrued interest payable at December 31, 1997, was $46,888. The assets
of the Company have been pledged as collateral for the note.

Related Party Leases

The Company leases office space under three separate leases with a related
party. In aggregate, the Company paid approximately $69,000 and $77,000 in 1996
and 1997, respectively.

F-58

<PAGE>

COASTAL RESORTS MANAGEMENT, INC.
AND
COASTAL RESORTS REALTY L.L.C.
(COMBINED SUCCESSOR COMPANIES)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Capital Contribution

On January 13, 1998, the owners of the Companies made a capital
contribution of approximately $762,000. On the same day, this amount was used to
repay the Companies' related party debt of $715,000 and the related accrued
interest.

7. INCOME TAXES:

The provision for income taxes consists of the following for the period
January 1 through December 30, 1996 (in thousands):

<TABLE>
<S> <C>
CURRENT:
Federal ...................................... $ 280
State ........................................ 64
-----
Total current provision .................... 344
DEFERRED:
Federal ...................................... (27)
State ........................................ (13)
-----
Total deferred benefit: .................... (40)
-----
Provision for income taxes .................... $ 304
=====

</TABLE>

A reconciliation of the statutory income tax rate to the provision for
income taxes included in the statement of operations of the Predecessor
Companies for the period January 1 through December 30, 1996 is as follows (in
thousands):

<TABLE>

<S> <C>
Federal income tax at statutory rate .......... 253
State income taxes, net ....................... 51
----
Income tax provision .......................... $304
====
</TABLE>

8. PRO FORMA ADJUSTMENTS TO FINANCIAL STATEMENT PRESENTATION
(UNAUDITED)

In conjunction with the planned merger with RQI, the Companies will change
from an S Corporation and a limited liability company to a C Corporation for
federal and state income tax reporting purposes, which will require the
Companies to recognize the tax consequences of operations in its statements of
operations. The supplemental pro forma information included in the accompanying
statements of operations reflect the estimated impact of recognizing income tax
expense as if the Companies had been a C Corporation for tax reporting purposes
for the three months ended March 31, 1997 and 1998, and for the year ended
December 31, 1997.

9. EVENT SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS (UNAUDITED):

The Companies and their stockholders and members have entered into a
definitive agreement with RQI pursuant to which all of the outstanding stock and
membership interest of the Companies will be acquired by RQI. In addition, the
stockholders and members will retain goodwill and other intangible assets that
will be excluded from the Combinations. This transaction is subject to, and will
be executed in conjunction with, RQI successfully completing the Offering.

F-59

<PAGE>

INDEPENDENT AUDITOR'S REPORT

To Collection of Fine Properties, Inc.:

We have audited the accompanying consolidated balance sheets of Collection
of Fine Properties, Inc. as of December 31, 1997 and 1996, and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for the three years ended December 31, 1997, 1996 and 1995. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Collection
of Fine Properties, Inc. as of December 31, 1997 and 1996, and the results of
their operations and their cash flows for the three years ended December 31,
1997, 1996 and 1995, in conformity with generally accepted accounting
principles.

MORRISON, BROWN, ARGIZ AND COMPANY

Denver, Colorado
January 23, 1998

F-60

<PAGE>

COLLECTION OF FINE PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)

DECEMBER 31,
--------------------- MARCH 31,
1996 1997 1998
--------- --------- ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............................ $2,664 $2,713 $1,723
Marketable securities ................................ 103 -- --
Accounts receivable .................................. 100 67 189
Receivables from affiliates and stockholders ......... 213 634 982
Prepaid expenses and other current assets ............ 312 434 268
------ ------ ------
Total current assets ............................... 3,392 3,848 3,162
------ ------ ------
PROPERTY AND EQUIPMENT, net ........................... 1,903 1,964 1,905
------ ------ ------
OTHER ASSETS .......................................... 98 54 50
------ ------ ------
Total assets ....................................... $5,393 $5,866 $5,117
====== ====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Line of credit ....................................... $ -- $ 97 $ --
Current portion of long-term debt .................... 397 28 138
Current portion of capital lease obligations ......... 51 55 --
Customer deposits and deferred revenue ............... 3,287 3,336 664
Payable to affiliates ................................ 42 28 28
Accounts payable and accrued liabilities ............. 938 1,175 1,259
------ ------ ------
Total current liabilities .......................... 4,715 4,719 2,089
------ ------ ------
LONG-TERM DEBT, net of current maturities ............. 188 299 923
------ ------ ------
CAPITAL LEASE OBLIGATIONS, net of current
maturities ........................................... 70 15 --
------ ------ ------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, no par value, 10,000 shares autho-
rized, issued and outstanding ...................... 788 788 788
Retained earnings (deficit) .......................... (368) 45 1,317
------ ------ ------
Total stockholders' equity ......................... 420 833 2,105
------ ------ ------
Total liabilities and stockholders' equity ......... $5,393 $5,866 $5,117
====== ====== ======

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-61

<PAGE>

COLLECTION OF FINE PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------- -------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES:
Property rental fees ..................................... $2,734 $3,273 $3,513 $2,238 $2,199
Service fees ............................................. 266 273 243 114 76
Other .................................................... 500 595 547 362 414
------ ------ ------ ------ ------
Total revenues ......................................... 3,500 4,141 4,303 2,714 2,689
OPERATING EXPENSES ........................................ 2,621 2,777 2,830 1,021 930
------ ------ ------ ------ ------
GENERAL AND ADMINISTRATIVE EXPENSES ....................... 923 948 893 238 224
------ ------ ------ ------ ------
Income (loss) from operations ............................ (44) 416 580 1,455 1,535
OTHER INCOME (EXPENSE):
Interest income, net ..................................... 21 31 58 36 34
Other .................................................... (34) 85 75 18 15
------ ------ ------ ------ ------
NET INCOME (LOSS) ......................................... $ (57) $ 532 $ 713 $1,509 $1,584
====== ====== ====== ====== ======
PRO FORMA DATA
(unaudited -- Note 10)
Historical net income (loss) before income taxes ......... $ (44) $ 416 $ 713 $1,509 $1,584
Less: pro forma provision (benefit) for income taxes ..... (18) 166 285 604 634
------ ------ ------ ------ ------
PRO FORMA NET INCOME (LOSS) ............................... $ (26) $ 250 $ 428 $ 950 $ 950
====== ====== ====== ====== ======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-62

<PAGE>

COLLECTION OF FINE PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

COMMON STOCK RETAINED
------------------- EARNINGS
SHARES AMOUNT (DEFICIT) TOTAL
-------- -------- ----------- ----------
<S> <C> <C> <C> <C>
BALANCE, January 1, 1995 .................... 10,000 $788 $ (443) $ 345
Net loss ................................... -- -- (57) (57)
Distributions .............................. -- -- (100) (100)
------ ---- ------ ------
BALANCE, December 31, 1995 .................. 10,000 788 (600) 188
Net income ................................. -- -- 532 532
Distributions .............................. -- -- (300) (300)
------ ---- ------ ------
BALANCE, December 31, 1996 .................. 10,000 788 (368) 420
Net income ................................. -- -- 713 713
Distributions .............................. -- -- (300) (300)
------ ---- ------ ------
BALANCE, December 31, 1997 .................. 10,000 788 45 833
Net income (unaudited) ..................... -- -- 1,584 1,584
Distributions (unaudited) .................. -- -- (312) (312)
------ ---- ------ ------
BALANCE, March 31, 1998 (unaudited) ......... 10,000 $788 $1,317 $2,105
====== ==== ====== ======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-63

<PAGE>

COLLECTION OF FINE PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
---------------------------------- -------------------------
1995 1996 1997 1997 1998
--------- ---------- --------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ....................................... $(57) $ 532 $ 713 $1,509 $1,584
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization ......................... 379 367 307 77 77
Gain on sale of assets ................................ -- (9) -- -- --
Changes in operating assets and liabilities:
Accounts receivable ................................... (21) 1 33 (254) (122)
Prepaid expenses and other current assets ............. 66 (21) (122) 105 170
Customer deposits and deferred revenue ................ 188 568 49 (2,567) (2,672)
Payable to affiliates ................................. 74 (363) (13) -- --
Accounts payable and accrued expenses ................. 186 (96) 237 484 84
---- ------ ------ ------ ------
Net cash provided by (used in) operating activ-
ities .............................................. 815 979 1,204 (646) (879)
---- ------ ------ ------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from loan receivable ........................... -- 160 -- -- --
Advances to stockholders ................................ -- (16) -- -- --
Purchases of property and equipment ..................... (360) (288) (284) (118) (18)
Proceeds from sale of property and equipment ............ -- 46 8 -- --
Other assets ............................................ 19 (10) 37 39 --
Sales and (purchases) of marketable securities .......... -- (103) 103 -- --
Proceeds from sale of land held for development ......... -- 67 -- -- --
---- ------ ------ ------ ------
Net cash used in investing activities ................ (341) (144) (136) (79) (18)
---- ------ ------ ------ ------

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-64

<PAGE>

COLLECTION OF FINE PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------------ ---------------------
1995 1996 1997 1997 1998
--------- ---------- ----------- -------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances on line of credit ................................ 514 -- 752 17 --
Repayments on line of credit .............................. (724) (90) (655) -- (97)
Proceeds from notes payable ............................... 149 -- -- 128 734
Payments on notes payable ................................. (123) (26) (344) -- --
Receivables from affiliates and stockholders, net ......... 27 (105) (421) 213 (348)
Payments on note payable to related parties ............... -- (154) -- --
Payments on capital leases ................................ (50) (54) (51) (65) (70)
Distributions to stockholders ............................. -- (400) (300) -- (312)
---- ---- ---- ---- ----
Net cash provided by (used in) financing activities. (207) (829) (1,019) 293 (93)
---- ---- ------ ---- ----
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS .......................................... 267 6 49 (432) (990)
CASH AND CASH EQUIVALENTS, beginning of
period .................................................... 2,391 2,658 2,664 2,664 2,713
----- ----- ------ ------ -----
CASH AND CASH EQUIVALENTS, end of period ................... $2,658 $2,664 $2,713 $ -- $1,723
====== ====== ====== ====== ======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid ............................................. $ 75 $ 100 $ 79
====== ====== ======
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Acquisition of assets under capitalized leases ............ $ -- $ -- $ 86
====== ====== ======

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-65

<PAGE>

COLLECTION OF FINE PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

Collection of Fine Properties, Inc. and its subsidiary Peak Ski Rental,
Ltd. ("Subsidiary", collectively the "Company"), a Colorado S-Corporation,
provides vacation property rental and management services for properties owned
by third parties and located in the Breckenridge, Colorado area. The properties
are primarily condominium rental units which are owned by third parties. The
Company manages approximately 470 rental units. The Company's subsidiary is
engaged in the rental of ski equipment.

On January 1, 1995, Tyra Management, Inc., Colorado Mountain Lodging, Inc.,
and River Mountain Lodge, Inc. formed a business combination accounted for as a
pooling of interests. All of the assets and liabilities of those companies were
transferred to Collection of Fine Properties, Inc. The stockholders of the
combined companies received 10,000 shares of common stock of Collection of Fine
Properties, Inc. in exchange for their stock in Tyra Management, Inc., Colorado
Mountain Lodging, Inc. and River Mountain Lodge, Inc. All existing basis in the
assets and liabilities of the combined companies was transferred to the Company.

As a result of this combination, the Company acquired 100% ownership of
Subsidiary, which prior to the combination, was owned one-third by each of the
combining companies.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Statements

Principles of consolidation

The consolidated financial statements include the accounts of Collection
of Fine Properties, Inc. and Peak Ski Rental, Ltd. All significant intercompany
accounts and transactions have been eliminated.

Revenue recognition

The Company records property rental and management fees on the accrual
basis of accounting ratably over the term of guest stays, as earned. Certain
other linen and maintenance fees are charged periodically. The Company provides
all marketing, management, housekeeping and minor maintenance.

The Company requires a non-refundable deposit equal to 100% of the rental
amount 60 days prior to the actual stay, recorded as Customer Deposits within
the accompanying consolidated balance sheets. Revenue from cancellations is
recognized when received.

Operating expenses

Operating expenses include travel agent commissions, salaries,
communications, advertising, credit card fees and other costs associated with
managing properties.

F-66

<PAGE>

COLLECTION OF FINE PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (C0NTINUED)

Cash and cash equivalents

The Company considers all short-term investments purchased with an original
maturity of three months or less to be cash equivalents.

Marketable securities

Marketable securities consist of corporate bonds and are classified as held
to maturity. The fair market value of the securities approximates the cost.

Held to maturity securities are securities which the Company has the
positive intent and ability to hold to maturity. Amounts are reported at
amortized cost, adjusted for the amortization of premiums and accretion of
discounts.

Inventories

Inventories consist of ski lift tickets, merchandise, uniforms, supplies
and parts used for the repair and service of the owners' units. Inventories are
stated at cost, determined on a first-in, first-out (FIFO) method. Inventories
are included in prepaid expenses and other current assets on the balance sheets.

Land held for development

Land held for development consists of raw land purchased for future
development. Cost includes original acquisition costs and costs incurred
specific to the property. During 1996, this property was sold to a related party
at cost.

Property and equipment

Property and equipment are recorded at cost.

Income taxes

The Company has S-Corporation status as defined by the Internal Revenue
Code. Under S-Corporation status, the stockholders report their shares of the
Company's taxable earnings or losses in their personal tax returns.

Management estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at December 31, 1997 and 1996
and revenues and expenses during the three years ended December 31, 1997, 1996
and 1995. The actual outcome of these estimates could differ from the estimates
made in the preparation of the financial statements.

Concentration of credit risk

At December 31, 1997 and 1996, the Company had cash deposits in a financial
institution of approximately $2,341,000 and $2,085,000, respectively, in excess
of the federal insured limit of $100,000.

F-67

<PAGE>

COLLECTION OF FINE PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (C0NTINUED)

The Company is economically dependent upon the tourism trade and changes in
weather conditions in the Breckenridge, Colorado area. The operations are
seasonal, with peaks during the first and fourth quarters of the year.

Reclassifications

Certain items in the 1995 and 1996 financial statements have been
reclassified to conform with the 1997 presentation.

Fair value of financial instruments

Statement of Financial Accounting Standards No. 107, "Disclosures about
Fair Value of Financial Instruments," requires disclosure regarding the fair
value of financial instruments for which it is practical to estimate that value.
The carrying value of cash and cash equivalents, approximates the fair value due
to the short-term nature of these instruments. The fair value of the Company's
long-term debt is estimated to approximate carrying value as the pricing and
terms are indicative of current rates and credit risk.

3. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Inventories consisted of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1996 1997
------ -------
<S> <C> <C>
Merchandise ................................................. $ 31 $ 35
Parts and supplies .......................................... 27 31
Uniforms .................................................... 9 13
Ski lift tickets ............................................ 94 78
---- ----
$161 $157
==== ====
</TABLE>

Property and equipment consisted of the following (in thousands):

<TABLE>
<CAPTION>
ESTIMATED DECEMBER 31,
USEFUL LIVES ------------------------
IN YEARS 1996 1997
------------- --------- ---------
<S> <C> <C> <C>
Buildings ......................................... 31-39 $1,206 $1,230
Property held for investment ...................... 31-39 330 332
Furniture and equipment ........................... 3-7 962 806
Transportation equipment .......................... 5 104 203
Equipment under capital leases .................... lease term 262 242
Leasehold improvements ............................ 39 52 59
Linens ............................................ 4 216 259
------ ------
3,132 3,131
Less accumulated depreciation and amortization..... 1,229 1,167
------ ------
Property and equipment, net ...................... $1,903 $1,964
====== ======

</TABLE>

F-68

<PAGE>

COLLECTION OF FINE PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (C0NTINUED)

Accounts payable and accrued liabilities consisted of the following (in
thousands):

<TABLE>
<CAPTION>
1996 1997
------ ---------
<S> <C> <C>
Trade payable .................................. $703 $ 915
Payroll and payroll taxes ...................... 101 111
Sales tax ...................................... 134 149
---- ------
Total accounts payable and accrued liabilities $938 $1,175
==== ======

</TABLE>

4. PROPERTY HELD UNDER CAPITAL LEASES:

The Company is subject to leases for telephone and computer equipment under
arrangements, which are accounted for as capital leases. The leases are
amortized over an estimated useful life of 5 years. Amortization on equipment
under capital leases for the years ended December 31, 1997, 1996 and 1995 was
approximately $49,000.

The following is a schedule of future minimum payments due under the
capital leases and the present value of the net minimum lease payments (in
thousands):

<TABLE>

<S> <C>
Year ending December 31,
1998 ............................................................. $ 58
1999 ............................................................. 15
-----
Total minimum lease payments ...................................... 73
Less amount representing interest ................................. 3
-----
Present value of net minimum obligations under capital leases ..... 70
Less current maturities ........................................... 55
-----
$ 15
=====
</TABLE>

5. RELATED PARTIES:

The related party balances consisted of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1996 1997
------ -------
<S> <C> <C>
Receivable from affiliates ........... $162 $583
Receivable from stockholders ......... 51 51
---- ----
$213 $634
==== ====
Payable to affiliates ................ $ 42 28
==== ====
</TABLE>

Related party receivables are unsecured, non-interest bearing and are
expected to be collected in the subsequent year.

The Company has a mortgage note payable with an affiliate (Note 7).

During 1996 and 1995, the Company incurred management fees to a related
party of approximately $100,000 and $118,000, respectively, for administrative
services. No management fees were incurred during 1997.

During 1997, 1996 and 1995, the Company received expense reimbursements
from a related party of approximately $75,000, $57,000 and $60,000,
respectively.

Loan receivable

Tyra Management, Inc. sold property to a related party at its cost basis of
approximately $323,000. Tyra Management, Inc. received a note from that related
entity. At January 1, 1995, when Tyra Management, Inc. was combined into the
Company, the note had been paid down to approximately $151,000,

F-69

<PAGE>

COLLECTION OF FINE PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (C0NTINUED)

which included accrued interest. The note was transferred to the Company as part
of the combination. No additional payments were made by the related entity
during 1995. Interest, which accrues at the rate of 6% per annum ($9,000) was
added to the balance at December 31, 1995. The loan was paid off during 1996.

6. LINE OF CREDIT:

The Company has a $750,000 line of credit from a bank. During 1997, the
maximum balance outstanding under the line of credit was approximately $502,000
and the minimum was zero. The line is secured by certain real estate, furniture,
fixtures, equipment and inventory. The principal shareholders of the Company are
additional parties to the note. The interest charged is the New York prime rate,
which was 8.5% and 8.25% at December 31, 1997 and 1996, respectively. These
interest rates approximate the weighted average rates during the respective
years.

7. LONG-TERM DEBT:

Long-term debt consisted of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1996 1997
------ -------
<S> <C> <C>
Mortgage note, payable in monthly principal installments of $500 plus interest at
the prime rate (8.5% and 8.25% at December 31, 1997 and 1996, respectively).
The note is secured by property and matures July, 2000, at which time a balloon
payment is due. Certain shareholders are guarantors of the note. .................... $131 $125

Mortgage note, payable in monthly installments of $600 including interest at the
prime rate (8.5% and 8.25% at December 31, 1997 and 1996, respectively). The
note is secured by property and matures January, 2003, at which time a balloon
payment is due. ..................................................................... 72 71

Mortgage note, payable in monthly installments of $3.6, including interest at 9%.
The note is secured by property and matured August, 1997, at which time a
balloon payment was due. ............................................................ 319 --

Mortgage note, payable in monthly installments of $.5 to a related party including
interest at 8%. The note is secured by property and matures through November,
2023. ............................................................................... 63 62

Loan payable for purchase of vehicles, payments of $2.1, including principal and
interest ............................................................................ -- 69
---- ----
$585 $327
==== ====
</TABLE>

F-70

<PAGE>

COLLECTION OF FINE PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (C0NTINUED)

The aggregate maturities of long-term debt at December 31, 1997 are as
follows (in thousands):

<TABLE>

<S> <C>
Year ending December 31,
1998 ....................................... $ 28
1999 ....................................... 30
2000 ....................................... 140
2001 ....................................... 5
2002 ....................................... 3
Thereafter ................................. 121
----
327
Less current maturities .................... 28
----
$299
====

</TABLE>

8. BENEFIT PLAN:

The Company instituted a 401(k) Profit Sharing Plan during September, 1996.
Employer contributions to the plan during 1997 and 1996 were approximately
$20,000 and $6,000, respectively.

9. SUBSEQUENT EVENT:

During January, 1998, the Company distributed $300,000 to its stockholders.

10. PRO FORMA ADJUSTMENTS TO FINANCIAL STATEMENT PRESENTATION
(UNAUDITED)

11. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

In connection with the Offering, an owner has agreed to reductions in
salary and benefits which would have reduced general and administrative expenses
by approximately $64,000, $74,000 and $94,000 for 1995, 1996, and 1997,
respectively. In addition, certain stockholders will retain non-operating assets
and assume certain liabilities that will be excluded from the Combinations. This
transaction is subject to, and will be executed in conjunction with, RQI
successfully completing the Offering.

F-71

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To First Resort Software, Inc.:

We have audited the accompanying balance sheet of First Resort Software,
Inc. (a Colorado corporation) as of December 31, 1997, and the related
statements of operations, changes in stockholders' equity (deficit) and cash
flows for the year then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of First Resort Software, Inc.,
as of December 31, 1997, and the results of its operations and its cash flows
for the year ended December 31, 1997, in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP

Houston, Texas
January 30, 1998

F-72

<PAGE>

FIRST RESORT SOFTWARE, INC.

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
-------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............................................ $ 126 $ 208
Accounts receivable .................................................. 274 290
Notes receivable ..................................................... 152 193
Prepaid expenses and other current assets ............................ 45 37
----- ------
Total current assets ............................................... 597 728

PROPERTY AND EQUIPMENT, net ........................................... 275 300
----- ------
Total assets ....................................................... $ 872 $1,028
===== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Deferred revenue ..................................................... $ 506 $ 530
Accounts payable and accrued liabilities ............................. 130 290
----- ------
Total current liabilities .......................................... 636 820
LONG-TERM OBLIGATIONS ................................................. 125 --

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Common stock, $1 par; 50,000 shares authorized; 3,000 shares outstand-
ing ................................................................ 3 3
Additional paid in capital ........................................... 13 13
Retained earnings .................................................... 95 192
----- ------
Total stockholders' equity ......................................... 111 208
----- ------
Total liabilities and stockholders' equity ......................... $ 872 $1,028
===== ======

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-73

<PAGE>

FIRST RESORT SOFTWARE, INC.

STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
1997 1997 1998
------------- ------ -------
(UNAUDITED)
<S> <C> <C> <C>
REVENUES:
Software sales ..................................... $1,318 $254 $395
Service contracts .................................. 1,390 292 396
Other .............................................. 156 32 37
------ ---- ----
Total revenues ................................... 2,864 578 828
OPERATING EXPENSES .................................. 1,704 374 448
------ ---- ----
GENERAL AND ADMINISTRATIVE EXPENSES ................. 417 96 126
------ ---- ----
Income from operations ............................. 743 108 254

OTHER INCOME:
Interest income .................................... 25 7 8
------ ---- ----
NET INCOME .......................................... $ 768 $115 $262
====== ==== ====
PRO FORMA DATA (unaudited -- Note 6):
Historical net income before income taxes .......... $ 768 $115 $262
Less: pro forma provision for income taxes ......... 307 44 105
------ ---- ----
PRO FORMA NET INCOME ................................ $ 461 $ 71 $157
====== ==== ====
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-74

<PAGE>

FIRST RESORT SOFTWARE, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL RETAINED
------------------- PAID IN EARNINGS
SHARES AMOUNT CAPITAL (DEFICIT) TOTAL
-------- -------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1996 .................. 3,000 $ 3 $13 $ (106) $ (90)
Net income ................................. -- -- -- 768 768
Distributions .............................. -- -- -- (567) (567)
----- --- --- ------ ------
BALANCE, December 31, 1997 .................. 3,000 3 13 95 111
Net income (unaudited) ..................... -- -- -- 262 262
Distributions (unaudited) .................. -- -- -- (165) (165)
----- --- --- ------ ------
BALANCE, March 31, 1998 (unaudited) ......... 3,000 $ 3 $13 $ 192 $ 208
===== === === ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-75

<PAGE>

FIRST RESORT SOFTWARE, INC.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, ------------------
1997 1997 1998
------------- ------------------
(UNAUDITED)

<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ................................................ $ 768 $ 115 $ 262
Adjustments to reconcile net income to net cash provided by
operating activities--
Depreciation ............................................ 45 12 12
Changes in operating assets and liabilities--
Accounts receivable ..................................... (44) 32 (16)
Notes receivable ........................................ (25) 23 (41)
Prepaid expenses and other current assets ............... 29 38 8
Deferred revenue ........................................ 49 (16) 24
Accounts payable and accrued liabilities ................ (17) 61 160
------ ------ ------
Net cash provided by operating activities .............. 805 265 409
------ ------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ........................ (183) (41) (37)
------ ------ ------
Net cash used in investing activities .................. (183) (41) (37)
------ ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on line of credit ................................ (39) (125) (125)
Distributions to stockholders ............................. (567) (92) (165)
------ ------ ------
Net cash used in financing activities .................. (606) (217) (290)
------ ------ ------
NET INCREASE IN CASH AND CASH EQUIVALENTS .................. 16 7 82
CASH AND CASH EQUIVALENTS, beginning of period ............. 110 110 126
------ ------ ------
CASH AND CASH EQUIVALENTS, end of period ................... $ 126 $ 117 $ 208
====== ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-76

<PAGE>

FIRST RESORT SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

First Resort Software, Inc. (the "Company") is a Colorado corporation. The
Company was founded and began operations in 1985. The Company develops, markets
and distributes property management computer software applications and provides
its licensees with implementation services and ongoing support. The Company has
a client base of over 650 companies located in the United States, Canada and the
Caribbean.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Statements

Revenue Recognition

The Company records revenue from software sales when the software is
successfully installed on the client's system.

The Company's revenue recognition policies conform to accounting principles
for software revenue recognition issued by the American Institute of Certified
Public Accountants ("AICPA"). For customer arrangements that include multiple
elements (i.e., additional software products, postcontract customer support, or
services) the contract price is generally allocated to the various elements
based on Company--specific objective evidence of fair values. Revenue related to
software maintenance agreements, which are generally one year in duration, is
generally billed in advance and recognized ratably over the term of the
maintenance contract. Customer deposits received and amounts invoiced but not
yet recognized as revenue are reflected as deferred revenue in the accompanying
balance sheet. These amounts are included in revenue when the relevant
recognition criteria are met.

Revenues related to service elements are generally recognized as the
services are provided. Should the Company enter into arrangements with customers
that require significant production, modification or customization of software,
the entire arrangement will be accounted for using progress to completion
accounting methods prescribed by the AICPA.

Operating Expenses

Operating expenses include salaries, benefits, communications, marketing,
postage and shipping, and other costs associated with developing, servicing and
marketing software.

Cash and Cash Equivalents

For the purposes of the balance sheets and statements of cash flows, the
Company considers all investments with original maturities of three months or
less to be cash equivalents.

F-77

<PAGE>

FIRST RESORT SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS - (C0NTINUED)

Property and Equipment

Property and equipment are stated at cost, and depreciation is computed
using the straight--line method over the estimated useful lives of the assets.

Research and Development

Research and development costs, except as discussed below, are expensed as
incurred. These costs consist primarily of salaries relating to the development
of new products and technologies.

Generally accepted accounting principles provide that costs incurred to
produce software for external sale or lease should be capitalized. Costs
eligible for capitalization are those incurred after the product's technological
feasibility has been established and before the product is ready for general
release. The establishment of technological feasibility and the ongoing
assessment of the recoverability of capitalized costs requires considerable
judgment by management with respect to certain external factors, including, but
not limited to, anticipated future product revenues, estimated economic life and
changes in software and hardware technology. The Company incurred costs through
December 31, 1997 which satisfy the above criteria of approximately $149,000 and
therefore these software development costs have been capitalized by the Company.

Income Taxes

The Company has elected S Corporation status as defined by the Internal
Revenue Code, whereby the Company is not subject to taxation. Under S
Corporation status, the stockholders report their share of the Company's taxable
earnings or losses in their personal tax returns.

Use of Estimates

3. PROPERTY AND EQUIPMENT:

Property and equipment consisted of the following (in thousands):

<TABLE>
<CAPTION>
ESTIMATED USEFUL DECEMBER 31,
LIVES IN YEARS 1997
------------------ -------------
<S> <C> <C>
Furniture, fixtures and equipment ......... 5 $ 255
Leasehold improvements .................... 5 9
Computer software ......................... 5 149
------
413
Less - Accumulated depreciation ........... (138)
------
Property and equipment, net .............. $ 275
======

</TABLE>

F-78
<PAGE>

FIRST RESORT SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

4. LINE OF CREDIT:

The Company has a loan agreement with a bank providing a line of credit
("LOC") credit facility of $150,000, which is subject to renewal and review on
an annual basis. The LOC bears interest at prime plus 1.75% and matures March
25, 1998. At December 31, 1997, there was no outstanding balance on this LOC.

The owners of the Company have guaranteed the obligations and liabilities
of the Company in connection with the LOC pursuant to a continuing guaranty
dated March 25, 1994.

5. COMMITMENTS AND CONTINGENCIES:

Litigation

The Company is involved in certain legal actions arising from the ordinary
course of business. Management does not believe that the outcome of such legal
actions will have a material adverse effect on the Company's financial position
or results of operations.

Insurance

The Company carries a broad range of insurance coverage, workers'
compensation and an error and omissions policy. The Company has not incurred
significant claims or losses on any of its insurance policies during the period
presented in the accompanying financial statements.

Benefit Plans

The Company's 401(k) retirement plan is available to substantially all of
the Company's employees. The Company's contribution to the plan is based upon a
percentage of employee contributions, as defined by the plan. The cost of this
plan was approximately $18,000 in 1997.

6. PRO FORMA ADJUSTMENTS TO FINANCIAL STATEMENT PRESENTATION
(UNAUDITED)

7. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

The Company and its stockholders have entered into a definitive agreement
with RQI pursuant to which all of the outstanding stock of the Company will be
acquired by RQI. In connection with the Offering the stockholders have agreed to
increases in salary and benefits which would have increased general and
administrative expenses by $42,000 in 1997. In addition, certain stockholders
will retain non-operating assets and assume or retire certain liabilities that
will be excluded from the Combinations. This transaction is subject to, and will
be executed in conjunction with, RQI successfully completing the Offering.

F-79

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Houston and O'Leary Company:

We have audited the accompanying balance sheet of Houston and O'Leary
Company (a Colorado corporation) as of December 31, 1997, and the related
statements of operations, changes in stockholders' equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Houston and O'Leary Company,
as of December 31, 1997, and the results of its operations and its cash flows
for the year then ended, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Houston, Texas
January 30, 1998

F-80

<PAGE>

HOUSTON AND O'LEARY COMPANY

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
-------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............................ $259 $208
Accounts receivable .................................. 5 70
Receivables from stockholders ........................ 274 --
Prepaid expenses and other current assets ............ 45 251
---- ----
Total current assets ............................... 583 529
PROPERTY AND EQUIPMENT, net ........................... 157 59
---- ----
Total assets ....................................... $740 $588
==== ====
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt ...................................... $164 $150
Customer deposits and deferred revenue ............... 255 173
Capital lease obligations ............................ 50 --
Accounts payable and accrued liabilities ............. 86 99
---- ----
Total current liabilities .......................... 555 422
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $1 par; 10,000 shares authorized; 200
shares outstanding ................................. -- --
Additional paid-in capital ........................... -- --
Retained earnings .................................... 185 166
---- ----
Total stockholders' equity ......................... 185 166
---- ----
Total liabilities and stockholders' equity ......... $740 $588
==== ====
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-81

<PAGE>

HOUSTON AND O'LEARY COMPANY

STATEMENT OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>

THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, -----------------
1997 1997 1998
---- -----------------
(UNAUDITED)
<S> <C> <C> <C>
REVENUES:
Real estate commissions ............................ $1,170 $381 $307
Property rental fees ............................... 298 86 113
Other .............................................. 128 17 1
------ ---- ----
Total revenues ................................... 1,596 484 421
OPERATING EXPENSES .................................. 494 5 3
------ ---- ----
GENERAL AND ADMINISTRATIVE EXPENSES. 322 173 324
------ ---- ----
Income from operations ........................... 780 306 94
OTHER INCOME (EXPENSE):
Interest expense, net .............................. (15) (5) (5)
------ ---- ----
NET INCOME .......................................... $ 765 $301 $89
====== ==== ====
PRO FORMA DATA (unaudited -- Note 6)
Historical net income before income taxes .......... $ 765 $301 $89
Less: pro forma provision for income taxes ......... 306 120 36
------ ---- ----
PRO FORMA NET INCOME ................................ $ 459 $181 $53
====== ==== ====
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-82

<PAGE>

HOUSTON AND O'LEARY COMPANY

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK
------------------- RETAINED
SHARES AMOUNT EARNINGS TOTAL
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1996 .................. 200 $-- $ 49 $ 49
Net income ................................. -- -- 765 765
Distributions .............................. -- -- (629) (629)
--- --- ------ ------
BALANCE, December 31, 1997 .................. 200 -- 185 185
Net income (unaudited) ..................... -- -- 89 89
Distributions (unaudited) .................. -- -- (108) (108)
--- --- ------ ------
BALANCE, March 31, 1998 (unaudited) ......... 200 $-- $ 166 $ 166
=== === ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-83

<PAGE>

HOUSTON AND O'LEARY COMPANY

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
1997 1997 1998
---- --------------------
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ..................................................... $ 765 $ 301 $ 89
Adjustments to reconcile net income to net cash provided by
operating activities--
Depreciation ................................................. 48 12 12
Changes in operating assets and liabilities--
Payable to property owners ................................... 20 -- --
3
Prepaid expenses and other current assets .................... (79) 3
Deferred revenue ............................................. 21 (56) (82)
Accounts payable and accrued liabilities ..................... (46) (49) 13
------ ------ ------
Net cash provided by operating activities ................... 811 129 35
------ ------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ............................. (57) -- --
------ ------ ------
Proceeds from sale of property and equipment ................... -- 11 86
Net cash provided by (used in) investing activities ......... (57) -- 86
------ ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt ..................................... (43) 6 (64)
Distributions to stockholders .................................. (629) (187) (108)
------ ------ ------
Net cash provided by (used in) financing activities ......... (672) (181) (172)
------ ------ ------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS .................................................... 82 (41) (51)
CASH AND CASH EQUIVALENTS, beginning of period .................. 177 177 259
------ ------ ------
CASH AND CASH EQUIVALENTS, end of period ........................ $ 259 $ 136 $ 208
====== ====== ======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFOR-
MATION:
Cash paid for interest ......................................... $ 15 $ 5 $ 5
====== ====== ======

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-84

<PAGE>

HOUSTON AND O'LEARY COMPANY

NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

Houston and O'Leary Company (the "Company"), a Colorado corporation,
provides luxury vacation property rentals and sales in Aspen, Colorado and
provides non-exclusive rental services for approximately 130 rental units. The
Company provides its management services to property owners pursuant to
management contracts, which are generally one year in length. The majority of
such contracts contain automatic renewal provisions but also allow property
owners to terminate the contract at any time.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Statements

Revenue Recognition

The Company records property rental fees on the accrual basis of
accounting, ratably over the term of guest stays, as earned. The Company
requires a deposit equal to 100% of the rental fee 45 days prior to the expected
arrival date. These deposits are non-refundable and are recorded as customer
deposits and deferred revenue in the accompanying financial statements until the
guest stay commences. The Company records revenue for cancellations as they
occur. Commissions on real estate sales are recognized at closing.

Operating Expenses

Operating expenses include broker commissions, salaries, communications,
advertising, credit card fees and other costs associated with rental and sales
of properties.

Cash and Cash Equivalents

For the purposes of the balance sheets and statements of cash flows, the
Company considers all investments with original maturities of three months or
less to be cash equivalents.

Property and Equipment

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the estimated useful lives of the assets.

F-85

<PAGE>

HOUSTON AND O'LEARY COMPANY

NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

Income Taxes

The Company has elected S Corporation status as defined by the Internal
Revenue Code and state tax statutes, whereby, the Company is not subject to
taxation for federal or state purposes. Under S Corporation status, the
stockholders report their share of the Company's taxable earnings or losses in
their personal tax returns.

Use of Estimates

Concentration of Risk

The Company's operations are exclusively in the Aspen, Colorado area and
are subject to significant changes due to weather conditions.

3. PROPERTY AND EQUIPMENT:

Property and equipment consisted of the following (in thousands):

<TABLE>
<CAPTION>
ESTIMATED USEFUL DECEMBER 31,
LIVES IN YEARS 1997
-------------- ----
<S> <C> <C>
Furniture, fixtures and equipment ......... 5 $ 89
Artwork ................................... -- 20
Airplane .................................. 5 159
------
268
Less - Accumulated depreciation ........... (111)
------
Property and equipment, net .............. $ 157
======
</TABLE>

4. SHORT-TERM DEBT:

Short-term debt consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1997
----
<S> <C>
Term note payable to bank, interest at 1% over the prime rate as
disclosed in the Wall Street Journal; collateralized by Airplane
and guaranteed by shareholders; payable in monthly installments
of $1,059, including interest, through March 5, 2000 at which time
the remaining principal becomes payable ........................... $ 65
Revolving note payable to bank ..................................... 99
----
$164
====
</TABLE>

Under the revolving note payable to a bank, the bank will provide a
revolving line of credit up to $100,000 to finance the Company's working capital
needs. At December 31, 1997, the Company had $99,000 outstanding on the line of
credit. Interest is payable monthly based upon the prime rate (9.50% at December
31, 1997). The note is collateralized by the assets of the Company.

F-86

<PAGE>

HOUSTON AND O'LEARY COMPANY

NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

Subsequent to year end, the note payable to a bank was assigned and assumed
by one of the stockholders.

5. COMMITMENTS AND CONTINGENCIES:

Litigation

Insurance

The Company carries a broad range of insurance coverage, including general
and business auto liability, commercial property, workers' compensation and a
general umbrella policy. The Company has not incurred significant claims or
losses on any of its insurance policies during the period presented in the
accompanying financial statements.

6. PRO FORMA ADJUSTMENTS TO FINANCIAL STATEMENT PRESENTATION
(UNAUDITED)

7. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

Subsequent to year end, certain non-operating assets and related
liabilities with a net asset value of $257,000 will be retained by one of the
stockholders. If this transaction had been recorded at December 31, 1997, the
effect on the accompanying balance sheet would be a decrease in assets of
$357,000, and a decrease in liabilities of $100,000 and a decrease in
stockholders' equity of $257,000. In addition, the stockholders and key
management have agreed to reductions in salary and benefits which would have
reduced general and administrative expenses by $58,000 in 1997. In addition,
certain stockholders will retain non-operating assets and assume or retire
certain liabilities that will be excluded from the Combinations. This
transaction is subject to, and will be executed in conjunction with, RQI
successfully completing the Offering.

F-87

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To The Maury People, Inc.:

We have audited the accompanying balance sheet of The Maury People, Inc. (a
Massachusetts corporation) as of December 31, 1997, and the related statements
of operations, changes in stockholder's equity(deficit) and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The Maury People, Inc., as
of December 31, 1997, and the results of its operations and its cash flows for
the year ended December 31, 1997 in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP

Houston, Texas
January 30, 1998

F-88

<PAGE>

THE MAURY PEOPLE, INC.

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

DECEMBER 31, MARCH 31,
1997 1998
---- ----
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ...................................... $ 297 $ 390
Cash held in escrow ............................................ 553 17
Prepaid expenses and other current assets ...................... 19 --
----- -----
Total current assets .......................................... 869 407
PROPERTY AND EQUIPMENT, net ...................................... 99 92
----- -----
Total assets .................................................. $ 968 $ 499
===== =====
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Escrow deposits on real estate sales ........................... $ 553 $ 3
Payable to property owners ..................................... 103 149
Accounts payable and accrued liabilities ....................... 224 368
----- -----
Total current liabilities ..................................... 880 520
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY (DEFICIT):
Common Stock, no par; 1,000 shares authorized; 200 shares issued 1 1
Retained earnings (deficit) .................................... 87 (22)
----- -----
Total stockholder's equity (deficit) .......................... 88 (21)
----- -----
Total liabilities and stockholder's equity (deficit) .......... $ 968 $ 499
===== =====

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-89

<PAGE>

THE MAURY PEOPLE, INC.

STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, ----------------
1997 1997 1998
---- ---- ----
(UNAUDITED)
<S> <C> <C> <C>
REVENUES:
Real estate commissions, net ....................... $ 829 241 185
Property rental fees, net .......................... 354 129 153
------ --- ---
Total revenues ................................... 1,183 370 338
OPERATING EXPENSES .................................. 211 57 66
------ --- ---
GENERAL AND ADMINISTRATIVE EXPENSES ................. 682 100 195
------ --- ---
Income from operations ............................. 290 213 77
OTHER INCOME:
Interest income, net ............................... 28 2 2
------ --- ---
NET INCOME .......................................... $ 318 $215 $ 79
====== ==== ====
PRO FORMA DATA (unaudited -- Note 7)
Historical net income before income taxes .......... $ 318 $215 $ 79
Less: pro forma provision for income taxes ......... 127 86 32
------ ---- ----
PRO FORMA NET INCOME ................................ $ 191 $129 $ 47
====== ==== ====
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-90

<PAGE>

THE MAURY PEOPLE, INC.

STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT)
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK RETAINED TOTAL
------------------- EARNINGS ----------
SHARES AMOUNT (DEFICIT)
------ ------ ---------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1996 .................. 200 $ 1 $ (84) $ (83)
Net income ................................. -- -- 318 318
Distributions .............................. -- -- (147) (147)
--- --- ------ ------
BALANCE, December 31, 1997 .................. 200 1 87 88
Distributions (unaudited) .................. (188) (188)
Net income (unaudited) ..................... -- -- 79 79
--- --- ------ ------
BALANCE, March 31, 1998 (unaudited) ......... 200 $ 1 $ (22) $ (21)
=== === ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-91

<PAGE>

THE MAURY PEOPLE, INC.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, -------------------
1997 1997 1998
---- ---- ----
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ........................................................ $ 318 $ 215 $ 79
Adjustments to reconcile net income to net cash provided by operat-
ing activities-
Depreciation .................................................... 28 7 7
Changes in operating assets and liabilities-
Cash held in escrow ............................................. (184) 264 536
Escrow deposits on real estate sales ............................ 184 (359) (553)
Prepaid expenses and other current assets ....................... (6) 13 19
Due to property owners .......................................... 32 81 46
Accounts payable and accrued liabilities ........................ 1 68 147
----- ------ ------
Net cash provided by operating activities ...................... 373 289 281
----- ------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ................................ (77) (27) --
----- ------ ------
Net cash used in investing activities .......................... (77) (27) --
----- ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable ........................................ 50
Payments on note payable .......................................... (50)
Distributions to stockholders ..................................... (147) (81) (188)
----- ------ ------
Net cash used in financing activities .......................... (147) (81) (188)
----- ------ ------
NET INCREASE IN CASH AND CASH EQUIVALENTS .......................... 149 181 93
CASH AND CASH EQUIVALENTS, beginning of period ..................... 148 148 297
----- ------ ------
CASH AND CASH EQUIVALENTS, end of period ........................... $ 297 $ 329 $ 390
===== ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-92

<PAGE>

THE MAURY PEOPLE, INC.
NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

The Maury People, Inc. (the "Company") is a Massachusetts corporation which
provides vacation property rentals and sales on the island of Nantucket off the
coast of Massachusetts. The Company provides non-exclusive rental services for
approximately 1200 rental units. The Company's property rental operations are
seasonal, with peaks during the first and fourth quarters of the year.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Statements

Revenue Recognition

The Company records property rental fees upon the receipt of customer
deposits. The Company requires a deposit equal to 100% of the rental fee 45 days
prior to the expected arrival date. Since these Company's deposits are
non-refundable, the Company records its fees and a payable to property owners in
the accompanying financial statements. The Company records revenue for
cancellations as they occur.

Commissions on real estate sales are recognized at closing and are recorded
net of the related commission expense to unaffiliated brokers. The Company
recognized commission revenues of $1,949,000 and commission expense of
$1,120,000 to affiliated brokers for the year 1997.

Operating Expenses

Operating expenses include agent commissions, salaries, communications,
advertising, and other costs associated with managing and selling properties.

Cash and Cash Equivalents

For the purposes of the balance sheets and statements of cash flows, the
Company considers all investments with original maturities of three months or
less to be cash equivalents.

Property and Equipment

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the estimated useful lives of the assets.

F-93

<PAGE>

THE MAURY PEOPLE, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

Income Taxes

Use of Estimates

Concentration of Risk

The Company's operations are exclusively on Nantucket Island.

3. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

At December 31, 1997, the Company had restricted cash totaling $553,000 in
real estate sales escrow.

Property and equipment consisted of the following (in thousands):

<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIVES DECEMBER 31,
IN YEARS 1997
-------- ----
<S> <C> <C>
Leasehold improvements .................. 10 $ 56
Office equipment ........................ 5 152
------
208
Less - Accumulated depreciation ......... (109)
------
Property and equipment, net ........... $ 99
======
</TABLE>

Accounts payable and accrued liabilities consisted of the following (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
1997
----
<S> <C>
Accrued rental commissions ............................. $ 66
Accrued sales commissions .............................. 51
Accounts payable and other accrued liabilities ......... 107
----
Total accounts payable and accrued liabilities ......... $224
====
</TABLE>

4. COMMITMENTS AND CONTINGENCIES:

Lease Obligation

The Company leases equipment and office space under noncancelable operating
leases expiring at various times through 2004. Rental expense for the year ended
December 31, 1997 was approximately $166,000. The minimum future rental payments
under noncancelable operating leases are as follows (exclusive of certain pass
through expenses such as real estate taxes and common area maintenance expenses
and exclusive of Consumer Price Index adjustments):

<TABLE>

<S> <C>
Year ending December 31,
1998 .......................... $ 164
1999 .......................... 204
</TABLE>

F-94

<PAGE>

THE MAURY PEOPLE, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

<TABLE>
<S> <C>
2000 ....................... 197
2001 ....................... 195
2002 ....................... 188
Thereafter ................. 232
-------
$ 1,180
=======
</TABLE>

Litigation

The Company is involved in certain legal actions arising in the ordinary
course of business. Management does not believe that the outcome of such legal
actions will have a material adverse effect on the Company's financial position
or results of operations.

Insurance

The Company carries a broad range of insurance coverage, including
multiperil, workers' compensation and an error and omissions policy. The Company
has not incurred significant claims or losses on any of its insurance policies
during the periods presented in the accompanying financial statements.

Benefit Plan

For all eligible employees, the Company sponsors a defined benefit pension
plan. Plan benefits are based on years of service and compensation. The
Company's funding policy is to make contributions at a minimum in accordance
with the requirements of applicable laws an regulations, but no more than the
amount deductible for income tax purposes. The components of net pension expense
for the Company's retirement plan for the year ended December 31, 1997 are
presented below:

<TABLE>
<S> <C>
Service cost ................................................... $ 1,459
Interest cost .................................................. 39,420
Actual return on plan assets ................................... (95,338)
Net amortization and deferral .................................. 75,875
--------
Net periodic pension expense ................................. $ 21,416
========
</TABLE>

The funded status of the Company's retirement plan and amounts included in
the Company's balance sheet at December 31, 1997 are set forth in the following
table:

<TABLE>
<S> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation ................................. $ 602,557
=========
Projected benefit obligation ................................... $ 602,557
Plan assets at fair value ...................................... 635,448
---------
Plan assets in excess of projected benefit obligations ......... 32,891
Unrecognized net gain .......................................... (70,894)
Unrecognized net transition obligation ......................... 38,637
---------
Prepaid pension asset ........................................ $ 634
=========
</TABLE>

The weighted average discount rate used in determining the actuarial
present value of the projected benefit obligations was 7.0 percent. The expected
long-term rate of return on assets was 5.0 percent.

5. RELATED PARTIES:

At present, the Company intends to transfer its offices to facilities owned
by a trust of which the owner is the primary beneficiary upon expiration of its
existing lease on March 31, 1999. The new lease term extends through March 2004,
with a five year extension option. Annual rent payments begin at $185,400 and
increase based on increases in the Consumer Price Index subject to a 6% annual
ceiling on increases.

F-95

<PAGE>

THE MAURY PEOPLE, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

6. NOTE PAYABLE:

During 1997, the Company had a $50,000 note payable to a bank, due in one
payment consisting of principal and interest. The note bore interest at 6.35%.
The note was secured by a security interest in a deposit account. The note was
paid in full during 1997.

7. PRO FORMA ADJUSTMENTS TO FINANCIAL STATEMENT PRESENTATION
(UNAUDITED)

8. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

The Company and its stockholder has entered into a definitive agreement
with RQI pursuant to which all of the outstanding stock of the Company will be
acquired by RQI. This transaction is subject to, and will be in conjunction
with, RQI successfully completing the Offering.

In connection with the Offering, the owner has agreed to reductions in
salary and benefits which would have reduced general and administrative expenses
by approximately $142,000 for 1997. In addition, the stockholder will retain
non-operating assets and assume or retire certain liabilities that will be
excluded from the Combinations. This transaction is subject to, and will be
executed in conjunction with, RQI successfully completing the Offering.

F-96

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(SUCCESSOR COMPANY REPORT)

To Howey Acquisition, Inc.:

We have audited the accompanying consolidated balance sheet of Howey
Acquisition, Inc. (a Florida corporation) as of December 31, 1997, and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for the period from January 3, 1997 (inception) through December
31, 1997. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Howey Acquisition, Inc., as of December 31, 1997, and the results of their
operations and their cash flows for the period from January 3, 1997 (inception)
through December 31, 1997, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Houston, Texas
January 30, 1998

F-97

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(PREDECESSOR COMPANY REPORT)

To Priscilla Murphy Realty, Inc.:

We have audited the accompanying balance sheet of Priscilla Murphy Realty,
Inc. (a Florida corporation) as of December 31, 1996, and the related statements
of operations, changes in stockholders' equity and cash flows for the years
ended December 31, 1995 and 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Priscilla Murphy Realty,
Inc., as of December 31, 1996, and the results of its operations and its cash
flows for the years ended December 31, 1995 and 1996, in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Houston, Texas
January 30, 1998

F-98

<PAGE>
HOWEY ACQUISITION, INC. DBA PRISCILLA MURPHY REALTY, INC

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

PREDECESSOR COMPANY COMPANY
----------- ------- -------
DECEMBER 31,
-------------------------
MARCH 31,
1996 1997 1998
---- ---- ----
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ................................ $1,672 $ 904 $ 2,375
Cash held in trust ....................................... 3,736 4,036 6,570
Advances to property owners .............................. 23 39 98
Prepaid expenses and other current assets ................ 3 60 --
------ ------- -------
Total current assets ................................... 5,434 5,039 9,043
PROPERTY AND EQUIPMENT, net ............................... 148 102 105
GOODWILL, net ............................................. -- 5,436 5,402
OTHER ASSETS, net ......................................... 181 187 185
------ ------- -------
Total assets ........................................... $5,763 $10,764 $14,735
====== ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt ..................... $ 100 $ 803 $ 803
Customer deposits and deferred revenue ................... 3,736 4,036 6,570
Accounts payable and accrued liabilities ................. 45 305 259
------ ------- -------
Total current liabilities .............................. 3,881 5,144 7,632

LONG-TERM DEBT, net of current maturities (includ-
ing note payable to an affiliate of $0, $2,000 and $2,000,
respectively) ............................................ 100 3,862 4,059

STOCKHOLDERS' EQUITY:
Class A Common stock, $.50 par value 40,000 shares
authorized and outstanding ............................. 1 20 20
Class B Common stock, non-voting, $.50 par value,
160,000 shares authorized and outstanding .............. -- 80 80
Additional paid-in capital ............................... -- 150 150
Retained earnings ........................................ 1,781 1,508 2,794
------ ------- -------
Total stockholders' equity ............................. 1,782 1,758 3,044
------ ------- -------
Total liabilities and stockholders' equity ............. $5,763 $10,764 $14,735
====== ======= =======

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-99

<PAGE>

HOWEY ACQUISITION, INC. DBA PRISCILLA MURPHY REALTY, INC

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
------------------- -----------------------------------------------------
YEAR ENDED PERIOD PERIOD
DECEMBER 31, JANUARY 3, 1997 JANUARY 3, 1997 THREE
------------------- THROUGH THROUGH MONTHS ENDED
1995 1996 DECEMBER 31, 1997 MARCH 31, 1997 MARCH 31, 1998
--------- --------- ------------------- ----------------- ---------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>

REVENUES:
Property rental fees ................... $2,347 $2,402 $ 2,514 $1,317 $1,409
Real estate commissions, net ........... 1,326 1,630 1,473 320 438
Service fees ........................... 643 689 753 322 428
------ ------ ------- ------ ------
Total revenues ....................... 4,316 4,721 4,740 1,959 2,275

OPERATING EXPENSES ...................... 1,319 1,314 1,184 283 318
------ ------ ------- ------ ------
GENERAL AND ADMINISTRA-
TIVE EXPENSES .......................... 2,257 2,125 1,866 485 635
------ ------ ------- ------ ------
Income from operations ................. 740 1,282 1,690 1,191 1,322

OTHER INCOME (EXPENSE):
Interest income (expense), net ......... 112 121 (182) (22) 36
------ ------ ------- ------ ------

NET INCOME .............................. $ 852 $1,403 $ 1,508 $1,169 $1,358
====== ====== ======= ====== ======
PRO FORMA DATA (unaudited -- Note 7)
Historical net income before income
taxes ................................ $ 825 $1,403 $ 1,508 $1,169 $1,358
Less: pro forma provision for income
taxes ................................ 341 561 603 468 543
------ ------ ------- ------ ------
PRO FORMA NET INCOME .................... $ 511 $ 842 $ 905 $ 701 $ 815
====== ====== ======= ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-100

<PAGE>

HOWEY ACQUISITION, INC. DBA PRISCILLA MURPHY REALTY, INC

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
CLASS A CLASS B
COMMON STOCK COMMON STOCK ADDITIONAL
------------------- ------------------- PAID-IN RETAINED
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS TOTAL
------ ------ ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Predecessor:
BALANCE, December 31, 1994 .................. 992 $ 1 -- $ -- $ -- $ 1,412 $ 1,413
Net income ................................. -- -- -- -- -- 852 852
Distributions .............................. -- -- -- -- -- (740) (740)
--- --- -- ---- ---- -------- --------

BALANCE, December 31, 1995 .................. 992 1 -- -- -- 1,524 1,525
Net income ................................. -- -- -- -- -- 1,403 1,403
Distributions .............................. (257) -- -- -- -- (1,146) (1,146)
---- --- -- ---- ---- -------- --------

BALANCE, December 31, 1996 .................. 735 $ 1 -- $ -- $ -- $ 1,781 $ 1,782
==== === == ==== ==== ======== ========
Company :
Capitalization Company (Note 1) ............ 40,000 $20 160,000 $ 80 $150 $ -- $ 250
Net income ................................. -- -- -- -- -- 1,508 1,508
------ --- ------- ---- ---- -------- --------

BALANCE, December 31, 1997 .................. 40,000 20 160,000 80 150 1,508 1,758
Net income (unaudited) ..................... -- -- -- -- -- 1,286 1,286
------ --- ------- ---- ---- -------- --------

BALANCE, March 31, 1998 (unaudited) ......... 40,000 $20 160,000 $ 80 $150 $ 2,794 $ 3,044
====== === ======= ==== ==== ======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-101

<PAGE>

HOWEY ACQUISITION, INC. DBA PRISCILLA MURPHY REALTY, INC

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSOR
-----------
YEAR ENDED
DECEMBER 31,
------------
1995 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................ $ 852 $ 1,403
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization ....................... 239 95
Gain on sale of assets .............................. 4 --
Changes in operating assets and liabilities ........... --
Cash held in trust ................................... (491) (946)
Advances to property owners .......................... 2
Prepaid expenses and other current assets ............ (56) (15)
Customer deposits and deferred revenue ............... 491 946
Accounts payable and accrued liabilities ............. (33) 46
------- -------
Net cash provided by (used in) operating ac-
tivities ......................................... 1,006 1,531
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net assets acquired (excluding cash) .................. -- --
Purchase of property and equipment .................... (108) (4)
Proceeds from sale of office equipment and vehicles 4 --
Excess of purchase price over net assets acquired ..... -- --
------- -------
Net cash used in investing activities ............. (104) (4)
------- -------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt .......................... -- --
Payments on long-term debt ............................ (231) (135)
Distributions to stockholders ......................... (740) (878)
Net proceeds from stock issuance ...................... -- --
------- -------
Net cash provided by (used in) financing ac-
tivities ......................................... (971) (1,013)
------- -------

NET INCREASE (DECREASE) IN CASH AND
CASH
EQUIVALENTS ........................................... (69) 514

CASH AND CASH EQUIVALENTS, beginning of
period ................................................ 1,227 1,158
------- -------
CASH AND CASH EQUIVALENTS, end of period................ $ 1,158 $ 1,672
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW

INFORMATION:

Cash paid for interest ............................... $ 80 $ 70
======= =======

<CAPTION>
COMPANY
-----------------------------------------------------
PERIOD PERIOD
JANUARY 3, 1997 JANUARY 3, 1997 THREE
THROUGH THROUGH MONTHS ENDED
DECEMBER 31, 1997 MARCH 31, 1997 MARCH 31, 1998
------------------- ----------------- ---------------
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................ $ 1,508 $ 1,169 $ 1,286
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization ....................... 203 51 51
Gain on sale of assets .............................. -- --
Changes in operating assets and liabilities ...........
Cash held in trust ................................... (300) (1,445) (2,091)
Advances to property owners .......................... (39) (54) --
Prepaid expenses and other current assets ............ (60) (5,575) 37
Customer deposits and deferred revenue ............... 300 1,445 --
Accounts payable and accrued liabilities ............. 305 269 2,108
-------- --------- ---------
Net cash provided by (used in) operating ac-
tivities ......................................... 1,917 (4,140) 1,391
-------- --------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Net assets acquired (excluding cash) .................. (225) -- --
Purchase of property and equipment .................... -- (15) (54)
Proceeds from sale of office equipment and vehicles -- -- --
Excess of purchase price over net assets acquired ..... (5,575) -- --
-------- --------- ---------
Net cash used in investing activities ............. (5,800) (15) (54)
-------- --------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt .......................... 5,750 5,324 134
Payments on long-term debt ............................ (1,213) -- --
Distributions to stockholders ......................... -- (1,844) --
Net proceeds from stock issuance ...................... 250 249 --
-------- --------- ---------
Net cash provided by (used in) financing ac-
tivities ......................................... 4,787 3,729 134
-------- --------- ---------

NET INCREASE (DECREASE) IN CASH AND
CASH
EQUIVALENTS ........................................... 904 (426) 1,471

CASH AND CASH EQUIVALENTS, beginning of
period ................................................ -- 1,672 904
-------- --------- ---------
CASH AND CASH EQUIVALENTS, end of period................ $ 904 $ 1,246 $ 2,375
======== ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest ............................... $ 211 $ 53 $ 53
======== ========= =========

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-102

<PAGE>

HOWEY ACQUISITION, INC. DBA PRISCILLA MURPHY REALTY, INC

CONSOLIDATED STATEMENTS OF CASH FLOWS-(CONTINUED)
(IN THOUSANDS)

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

During 1996, the Company distributed certain fixed assets and liabilities
of the Company to a shareholder as follows:

<TABLE>
<S> <C>
Net book value of assets ............................ $ 774
Debt assumed ........................................ (506)
------
Distributed to Stockholder .......................... $ 268
======

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-103

<PAGE>

HOWEY ACQUISITION, INC. DBA PRISCILLA MURPHY REALTY, INC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

Howey Acquisition, Inc. ("HAI") dba, Priscilla Murphy Realty, Inc. and its
wholly-owned subsidiaries, Priscilla Murphy Realty, Inc. ("PMR") and Realty
Consultants, Inc., collectively the "Company", are Florida corporations. The
Company provides vacation property rentals and sales on the Florida Islands of
Sanibel and Captiva for approximately 900 rental units. The Company provides its
management services to property owners pursuant to management contracts which
are generally one year in length. The majority of such contracts contain
automatic renewal provisions but also allow property owners to terminate the
contract at any time. The Company's operations are seasonal, with a peak during
the first quarter of the year.

On January 3, 1998, HAI entered into an agreement to purchase the assets
and assume certain liabilities of PMR. HAI borrowed $5,800,000 from a bank and a
stockholder to finance the purchase transaction. The fair value of the net
assets purchased totaled $225,000, resulting in the recognition of goodwill of
$5,575,000. The goodwill is being amortized using a 40-year estimated life.
Additionally, the Company executed a non-compete agreement with the former
shareholder valued at $200,000. The non-compete agreement is for a period of ten
years and is payable in installments of approximately $3,000 per month for 5
years.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Statements

Basis of Combination and Financial Statement Presentation

The consolidated financial statements include the accounts of HAI its
wholly-owned subsidiary, PMR collectively, the "Company." All intercompany items
and transactions have been eliminated.

The financial statements of the PMR (the "Predecessor Company") are
presented for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission. The Predecessor Company had only one class
of common stock and is included in Class A common stock for presentation
purposes in the accompanying consolidated financial statements.

The consolidated statements of operations of the Companies for the period
from January 1, 1997 to January 3, 1997 (inception), has not been presented due
to the nominal level of operations.

Revenue Recognition

F-104

<PAGE>

HOWEY ACQUISITION, INC. DBA PRISCILLA MURPHY REALTY, INC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Service fees are recorded for a variety of services and are recognized as
the service is provided, including cleaning income, repair and maintenance and
service charges.

Commissions on real estate sales are recognized at closing and are recorded
net of the related commission expense. The Company recognized commission
revenues of $4,360,000, $5,221,000 and $5,440,000 for the years 1995 and 1996
and the period ending December 31, 1997, and commission expense of $3,034,000,
$3,591,000 and $3,967,000 for the years 1995 and 1996 and the period ending
December 31, 1997, respectively.

Operating Expenses

Operating expenses include travel agent commissions, salaries,
communications, advertising, credit card fees and other costs associated with
managing and selling properties.

Cash and Cash Equivalents

For the purposes of the balance sheets and statements of cash flows, the
Company considers all investments with original maturities of three months or
less to be cash equivalents.

Property and Equipment

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the estimated useful lives of the assets.

Income Taxes

The Company has elected S Corporation status as defined by the Internal
Revenue Code and state tax statutes, whereby the Company is not subject to
taxation for federal or state tax purposes. Under S Corporation status, the
stockholders' report their shares of the Company's taxable earnings or losses in
their personal tax returns.

Use of Estimates

Concentration of Risk

The Companies operations are exclusively in the Fort Myers/Sanibel and
Captiva Islands, Florida area and are subject to significant changes due to
weather conditions.

3. OTHER ASSETS

Other assets consist of a non-compete agreement between the Company and the
prior owner. The total consideration for the agreement was $200,000 and is being
amortized over the term of the agreement, 10 years. The Company signed a five
year note payable for this agreement.

F-105

<PAGE>

HOWEY ACQUISITION, INC. DBA PRISCILLA MURPHY REALTY, INC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

4. DEBT

Long-term debt at December 31, 1997 and 1996, consist of the following (in
thousands):

<TABLE>
<CAPTION>
1996 1997
---- ----
<S> <C> <C>
Note payable to a bank, bearing interest at 7.50%; monthly payments of $58 through
maturity in January 2002. Secured by assets of the Company and guaranteed by
stockholder. ........................................................................ $ -- $ 2,350
Note payable to an affiliate, bearing interest at 7.95%; subordinate to bank note pay-
able; no payment may be made until bank note is paid in full. ....................... -- 2,000
Note payable to a stockholder, bearing interest at 7.95%; subordinate to bank note
payable; no payment may be made until bank note is paid in full. .................... -- 155
Note payable, monthly payments of $3 through maturity in January 2002; interest im-
puted at 7.50% unsecured. ........................................................... -- 160
Note payable to a bank, bearing interest at 7.70%; quarterly payments of $25 through
maturity in December 1998; unsecured. ............................................... 200 --
------ -------
200 4,665
Less current maturities .............................................................. (100) (803)
------ -------
$ 100 $ 3,862
====== =======
</TABLE>

5. COMMITMENTS AND CONTINGENCIES:

Litigation

Insurance

The Company carries a broad range of insurance coverage, including general
and business auto liability, commercial property, workers' compensation, error
and omission, and a general umbrella policy. The Company has not incurred
significant claims or losses on any of its insurance policies during the periods
presented in the accompanying financial statements.

Benefit Plans

The Company's 401(k) retirement plan is available to substantially all of
the Company's employees. The Company's contribution to the plan is based upon a
percentage of employee contributions. The cost of this plan was approximately
$9,000 in 1995, $12,000 in 1996 and $9,000 in 1997.

6. RELATED PARTIES:

The Company has leased office space under three separate agreements since
August 1997 from trusts affiliated with an owner. In aggregate, rents paid to
these affiliated trusts were approximately $45,000. Subsequent to year end, the
Company entered a fourth lease for an additional $12,000 per year.

7. PRO FORMA ADJUSTMENTS TO FINANCIAL STATEMENT PRESENTATION
(UNAUDITED)

F-106

<PAGE>

HOWEY ACQUISITION, INC. DBA PRISCILLA MURPHY REALTY, INC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

7. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

The Company and its stockholders have entered into a definitive agreement
with RQI pursuant to which all of the outstanding stock of the Company will be
acquired by RQI. In connection with the Offering, stockholders have agreed to
reductions in salary and benefits which would have reduced general and
administrative expenses by $250,000, $320,000 and $31,000 for 1995, 1996 and
1997, respectively. In addition, certain stockholders will retain non-operating
assets and assume or retire certain liabilities that will be excluded from the
Combinations. This transaction is subject to, and will be executed in
conjunction with, RQI successfully completing the Offering.

F-107

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Resort Property Management, Inc.:

We have audited the accompanying balance sheet of Resort Property
Management, Inc. (a Utah corporation) as of September 30, 1997, and the related
statements of operations, changes in stockholders' deficit and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Resort Property Management,
Inc., as of September 30, 1997, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Houston, Texas
January 30, 1998

F-108

<PAGE>

RESORT PROPERTY MANAGEMENT, INC.

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

SEPTEMBER 30, MARCH 31,
1997 1998
---- ----
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ...................................... $ 186 $ 865
Due from property owners ....................................... 60 4
Receivable from stockholders ................................... 10 --
Prepaid expenses and other current assets ...................... 22 293
------ ------
Total current assets ......................................... 278 1,162
NOTE RECEIVABLE ................................................. 54 --
PROPERTY AND EQUIPMENT, net ..................................... 203 355
------ ------
Total assets ................................................. $ 535 $1,517
====== ======
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Current portion of long-term debt .............................. $ 171 $ 77
Customers deposits and deferred revenue ........................ 233 166
Payable to property owners ..................................... 36 603
Accounts payable and accrued liabilities ....................... 32 127
------ ------
Total current liabilities .................................... 472 973
DEFERRED TAXES .................................................. 3 3
LONG-TERM DEBT, net of current portion .......................... 310 116
------ ------
Total liabilities ............................................ 785 1,092
------ ------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, no par; 100,000 shares authorized; 51,000 shares
outstanding .................................................. 26 26
Retained earnings (deficit) .................................... (276) 399
------ ------
Total stockholders' equity (deficit) ......................... (250) 425
------ ------
Total liabilities and stockholders' equity (deficit) ......... $ 535 $1,517
====== ======

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-109

<PAGE>

RESORT PROPERTY MANAGEMENT, INC.

STATEMENTS OF OPERATIONS
(IN THOUSANDS)

SIX MONTHS
ENDED
YEAR ENDED MARCH 31,
SEPTEMBER 30, ---------------------
1997 1997 1998
---- ---- ----
(UNAUDITED)
<S> <C> <C> <C>
REVENUES:
Property rental fees ............................... $1,930 $1,792 $1,712
Service fees ....................................... 365 250 306
------ ------ ------
Total revenues ................................... 2,295 2,042 2,018
OPERATING EXPENSES .................................. 1,560 1,003 977
------ ------ ------
GENERAL AND ADMINISTRATIVE EXPENSES ................. 627 348 322
------ ------ ------
Income from operations ........................... 108 691 719
OTHER INCOME:
Interest income net ................................ 7 21 16
Gain on sale of land ............................... 210 -- --
------ ------ ------
Income before taxes .............................. 325 712 703
PROVISION FOR INCOME TAX ............................ 75 58 28
------ ------ ------
NET INCOME .......................................... $ 250 $ 654 $ 675
====== ====== ======
PRO FORMA DATA (unaudited -- Note):
Historical net income before income taxes .......... $ 325 $ 712 $ 703
Less: Pro forma provision for income taxes ......... 130 285 281
------ ------ ------
PRO FORMA NET INCOME ................................ $ 195 $ 427 $ 422
====== ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-110

<PAGE>

RESORT PROPERTY MANAGEMENT, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK RETAINED
------------------- EARNINGS
SHARES AMOUNT (DEFICIT) TOTAL
------ ------ --------- -----
<S> <C> <C> <C> <C>
BALANCE, September 30, 1996 ................. 51 $26 $ (526) $ (500)
Net income ................................. -- -- 250 250
-- --- ------ ------
BALANCE, September 30, 1997 ................. 51 26 (276) (250)
Net income (unaudited) ..................... -- -- 675 675
-- --- ------ ------
BALANCE, March 31, 1998 (unaudited) ......... 51 $26 $ 399 $ 425
== === ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-111

<PAGE>

RESORT PROPERTY MANAGEMENT, INC.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED MARCH 31,
SEPTEMBER 30, ---------------------
1997 1997 1998
---- ---- ----
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ....................................................... $ 250 $ 654 $ 675
Adjustments to reconcile net income to net cash provided by
operating activities--
Depreciation ................................................... 36 40 40
Gain on sale of land ........................................... (210) -- --
Changes in operating assets and liabilities--
Due from property owners ....................................... (24) (19) 56
Prepaid expenses and other current assets ...................... (3) (29) (271)
Customer deposits and deferred revenue ......................... (50) (78) (67)
Payable to property owners ..................................... 16 1 528
Deferred tax liability ......................................... 3 -- --
Accounts payable and accrued liabilities ....................... 28 279 134
------- ------ ------
Net cash provided by operating activities ..................... 46 848 1,095
------- ------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Note receivable .................................................. (54) -- --
Purchase of property and equipment ............................... (179) (137) (192)
Proceeds from sale of office equipment, vehicles and land ........ 335 -- --
------- ------ ------
Net cash provided by (used in) investing activities ........... 102 (137) (192)
------- ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt ..................................... 493 686 (94)
Payments on long-term debt ....................................... (451) (280) (140)
------- ------ ------
Proceeds/payment on receivables from stockholders ................ (10) -- 10
Net cash provided by (used in) financing activities ........... 32 406 (224)
------- ------ ------
NET INCREASE IN CASH AND CASH EQUIVALENTS ......................... 180 1,117 679
CASH AND CASH EQUIVALENTS, beginning of period .................... 6 6 186
------- ------ ------
CASH AND CASH EQUIVALENTS, end of period .......................... $ 186 $1,123 $ 865
======= ====== ======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW: .............................
Cash paid for interest ........................................... $ 25 $ 6 $ 3
======= ====== ======

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-112

<PAGE>

RESORT PROPERTY MANAGEMENT, INC.

NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

Resort Property Management, Inc. (the "Company"), a Utah corporation,
provides property rentals and management services for properties owned by third
parties and located within the Park City, Utah region. The Company manages
approximately 330 total rental units. The Company provides its management
services to property owners pursuant to management contracts, which are
generally one year in length. The majority of such contracts contain automatic
renewal provisions but also allow property owners to terminate the contract at
any time. The Company's operations are seasonal, with a peak during the second
quarter of the fiscal year.

The Company had working capital deficits at September 30, 1997 and December
31, 1997. The Company has funded its operations with cash flows from operations
and short-term borrowings from lenders. Management expects that operations will
generate sufficient cash flows from operations to meet the Company's working
capital needs in 1998.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Statements

The interim financial statements at March 31, 1998, and for the six months
ended March 31, 1998 and 1997, are unaudited, and certain information and
footnote disclosures, normally included in financial statements prepared in
accordance with generally accepted accounting principles, have been omitted. In
the opinion of management, all adjustments, consisting only of normal recurring
adjustments, necessary to fairly present the financial position, results of
operations and cash flows with respect to the interim financial statements, have
been included. The results of operations for the interim periods are not
necessarily indicative of the results for the entire fiscal year.

Revenue Recognition

The Company records property rental fees on the accrual basis of
accounting, ratably over the term of guest stays, as earned. During peak
periods, the Company requires a deposit equal to 100% of the rental fee 30 days
prior to the expected arrival date. These deposits are non-refundable and are
recorded as customer deposits and deferred revenue in the accompanying combined
financial statements until the guest stay commences. The Company records revenue
for cancellations as they occur.

Service fees are recorded for a variety of services and are recognized as
the service is provided, including housekeeping, phone service and rentals.

Operating Expenses

Operating expenses include travel agent commissions, salaries,
communications, advertising, credit card fees and other costs associated with
managing and renting the properties.

Cash and Cash Equivalents

For the purposes of the balance sheets and statements of cash flows, the
Company considers all investments with original maturities of three months or
less to be cash equivalents.

Property and Equipment

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the estimated useful lives of the assets.

F-113

<PAGE>

RESORT PROPERTY MANAGEMENT, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

Income Taxes

The company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No.
109"). Under SFAS No. 109, the current provision for income taxes represents
actual or estimated amounts payable or refundable on tax returns filed or to be
filed for each year. Deferred tax assets and liabilities are recorded for the
estimated future tax effects of: (a) temporary differences between the tax bases
of assets and liabilities and amounts reported in the consolidated balance
sheets, and (b) operating loss and tax credit carryforwards. The overall change
in deferred tax assets and liabilities for the period measures the deferred tax
expense for the period. Effects of changes in enacted tax laws on deferred tax
assets and liabilities are reflected as adjustments to tax expense in the period
of enactment. The measurement of deferred tax assets may be reduced by a
valuation allowance based on judgemental assessment of available evidence if
deemed more likely than not that some or all of the deferred tax assets will not
be realized.

Use of Estimates

Concentration of Risk

The Company's operations are exclusively in the Park City, Utah area and
are subject to significant changes in weather conditions.

F-114

<PAGE>

RESORT PROPERTY MANAGEMENT, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

3. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Property and equipment consisted of the following (in thousands):

<TABLE>
<CAPTION>
ESTIMATED USEFUL SEPTEMBER 30,
LIFE IN YEARS 1997
------------- ----
<S> <C> <C>
Leasehold improvements .................. 12 $ 21
Office equipment and other .............. 5 236
Vehicles ................................ 5 128
------
385
Less - Accumulated depreciation ......... (182)
------
Property and equipment, net ............. $ 203
======

</TABLE>

At September 30, 1997, maturities of long-term debt were as follows (in
thousands):

<TABLE>
<S> <C>
Year ending September 30,
1998 .......................................................... $171
1999 .......................................................... 17
2000 .......................................................... 19
2001 .......................................................... 21
2002 .......................................................... 3
----
$231
====

</TABLE>

In addition to the debt disclosed above, the Company has a revolving line
of credit with a bank. The line of credit has an interest rate of 10.25%, a
maximum limit of $250,000 and is secured by personal property of the Company's
owners. As of September 30, 1997, the line of credit was fully drawn, and is
included in long-term debt in the accompanying financial statements.

4. INCOME TAXES:

The provision for income taxes consists of the following for the year ended
September 30, 1997 (in thousands):

<TABLE>

<S> <C>
Current ........................................................ $ 6
Deferred ....................................................... 69
---
$75
===
</TABLE>

The provision for income taxes differs from the amount computed by applying
the U.S. Federal income tax statutory rate of 34% for the following reasons:

<TABLE>
<S> <C>
U.S. corporate income tax provision at statutory rate ......... $ 111
Utilization of NOL carryforwards .............................. (36)
-----
$ 75
=====

</TABLE>

5. COMMITMENTS AND CONTINGENCIES:

Litigation

F-115

<PAGE>

RESORT PROPERTY MANAGEMENT, INC.

NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

Insurance

6. RELATED PARTIES:

During 1997, the Company paid rental payments to the owners in exchange for
use of the housekeeping facility in the amount of approximately $18,000.

The Company plans to enter a lease agreement with the owners in June 1998
for an initial term of 10 years and two options to extend the lease for 5
additional years. The lease agreement to be finalized prior to the Offering will
have estimated annual payments of $100,000, and annual increases of Consumer
Price Index.

Leases

The Company has entered into various leases for housekeeping and laundry
facilities, and for their corporate office. The following is a schedule of
future minimum rental payments which are required under operating leases that
have lease terms in excess of one year at September 30, 1997:

1998 .............................................. $ 61,793
1999 .............................................. 21,408
2000 .............................................. 14,517
2001 .............................................. 15,246
--------
$112,964
========

</TABLE>

7. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

The Company and its stockholders have entered into a definitive agreement
with RQI pursuant to which all of the outstanding stock of the Company will be
acquired by RQI.

In connection with the Offering, the owner and certain key employees have
agreed to reductions in salary and benefits which would have reduced general and
administrative expenses by approximately $186,000 for the year ended September
30, 1997. In addition, certain stockholders will retain non-operating assets and
assume or retire certain liabilities that will be excluded from the
Combinations. This transaction is subject to, and will be executed in
conjunction with, RQI successfully completing the Offering.

F-116

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Telluride Resort Accommodations, Inc.:

We have audited the accompanying balance sheet of Telluride Resort
Accommodations, Inc. (a Colorado corporation) as of December 31, 1997, and the
related statements of operations, changes in stockholders' deficit and cash
flows for the year then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Telluride Resort
Accommodations, Inc., as of December 31, 1997, and the results of its operations
and its cash flows for the year then ended, in conformity with generally
accepted accounting principles.

ARTHUR ANDERSEN LLP

Houston, Texas
January 30, 1998

F-117

<PAGE>

TELLURIDE RESORT ACCOMMODATIONS, INC.

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
---- ----
(UNAUDITED)

<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ........................................... $2,103 $1,672
Accounts receivable ................................................. 392 154
Due from property owners ............................................ 152 260
Prepaid expenses and other current assets ........................... 12 78
------ ------
Total current assets .............................................. 2,659 2,164

PROPERTY AND EQUIPMENT, net .......................................... 62 63
------ ------
Total assets ...................................................... $2,721 $2,227
====== ======
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Line of credit ...................................................... $ 194 $ --
Customer deposits and deferred revenue .............................. 2,096 468
Payable to property owners .......................................... 640 --
Accounts payable and accrued liabilities ............................ 209 1,250
------ ------
Total current liabilities ......................................... 3,139 1,718

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT:
Common Stock, no par; 1,000,000 shares authorized; 15,000 shares out-
standing .......................................................... 216 216
Retained equity (deficit) ........................................... (634) 293
------ ------
Total stockholders' equity (deficit) .............................. (418) 509
------ ------
Total liabilities and stockholders' equity (deficit) .............. $2,721 $2,227
====== ======

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-118

<PAGE>

TELLURIDE RESORT ACCOMMODATIONS, INC.

STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, ---------------------
1997 1997 1998
---- ---- ----
(UNAUDITED)
<S> <C> <C> <C>
REVENUES:
Property rental fees ..................................... $3,204 $1,783 $1,899
Service fees ............................................. 1,109 352 443
------ ------ ------
Total revenues ......................................... 4,313 2,135 2,342

OPERATING EXPENSES ........................................ 3,037 967 1,066
------ ------ ------
GENERAL AND ADMINISTRATIVE EXPENSES ....................... 1,030 257 361
------ ------ ------
Income from operations ................................. 246 911 915

OTHER INCOME:
Interest income, net ..................................... 31 19 12
------ ------ ------

NET INCOME ................................................ $ 277 $ 930 $ 927
====== ====== ======
PRO FORMA DATA (unaudited -- Note 7):
Historical net income (loss) before income taxes ......... $ 277 $ 930 $ 927
Less: pro forma provision for income taxes ............... 111 372 371
------ ------ ------
PRO FORMA NET INCOME (LOSS) ............................... $ 166 $ 558 $ 556
====== ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-119

<PAGE>

TELLURIDE RESORT ACCOMMODATIONS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS, EXCEPT SHARE DATA)

COMMON STOCK RETAINED
------------------- EARNINGS
SHARES AMOUNT (DEFICIT) TOTAL
------ ------ --------- -----
<S> <C> <C> <C> <C>
BALANCE, December 31, 1996 .................. 15,000 $216 $ (611) $ (395)
Net income ................................. -- -- 277 277
Distributions .............................. -- -- (300) (300)
------ ---- ------ ------

BALANCE, December 31, 1997 .................. 15,000 216 (634) (418)
Net income (unaudited) ..................... -- -- 927 927
------ ---- ------ ------
BALANCE, March 31, 1998 (unaudited) ......... 15,000 $216 $ 293 $ 509
====== ==== ====== ======
</TABLE>

The accompanying notes are an integral part of this financial statement.

F-120

<PAGE>

TELLURIDE RESORT ACCOMMODATIONS, INC.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, -----------------------
1997 1997 1998
---- ---- ----
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .......................................................... $ 277 $ 930 $ 927
Adjustments to reconcile net income to net cash provided by operating
activities
Depreciation ........................................................ 48 12 12
Changes in operating assets and liabilities
Accounts receivable ............................................... 35 242 238
Prepaid expenses and other current assets ......................... 15 20 (66)
Payable to property owners, net ................................... 19 (604) (748)
Customer deposits and deferred revenue ............................ 28 (1,757) (1,628)
Accounts payable and accrued liabilities .......................... 299 1,531 1,041
------ -------- --------
Net cash provided by (used in) operating activities .............. 721 374 (224)
------ -------- --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment .................................. (25) (108) (13)
------ -------- --------
Net cash used in investing activities ............................ (25) (108) (13)
------ -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (payments on) line of credit .......................... 93 -- (194)
Distributions to stockholders ....................................... (300) -- --
------ -------- --------
Net cash used in financing activities ............................ (207) -- (194)
------ -------- --------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVA-
LENTS ............................................................... 489 266 (431)
CASH AND CASH EQUIVALENTS, beginning of period ....................... 1,614 1,614 2,103
------ -------- --------
CASH AND CASH EQUIVALENTS, end of period ............................. $2,103 $ 1,880 $ 1,672
====== ======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-121

<PAGE>

TELLURIDE RESORT ACCOMMODATIONS, INC.
NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

Telluride Resort Accommodations, Inc. (the "Company"), a Colorado
corporation, provides property rentals and management services in Telluride,
Colorado and manages approximately 450 total rental units. The Company provides
its management services to property owners pursuant to management contracts,
which are generally one year in length. The majority of such contracts contain
automatic renewal provisions but also allow property owners to terminate the
contract at any time. The Company's operations are seasonal, with a peak during
the first quarter of the year.

The Company had a working capital deficit at December 31, 1997. The Company
has funded its operations with cash flows from operations and short-term
borrowings from lenders. Management expects that operations will generate
sufficient cash flows from operations to meet the Company's working capital
needs during 1998.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Statements

Revenue Recognition

The Company records property rental fees on the accrual basis of
accounting, ratably over the term of guest stays, as earned. During peak
periods, the Company requires a deposit equal to 100% of the rental fee 45 days
prior to the expected arrival date. These deposits are non-refundable and are
recorded as customer deposits and deferred revenue in the accompanying financial
statements until the guest stay commences. The Company records revenue for
cancellations as they occur.

Service fees are recorded for a variety of services and are recognized as
the service is provided, including spring and fall cleaning, unit maintenance
and housekeeping.

Operating Expenses

Operating expenses include travel agent commissions, salaries, maintenance,
housekeeping, communications, advertising, credit card fees and other costs
associated with management of the properties.

Cash and Cash Equivalents

For the purposes of the balance sheets and statements of cash flows, the
Company considers all investments with original maturities of three months or
less to be cash equivalents.

Property and Equipment

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the estimated useful life of the assets.

F-122

<PAGE>

TELLURIDE RESORT ACCOMMODATIONS, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

Income Taxes

The Company has elected S Corporation status as defined by the Internal
Revenue Code and state tax statutes, whereby the Company is not subject to
taxation for federal or state tax purposes. Under S Corporation status, the
stockholders report their share of the Company's taxable earnings or losses in
their personal tax returns.

Use of Estimates

Concentration of Risk

The Company's operations are exclusively in the Telluride, Colorado area
and are subject to significant changes due to weather conditions.

3. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Property and equipment consisted of the following (in thousands):

<TABLE>
<CAPTION>
ESTIMATED USEFUL DECEMBER 31,
LIVES IN YEARS 1997
-------------- ----
<S> <C> <C>
Furniture, fixtures and equipment ......... 5 $ 580
Leasehold improvement ..................... 5 79
Vehicles and other ........................ 5 65
------
724
Less - Accumulated depreciation ........... (662)
------
Property and equipment, net ............... $ 62
======

</TABLE>

Accounts payable and accrued liabilities at December 31, 1997, consisted of
the following (in thousands):

DECEMBER 31,
1997
----
<S> <C>
Sales tax payable .............................................. $127
Accounts payable and other accrued liabilities ................. 82
----
Total accounts payable and accrued liabilities ................. $209
====

</TABLE>

F-123

<PAGE>

TELLURIDE RESORT ACCOMMODATIONS, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

4. LINES OF CREDIT:

The Company has lines of credit with a bank. The first line of credit
matures June 1998 and provides a revolving line of credit up to $200,000 to
finance working capital needs. At December 31, 1997, the Company had $194,000
outstanding on this line of credit. Interest is payable monthly at 1.75% over
the Wall Street Journal Base Rate (8.5% at December 31, 1997). The second line
of credit in the amount of $90,000, matures August 31, 1998 and can be drawn
upon only in the event that certain guaranteed load factors aboard aircraft into
the Telluride area are not met. Interest is payable monthly at 2.00% over the
Wall Street Journal Base Rate (8.5% at December 31, 1997). There was no
outstanding balance on this line of credit at December 31, 1997.

5. COMMITMENTS AND CONTINGENCIES:

Litigation

Insurance

Benefit Plans

The Company's 401(k) retirement plan is available to substantially all of
the Company's employees. The Plan allows the Company to make discretionary
contributions to the Plan. The Company has made no such contribution to the Plan
in 1997.

6. RELATED PARTIES:

During 1997, the Company paid certain stockholders $32,000 in consulting
fees. In addition, the Company rented office space from stockholders totaling
$36,000.

7. PRO FORMA ADJUSTMENTS TO FINANCIAL STATEMENT PRESENTATION
(UNAUDITED)

8. EVENT SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

The Company and its stockholders have entered into a definitive agreement
with RQI pursuant to which all of the outstanding stock of the Company will be
acquired by RQI. In addition, certain stockholders will retain non-operating
assets and assume or retire certain liabilities that will be excluded from the
Combinations. This transaction is subject to, and will be executed in
conjunction with, RQI successfully completing the Offering.

F-124

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Trupp-Hodnett Enterprises, Inc. and
THE Management Company:

We have audited the accompanying combined balance sheets of Trupp Hodnett
Company, consisting of Trupp-Hodnett Enterprises, Inc. and THE Management
Company (both Georgia corporations) (collectively "Trupp Hodnett Company" or the
"Company") as of December 31, 1996 and 1997, and the related combined statements
of operations, changes in stockholders' equity and cash flows for the years
ended December 31, 1996 and 1997. These combined financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these combined financial statements based on our audits.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Trupp
Hodnett Company, as of December 31, 1996 and 1997, and the results of their
combined operations and their cash flows for the years then ended December 31,
1996 and 1997 in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Houston, Texas
January 16, 1998

F-125

<PAGE>

TRUPP HODNETT COMPANY

COMBINED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------- MARCH 31,
1996 1997 1998
---- ---- ----
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............................ $ 144 $ 293 $ 177
Cash held in trust ................................... 321 347 922
Accounts receivable .................................. 69 100 350
Receivables from stockholders and employees .......... 111 32 --
Prepaid expenses and other current assets ............ 17 31 36
------ ------ -------
Total current assets ............................... 662 803 1,485
PROPERTY AND EQUIPMENT, net ........................... 245 259 286
OTHER ASSETS .......................................... 305 -- --
------ ------ -------
Total assets ....................................... $1,212 $1,062 $ 1,771
====== ====== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt ...................................... $ 345 $ -- $ --
Customer deposits and deferred revenue ............... 290 331 890
Payable to property owners ........................... 31 16 --
Accounts payable and accrued liabilities ............. 130 191 293
------ ------ -------
Total current liabilities .......................... 796 538 1,183
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Common stock, no par; 2,000 shares
authorized; 200 shares outstanding ................. 17 17 17
Retained earnings .................................... 399 507 571
------ ------ -------
Total stockholders' equity ......................... 416 524 588
------ ------ -------
Total liabilities and stockholders' equity ......... $1,212 $1,062 $ 1,771
====== ====== =======

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-126

<PAGE>

TRUPP HODNETT COMPANY

COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
------------------------ ----------------------
1996 1997 1997 1998
---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES:
Property rental fees ..................................... $2,508 $2,809 $ 525 $ 610
Real estate commissions, net ............................. 673 892 132 594
Service fees ............................................. 250 360 110 50
------ ----- ---- ------
Total revenues ......................................... 3,431 4,061 767 1,254
OPERATING EXPENSES ........................................ 1,652 1,838 388 519
------ ----- ---- ------
GENERAL AND ADMINISTRATIVE EXPENSES ....................... 1,653 2,024 354 650
------ ----- ---- ------
Income from operations ................................. 126 199 25 85
OTHER INCOME (EXPENSE):
Interest expense, net .................................... (19) (5) (8) --
Gain on sale of assets ................................... -- 52 44 --
------ ----- ---- ------
Income before income taxes ............................. 107 246 61 85
PROVISION FOR INCOME TAXES ................................ 12 60 17 21
------ ----- ---- ------
NET INCOME ................................................ $ 95 $ 186 $ 44 $ 64
====== ===== ==== ======
PRO FORMA DATA (unaudited -- Note 9)
Historical net income (loss) before income taxes ......... $ 107 $ 246 $ 61 $ 85
Less: pro forma provision for income taxes ............... 43 98 24 34
------ ----- ---- ------
PRO FORMA NET INCOME ...................................... $ 64 $ 148 $ 37 $ 51
====== ===== ==== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-127

<PAGE>

TRUPP HODNETT COMPANY

COMBINED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

COMMON STOCK
------------------- RETAINED
SHARES AMOUNT EARNINGS TOTAL
------ ------ -------- -----
<S> <C> <C> <C> <C>
BALANCE, December 31, 1995 .................. 200 $17 $ 304 $ 321
Net income ................................. -- -- 95 95
--- --- ----- -----
BALANCE, December 31, 1996 .................. 200 17 399 416
Net income ................................. -- -- 186 186
Distributions .............................. -- -- (78) (78)
--- --- ----- -----
BALANCE, December 31, 1997 .................. 200 17 507 524
Net income (unaudited) ..................... -- -- 64 64
--- --- ----- -----
BALANCE, March 31, 1998 (unaudited) ......... 200 $17 $ 571 $ 588
=== === ===== =====
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-128

<PAGE>

TRUPP HODNETT COMPANY

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
---------------------- -----------------------
1996 1997 1997 1998
---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ..................................................... $ 95 $ 186 $ 141 $ 64
Adjustments to reconcile net income to net cash provided by
operating activities--
Depreciation ................................................ 83 85 22 22
Gain on sale of assets ...................................... -- (52) -- --
Changes in operating assets and liabilities--
Cash held in trust ........................................... (321) (26) (532) (575)
Accounts receivable .......................................... (17) (31) (278) (250)
Receivables from stockholder and employees ................... (8) 79
Prepaid expenses and other current assets .................... (7) (14) 4 (5)
Customer deposits and deferred revenue ....................... 290 41 492 559
Payable to property owners ................................... 31 (15) (31) (16)
Accounts payable and accrued liabilities ..................... 50 61 221 102
------- ----- ------ -------
Net cash provided by (used in) operating activities ......... 196 314 39 (99)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ............................. (58) (99) (65) (49)
Purchase of other assets ....................................... (40) (80) -- --
Proceeds from sale of other assets ............................. -- 105 305 --
------- ----- ------ -----
Net cash provided by (used in) investing activities ......... (98) (74) 240 (49)
------- ----- ------ -----
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term debt .................................. -- 84 -- 32
Payments on short-term debt .................................... (73) (97) (345) --
Distributions to stockholders .................................. -- (78) (78) --
------- ----- ------ -----
Net cash (used in) provided by financing activities ......... (73) (91) (423) 32
------- ----- ------ -----
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS .................................................... 25 149 (144) (116)

CASH AND CASH EQUIVALENTS, beginning of period .................. 119 144 144 293
------- ----- ------ -----
CASH AND CASH EQUIVALENTS, end of period ........................ $ 144 $ 293 $ -- $ 177
======= ===== ====== =====
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFOR-
MATION:
Cash paid for interest ......................................... $ 35 $ 18 $ 10 $ 4
======= ===== ====== =====
Cash paid for income taxes ..................................... $ 8 $ 1 $ 2 $ --
======= ===== ====== =====

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-129

<PAGE>

TRUPP HODNETT COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)
(IN THOUSANDS)

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

In 1997, the Company sold certain fixed assets of the Company to a third
party as follows:

<TABLE>
<S> <C>
Net book value of assets ................................... $ 385
Debt assumed ............................................... (332)
------
Net assets sold ............................................ $ 53
======
</TABLE>

F-130

<PAGE>

TRUPP HODNETT COMPANY

NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

The Management Company ("TMC"), an S Corporation, and Trupp-Hodnett
Enterprises, Inc. ("THE"), a C Corporation, (collectively "Trupp Hodnett" or the
"Company"), both Georgia corporations, are leading providers of vacation
property rentals, management services and sales in the St. Simons Island,
Georgia. Trupp Hodnett manages approximately 400 total rental units. The Company
provides its management services to property owners pursuant to management
contracts, which generally are one year in length. The majority of such
contracts contain automatic renewal provisions but also allow property owners to
terminate the contract at any time. The Company's operations are seasonal, with
peaks during the second and third quarters of the year.

The Company and its stockholders intend to enter into a definitive
agreement with ResortQuest International, Inc. ("RQI"), pursuant to which all of
the outstanding stock of the company will be exchanged for cash and shares of
RQI common stock concurrent with the consummation of the initial public offering
(the "Offering") of the common stock of RQI.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Statements

Revenue Recognition

The Company records property rental fees on the accrual basis of
accounting, ratably over the term of guest stays, as earned. For weekly and
monthly stays in homes and cottages the Company requires a deposit equal to 50%
of the rental fee 60 days prior to the expected arrival date. These deposits are
refundable with 60 days notice of cancellation. Daily and weekly stays in "condo
hotels" use a credit card to guarantee arrival.

All deposits are recorded as customer deposits and deferred revenue in the
accompanying combined financial statements until the guest stay commences.
Advance deposits are recorded as payable to property owners, ratably over the
term of guest stays, as earned. The Company records revenue for cancellations as
they occur.

Service fees are recorded for a variety of services and are recognized as
the service is provided, including management fees.

Commissions on real estate sales are recognized at closing and are recorded
net of the related commission expense. The Company recognized commission
revenues of $1,308,000 and $1,621,000 for the years 1996 and 1997, respectively
and commission expense of $635,000 and $729,000 for the years 1996 and 1997,
respectively.

Operating Expenses

Operating expenses include travel agent commissions, salaries,
communications, advertising, credit card fees and other costs associated with
managing and selling properties.

F-131

<PAGE>

TRUPP HODNETT COMPANY

NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

Cash and Cash Equivalents

For the purposes of the balance sheets and statements of cash flows, the
Company considers all investments with original maturities of three months or
less to be cash equivalents.

Property and Equipment

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the estimated useful lives of the assets.

Other Assets

As of December 31, 1996, other assets is comprised of properties held for
resale.

Income Taxes

TMC has elected S Corporation status as defined by the Internal Revenue
Code and state tax statutes, whereby, TMC is not subject to taxation for federal
or state tax purposes. Under S Corporation status, the stockholders report their
share of the Company's taxable earnings or losses in their personal tax returns.

THE is a regular C Corporation and as such is subject to taxation for
federal and state purposes. THE accounts for income taxes under the provisions
of Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS No. 109"). Under SFAS No. 109, the current provision for income
taxes represents actual or estimated amounts payable or refundable on tax
returns filed or to be filed for each year. Deferred tax assets and liabilities
are recorded for the estimated future tax effects of: (a) temporary differences
between the tax bases of assets and liabilities and amounts reported in the
consolidated balance sheets, and (b) operating loss and tax credit
carryforwards. The overall change in deferred tax assets and liabilities for the
period measures the deferred tax expense for the period. Effects of changes in
enacted tax laws on deferred tax assets and liabilities are reflected as
adjustments to tax expense in the period of enactment. The measurement of
deferred tax assets may be reduced by a valuation allowance based on judgemental
assessment of available evidence if deemed more likely than not that some or all
of the deferred tax assets will not be realized.

Use of Estimates

Concentration of Risk

The Company's operations are exclusively in the St. Simons Island area and
are subject to significant changes due to weather conditions.

F-132

<PAGE>

TRUPP HODNETT COMPANY

NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

3. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Property and equipment consisted of the following (in thousands):

<TABLE>
<CAPTION>
ESTIMATED DECEMBER 31,
USEFUL LIVES ---------------------
IN YEARS 1996 1997
-------- ---- ----
<S> <C> <C> <C>
Leasehold improvements .................. 31 $ 31 $ 40
Office equipment and vehicles ........... 3-7 551 635
------ ------
582 675
Less - Accumulated depreciation ......... (337) (416)
------ ------
Property and equipment, net ............ $ 245 $ 259
====== ======

</TABLE>

Accounts payable and accrued liabilities consisted of the following (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1996 1997
---- ----
<S> <C> <C>
Accrued compensation and benefits .................. $ 31 $ 36
Accounts payable and other accrued liabilities ..... 99 155
---- ----
Total accounts payable and accrued liabilities..... $130 $191
==== ====

</TABLE>

4. SHORT-TERM DEBT:

As of December 31, 1996, the Company's short-term debt was comprised of
$263,000 of notes payable and $82,000 of outstanding lines of credit. The
Company repaid all of its notes payable and lines of credit in 1997.

As of December 31, 1997, the Company had two outstanding unused, unsecured
lines of credit with banks. The Company's $100,000 line of credit bears interest
at the Chase Manhattan Bank prime rate plus 1.0% and matures December 1, 1998.
The Company's $30,000 line of credit bears interest at the Wall Street Journal's
bank prime rate plus 2.0% and matures June 1, 1998.

5. SALE OF OTHER ASSETS:

During 1997, the Company sold other assets (comprised of land and a
building) with a book value totaling $250,000 and the related note payable of
$208,000 to a third-party for $94,000. The Company recorded a gain of $52,000,
which is included in other income. Additionally, a sale to a related party was
consummated (see Note 7).

6. INCOME TAXES:

The provision for income taxes consists of the following (in thousands):

DECEMBER 31,
--------------
1996 1997
---- ----
<S> <C> <C>
Current ............................................ $12 $60
=== ===
</TABLE>
F-133

<PAGE>

TRUPP HODNETT COMPANY

NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

The provision for income taxes differs from the amount computed by applying
the U.S. Federal income tax statutory rate of 34% for the following reasons:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1996 1997
---- ----
<S> <C> <C>
U.S. corporate income tax provision at statutory
rate .......................................... $ 36 $ 84
State income taxes ............................. 4 9
S Corporation income ........................... (28) (33)
----- -----
$ 12 $ 60
===== =====
</TABLE>

7. COMMITMENTS AND CONTINGENCIES:

Litigation

Insurance

The Company carries a broad range of insurance coverage, including general
and business auto liability, commercial property, workers' compensation and a
general umbrella policy. The Company is self-insured for employee medical with a
stop-loss policy beginning at $7,500. The Company has not incurred significant
claims or losses on any of its insurance policies during the periods presented
in the accompanying combined financial statements.

Benefit Plans

The Company began a 401(k) retirement plan in April of 1997 which is
available to substantially all of the Company's employees. The Company is
obligated to match the employee's contribution up to 5%. The cost of this plan
to the Company was approximately $9,000 in 1997.

8. RELATED PARTIES:

The Company's revenues include approximately $132,000 and $187,000 in 1996
and 1997, respectively for fees earned from properties in which the Company's
stockholders have an ownership interest. In 1997, the Company sold a building,
the related land (total book value of $135,000) and the related $124,000
mortgage note payable to the Company's stockholders for $11,000 in cash.

In 1995, the Company advanced the stockholders $75,000 as a note receivable
at an annual interest rate of 6%. As of December 31, 1996, the $75,000 note
balance and the related accrued interest of $9,000 was included in receivables
from stockholders and employees. The Company recorded interest income on this
note of $4,500 and $4,000 in 1996 and 1997, respectively. The stockholders
repaid the note in 1997.

F-134

<PAGE>

TRUPP HODNETT COMPANY

NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

The Company has agreements to lease office space from the stockholders and
the minimum lease payments are as follows (in thousands):

<TABLE>

<S> <C>
1998 ........................................... $ 112
1999 ........................................... 117
2000 ........................................... 122
2001 ........................................... 126
2002 ........................................... 131
Thereafter ..................................... 967
------
$1,575
======

</TABLE>

During 1996 and 1997, the Company recorded rental expense of $93,000 and
$110,000, respectively, relating to the above leases.

9. PRO FORMA ADJUSTMENTS TO FINANCIAL STATEMENT PRESENTATION
(UNAUDITED)

In conjunction with the planned merger with RQI, the TMC will change from
an S Corporation to a C Corporation for federal and state income tax reporting
purposes, which will require the Company to recognize the tax consequences of
operations in its statements of operations. The supplemental pro forma
information included in the accompanying statements of operations reflect the
estimated impact of recognizing income tax expense as if the Company had been a
C Corporation for tax reporting purposes during the three months ended March 31,
1998 and 1997, and for the year ended December 31, 1997.

10. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

In connection with the Offering, the owner and certain key employees have
agreed to reductions in salary and benefits which would have reduced general and
administrative expenses by approximately $865,000 and $1.1 million for 1996 and
1997, respectively. In addition, certain stockholders will retain non-operating
assets and assume or retire certain liabilities that will be excluded from the
Combinations. This transaction is subject to, and will be executed in
conjunction with, RQI successfully completing the Offering.

F-135

===================================================== ====================================================
<S> <C>
NO DEALER, SALES REPRESENTATIVE OR ANY OTHER 5,800,000 SHARES
PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE
OFFERING OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY,
ANY SECURITIES OTHER THAN THE SHARES OF COMMON STOCK RESORTQUEST
TO WHICH IT RELATES OR AN OFFER TO, OR A SOLICITATION INTERNATIONAL, INC.
OF, ANY PERSON IN ANY JURISDICTION WHERE SUCH AN
OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY OR THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AT ANY TIME SUBSEQUENT TO
THE DATE HEREOF. COMMON STOCK

------------

TABLE OF CONTENTS

PAGE
----
<S> <C>
Prospectus Summary ....................... 3 [RESORTQUEST INTERNATIONAL, INC. LOGO]
Risk Factors ............................. 11
The Company .............................. 18
Use of Proceeds .......................... 22
Dividend Policy .......................... 22 -----------------
Capitalization ........................... 23
Dilution ................................. 24 P R O S P E C T U S
Selected Financial Data .................. 25
Management's Discussion and Analysis
of Financial Condition and Results of
Operations ............................ 27 , 1998
Business ................................. 46
Management ............................... 56
Certain Transactions ..................... 63
Principal Stockholders ................... 70 -----------------
Description of Capital Stock ............. 71
Shares Eligible for Future Sale .......... 74
Underwriting ............................. 76
Legal Matters ............................ 78
Experts .................................. 78
Additional Information ................... 78
Index to Financial Statements ............ F-1
SALOMON SMITH BARNEY
UNTIL , 1998 (25 DAYS FROM THE DATE OF THIS
PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN NATIONSBANC MONTGOMERY
THE REGISTERED SECURITIES OFFERED HEREBY, WHETHER OR SECURITIES LLC
NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION FURMAN SELZ
TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS
WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
===================================================== ====================================================
</TABLE>

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. (1)

The following table sets forth the expenses (other than underwriting
compensation expected to be incurred) in connection with the Offering. All of
such amounts (except the SEC Registration Fee and the NASD Filing Fee) are
estimated.

<TABLE>

<S> <C>
SEC Registration Fee ................................... $ 25,616
New York Stock Exchange Listing Fee .................... 88,100
NASD Filing Fee ........................................ 9,000
Accounting Fees and Expenses ........................... 2,000,000
Printing Costs ......................................... 300,000
Legal Fees and Expenses ................................ 1,300,000
Transfer Agent and Registrar Fees and Expenses ......... 4,400
Miscellaneous .......................................... 272,884
----------
Total ............................................... $4,000,000
==========
</TABLE>

- ----------
(1} The amounts set forth, except for the SEC and NASD fees, are in each case
estimated.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Subsection (a) of Section 145 of the General Corporation Law of the State
of Delaware (the "DGCL") empowers a corporation to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation ) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.

Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
made to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnify for such expenses which the Court of Chancery or such
other court shall deem proper.

Section 145 further provides that to the extent a director or officer of a
corporation has been successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) of Section 145
in the defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith; that indemnification provided for by Section 145
shall not be deemed exclusive of any other rights to which the indemnified party
may be entitled; that indemnification provided for by Section 145 shall, unless
otherwise provided when authorized or ratified, continue as to a person who has

II-1

<PAGE>

ceased to be a director, officer, employee or agent and shall inure to the
benefit of such person's heirs, executors and administrators; and empowers the
corporation to purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such
whether or not the corporation would have the power to indemnify him against
such liabilities under Section 145.

Section 102(b)(7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director provided that such provision shall not eliminate
or limit the liability of a director: (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders; (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law; (iii) under Section 174 of the DGCL; or (iv) for any transaction from
which the director derived an improper personal benefit.

Articles Seventh and Eighth of the Company's Certificate of Incorporation,
as amended, states that:

"No director of the Corporation shall be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability: (1) for any breach of the director's duty of loyalty to
the Corporation or its stockholders; (2) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of the law; (3)
under Section 174 of the DGCL; or (4) for any transaction from which the
director derived an improper personal benefit.

The Corporation shall, to the fullest extent permitted by Section 145 of
the DGCL, as amended from time to time, indemnify all persons whom it may
indemnify pursuant thereto.

In addition, Article II of the Company's Bylaws further provides that the
Company shall indemnify its officers, directors and employees to the fullest
extent permitted by law.

The Company intends to enter into indemnification agreements with each of
its executive officers and directors which indemnifies such person to the
fullest extent permitted by its Amended and Restated Certificate of
Incorporation, its Bylaws and the DGCL. The Company also intends to obtain
directors and officers liability insurance.

Pursuant to the Underwriting Agreement filed as Exhibit 1.1 to this
Registration Statement, the Underwriters have agreed to indemnify, under certain
conditions, the Company against certain liabilities.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

The following information relates to all securities of the Company issued
or sold by the Company within the past three years which were not registered
under the Securities Act.

(a) RQI was organized in September 1997 and issued 97.9827 and 195.9654
shares of its Common Stock to its Founders, Capstone Partners, LLC and Alpine
Consolidated II, LLC, respectively, at a per share price of $.01. The offer
and sale of these shares was exempt from registration under the Securities
Act of 1933 in reliance on Section 4(2) thereof because the offers and sales
were made to sophisticated investors who had access to information about RQI
and were able to bear the risk of loss of their investment. In November and
December of 1997 and the first quarter of 1998, RQI issued 60.8584 shares of
its Common Stock to 18 individuals, including its executive officers, at a
per share price of $.01. The offer and sale of these shares was exempt from
registration under the Securities Act of 1933 in reliance on Section 4(2)
thereof because the offers and sales were made to sophisticated investors who
had access to information about RQI and were able to bear the risk of loss of
their investment. On March 9, 1998, the number of these shares were increased
by a 8,834.76-for-one stock split.

(b) See "Certain Transactions" for a discussion of the issuance of shares
of Common Stock and options to purchase shares of Common Stock in connection
with the Combinations. Each of these transactions was effected or will be
effected without registration of the relevant security under the Securities
Act in reliance upon the exemption provided by Section 4(2) of the Securities
Act.

II-2

<PAGE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER
------
<S> <C> <C>

*1.1 -- Form of Underwriting Agreement.

*2.1 -- Agreement and Plan of Organization, dated at March 11, 1998, by and among Vacation Properties
International, Inc., HCP Acquisition Corp., and Hotel Corporation of the Pacific, Inc. and Andre S.
Tatibouet.

*2.2 -- Agreement and Plan of Organization, dated at March 11, 1998, by and among Vacation Properties
International, Inc., B&B Acquisition Corp., Brindley Acquisition Corp., B&B On The Beach, Inc.,
Brindley and Brindley Realty and Development, Inc., Douglas R. Brindley and Betty Shotton
Brindley.

*2.3 -- Agreement and Plan of Organization, dated at March 11, 1998, by and among Vacation Properties
International, Inc., Coastal Realty Acquisition LLC, Coastal Management Acquisition Corp. and
Coastal Resorts Realty L.L.C., Coastal Resorts Management, Inc., Joshua M. Freeman, T. Michael
McNally and CMF Coastal Resorts L.L.C.

*2.4 -- Agreement and Plan of Organization, dated at March 11, 1998, by and among Vacation Properties
International, Inc. and Collection of Fine Properties, Inc., Ten Mile Holdings, Ltd., Luis Alonso,
Domingo R. Moreira, Brenda M. Lopez Ibanez and Ana Maria Moreira.

*2.5 -- Agreement and Plan of Organization, dated at March 11, 1998, by and among Vacation Properties
International, Inc. and Houston and O'Leary Company and Heidi O'Leary Houston.

*2.6 -- Agreement and Plan of Organization, dated at March 11, 1998, by and among Vacation Properties
International, Inc., Jupiter Acquisition Corp. and Jupiter Property Management at Park City, Inc.
and Jon R. Brinton. (Agreement terminated on April 23, 1998.)

*2.7 -- Agreement and Plan of Organization, dated at March 11, 1998, by and among Vacation Properties
International, Inc., Maui Acquisition Corp. and Maui Condominium and Home Realty, Inc., Daniel
C. Blair and Paul T. Dobson.

*2.8 -- Agreement and Plan of Organization, dated at March 11, 1998, by and among Vacation Properties
International, Inc., Maury Acquisition Corp. and The Maury People, Inc. and Sharon Benson
Doucette.

*2.9 -- Agreement and Plan of Organization, dated at March 11, 1998, by and among Vacation Properties
International, Inc., Priscilla Acquisition Corp., Realty Consultants Acquisition Corp., Realty Con-
sultants, Inc., and Howey Acquisition, Inc., Charles O. Howey and Dolores C. Howey.

*2.10 -- Agreement and Plan of Organization, dated at March 11, 1998, by and among Vacation Properties
International, Inc., Resort Property Management Acquisition Corp. and Resort Property Manage-
ment, Inc., Daniel L. Meehan, Kimberlie C. Meehan and Nancy Hess.

*2.11 -- Agreement and Plan of Organization, dated at March 11, 1998, by and among Vacation Properties
International, Inc., Telluride Acquisition Corp., and Telluride Resort Accommodations, Inc. and
Steven A. Schein, Michael E. Gardner, Park Brady, Daniel Shaw, Carolyn S. Shaw, Virginia C.
Gordon, Joyce Allred, Ronald D. Allred, A.J. Wells, Forrest Faulconer, Thomas McNamara, Donald
J. Peterson, Nancy McNamara, Charles E. Cobb, Jr., Sue M. Cobb, Stephen A. Martori, Anthony F.
Martori, Arthur John Matori and Alan Miskin.

*2.12 -- Agreement and Plan of Organization, dated at March 11, 1998, by and among Vacation Properties
International, Inc., Trupp Acquisition Corp., Trupp Management Acquisition Corp. and Trupp-
Hodnett Enterprises, Inc., THE Management Company, Hans F. Trupp, Roy K. Hodnett, Pat
Hodnett Cooper and Austin Trupp.

*2.13 -- Agreement and Plan of Organization, dated at March 12, 1998, by and among Vacation Properties
International, Inc., Whistler Chalets Holding Corp. and Whistler Chalets Limited and J. Patrick
McCurdy.

*2.14 -- Agreement and Plan of Organization, dated at March 11, 1998, by and among Vacation Properties
International, Inc., FRS Acquisition Corp and First Resort Software, Inc., Thomas A. Leddy, Evan
H. Gull and Daniel Patrick Curry.

*3.1 -- Certificate of Incorporation, as amended.

*3.2 -- Bylaws.

</TABLE>

II-3

EXHIBIT
NUMBER
------
<S> <C> <C>

**3.3 -- Certificate of Amendment of Certificate of Incorporation of the Company, dated April 23, 1998
(changing the name of the Company from Vacation Properties International, Inc. to ResortQuest
International, Inc.).

**4.1 -- Specimen Common Stock Certificate.

**5.1 -- Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P. as to the legality of the securities being
registered.

*10.1 -- Form of 1998 Long-Term Incentive Plan of the Company.

**10.2 -- Form of Employment Agreement between the Company and David M. Sullivan.

**10.3 -- Form of Employment Agreement between the Company and Jeffery M. Jarvis.

**10.4 -- Form of Employment Agreement between the Company and W. Michael Murphy.

**10.5 -- Form of Employment Agreement between the Company and Jules S. Sowder.

**10.6 -- Form of Employment Agreement between the Company and David L. Levine.

**10.7 -- Form of Employment Agreement between the Company and John K. Lines.

**10.8 -- Form of Employment Agreement between the Company and Fred Farmer.

**10.9 -- Form of Employment Agreement between the Company and Luis Alonso.

*10.10 -- Form of Employment Agreement between the Company and Douglas R. Brindley.

*10.11 -- Form of Employment Agreement between the Company and Paul T. Dobson.

*10.12 -- Form of Employment Agreement between the Company and Sharon Benson Doucette.

*10.13 -- Form of Employment Agreement between the Company and Evan H. Gull.

*10.14 -- Form of Employment Agreement between the Company and Heidi O'Leary Houston.

*10.15 -- Form of Employment Agreement between the Company and Daniel L. Meehan.

*10.16 -- Form of Management Services Agreement between the Company and J. Patrick McCurdy.

*10.17 -- Form of Employment Agreement between the Company and Andre S. Tatibouet.

*10.18 -- Form of Employment Agreement between the Company and Hans F. Trupp.

**10.19 -- Form of Officer and Director Indemnification Agreement.

**10.20 -- Form of Consulting Agreement between the Company and Park Brady.

*10.21 -- Promissory Note.

** 21 -- Subsidiaries of the Company.

23.1 -- Consent of Arthur Andersen LLP.

23.2 -- Consent of Morrison, Brown, Argiz and Company.

**3.4 -- Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (contained in Exhibit 5.1).

*23.5 -- Consents to become directors.

*24 -- Powers of Attorney (included on signature page).

**27 -- Financial Data Schedule.
</TABLE>
- ----------
* Previously filed on March 12, 1998 as an exhibit to the Company's
Registration Statement on Form S-1.

** Previously filed on April 27, 1998 as an exhibit to Amendment No.1 to the
Company's Registration Statement on form S-1/A

(b) Financial Statement Schedules

None

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes as follows:

(1) The undersigned will provide to the underwriters at the closing
specified in the underwriting agreement certificates in such denominations
and registered in such names as required by the underwriters to permit prompt
delivery to each purchaser.

(2) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance on Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement at the time it is declared effective.

II-4

<PAGE>

(3) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 14, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

II-5

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Company has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Washington, District of
Columbia, on the 29th day of April, 1998.

RESORTQUEST INTERNATIONAL, INC.

By: /s/ Elan J. Blutinger
----------------------------------------
Elan J. Blutinger
President

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the date indicated.

VACATION PROPERTIES INTERNATIONAL, INC.

SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Elan J. Blutinger President, Director April 29, 1998
- ---------------------------
Elan J. Blutinger
(Principal Executive Officer)

/s/ D. Fraser Bullock Vice President, Director April 29, 1998
- ---------------------------
D. Fraser Bullock
(Principal Financial and
Accounting Officer)

</TABLE>

II-6

<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER
------
<S> <C> <C>

*1.1 -- Form of Underwriting Agreement.

*2.5 -- Agreement and Plan of Organization, dated at March 11, 1998, by and among Vacation Properties
International, Inc. and Houston and O'Leary Company and Heidi O'Leary Houston.

*3.1 -- Certificate of Incorporation, as amended.

*3.2 -- Bylaws.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

EXHIBIT
NUMBER
------
<S> <C> <C>
**3.3 -- Certificate of Amendment of Certificate of Incorporation of the Company, dated April 23, 1998
(changing the name of the Company from Vacation Properties International, Inc. to ResortQuest
International, Inc.).