<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 16, 1999
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
REGISTRATION STATEMENT ON FORM S-4
UNDER THE SECURITIES ACT OF 1933
------------------------------
RESORTQUEST INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 7011 62-1750352
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
Of incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
------------------------------
530 OAK COURT DRIVE
SUITE 360
MEMPHIS, TN 38117
(901) 762-0600
(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.
530 OAK COURT DRIVE
SUITE 360
MEMPHIS, TN 38117
(901) 762-0600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
JOHN K. LINES BRUCE S. MENDELSOHN, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL PAUL A. BELVIN, ESQ.
RESORTQUEST INTERNATIONAL, INC. AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
530 OAK COURT DRIVE 1333 NEW HAMPSHIRE AVENUE, N.W.
SUITE 360 SUITE 400
MEMPHIS, TN 38117 WASHINGTON, D.C. 20036
(901) 762-0600 (202) 887-4000
FAX: (901) 762-0635 FAX: (202) 887-4288
</TABLE>
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the registration statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, 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, 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 Rule 462(d)
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. / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TITLE OF EACH CLASS TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE(2) REGULATION FEE(3)
<S> <C> <C> <C> <C>
Common Stock, $.01 per value per share.... 5,000,000 $8.9375 $44,687,500 $12,423.13
</TABLE>
(1) Pursuant to Rule 416(a), the number of shares of common stock being
registered shall be adjusted to include any additional shares which may
become issuable as a result of stock splits, stock dividends or similar
transactions.
(2) Calculated in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee on the basis of the average of the high and
low prices of the common stock as reported by the New York Stock Exchange on
July 14, 1999.
(3) A fee of $12,500.63 was paid in connection with the filing of Registration
Statement No. 333-56703, of which $3,289.76 related to the shares of common
stock included herein under Rule 429.
Pursuant to Rule 429 under the Securities Act of 1933, the prospectus filed
as part of this Registration Statement relates to the shares of common stock
registered hereby and to 789,501 shares of common stock previously registered by
ResortQuest International, Inc. under its Registration Statement on Form S-1
(File No. 333-56703).
------------------------------
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
THE INFORMATION FOR THIS PROSPECTUS IS NOT COMPLETE AND MAY CHANGE. WE MAY NOT
SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
SECURITIES AND RESORTQUEST IS NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN
ANY STATE THAT DOES NOT PERMIT THAT OFFER OR SALE.
<PAGE>
SUBJECT TO COMPLETION, DATED JULY 16, 1999
P R O S P E C T U S
5,789,501 SHARES
[LOGO]
COMMON STOCK
---------------
ResortQuest International, Inc. is the first company to offer vacation
condominium and home rentals, sales and property management services under a
national brand name and is a leading provider of vacation rentals in premier
destination resorts throughout the United States and in Canada. We currently
manage approximately 15,500 condominiums and homes in 34 premier, geographically
and seasonally diverse resort locations in 15 states and in Canada.
We may use this prospectus from time to time to issue shares of our common
stock to the owners of businesses or assets that we may acquire in the future.
ResortQuest and the owners or controlling persons of the businesses or assets we
may seek to acquire will negotiate the terms of such acquisition. We expect that
the value of our common stock issued in any acquisition will be reasonably
related to the market value of our common stock either at the time we enter into
an agreement on the terms of an acquisition or at the time of delivery of our
common stock.
Persons who receive shares of common stock in connection with an acquisition
by us also may use this prospectus to offer and sell such shares. ResortQuest
will not receive any of the proceeds from such sales.
Our shares are listed on the New York Stock Exchange under the symbol "RZT."
------------------------
INVESTING IN OUR COMMON STOCK INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON
PAGE 10.
---------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
About this Prospectus.................................................................. 1
Where You Can Find More Information.................................................... 1
Incorporation by Reference............................................................. 2
Description of ResortQuest............................................................. 3
Selected Consolidated Financial Data................................................... 7
Price Range of Common Stock............................................................ 9
Special Note of Caution Regarding Forward-Looking Statements........................... 9
Risk Factors........................................................................... 10
Acquisition Terms...................................................................... 17
Resale of Common Stock................................................................. 18
Restrictions on Resale of Common Stock................................................. 19
Use of Proceeds........................................................................ 19
Legal Matters.......................................................................... 19
Experts................................................................................ 19
</TABLE>
i
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf registration process, we may issue the shares of our common
stock described in this prospectus to the owners of businesses, assets or
securities of entities engaged in the vacation rental and property management
business and other related businesses we may acquire in the future. If we issue
warrants, options or other similar instruments in connection with acquisitions,
we may reserve shares for issuance to cover the offering, issuance and sale upon
exercise or conversion of these rights. This prospectus provides you with a
general description of our company.
You should rely only on the information provided in this prospectus or
incorporated by reference into this prospectus. We have not authorized anyone
else to provide you with different information. We are not making an offer of
our common stock in any state where the offer is not permitted. Information is
accurate only as of the date of the documents containing the information, unless
the information specifically indicates that another date applies.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement of which this prospectus forms a
part. The registration statement, including the attached exhibits and schedules,
contains additional relevant information about our common stock. The rules and
regulations of the SEC allow us to omit some of the information included in the
registration statement from this prospectus.
In addition, we file annual, quarterly and special reports, proxy statements
and other information with the SEC under the Securities Exchange Act. You may
read and copy any of this information at the following locations of the SEC:
<TABLE>
<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois
60661-2511
</TABLE>
You may obtain information on the operation of the SEC's Public Reference
Room by calling the SEC at 1-800-SEC-0330.
The SEC also maintains an Internet web site that contains reports, proxy
statements and other information regarding issuers, like ResortQuest, that file
electronically with the SEC. The address of that site is http://www.sec.gov. The
SEC file number for our documents filed under the Securities Exchange Act is
1-14115.
Our common stock is traded on the New York Stock Exchange and certain
reports, proxy statements and other information is also available for inspection
and copying at prescribed rates at the offices of the NYSE, 20 Broad Street, New
York, New York 10005. You can obtain any of the documents we file from the SEC,
through the SEC's web site at the address described above, or directly from us,
through our web site, RESORTQUEST.COM, by selecting the Investor Relations link,
selecting the Info Request link and completing the information request form
on-line.
1
<PAGE>
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" information into this
prospectus. This means we can disclose important information to you by referring
you to another document filed separately with the SEC. The information
incorporated by reference is considered to be a part of this prospectus, except
for any such information that is superseded by information included directly in
this document.
This prospectus incorporates by reference the documents listed below that we
have previously filed or will file with the SEC. They contain important
information about us and our financial condition.
- our Annual Report on Form 10-K for our fiscal year ended December 31,
1998, filed on March 29, 1999;
- our definitive proxy statement for the 1999 annual meeting of
stockholders, filed April 6, 1999;
- our Quarterly Report on Form 10-Q for our fiscal quarter ended March 31,
1999, filed on May 17, 1999;
- our Current Reports on Form 8-K, filed on May 21, 1999 and May 24, 1999;
- all documents filed with the SEC by us under Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act after the date of this prospectus and
before the offering is terminated, are considered to be a part of this
prospectus, effective the date such documents are filed; and
- the description of our common stock set forth in our registration
statement filed under Section 12 of the Securities Exchange Act on Form
8-A on May 12, 1998, as incorporated by reference from our registration
statement on Form S-1, as amended (File No. 333-47867), the description of
the Preferred Stock Purchase Rights set forth in our Form 8-A (Amendment
No. 1) filed on March 12, 1999 and any amendment or report filed with the
SEC for purpose of updating such descriptions.
In the event of conflicting information in these documents, the information in
the latest filed document should be considered correct.
You may obtain a copy of any of these filings, at no cost, through our web
site, RESORTQUEST.COM, by selecting the Investor Relations link. You may
alternatively write or call us at the following address and telephone number:
Mr. John K. Lines
Vice President, General Counsel and Secretary
ResortQuest International, Inc.
530 Oak Court Drive
Suite 360
Memphis TN 38117
(901) 762-0600
We will provide a copy of any of these documents without charge, excluding
any exhibits unless the exhibit is specifically listed as an exhibit to the
registration statement of which this prospectus forms a part. If you request any
documents from us, we will mail them to you by first class mail, or another
equally prompt means, within one business day after we receive your request.
2
<PAGE>
DESCRIPTION OF RESORTQUEST
ResortQuest is the first company to offer vacation condominium and home
rentals, sales and property management services under a national brand name and
is a leading provider of vacation rentals in premier destination resorts
throughout the United States and in Canada. 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, we offer
vacationers a branded network of high quality, fully furnished, privately-owned
condominium and home rentals. In addition, we provide property owners with
superior management services by combining local management expertise with the
marketing power and resources of a leading brand, which work to enhance a
property's value and marketability.
On May 26, 1998, we completed our initial public offering and simultaneously
acquired 12 vacation rental and property management companies and one leading
vacation rental and property management software company. Since our initial
public offering, we have completed 15 additional vacation rental and property
management acquisitions, five in 1998 and 10 in 1999. These acquisitions contain
a total of approximately 5,500 vacation rental units, which represents a 53%
increase in our initial portfolio of vacation rental condominiums and homes.
Through these acquisitions, we expanded our presence into 11 new resort markets.
We currently manage approximately 15,500 condominiums and homes in 34 premier,
geographically and seasonally diverse resort locations throughout the United
States and in Canada.
Most vacationers seeking to rent a condominium or home at a popular
destination resort typically have relied on local vacation rental and property
management firms to inquire about availability and make reservations.
Vacationers made rental choices with limited information and, as a result, faced
great uncertainty concerning the quality of their rental. To address this need,
we established the ResortQuest brand to provide vacationers with single-source
access to quality condominium and home rentals intended to consistently meet
their expectations. The ResortQuest brand is designed to ensure that a vacation
rental meets customer expectations by providing a standardized basic level of
products and services and by consistently categorizing accommodations based on
quality, appearance and features. In November 1998, we established a
proprietary, five-level rating system that categorizes individual unit
accommodations according to specific criteria enabling vacationers to know what
to expect from one ResortQuest location to another. The rating categories are
Quest Home, Platinum, Gold, Silver and Bronze.
In order to increase awareness of the ResortQuest brand, we have implemented
a multi-faceted national marketing program which targets consumers and the
travel trade through high-profile advertising, direct mail, e-mail marketing,
public relations, promotional programs and the Internet. In January 1999, we
launched RESORTQUEST.COM, one of the most comprehensive web sites in the
vacation industry based on its breadth of locations, property information and
functionality. RESORTQUEST.COM allows consumers:
- to search all of our vacation and home rentals;
- to simultaneously determine the availability of a customized rental
request in up to six different destinations;
- to access detailed property information, including floor plans,
photographs and accommodation ratings;
- to take a 360 degree virtual tour of each destination;
- to take a virtual tour, including interior and exterior views, of one or
more typical properties in each of our destinations; and
- to make real-time, on-line reservations.
3
<PAGE>
Since the inception of RESORTQUEST.COM, monthly site hits have increased
from 500,000 in January 1999 to over 8 million in March 1999, generating
approximately $2 million of on-line bookings during the first quarter of 1999.
In addition, for customers interested in buying or selling a vacation home,
RESORTQUEST.COM provides multiple location real estate listings for condominiums
and homes located in 15 of our resort locations.
We are aggressively marketing our web site with a comprehensive, national
campaign which includes print advertising in high-profile publications,
including USA TODAY, CONDE NAST TRAVELER, TRAVEL & LEISURE and leading travel
trade journals. We are also promoting our web site through Internet banner
advertising and targeted links, e-mail marketing campaigns and direct mail
programs. We expect Internet sales will account for a significant portion of our
revenues within the next few years.
Our primary source of revenue is property rental fees, which are charged to
the property owners as a percentage of the vacationer's total rental rate. Fee
percentages for vacation condominiums and homes range from approximately 3% to
over 40% of rental rates depending on the market, the type of services provided
to the property owner, the type of rental unit managed and which party bears
responsibility for operating expenses. We believe that our national brand and
superior management services, which are designed to enhance rental income for
property owners, will provide us with a competitive advantage in attracting
additional high quality condominiums and homes in our markets.
Since closing our initial public offering on May 26, 1998, we have:
- completed 15 additional acquisitions, which added approximately 5,500
vacation rental condominiums and homes, located in three existing markets
and 11 new resort markets;
- launched a comprehensive web site, RESORTQUEST.COM, which includes a fully
integrated on-line reservation and booking system;
- established national product and service standards, including a five-level
rating system that categorizes individual unit accommodations according to
specific criteria;
- increased the borrowing capacity available under our credit facility from
$30 million to $50 million; and
- completed a placement of $50 million of senior secured notes to a limited
number of institutional investors.
OUR STRATEGIES
BUSINESS STRATEGY
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. We believe this fragmented market presents a significant
opportunity for a well-capitalized company offering a branded, national network
of high quality vacation condominiums and homes with superior levels of customer
service. Our objective is to enhance our position as a leading provider of
premier destination resort condominium and home rentals by pursuing the
following elements of our business strategy:
- CONTINUE TO BUILD THE RESORTQUEST BRAND. We have established the only
national brand in the fragmented vacation rental industry and continue to
provide vacationers with high quality condominium and home rentals. The
ResortQuest brand is designed to ensure that a vacation rental meets
customer expectations by providing a basic, standardized level of products
and services and by consistently categorizing accommodations based on
quality, appearance and amenities.
- CAPITALIZE ON TECHNOLOGY. We believe that investment in technology,
especially that related to the Internet, will be critical in building our
national brand, increasing revenue, reducing costs and
4
<PAGE>
managing vacationer, owner, employee and investor expectations. Our
commitment to technology is evidenced by (1) RESORTQUEST.COM, our
comprehensive web site which enables consumers to search through our
vacation rentals, to check availability and to make reservations on-line,
and (2) First Resort Software, one of our operating companies, which is a
leading provider of integrated software for the vacation rental and
property management industry.
- OFFER VACATIONERS SUPERIOR CUSTOMER SERVICE. We believe that maintaining
superior levels of customer service is critical to developing a reputation
for high quality vacation rentals and for attracting new customers. By
offering the convenience and accommodations of a condominium or home while
providing many of the amenities and services of a hotel, such as
convenient check-in and check-out, frequent housekeeping and cleaning and
concierge-type services, we believe we will continue to strengthen the
loyalty of our existing customers and attract new vacationers into the
vacation condominium and home rental market.
- ENHANCE VALUE FOR PROPERTY OWNERS. We provide property owners with
superior management services by combining local management expertise with
the marketing power and resources of a leading brand, which work to
increase rental income through increased occupancy and rental rates.
- CAPITALIZE ON THE EXPERIENCE OF SENIOR MANAGEMENT. Our senior management
team has a proven track record of building and operating successful
brands, and the breadth of experience necessary to execute our business
plan effectively. Our senior management team, led by David C. Sullivan,
Chairman and Chief Executive Officer, averages 23 years of lodging related
experience.
- LEVERAGE LOCAL RELATIONSHIPS AND EXPERTISE. Our local management teams
have a valuable understanding of their respective markets and businesses
and have developed strong local relationships. Accordingly, our
decentralized management strategy is designed to allow local managers to
leverage their market knowledge and expertise to provide superior customer
service to both property owners and vacationers.
GROWTH STRATEGY
We believe we can achieve significant growth both internally and through an
active acquisition program.
INTERNAL GROWTH. The primary elements of our internal growth strategy
include:
- FULLY IMPLEMENT OUR NATIONAL MARKETING STRATEGY. We have implemented a
multi-faceted national marketing program designed to increase vacationer
awareness of the ResortQuest brand, while promoting the unique
characteristics of our individual resorts. This comprehensive marketing
program targets consumers and the travel trade through various forms of
media and is designed to attract new customers as well as cross-sell
additional services and locations to existing customers.
- INCREASE MARKET SHARE WITHIN EXISTING MARKETS. A key element of our growth
strategy is to increase our selection of condominiums and homes in order
to expand our market share and strengthen the local brands of each of our
operating companies. We intend to attract new property owners by achieving
high occupancy rates through effective national marketing and
cross-selling and by offering additional incentives to property owners,
such as QuestClub, our new travel benefits program for owners of
properties we manage.
- EXPAND PROFIT MARGINS. We believe that enhanced efficiency and economies
of scale will reduce overall operating costs and allow us to achieve
increased margins by spreading operating and corporate overhead costs over
a larger revenue base. For example, we have already begun to
5
<PAGE>
achieve savings through company-wide contracts for long distance telephone
service, credit card fees and insurance.
- USE ADDITIONAL MARKETING CHANNELS. Given our size and presence in premier
destination resorts, we believe we are an attractive partner to travel
agents, tour package operators and other travel providers. These
relationships should continue to be a significant source of new customers
and, in particular, will be a valuable marketing channel for off-peak
seasons.
ACQUISITIONS. We continue to pursue an aggressive acquisition program to
gain a presence in additional premier destination resort locations as well as to
expand our market share in existing resort locations. While we seek to acquire
leading companies in each new market we enter, we also plan to pursue tuck-in
acquisitions through which we can expand our selection of rental inventory in
our existing markets. We believe that we provide acquisition candidates with a
number of significant benefits, including:
- affiliation with a national brand;
- the ability to cross-sell to customers of other vacation rental and
property management companies within the ResortQuest network;
- the ability to increase liquidity as a result of our financial strength as
a public company and access to additional sources of capital; and
- the ability to increase profitability through the centralization of
certain administrative functions and other economies of scale.
Our executive offices are located at 530 Oak Court Drive, Suite 360,
Memphis, Tennessee 38117, and our telephone number is (901) 762-0600.
Information contained in our web site, RESORTQUEST.COM, is not part of this
prospectus.
6
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
On May 26, 1998, we consummated our initial public offering and the
acquisition of our 13 founding companies. For financial statement presentation
purposes, Aston Hotels & Resorts was designated as the "accounting acquiror." We
also completed five additional acquisitions in 1998 after the initial public
offering and ten additional acquisitions in 1999. The historical consolidated
financial statement data include the financial results of Aston and our three
acquisitions accounted for as poolings of interests prior to the acquisition of
the 13 founding companies and the initial public offering, and include the
combined balances and transactions of ResortQuest and the 13 founding companies
only since May 26, 1998. The financial results of our remaining acquisitions
completed since the initial public offering and prior to April 1, 1999 have been
reflected since their respective dates of acquisition. The following
consolidated statements of pro forma income present certain data for
ResortQuest, excluding income from discontinued operations, as adjusted for:
- the effects of our acquisition of the 13 founding companies as if they had
occurred on January 1, 1998;
- the effects of our acquisition of Abbott Realty Services, Inc., commonly
referred to as Abbott Resorts, as if it had occurred on January 1, 1998;
- the effects of certain reductions in salary, bonuses and benefits derived
from contractual agreements which establish the compensation of the former
owners and certain key employees of the 13 founding companies, Abbott
Resorts and our three acquisitions accounted for as poolings of interests
as if they had occurred on January 1, 1998;
- the effects of an assumed comparable corporate expense for each of the
four quarters ended December 31, 1998, based on actual corporate expense
incurred for the three months ended March 31, 1999;
- the effects of goodwill amortization, which is principally not deductible
for income tax purposes, recorded as a result of the acquisitions of the
13 founding companies and Abbott Resorts;
- the effects of the provision for federal and state income taxes relating
to converting certain operations to C Corporation status and the tax
impact of pro forma adjustments;
- the effects of additional revenue that we would have realized related to
certain property management contracts with affiliates of the 13 founding
companies and Abbott Resorts, based on contractual rates that were not
reflective of market conditions; and
- the effects of excluding certain depreciation and interest expense related
to certain assets and liabilities not acquired from the 13 founding
companies and Abbott Resorts.
Our shares used in computing pro forma net income per share include:
- 6,119,656 shares issued to owners of the 13 founding companies;
- 3,134,630 shares issued to our management and founders;
- 6,670,000 shares sold in the initial public offering necessary to pay the
cash portion of the consideration for the 13 founding companies, to repay
debt assumed in the acquisition of the 13 founding companies, to pay the
underwriting discount and other expenses of the initial public offering
and to provide additional working capital;
- 392,780 shares used in the purchase of our three acquisitions accounted
for as poolings of interests;
- 757,040 shares used in the purchase of Abbott Resorts;
- the weighted average effect of issuing 315,539 shares used in the purchase
of our remaining acquisitions completed prior to April 1, 1999; and
- the dilutive effect of options outstanding in calculating diluted pro
forma net income per share.
7
<PAGE>
You should read this information together with the Consolidated Financial
Statements and the related Notes incorporated by reference into this prospectus.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
------------------------------------------------------- --------------------
1994 1995 1996 1997 1998 1998 1999
----------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
HISTORICAL CONSOLIDATED STATEMENTS OF
INCOME DATA:
Revenues............................. $ 24,966 $ 24,031 $ 25,670 $ 26,753 $ 55,359 $ 8,666 $ 31,656
Direct operating expenses............ 13,947 12,482 14,860 13,635 31,596 4,411 14,469
General and administrative expenses,
including depreciation and
amortization....................... 8,297 8,171 6,840 7,613 18,273 1,729 10,995
----------- --------- --------- --------- --------- --------- ---------
Operating income..................... 2,722 3,378 3,970 5,505 5,490 2,526 6,192
Interest and other expense, net...... 224 728 342 86 507 233 647
Provision for income taxes........... -- -- 90 90 1,518 28 2,505
----------- --------- --------- --------- --------- --------- ---------
Income from continuing operations.... $ 2,498 $ 2,650 $ 3,538 $ 5,329 $ 3,465 $ 2,265 $ 3,040
----------- --------- --------- --------- --------- --------- ---------
----------- --------- --------- --------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED MARCH 31,
DECEMBER 31, ------------------------------
1998 1998 1999
----------------- -------------- --------------
<S> <C> <C> <C>
CONSOLIDATED STATEMENTS OF PRO FORMA INCOME (UNAUDITED):
Revenues:
Property management fees.................................... $ 52,942 $ 16,437 $ 18,364
Service fees................................................ 25,852 6,098 7,717
Other....................................................... 21,957 4,292 5,528
----------------- -------------- --------------
100,751 26,827 31,609
Direct operating expenses..................................... 52,290 12,435 14,427
General and administrative expenses........................... 29,779 7,282 8,966
Depreciation and amortization................................. 5,746 1,401 1,558
----------------- -------------- --------------
Operating income.............................................. 12,936 5,709 6,658
Interest and other expense, net............................... 2,082 592 647
----------------- -------------- --------------
Income before income taxes.................................... 10,854 5,117 6,011
Provision for income taxes.................................... 5,457 2,278 2,682
----------------- -------------- --------------
Net income.................................................... $ 5,397 $ 2,839 $ 3,329
----------------- -------------- --------------
----------------- -------------- --------------
Basic net income per share.................................... $ 0.32 $ 0.17 $ 0.19
----------------- -------------- --------------
----------------- -------------- --------------
Shares used in computing basic pro forma net income per
share....................................................... 17,075,661 17,074,106 17,353,989
----------------- -------------- --------------
----------------- -------------- --------------
Diluted net income per share.................................. $ 0.31 $ 0.17 $ 0.19
----------------- -------------- --------------
----------------- -------------- --------------
Shares used in computing diluted pro forma net income per
share....................................................... 17,215,083 17,074,106 17,786,211
----------------- -------------- --------------
----------------- -------------- --------------
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 31,
AS OF DECEMBER 31, 1999
----------------------------------------------------- -------------------
1994 1995 1996 1997 1998 ACTUAL
--------- --------- --------- --------- --------- -------------------
<S> <C> <C> <C> <C> <C> <C>
(UNAUDITED)
BALANCE SHEET DATA:
Working capital (deficit) surplus...... $ (4,076) $ (3,384) $ (1,940) $ (4,579) $ (2,080) $ (4,868)
Total assets........................... 10,873 15,760 16,658 19,072 188,219 216,239
Long-term debt, net of current
maturities........................... 2,582 2,378 3,060 4,122 38,098 49,214
Stockholders' (deficit) equity......... (195) 268 (54) (397) 106,855 114,261
</TABLE>
8
<PAGE>
PRICE RANGE OF COMMON STOCK
Our common stock trades on the New York Stock Exchange under the symbol
"RZT." We completed our initial public offering in May 1998 at a price of $11.00
per share. The following table sets forth the high and low sales prices for the
common stock for the second, third and fourth quarters of the fiscal year ended
December 31, 1998, and for the first and second quarters, and part of the third
quarter of the fiscal year ending December 31, 1999.
<TABLE>
<CAPTION>
HIGH LOW
----------- -----------
<S> <C> <C>
Fiscal Year Ended December 31, 1998
Second Quarter (from May 20, 1998).............................. $ 18.7500 $ 13.9375
Third Quarter................................................... 17.1250 8.8125
Fourth Quarter.................................................. 14.7500 6.5000
Fiscal Year Ending December 31, 1999
First Quarter................................................... 22.9375 13.9375
Second Quarter.................................................. 17.5000 7.5000
Third Quarter (through July 14, 1999)........................... 9.4375 8.25
</TABLE>
On July 14, 1999, the last reported sales price of the common stock on the
NYSE was $8.9375 per share. On July 14, 1999, there were 257 holders of record
of common stock, although we believe the number of beneficial holders is
substantially greater.
SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains statements about activities, events or developments
which we expect or anticipate will or may occur in the future, including:
- business strategies;
- market potential;
- acquisitions of assets and businesses;
- industry trends;
- financial performance; and
- other matters.
We also use in this prospectus the words "intend to," "anticipate," "expect,"
and similar expressions to identify those types of forward-looking statements.
These statements are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are based on
certain assumptions and analyses we have made in light of our perception of
historical trends, current business and economic conditions and expected future
developments as well as other factors. However, whether actual results and
developments will conform with our expectations and predictions is subject to a
number of risks and uncertainties beyond our control, including:
- the risk factors discussed in this prospectus;
- general economic, market or business conditions;
- changes in laws or regulations;
- business opportunities, or lack thereof, that may be presented to and
pursued by us; and
- other factors.
Consequently, we cannot assure you that the actual results or developments we
anticipate will be realized or, even if substantially realized, that they will
have the expected consequences to or effects on us.
9
<PAGE>
RISK FACTORS
A PURCHASE OF OUR SHARES INVOLVES RISKS. WE DISCUSS BELOW SOME RISKS THAT
COULD HARM OUR BUSINESS, FINANCIAL CONDITIONS, OPERATING RESULTS AND STOCK
PRICE. OTHER RISKS THAT WE CANNOT NOW FORESEE MIGHT ALSO HURT US. YOU SHOULD
CAREFULLY CONSIDER THESE FACTORS AND THE OTHER INFORMATION IN THIS PROSPECTUS IN
EVALUATING RESORTQUEST AND DECIDING WHETHER TO PURCHASE OUR COMMON STOCK.
OUR REPORTED PRO FORMA FINANCIAL RESULTS MAY NOT BE INDICATIVE OF FUTURE
PERFORMANCE BECAUSE THEY COVER A PERIOD DURING WHICH OUR OPERATING COMPANIES
CONDUCTED BUSINESS AS INDEPENDENT ENTITIES.
Prior to the time we completed our acquisition of our operating companies,
each company operated as a separate, privately-held entity. For financial
reporting, we currently rely on the existing reporting systems of each of these
operating companies. The pro forma financial information of the 13 founding
companies and subsequent acquisitions cover periods when these companies and
ResortQuest were not under common control or management. Consequently, they may
not be indicative of our future financial or operating results.
WE MAY NOT BE ABLE TO INTEGRATE SUCCESSFULLY ANY FUTURE ACQUISITION.
We assembled our senior management group in connection with the initial
public offering. We cannot assure you that our management group will be able to
continue to manage effectively the combined entity or implement effectively our
operating and growth strategies. If we are unable to integrate successfully the
existing operating companies and future acquisitions, it would have a material
adverse effect on our business and financial results and make it unlikely that
our acquisition program will continue to be successful.
Our operating companies offer a variety of different services to property
owners and vacationers, apply different sales and marketing techniques to
attract new customers, use different fee structures and target different
customer segments. In addition, almost all of our operating 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 our operating companies.
WE MAY NOT BE ABLE TO COMPLETE SUCCESSFULLY OUR PLANNED EXPANSION.
We intend to continue to expand the markets we serve and increase the number
of properties we manage, in part, through the acquisition of additional vacation
rental and property management companies. We cannot assure you that we will be
able to identify, acquire or profitably manage additional businesses or
successfully integrate acquired businesses into our existing operations without
substantial costs, delays or other operational or financial problems. It is
possible that competition may increase for companies we might seek to acquire.
In such event, there may be fewer acquisition opportunities available to us, as
well as higher acquisition prices.
Acquisitions also involve a number of special risks which could have a
material adverse effect on our business and financial results. These risks
include the following:
- failure of acquired companies to achieve expected financial results;
- diversion of management's attention;
- failure to retain key personnel;
- amortization of acquired intangible assets; and
- increased potential for customer dissatisfaction or performance problems
at a single acquired company to affect adversely our reputation and brand
name.
10
<PAGE>
We may also seek international acquisitions that may be subject to
additional risks associated with doing business in such countries. We
continually review various strategic acquisition opportunities and have held
discussions with a number of such acquisition candidates.
WE MAY NOT BE ABLE TO CLOSE ON PENDING FINANCINGS OR TO FINANCE FUTURE
ACQUISITIONS.
We intend to use shares of our common stock to finance a portion of the
consideration for future acquisitions. If our common stock does not maintain a
sufficient market value, or the owners of businesses we may seek to acquire are
otherwise unwilling to accept shares of common stock as part of the
consideration for the sale of their businesses, we may be required to use more
of our cash resources in order to implement our acquisition strategy. If we have
insufficient cash resources, our growth could be limited unless we are able to
obtain additional funds through debt or equity financings. Our ability to obtain
debt financing may be constrained by existing or future loan covenants, the
satisfaction of which may be dependent upon our ability to raise additional
equity capital through either offerings for cash or the issuance of stock as
consideration for acquisitions. We cannot assure you that our cash resources
will be sufficient, or that other financing will be available on terms we find
acceptable. If we are unable to obtain financing sufficient for all of our
desired acquisitions, we may be unable to implement fully our acquisition
strategy.
OUR BUSINESS MAY BE NEGATIVELY AFFECTED IF WE ARE UNABLE TO MANAGE OUR GROWTH
EFFECTIVELY.
We plan to continue to grow internally and through acquisitions. We will
expend significant time
and effort in expanding the existing operating companies and in identifying,
completing and integrating acquisitions. We cannot assure you that our systems,
procedures and controls will be adequate to support our 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. We cannot assure you that we will be able
to identify and retain such additional management. If we are unable to manage
our growth efficiently and effectively, or we are unable to attract and retain
additional qualified management, it could have a material adverse effect on our
business and financial results.
OUR STOCK PRICE MAY BE ADVERSELY AFFECTED BY MARKET VOLATILITY.
The following factors, among others, may cause the market price of our
common stock to significantly increase or decrease:
- our failure to meet financial research analysts' estimates of our
earnings;
- variations in our annual or quarterly financial results or the financial
results of our competitors;
- changes by financial research analysts in their estimates of our earnings;
- conditions in the general economy, or the vacation and property rental
management or leisure and travel industries in particular;
- unfavorable publicity about us or our industry; and
- significant price and volume volatility in the stock market in general for
reasons unrelated to us.
THE NUMBER OF SHARES AVAILABLE FOR SALE AFTER THIS OFFERING COULD CAUSE OUR
STOCK PRICE TO DECLINE.
The market price of our common stock could drop as a result of the sale of
substantial amounts of our common stock in the public market, or the perception
that such sales could occur.
We had 18,134,785 shares of our common stock outstanding as of July 14. The
6,670,000 shares of our common stock sold in the initial public offering are
freely tradeable unless held by our affiliates. Simultaneous with the closing of
the acquisition of the 13 founding companies, the stockholders of the 13
founding companies received 6,119,656 shares, and our management and founders
received 3,134,630 shares. These 9,254,286 shares have not been registered under
the Securities Act of 1933,
11
<PAGE>
and, therefore, may not be sold unless registered under the Securities Act of
1933 or sold pursuant to an exemption from registration, such as the exemption
provided by Rule 144.
We have issued 2,210,499 shares in connection with the 15 acquisitions which
closed since the initial public offering. All of these shares were registered
under the Securities Act and 898,254 of these shares are subject to certain
contractual transfer restrictions expiring between November 30, 1999 and June
29, 2001. The shares offered by this prospectus are generally freely tradeable
after issuance, unless the holders of these shares are subject to the
restrictions on resale provided in Rule 145 under the Securities Act.
OUR BUSINESS AND FINANCIAL RESULTS DEPEND UPON FACTORS THAT AFFECT THE VACATION
RENTAL AND PROPERTY MANAGEMENT INDUSTRY.
Our business and financial results are dependent upon various factors
affecting the vacation rental and property management industry. Factors such as
the following could have a negative impact on our business and financial
results:
- reduction in the demand for vacation properties, particularly for beach,
island and mountain resort properties;
- adverse changes in travel and vacation patterns;
- adverse changes in the tax treatment of second homes;
- a downturn in the leisure and tourism industry;
- an interruption of airline service;
- increases in gasoline or airfare prices; and
- adverse weather conditions or natural disasters, such as hurricanes, tidal
waves or tornadoes.
OUR OPERATING RESULTS ARE HIGHLY SEASONAL.
Our business is highly seasonal. The financial results of each of our
operating companies have been subject to quarterly fluctuations caused primarily
by the combination of seasonal variations and when revenue is recognized in the
vacation rental and property management industry. Peak seasons for our operating
companies depend upon whether the resort is primarily a summer or winter
destination. During 1998, we derived approximately 26.6% of our pro forma
revenues and 44.1% of our pro forma operating income in the first quarter and
28.8% of our pro forma revenues and 40.5% of our pro forma operating income in
the third quarter. Although the seasonality of our financial results may be
partially mitigated by the geographic diversity of the existing operating
companies and any future acquisitions, we expect a significant seasonal factor
with respect to our financial results to continue.
Our quarterly financial results 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 our quarterly financial results
could adversely affect the price of our common stock which in turn could
adversely affect our proposed acquisition strategy.
OUR BUSINESS DEPENDS UPON THE EFFORTS OF THIRD PARTIES TO MAINTAIN RESORT
FACILITIES AND TO MARKET OUR HAWAIIAN PROPERTIES.
We manage properties that are generally located in destination resorts which
depend upon third parties to maintain resort amenities such as golf courses and
chair lifts. The failure of third parties to continue to maintain resort
amenities could have a material adverse effect on the rental value of our
properties and, consequently, on our business and financial results.
We also depend on travel agents, package tour providers and wholesalers for
a substantial portion of our revenues. During 1998, we derived approximately
17.0% of our consolidated pro forma revenues
12
<PAGE>
from sales made through travel intermediaries. Failure of travel intermediaries
to continue to recommend or package our vacation properties could result in a
material adverse effect on our business and financial results.
OUR BUSINESS COULD BE HARMED IF THE MARKET FOR LEISURE AND VACATION TRAVEL DOES
NOT CONTINUE TO GROW.
Although travel and tourism expenditures in the United States grew at a
compounded annual rate of 6.1% between 1987 and 1997, there have been years in
which spending has declined. We cannot assure you that we or the total market
for vacation property rentals will continue to experience growth. Factors
affecting our ability to continue to experience internal growth include our
ability to:
- maintain existing relationships with property owners;
- expand the number of properties under management;
- increase rental rates and cross-sell among our operating companies; and
- sustain continued demand for our rental inventory.
OUR OPERATIONS ARE CONCENTRATED IN THREE GEOGRAPHIC AREAS.
We manage properties that are significantly concentrated in beach and island
resorts located in Florida and Hawaii and mountain resorts located in Colorado
and Utah. The following table sets forth the December 31, 1998 consolidated pro
forma revenues and percentage of total pro forma revenues derived from each
region (dollars in thousands).
<TABLE>
<CAPTION>
CONSOLIDATED
PRO FORMA % OF TOTAL
REGION REVENUES REVENUES
- -------------------------------------------------------------------- ------------ -----------
<S> <C> <C>
Florida............................................................. $ 38,318 38.0%
Hawaii.............................................................. 21,874 21.7
Colorado and Utah................................................... 14,164 14.1
Other(1)............................................................ 26,395 26.2
------------ -----------
Total......................................................... $ 100,751 100.0%
------------ -----------
------------ -----------
</TABLE>
- ------------------------
(1) Includes revenues of First Resort Software.
Adverse events or conditions which affect these 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
our operations, than if our operations were more geographically diverse.
OUR BUSINESS DEPENDS ON ATTRACTING AND RETAINING HIGHLY CAPABLE MANAGEMENT AND
EMPLOYEES.
Our business substantially depends on the efforts and relationships of David
C. Sullivan, Chairman and Chief Executive Officer, the other executive officers
of ResortQuest and the senior management of our operating companies.
Furthermore, we will likely be dependent on the senior management of any
businesses acquired in the future. If any of these persons becomes unable or
unwilling to continue in his or her role, or if we are unable to attract and
retain other qualified employees, it could have a material adverse effect on our
business and financial results. Although we have entered into employment
agreements with each of our executive officers and the majority of the managers
of our operating companies, we cannot assure you that any of these individuals
will continue in his or her present capacity for any particular period of time.
POTENTIAL CHANGES IN REQUIRED ACCOUNTING METHODOLOGY COULD NEGATIVELY IMPACT OUR
FUTURE REPORTED FINANCIAL RESULTS.
In April 1999, the Financial Accounting Standards Board preliminarily agreed
to eliminate the use of the pooling of interests method of accounting for
business combinations. Additionally, the Financial
13
<PAGE>
Accounting Standards Board is considering substantially reducing the
amortization period for goodwill. We expect that these changes in accounting
treatment will apply to any acquisition closed after January 1, 2001. The
Financial Accounting Standards Board expects to issue an Exposure Draft in the
third quarter of 1999, with a final standard issued in the fourth quarter of
2000, effective January 1, 2001. Both of these positions, when issued, could
have an adverse effect on our ability to make future acquisitions and could have
a material negative effect on our future financial results which, in turn, could
have a material adverse effect on the market price of our common stock.
THE SUBSTANTIAL AMOUNT OF GOODWILL RESULTING FROM OUR ACQUISITIONS COULD
ADVERSELY AFFECT OUR FINANCIAL AND OPERATING RESULTS.
Approximately $150.3 million or 69.5% of our total assets at March 31, 1999
is net goodwill, which represents the excess of what we paid over the estimated
fair market value of the net assets we acquired in business combinations
accounted for as purchases. We amortize goodwill on a straight-line basis over a
period of 40 years, except for First Resort Software, whose goodwill is being
amortized over 15 years. The amount of goodwill amortized in a particular period
constitutes a non-cash expense that reduces our net income.
Amortization of goodwill resulting from substantially all of our past
acquisitions, and additional goodwill recorded in certain future acquisitions,
may not be deductible for tax purposes. In addition, we periodically evaluate
the recoverability of goodwill by reviewing the anticipated undiscounted future
cash flows from operations and comparing such cash flows to the carrying value
of the associated goodwill. If goodwill becomes impaired, we would be required
to write down the carrying value of the goodwill and incur a related charge to
our income. A reduction in net income resulting from a write-down of goodwill
would currently affect our financial results and could have a material adverse
impact upon the market price of our common stock.
IF VACATION RENTAL PROPERTY OWNERS DO NOT RENEW A SIGNIFICANT NUMBER OF PROPERTY
MANAGEMENT CONTRACTS OUR BUSINESS WOULD BE ADVERSELY AFFECTED.
We provide 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. If property owners do not
renew a significant number of management contracts or we are unable to attract
additional property owners, it would have a material adverse effect on our
business and financial results. In addition, although most of our contracts are
exclusive, industry standards in certain geographic markets dictate that rental
services be provided on a non-exclusive basis. Less than 1% of our revenues for
1998 on a consolidated pro forma basis were derived from rental services
provided on a non-exclusive basis. We are unable to determine the percentage of
the national rental services market that is provided on a non-exclusive basis.
IF HOMEOWNERS' ASSOCIATIONS TERMINATE MANAGEMENT AGREEMENTS, WE COULD LOSE SOME
OF OUR COMPETITIVE ADVANTAGE IN THESE MARKETS.
We currently provide management services at numerous condominium
developments pursuant to contracts with the homeowners' associations. We
frequently provide rental management services for a significant percentage of
the condominiums within these developments. Providing management services for
homeowners' associations frequently leads the associations to request that we
manage and control the front desk operations, laundry facilities and other
related services of the condominium developments. Controlling these services
often gives us a competitive advantage over other vacation rental and property
management companies in retaining the condominiums we currently manage and in
attracting new property owners.
We cannot assure you that a homeowners' association will not terminate its
management agreement with us. If a homeowners' association terminates a
management agreement, we could lose
14
<PAGE>
control or management of the front desk and related services in that condominium
development, thereby eliminating our competitive advantage in that development.
If a number of terminations occur, it could have a material adverse effect on
our business and financial results.
WE MAY BE NEGATIVELY AFFECTED BY THE YEAR 2000 PROBLEM.
The vacation property management industry uses complex software. The
potential impact upon our business of Year 2000 issues is greatest in the areas
of property management systems, telecommunications and financial accounting and
reporting. We have substantially completed the process of evaluating these
various components of our operating environment and embedded technology, except
with respect to our most recent acquisitions. We expect to complete the analysis
and implement any corrective measures for all of our current operations by the
end of the fourth quarter of 1999.
Although we believe that the consequences of the Year 2000 issues upon our
results of operations will not be material, we will have contingency plans in
place designed to mitigate the impact of Year 2000 issues. All contingency plans
are expected to be developed, tested and implemented by the end of the fourth
quarter of 1999.
If we should fail to identify or fix all such issues in our operations, or
if we are affected by the inability of a sole-source supplier or a major
customer to continue operations due to such a problem, our operations could be
adversely affected.
COMPETITION COULD RENDER OUR SERVICES UNCOMPETITIVE.
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. We compete for
vacationers and property owners primarily with local vacation rental and
property management companies located in our markets. Some of these competitors
are affiliated with the owners or operators of resorts where these competitors
provide their services. Certain of these competitors may have lower cost
structures and may provide their services at lower rates.
We also compete for vacationers with large hotel and resort companies. Many
of these competitors are large companies that have greater financial resources
than we do, 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, they would
constitute formidable competition for our business. Such competition could cause
us to lose management contracts, increase expenses or reduce management fees
which could have a material adverse effect on our business and financial
results.
EXISTING MANAGEMENT, DIRECTORS AND THEIR AFFILIATES OWN ENOUGH SHARES TO
EXERCISE SUBSTANTIAL INFLUENCE OVER MATTERS REQUIRING A VOTE OF STOCKHOLDERS.
Management, directors and affiliated entities, as of June 30, 1999, owned
shares of common stock representing approximately 26% of the total voting power
of the common stock. They would own approximately 28% of the voting power of the
common stock if all shares of voting-restricted common stock, which are entitled
to one-half vote per share, were converted into unrestricted common stock. These
persons, if acting together, will likely be able to exercise substantial
influence over our affairs, to elect all of the directors and to control the
disposition of any matter submitted to a vote of stockholders.
15
<PAGE>
ANY ADVERSE CHANGE IN THE REAL ESTATE MARKET COULD ADVERSELY AFFECT OUR
FINANCIAL AND OPERATING RESULTS.
We derived approximately 11% of our consolidated pro forma revenues for 1998
from net real estate brokerage commissions. Any factors which adversely affect
real estate sales, such as a 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 our business and financial results.
WE ARE SUBJECT TO GOVERNMENTAL REGULATION OF THE VACATION RENTAL AND PROPERTY
MANAGEMENT INDUSTRY.
Our operations are subject to various federal, state, local and foreign laws
and regulations, including licensing requirements applicable to real estate
operations and the sale of alcoholic beverages, laws and regulations relating to
consumer protection and local ordinances. Many states have adopted specific laws
and regulations which regulate our activities, such as:
- anti-fraud laws;
- real estate and travel services
provider license requirements;
- environmental laws;
- telemarketing laws;
- labor laws; and
- the Fair Housing Act.
We believe that we are in material compliance with all federal, state, local
and foreign laws and regulations to which we are currently subject. However, we
cannot assure you that the cost of qualifying under applicable regulations in
all jurisdictions in which we desire to conduct business will not be significant
or that we are actually in compliance with all applicable federal, state, local
and foreign laws and regulations. Compliance with or violation of any current or
future laws or regulations could require us to make material expenditures or
otherwise have a material adverse effect on our business and financial results.
TRANSACTIONS BETWEEN OUR OPERATING COMPANIES AND THEIR AFFILIATES MAY RESULT IN
CONFLICTS OF INTEREST.
Several lease agreements, management contracts and other agreements with
stockholders of our operating companies and entities controlled by them
continued after the closing of the acquisitions of our operating companies. We
have also entered into certain similar agreements that became effective upon
such acquisitions. In addition, we may enter into similar agreements in the
future. Other than a loan agreement with the former principal stockholder of
Aston Hotels & Resorts, a founding company, we believe existing agreements with
related persons are, and that all future agreements will be, on terms no less
favorable to us than we could obtain from unrelated third parties. Conflicts of
interests may arise between us and these related persons.
At March 31, 1999, the former principal stockholder of Aston owed us
approximately $4.3 million, either directly or through entities controlled by
him, including properties managed by Aston. Of this amount, $4.0 million is
fully collateralized by cash or cash equivalents and real estate or by the
former principal stockholder's personal guarantee, which guarantee may not
exceed $1.0 million.
DELAWARE LAW, OUR CHARTER DOCUMENTS AND STOCKHOLDER RIGHTS PLAN CONTAIN
PROVISIONS THAT MAY HAVE AN ANTI-TAKEOVER EFFECT.
We are subject to Section 203 of the Delaware General Corporation Law, which
generally prohibits us from engaging in a broad range of business combinations
with an interested stockholder for a period of three years after such a person
first becomes an interested stockholder. Interested stockholders include our
affiliates, associates and anyone who owns 15% or more of our outstanding voting
stock. The provisions of Section 203 could delay or prevent a change of control
of ResortQuest.
Provisions of our certificate of incorporation could make it more difficult
for a third party to acquire control of ResortQuest, even if such change in
control would be beneficial to stockholders. The directors are allowed to issue
preferred stock without stockholder approval. Such issuances could make
16
<PAGE>
it more difficult for a third party to acquire ResortQuest. Our bylaws contain
provisions that may have an anti-takeover effect, such as the requirement that
we must receive notice of nomination of directors not less than 60 nor more than
90 days prior to the date of the annual meeting.
On February 25, 1999, our board of directors adopted a stockholder rights
plan designed to protect our stockholders in the event of takeover action that
would deny them the full value of their investment. Under this plan, a dividend
distribution of one right for each share of common stock was declared to holders
of record at the close of business on March 15, 1999. The rights will also
attach to common stock issued after March 15, 1999. The rights will become
exercisable only in the event, with certain exceptions, an acquiring party
accumulates 15% or more of our voting stock, or if a party announces an offer to
acquire 15% or more of our voting stock. The rights will expire on March 15,
2009. Each right will entitle the holder to buy one one-hundredth of a share of
a new series of preferred stock at a price of $87.00. In addition, upon the
occurrence of certain events, holders of the rights will be entitled to purchase
either our stock or shares in an "acquiring entity" at half of market value. We
generally will be entitled to redeem the rights at $0.01 per right at any time
until the date on which a 15% position in our voting stock is acquired by any
person or group.
The rights plan is designed to prevent the use of coercive and/or abusive
takeover techniques and to encourage any potential acquiror to negotiate
directly with our board of directors for the benefit of all stockholders. In
addition, the rights plan is intended to provide increased assurance that a
potential acquiror would pay an appropriate control premium in connection with
any acquisition of ResortQuest. Nevertheless, the rights plan could be utilized,
under certain circumstances, as a method of discouraging, delaying or preventing
a change of control.
ACQUISITION TERMS
This prospectus covers the offer and sale of up to 5,789,501 shares of our
common stock that we may issue from time to time in connection with direct or
indirect acquisitions of other businesses, assets or securities in business
combination transactions. We will furnish this prospectus to the securityholders
or owners of those businesses we acquire in exchange for the shares of common
stock we offer by this prospectus.
We expect that negotiations with the securityholders or principal owners of
the businesses whose securities or assets we acquire will determine the terms
upon which we will issue the shares of common stock offered by this prospectus.
We expect that the shares of common stock we issue in an acquisition will be
valued at prices reasonably related to the market prices for our common stock
prevailing at or near the time we enter into an acquisition agreement or
consummate the acquisition. We will pay all expenses of the offering of the
shares of common stock described in this prospectus.
If we consummate an acquisition (or a series of acquisitions since the date
of our most recently audited financial statements) that would have a material
financial effect on our business, we will file a Current Report on Form 8-K
containing the financial and other information about the acquisition(s) that
would be material to subsequent purchasers of the shares of common stock we
offer in this prospectus.
17
<PAGE>
RESALE OF COMMON STOCK
With our consent, this prospectus may be used by selling stockholders who
have received or will receive shares of common stock under this prospectus in
connection with acquisitions and who may wish to sell shares of common stock. We
may consent to the use of this prospectus by selling stockholders for a limited
period of time and subject to limitations and conditions which may be varied by
agreement between us and one or more selling stockholders. Selling stockholders
may agree that:
- an offering of shares under this prospectus will be effected in an orderly
manner through securities dealers, acting as broker or dealer, selected by
us;
- they will enter into custody agreements with one or more banks with
respect to such shares; or
- that they make sales only by one or more of the methods described in this
prospectus, as appropriately supplemented or amended when required.
We will not receive any of the proceeds from any sale of shares offered by a
selling stockholder.
A selling stockholder may sell shares:
- on any national securities exchange or quotation service on which our
common stock is listed or quoted at the time of sale;
- in the over-the-counter market;
- in transactions other than on an exchange or in the over-the-counter
market;
- in connection with short sales of shares;
- by pledge to secure debts and obligations;
- in connection with the writing of call options, in hedging transactions
and in settlement of other transactions in standardized or
over-the-counter options; or
- in a combination of any of the above transactions.
Shares may be sold at a fixed offering price, which may be changed, at the
prevailing market price at the time of sale, at prices related to such
prevailing market price or at negotiated prices. Selling stockholders may use
underwriters, brokers, dealers or agents to sell their shares. Any underwriters,
brokers, dealers or agents may arrange for others to participate in any such
transaction and may receive compensation in the form of discounts, commissions
or concessions from selling stockholders and/or the purchasers of shares.
If required at the time that a particular offer of shares is made, a
supplement to this prospectus will be delivered that describes any material
arrangements for the distribution of shares and the terms of the offering
including, without limitation, the names of any underwriters, brokers, dealers
or agents and any discounts, commissions or concessions and other items
constituting compensation from the selling stockholders or otherwise.
Selling stockholders and any underwriters, brokers, dealers or agents that
participate with a selling stockholder in the distribution of shares may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, in
which event any discounts, commissions or concessions received by such
underwriters, brokers, dealers or agents and any profit on the resale of shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act of 1933.
We may agree to indemnify selling stockholders or any participating
underwriters, brokers, dealers or agents against certain civil liabilities,
including liabilities under the Securities Act of 1933, and to reimburse them
for certain expenses in connection with the offering and sale of shares.
Selling stockholders may also offer shares of common stock covered by this
prospectus under exemptions from the registration requirements of the Securities
Act of 1933, including sales which meet the requirements of Rule 145(d) under
the Securities Act of 1933.
18
<PAGE>
RESTRICTIONS ON RESALE OF COMMON STOCK
The common stock offered by this prospectus has been registered under the
Securities Act of 1933, but this registration does not cover resale or
distribution of such common stock by persons who receive our common stock in
acquisition transactions. Affiliates of those entities that we acquire may not
sell the shares of common stock offered by this prospectus except pursuant to an
effective registration statement under the Securities Act of 1933 covering such
shares, or in compliance with Rule 145 promulgated under the Securities Act of
1933 or another applicable exemption from the registration requirements of the
Securities Act of 1933.
Rule 145 generally permits affiliates of acquired companies to sell their
shares of common stock immediately following the acquisition in compliance with
certain volume limitations and manner of sale requirements under Rule 145.
Specifically, sales by such affiliates during any three-month period cannot
exceed the greater of (1) 1% of all of the shares of our common stock
outstanding, and (2) the average weekly reported volume of trading of our common
stock on the NYSE during the four calendar weeks preceding the proposed sale.
Sales by such affiliates also may be made only in a broker's transaction or
transactions directly with a market marker.
These restrictions will cease to apply under most other circumstances if the
affiliate has held the shares of common stock offered by this prospectus for at
least one year, provided that the person or entity is not then an affiliate of
ResortQuest. Individuals who are not affiliates of the company being acquired
will not be subject to resale restrictions under Rule 145 and may resell the
shares of common stock offered by this prospectus immediately following the
acquisition without an effective registration statement under the Securities Act
of 1933.
In addition to the resale limitations imposed by federal securities laws
described above, we may require that persons who receive our common stock in
connection with an acquisition agree to hold such stock for a certain period
from the date it is received.
Additional restrictions may apply if the acquisition will be accounted for
under the pooling of interests method of accounting.
USE OF PROCEEDS
This prospectus relates to shares of our common stock that we may offer and
issue from time to time in connection with the acquisition of other businesses
and assets and interests therein, and upon exercise or conversion of warrants,
options or other similar instruments issued by us in connection with such
acquisitions. Other than the businesses or assets acquired, we will generally
not receive any proceeds from the issuance of shares under this prospectus.
However, in situations where we issue warrants or options to purchase common
stock in connection with an acquisition, any proceeds that we receive upon the
exercise of the warrants or options will be used for general corporate purposes.
When this prospectus is used by a selling stockholder in a public reoffering or
resale of common stock acquired pursuant to this prospectus, we will not receive
any proceeds from such sale by the selling stockholder.
LEGAL MATTERS
The legality of the common stock offered by this prospectus will be passed
upon by Akin, Gump, Strauss, Hauer & Feld, L.L.P., Washington, D.C.
EXPERTS
Our audited financial statements, incorporated by reference into this
prospectus, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports, and are included in this prospectus
in reliance upon the authority of Arthur Andersen LLP as experts in giving said
reports.
19
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5,789,501 SHARES
[LOGO]
COMMON STOCK
------------
PROSPECTUS
, 1999
-------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection (a) of Section 145 of the General Corporation Law of the State of
Delaware 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 shall 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 (1) 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; (2) that indemnification provided for
by Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; (3) that indemnification provided for by
Section 145 shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of such person's heirs, executors and
administrators; and (4) that the corporation is empowered 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.
As permitted by Section 102(b)(7) of the General Corporation Law of the
State of Delaware, articles seventh and eighth of our certificate of
incorporation, as amended, provides that none of our directors shall be liable
to us or our 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 ResortQuest or our 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; or (4) for any transaction from which the director
derived an improper personal benefit, we shall, to the fullest extent permitted
by Section 145, as amended from time to time, indemnify all persons whom we may
indemnify pursuant thereto.
II-1
<PAGE>
In addition, Article VIII of our bylaws further provides that we shall
indemnify our officers, directors and employees to the fullest extent permitted
by law.
We have entered into indemnification agreements with each of our executive
officers and directors which indemnifies such person to the fullest extent
permitted by our amended and restated certificate of incorporation, our bylaws
and Delaware law. We also have obtained directors and officers liability
insurance.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------
<C> <S> <C>
2.1(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation
Properties International, Inc., HCP Acquisition Corp., Hotel Corporation of the Pacific, Inc.
and Andre S. Tatibouet.
2.2(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation
Properties International, Inc., B&B Acquisition Corp., Brindley Acquisition Corp., B&B On The
Beach, Inc., Brindley & Brindley Realty and Development, Inc., Douglas R. Brindley and Betty
Shotton Brindley.
2.3(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation
Properties International, Inc., Coastal Realty Acquisition LLC, Coastal Management Acquisition
Corp., Coastal Resorts Realty LLC, Coastal Resorts Management, Inc., Joshua M. Freeman, T.
Michael McNally and CMF Coastal Resorts, L.L.C.
2.4(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation
Properties International, Inc., Collection of Fine Properties, Inc., Ten Mile Holdings, Ltd.,
Luis Alonso, Domingo R. Moreira, Brenda M. Lopez Ibanez and Ana Maria Moreira.
2.5(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation
Properties International, Inc., Houston and O'Leary Company and Heidi O'Leary Houston.
2.6(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation
Properties International, Inc., Jupiter Acquisition Corp., Jupiter Property Management at Park
City, Inc. and Jon R. Brinton.
2.7(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation
Properties International, Inc., Maui Acquisition Corp., Maui Condominium and Home Realty,
Inc., Daniel C. Blair and Paul T. Dobson.
2.8(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation
Properties International, Inc., Maury Acquisition Corp., The Maury People, Inc. and Sharon
Benson Doucette.
2.9(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation
Properties International, Inc., Priscilla Acquisition Corp., Realty Consultants Acquisition
Corp., Realty Consultants, Inc., Howey Acquisition, Inc., Charles O. Howey and Dolores C.
Howey.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------
<C> <S> <C>
2.10(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation
Properties International, Inc., RPM Acquisition Corp., Resort Property Management, Inc.,
Daniel L. Meehan, Kimberlie C. Meehan and Nancy Hess.
2.11(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation
Properties International, Inc., Telluride Acquisition Corp., Telluride Resort Accommodations,
Inc., 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 Martori and Alan Mishkin.
2.12(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation
Properties International, Inc., Trupp Acquisition Corp., Management Acquisition Corp.,
Trupp-Hodnett Enterprises, Inc., THE Management Company, Hans F. Trupp, Roy K. Hodnett, Pat
Hodnett Cooper and Austin Trupp.
2.13(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation
Properties International, Inc., Whistler Holding Corp., Whistler Chalets Ltd. and J. Patrick
McCurdy.
2.14(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation
Properties International, Inc., FRS Acquisition Corp., First Resort Software, Inc., Thomas A.
Leddy, Evan H. Gull and Daniel Patrick Curry.
2.15(2) -- Stock Purchase Agreement, dated September 11, 1998, by and among ResortQuest International,
Inc., Abbott Realty Services, Inc., Tops'L Sales Group Inc., William W. Abbott, Jr., Stephen
J. Abbott, James R. Steiner, Charles H. Van Driver, Sue C. Van Driver and Angus G. Andrews.
4.1(3) -- Specimen Common Stock Certificate.
4.2(4) -- Form of Restriction and Registration Rights Agreements between ResortQuest and each of Alpine
Consolidated II, LLC, Capstone Partners, LLC, John Przywara, David Marshall, Douglas W.
Comfort, Robert G. Falcone, Wayne Heller, Dwain Wall, Stephen J. Garchik, John Shaw, David
Sullivan, Jeffrey M. Jarvis, Frederick L. Farmer, W. Michael Murphy, Jules S. Sowder, John K.
Lines, Brian S. Sullivan, John D. Sullivan, the Sullivan Grandchildren's Trust, the David L.
Levine Irrevocable Children's Trust Under Agreement dated April 27, 1998 f/b/o Whitney Monica
Levine, the David L. Levine Irrevocable Children's Trust Under Agreement dated April 27, 1998
f/b/o Ross Michael Levine, the David L. Levine Irrevocable Children's Trust Under Agreement
dated April 27, 1998 f/b/o Keith Phillip Levine and the David L. Levine Revocable Trust Under
Agreement dated April 27, 1998.
4.3(5) -- Rights Agreement, dated as of February 25, 1999 between ResortQuest International, Inc. and
American Stock Transfer & Trust Company, as Rights Agent.
5.1 -- Opinion of Akin, Gump Strauss, Hauer & Feld, L.L.P. as to the legality of the securities being
registered.
10.30 -- Fourth Amendment to Credit Agreement, dated as of June 1, 1999.
10.31 -- Note Purchase and Guarantee Agreement, dated as of June 1, 1999.
10.32 -- Intercreditor and Collateral Agreement, dated as of June 1, 1999.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------
<C> <S> <C>
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Arthur Andersen LLP.
23.3 -- Consent of Morrison, Brown, Argiz and Company.
23.4 -- Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P (CONTAINED IN EXHIBIT 5.1).
24.1 -- Power of Attorney (included on the signature page to the registration statement).
27.1(6) -- Financial Data Schedule for the Period Ended December 31, 1998.
99.2(7) -- Financial Statements of Howey Acquisition, Inc. (dba Priscilla Murphy Realty, Inc.) as of
December 31, 1997 and May 26, 1998 together with Report of Independent Public Accountants.
99.3(7) -- Financial Statements of Collection of Fine Properties, Inc. as of December 31, 1997 and May
26, 1998 together with Reports of Independent Public Accountants.
99.4(7) -- Financial Statements of Coastal Resorts Management, Inc. and Coastal Resorts Realty L.L.C. as
of December 31, 1997 and May 26, 1998 together with Report of Independent Public Accountants.
99.5(7) -- Financial Statements of First Resort Software, Inc. as of December 31, 1997 and May 26, 1998
together with Report of Independent Public Accountants.
99.6(7) -- Financial Statements of Houston & O'Leary Company as of December 31, 1997 and May 26, 1998
together with Report of Independent Public Accountants.
99.7(7) -- Financial Statements of Brindley & Brindley (including Brindley Realty and Development, Inc.
and B&B On The Beach, Inc.) as of December 31, 1997 and May 26, 1998 together with Report of
Independent Public Accountants.
99.8(7) -- Financial Statements of The Maury People, Inc. as of December 31, 1997 and May 26, 1998
together with Report of Independent Public Accountants.
99.9(7) -- Financial Statements of Resort Property Management, Inc. as of September 30, 1997 and May 26,
1998 together with Report of Independent Public Accountants.
99.10(7) -- Financial Statements of Telluride Resort Accommodations, Inc. as of December 31, 1997 and May
26, 1998 together with Report of Independent Public Accountants.
99.11(7) -- Financial Statements of Trupp-Hodnett Enterprises (including Trupp-Hodnett Enterprises, Inc.
and THE Management Company) as of December 31, 1997 and May 26, 1998 together with Report of
Independent Public Accountants.
</TABLE>
- ------------------------
(1) Previously filed on March 12, 1998 as an exhibit to ResortQuest's
Registration Statement on Form S-1 (File No. 333-47867) and incorporated
herein by reference.
(2) Previously filed on October 16, 1998 as an exhibit to ResortQuest's
Registration Statement on Form S-1 (File No. 333-56703) and incorporated
herein by reference.
(3) Previously filed on April 27, 1998 as an exhibit to Amendment No. 1 to
ResortQuest's Registration Statement on Form S-1 (File o. 333-47867) and
incorporated herein by reference.
(4) Previously filed on May 26, 1998 as an exhibit to ResortQuest's Current
Report on Form 8-K (File No. 001-14115) and incorporated herein by
reference.
II-4
<PAGE>
(5) Previously filed on November 16, 1998 as an exhibit to ResortQuest's
Quarterly Report on Form 10-Q for the period ended September 30, 1998 (File
No. 00-14115) and incorporated herein by reference.
(6) Previously filed on May 28, 1999 as an exhibit to ResortQuest's Post
Effective Amendment No. 3 to its Registration Statement on Form S-1 (File
No. 333-56703) and incorporated herein by reference.
(7) Previously filed on April 13, 1999 as an exhibit to ResortQuest's Post
Effective Amendment No. 2 to its Registration Statement on Form S-1 (File
No. 333-56703) and incorporated herein by reference.
(b) None
(c) None
ITEM 22. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment 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 deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(4) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in this registration statement 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 deemed to be the in initial bona fide offering thereof.
(5) That prior to any public reoffering of the securities registered
hereunder through the use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the issuer undertakes that
such reoffering prospectus will contain the information called for by the
applicable registration form with respect to reoffering by persons who
may be deemed underwriters, in addition to the information called for by
the other items of the applicable form.
II-5
<PAGE>
(6) That every prospectus (i) that is filed pursuant to the immediately
preceding paragraph, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Securities Act of 1933 and is used in connection
with an offering of securities subject to Rule 415, will be filed as a
part of an amendment to the registration statement and will not be used
until such amendment is effective, and that, for purposes of determining
any liability under the Securities Act of 1933, each such post-effective
amendment 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 deemed to 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 foregoing provisions, 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 Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
(b) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(c) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Memphis, Tennessee, on the day of
July 16, 1999.
RESORTQUEST INTERNATIONAL, INC.
By: /s/ JEFFERY M. JARVIS
-----------------------------------------
Jeffery M. Jarvis
Chief Financial Officer
POWERS OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David C. Sullivan, David L. Levine, Jeffery M.
Jarvis and John K. Lines, and each of them, with full power to act without the
other, such person's true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign this registration statement, any and
all amendments thereto (including post-effective amendments), any subsequent
registration statements pursuant to Rule 462 of the Securities Act of 1933, as
amended, and any amendments thereto and to file the same, with exhibits and
schedules thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing necessary or desirable to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE CAPACITY DATE
- ------------------------------ --------------------------- -------------------
/s/ DAVID C. SULLIVAN Chairman of the Board and July 16, 1999
- ------------------------------ Chief Executive Officer,
(David C. Sullivan) (Principal Executive
Officer)
/s/ DAVID L. LEVINE President and Chief July 16, 1999
- ------------------------------ Operating Officer,
(David L. Levine) Director
/s/ JEFFERY M. JARVIS Senior Vice President and July 16, 1999
- ------------------------------ Chief Financial Officer
(Jeffery M. Jarvis) (Principal Financial and
Accounting Officer)
/s/ WILLIAM W. ABBOTT, JR. Director July 16, 1999
- ------------------------------
(William W. Abbott, Jr.)
Director July 16, 1999
- ------------------------------
(Elan J. Blutinger)
II-7
<PAGE>
<TABLE>
<C> <S> <C>
/s/ D. FRASER BULLOCK Director July 16, 1999
- ------------------------------
(D. Fraser Bullock)
/s/ JOSHUA M. FREEMAN Director July 16, 1999
- ------------------------------
(Joshua M. Freeman)
/s/ HEIDI O'LEARY HOUSTON Director July 16, 1999
- ------------------------------
(Heidi O'Leary Houston)
/s/ MICHAEL D. ROSE Director July 16, 1999
- ------------------------------
(Michael D. Rose)
/s/ ANDRE S. TATIBOUET Director July 16, 1999
- ------------------------------
(Andre S. Tatibouet)
/s/ JOSEPH V. VITTORIA Director July 16, 1999
- ------------------------------
(Joseph V. Vittoria)
/s/ THEODORE L. WEISE Director July 16, 1999
- ------------------------------
(Theodore L. Weise)
</TABLE>
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- ------------------------------------------------------------------------------------------------
<C> <S> <C>
2.1(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., HCP Acquisition Corp., Hotel Corporation of the Pacific, Inc. and Andre S.
Tatibouet.
2.2(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., B&B Acquisition Corp., Brindley Acquisition Corp., B&B On The Beach, Inc.,
Brindley & Brindley Realty and Development, Inc., Douglas R. Brindley and Betty Shotton
Brindley.
2.3(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Coastal Realty Acquisition LLC, Coastal Management Acquisition Corp.,
Coastal Resorts Realty LLC, Coastal Resorts Management, Inc., Joshua M. Freeman, T. Michael
McNally and CMF Coastal Resorts, L.L.C.
2.4(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Collection of Fine Properties, Inc., Ten Mile Holdings, Ltd., Luis Alonso,
Domingo R. Moreira, Brenda M. Lopez Ibanez and Ana Maria Moreira.
2.5(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Houston and O'Leary Company and Heidi O'Leary Houston.
2.6(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Jupiter Acquisition Corp., Jupiter Property Management at Park City, Inc.
and Jon R. Brinton.
2.7(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Maui Acquisition Corp., Maui Condominium and Home Realty, Inc., Daniel C.
Blair and Paul T. Dobson.
2.8(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Maury Acquisition Corp., The Maury People, Inc. and Sharon Benson Doucette.
2.9(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Priscilla Acquisition Corp., Realty Consultants Acquisition Corp., Realty
Consultants, Inc., Howey Acquisition, Inc., Charles O. Howey and Dolores C. Howey.
2.10(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., RPM Acquisition Corp., Resort Property Management, Inc., Daniel L. Meehan,
Kimberlie C. Meehan and Nancy Hess.
2.11(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Telluride Acquisition Corp., Telluride Resort Accommodations, Inc., 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 Martori and Alan Mishkin.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- ------------------------------------------------------------------------------------------------
<C> <S> <C>
2.12(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Trupp Acquisition Corp., Management Acquisition Corp., Trupp-Hodnett
Enterprises, Inc., THE Management Company, Hans F. Trupp, Roy K. Hodnett, Pat Hodnett Cooper and
Austin Trupp.
2.13(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Whistler Holding Corp., Whistler Chalets Ltd. and J. Patrick McCurdy.
2.14(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., FRS Acquisition Corp., First Resort Software, Inc., Thomas A. Leddy, Evan
H. Gull and Daniel Patrick Curry.
2.15(2) -- Stock Purchase Agreement, dated September 11, 1998, by and among ResortQuest International,
Inc., Abbott Realty Services, Inc., Tops'L Sales Group Inc., William W. Abbott, Jr., Stephen J.
Abbott, James R. Steiner, Charles H. Van Driver, Sue C. Van Driver and Angus G. Andrews.
4.1(3) -- Specimen Common Stock Certificate.
4.2(4) -- Form of Restriction and Registration Rights Agreements between ResortQuest and each of Alpine
Consolidated II, LLC, Capstone Partners, LLC, John Przywara, David Marshall, Douglas W. Comfort,
Robert G. Falcone, Wayne Heller, Dwain Wall, Stephen J. Garchik, John Shaw, David Sullivan,
Jeffrey M. Jarvis, Frederick L. Farmer, W. Michael Murphy, Jules S. Sowder, John K. Lines, Brian
S. Sullivan, John D. Sullivan, the Sullivan Grandchildren's Trust, the David L. Levine
Irrevocable Children's Trust Under Agreement dated April 27, 1998 f/b/o Whitney Monica Levine,
the David L. Levine Irrevocable Children's Trust Under Agreement dated April 27, 1998 f/b/o Ross
Michael Levine, the David L. Levine Irrevocable Children's Trust Under Agreement dated April 27,
1998 f/b/o Keith Phillip Levine and the David L. Levine Revocable Trust Under Agreement dated
April 27, 1998.
4.3(5) -- Rights Agreement, dated as of February 25, 1999 between ResortQuest International, Inc. and
American Stock Transfer & Trust Company, as Rights Agent.
5.1 -- Opinion of Akin, Gump Strauss, Hauer & Feld, L.L.P. as to the legality of the securities being
registered.
10.30 -- Fourth Amendment to Credit Agreement, dated as of June 1, 1999.
10.31 -- Note Purchase and Guarantee Agreement, dated as of June 1, 1999.
10.32 -- Intercreditor and Collateral Agreement, dated as of June 1, 1999.
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Arthur Andersen LLP.
23.3 -- Consent of Morrison, Brown, Argiz and Company.
23.4 -- Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P (CONTAINED IN EXHIBIT 5.1).
24.1 -- Power of Attorney (included on the signature page to the registration statement)
27.1(6) -- Financial Data Schedule for the Period Ended December 31, 1998.
99.2(7) -- Financial Statements of Howey Acquisition, Inc. (dba Priscilla Murphy Realty, Inc.) as of
December 31, 1997 and May 26, 1998 together with Report of Independent Public Accountants.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- ------------------------------------------------------------------------------------------------
<C> <S> <C>
99.3(7) -- Financial Statements of Collection of Fine Properties, Inc. as of December 31, 1997 and May 26,
1998 together with Reports of Independent Public Accountants.
99.4(7) -- Financial Statements of Coastal Resorts Management, Inc. and Coastal Resorts Realty L.L.C. as of
December 31, 1997 and May 26, 1998 together with Report of Independent Public Accountants.
99.5(7) -- Financial Statements of First Resort Software, Inc. as of December 31, 1997 and May 26, 1998
together with Report of Independent Public Accountants.
99.6(7) -- Financial Statements of Houston & O'Leary Company as of December 31, 1997 and May 26, 1998
together with Report of Independent Public Accountants.
99.7(7) -- Financial Statements of Brindley & Brindley (including Brindley Realty and Development, Inc. and
B&B On The Beach, Inc.) as of December 31, 1997 and May 26, 1998 together with Report of
Independent Public Accountants.
99.8(7) -- Financial Statements of The Maury People, Inc. as of December 31, 1997 and May 26, 1998 together
with Report of Independent Public Accountants.
99.9(7) -- Financial Statements of Resort Property Management, Inc. as of September 30, 1997 and May 26,
1998 together with Report of Independent Public Accountants.
99.10(7) -- Financial Statements of Telluride Resort Accommodations, Inc. as of December 31, 1997 and May
26, 1998 together with Report of Independent Public Accountants.
99.11(7) -- Financial Statements of Trupp-Hodnett Enterprises (including Trupp-Hodnett Enterprises, Inc. and
THE Management Company) as of December 31, 1997 and May 26, 1998 together with Report of
Independent Public Accountants.
</TABLE>
- ------------------------
(1) Previously filed on March 12, 1998 as an exhibit to ResortQuest's
Registration Statement on Form S-1 (File No. 333-47867) and incorporated
herein by reference.
(2) Previously filed on October 16, 1998 as an exhibit to ResortQuest's
Registration Statement on Form S-1 (File No. 333-56703) and incorporated
herein by reference.
(3) Previously filed on April 27, 1998 as an exhibit to Amendment No. 1 to
ResortQuest's Registration Statement on Form S-1 (File o. 333-47867) and
incorporated herein by reference.
(4) Previously filed on May 26, 1998 as an exhibit to ResortQuest's Current
Report on Form 8-K (File No. 001-14115) and incorporated herein by
reference.
(5) Previously filed on November 16, 1998 as an exhibit to ResortQuest's
Quarterly Report on Form 10-Q for the period ended September 30, 1998 (File
No. 00-14115) and incorporated herein by reference.
(6) Previously filed on May 28, 1999 as an exhibit to ResortQuest's Post
Effective Amendment No. 3 to its Registration Statement on Form S-1 (File
No. 333-56703) and incorporated herein by reference.
(7) Previously filed on April 13, 1999 as an exhibit to ResortQuest's Post
Effective Amendment No. 2 to its Registration Statement on Form S-1 (File
No. 333-56703) and incorporated herein by reference.
<PAGE>
Exhibit 5.1
July 16, 1999
ResortQuest International, Inc.
1355-B Lynnfield Road
Suite 245
Memphis, TN 38119
RE: Shelf Registration Statement on Form S-4
Ladies and Gentlemen:
We have acted as counsel to ResortQuest International, Inc., a Delaware
corporation (the "Company"), in connection with the filing of a Shelf
Registration Statement on Form S-4, including the exhibits thereto (the
"Registration Statement"), under the Securities Act of 1933, as amended (the
"Act"), for the registration by the Company of 5,000,000 shares (the "Shares")
of Common Stock, par value $.01 per share, which may be issued (i) to the
Selling Stockholders (as such term is defined in the Registration Statement) and
(ii) from time to time in connection with the acquisition by the Company of
other businesses, and which may be reserved for issuance pursuant to, or offered
and issued upon exercise or conversion of, warrants, options, convertible notes
or other similar instruments ("Other Securities") issued by the Company from
time to time in connection with any such acquisition.
In connection with this opinion, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of the Registration
Statement and such other documents
<PAGE>
and records as we have deemed necessary. We have assumed that (i) the
Registration Statement, and any amendments thereto, will have become effective;
and (ii) all Shares will be issued in compliance with applicable federal and
state securities laws.
With respect to the issuance of any Shares, we have assumed that the
issuance of such Shares will have been duly authorized and, if applicable, such
Shares will have been reserved for issuance upon the exercise or conversion of
Other Securities; and we have further assumed that the Shares will have been
issued, and the certificates evidencing the same will have been duly executed
and delivered, against receipt of the consideration approved by the Company
which will be no less than the par value thereof.
Based upon the foregoing, we are of the opinion that, upon issuance,
all of the Shares will be duly authorized and validly issued, fully paid and
non-assessable.
The foregoing opinion is limited to the laws of the State of Delaware.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters." In giving this consent, we do not admit that we are acting within
the category of persons whose consent is required under Section 7 of the Act.
Sincerely,
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
<PAGE>
Exhibit 10.30
FOURTH AMENDMENT
THIS FOURTH AMENDMENT (this "AMENDMENT"), dated as of June 1, 1999, is
by and among RESORTQUEST INTERNATIONAL, INC., a Delaware corporation (the
"BORROWER"), the Subsidiaries of the Borrower party hereto (collectively the
"GUARANTORS"), the Lenders party hereto (the "LENDERS"), SOCIETE GENERALE, as
Co-Agent (the "CO-AGENT") and NATIONSBANK, N.A., a national banking association
as Agent for the Lenders (the "AGENT").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement dated as of May 26, 1998 (as
amended by a letter agreement (the "FIRST AMENDMENT") dated as of September 30,
1998, a Second Amendment (the "SECOND AMENDMENT") dated as of December 7, 1998
and a Third Amendment dated as of April 16, 1999 (the "THIRD AMENDMENT"), the
"EXISTING CREDIT AGREEMENT"), among the Borrower, the Guarantors, the Lenders,
the Co-Agent and the Agent, the Lenders have extended commitments to make
certain credit facilities available to the Borrower;
WHEREAS, the Borrower has requested that each of the Lenders (other
than First Tennessee Bank National Association ("FIRST TENNESSEE")) (each an
"OTHER LENDER") agree to the termination of the Commitment of First Tennessee
without a pro rata reduction of the Commitment of such Other Lender, the
repayment of all outstanding Loans of First Tennessee without a pro rata
repayment of the Loans of such Other Lender and the release of First Tennessee
from its obligations as a Lender under the Credit Documents without a
corresponding release of such Other Lender from its obligations under the Credit
Documents;
WHEREAS, the Borrower has requested certain amendments to the Credit
Agreement to permit the issuance of senior secured notes and the sharing of
collateral by the noteholders and the Lenders on a PARI PASSU basis;
WHEREAS, the Credit Parties and the Other Lenders have agreed to the
release of First Tennessee and to amend the Existing Credit Agreement as set
forth herein.
NOW, THEREFORE, in consideration of the agreements herein contained,
the parties hereby agree as follows:
PART I
DEFINITIONS
SUBPART 1.1. CERTAIN DEFINITIONS. Unless otherwise defined herein or
the context otherwise requires, the following terms used in this Amendment,
including its preamble and recitals, have the following meanings:
"AMENDED CREDIT AGREEMENT" means the Existing Credit Agreement as
amended by this Amendment.
<PAGE>
"AMENDMENT EFFECTIVE DATE" is defined in SUBPART 4.1.
SUBPART 1.2. OTHER DEFINITIONS. Unless otherwise defined herein or the
context otherwise requires, terms used in this Amendment, including its
preamble and recitals, have the meanings provided in the Amended Credit
Agreement.
PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
AND WAIVER
Effective on (and subject to the occurrence of) the Amendment Effective
Date, the Existing Credit Agreement is hereby amended in accordance with this
PART II. Except as so amended, the Existing Credit Agreement shall continue in
full force and effect.
SUBPART 2.1. AMENDMENT TO SECTION 1.1. Section 1.1 is amended by adding
the following definition of "ADDITIONAL CREDITORS" in the appropriate
alphabetical order:
"ADDITIONAL CREDITORS" shall have the meaning assigned to such
term in the Intercreditor Agreement.
SUBPART 2.2. ADDITIONAL AMENDMENT TO SECTION 1.1. Section 1.1 is
amended by adding the following definition of "ADDITIONAL FACILITY
DOCUMENTS" in the appropriate alphabetical order:
"ADDITIONAL FACILITY DOCUMENTS" shall have the meaning assigned to
such term in the Intercreditor Agreement.
SUBPART 2.3. ADDITIONAL AMENDMENT TO SECTION 1.1. The definition of
"CHANGE OF CONTROL" contained in Section 1.1 is amended in its entirety so
that such definition now reads as follows:
"CHANGE OF CONTROL" means the occurrence of any of the following
events: (i) any Person or two or more Persons acting in concert shall
have acquired "beneficial ownership," directly or indirectly, of, or
shall have acquired by contract or otherwise, or shall have entered
into a contract or arrangement that, upon consummation, will result in
its or their acquisition of, control over, Voting Stock of the Borrower
(or other securities convertible into such Voting Stock) sufficient to
elect a majority of the Borrower's Board of Directors or (ii) during
any period of up to 24 consecutive months, commencing after the Closing
Date, individuals who at the beginning of such 24 month period were
directors of the Borrower (together with any new director whose
election by the Borrower's Board of Directors or whose nomination for
election by the Borrower's shareholders was approved by a vote of at
least two-thirds of the directors then still in office who either were
-2-
<PAGE>
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors of the Borrower then
in office. As used herein, "beneficial ownership" shall have the
meaning provided in Rule 13d-3 of the Securities and Exchange
Commission under the Securities Act of 1934.
SUBPART 2.4. ADDITIONAL AMENDMENT TO SECTION 1.1. Section 1.1 is
amended by adding the following definition of "COLLATERAL AGENT" in the
appropriate alphabetical order:
"COLLATERAL AGENT" means NationsBank, N.A., as collateral agent
for the Lenders, the Noteholders and the Additional Creditors pursuant
to the Intercreditor Agreement.
SUBPART 2.5. ADDITIONAL AMENDMENT TO SECTION 1.1. The definition of
"COLLATERAL DOCUMENTS" contained in Section 1.1 is amended in its entirety
so that such definition now reads as follows:
"COLLATERAL DOCUMENTS" means a collective reference to the
Security Agreement, the Pledge Agreement, any collateral documents
executed pursuant to Section 7.12 and such other documents executed and
delivered in connection with the attachment and perfection of the
Collateral Agent's security interests in the assets of the Credit
Parties, including without limitation, UCC financing statements and
patent and trademark filings.
SUBPART 2.6. ADDITIONAL AMENDMENT TO SECTION 1.1 The definition of
"CREDIT DOCUMENTS" contained in Section 1.1 is amended in its entirety so
that such definition now reads as follows:
"CREDIT DOCUMENTS" means a collective reference to this Credit
Agreement, the Revolving Notes, the LOC Documents, each Joinder
Agreement, the Agent's Fee Letter, the Collateral Documents, the
Intercreditor Agreement and all other related agreements and documents
issued or delivered hereunder or thereunder or pursuant hereto or
thereto (in each case as the same may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time), and
"CREDIT DOCUMENT" means any one of them.
SUBPART 2.7. ADDITIONAL AMENDMENT TO SECTION 1.1. Section 1.1 is
amended by adding the following definition of "FOURTH AMENDMENT EFFECTIVE
DATE" in the appropriate alphabetical order:
"FOURTH AMENDMENT EFFECTIVE DATE" means June 16, 1999.
-3-
<PAGE>
SUBPART 2.8. ADDITIONAL AMENDMENT TO SECTION 1.1. Section 1.1 is
amended by adding the following definition of "INTERCREDITOR AGREEMENT" in
the appropriate alphabetical order:
"INTERCREDITOR AGREEMENT" means the Intercreditor and Collateral
Agency Agreement, dated as of June 1, 1999, by and among the Collateral
Agent, the Noteholders, the Agent, the Lenders and the Additional
Creditors, as amended, modified, supplemented or restated from time to
time.
SUBPART 2.9. ADDITIONAL AMENDMENT TO SECTION 1.1. Section 1.1 is
amended by adding the following definition of "NOTE PURCHASE AND GUARANTEE
AGREEMENT" in the appropriate alphabetical order:
"NOTE PURCHASE AND GUARANTEE AGREEMENT" means the Note Purchase
and Guarantee Agreement, dated as of June 1, 1999, among the Credit
Parties and the Noteholders, as amended, modified, supplemented or
restated from time to time.
SUBPART 2.10. ADDITIONAL AMENDMENT TO SECTION 1.1. Section 1.1 is
amended by adding the following definition of "NOTEHOLDERS" in the
appropriate alphabetical order:
"NOTEHOLDERS" means the noteholders party from time to time to the
Note Purchase and Guarantee Agreement.
SUBPART 2.11. ADDITIONAL AMENDMENT TO SECTION 1.1. Clause (i) of the
definition of "PERMITTED LIENS" contained in Section 1.1 is amended in its
entirety so that such clause now reads as follows:
"PERMITTED LIENS" means:
(i) Liens in favor of the Collateral Agent to secure the
Credit Party Obligations and the obligations of the Credit
Parties under the Senior Note Documents;
************
SUBPART 2.12. ADDITIONAL AMENDMENT TO SECTION 1.1 The definition of
"PLEDGE AGREEMENT" contained in Section 1.1 is amended in its entirety so
that such definition now reads as follows:
"PLEDGE AGREEMENT" means the amended and restated pledge agreement
dated as of June 1, 1999 executed and delivered by the Borrower and the
Guarantors in favor of the Collateral Agent, for the benefit of the
Secured Parties on a PARI PASSU basis, to secure the Secured
Obligations, as amended, modified, restated or supplemented from time
to time.
-4-
<PAGE>
SUBPART 2.13. ADDITIONAL AMENDMENT TO SECTION 1.1 The definition of
"REVOLVING COMMITTED AMOUNT" contained in Section 1.1 is amended in its
entirety so that such definition now reads as follows:
"REVOLVING COMMITTED AMOUNT" means FIFTY MILLION DOLLARS
($50,000,000) or such lesser amount as the Revolving Committed Amount
may be reduced pursuant to Section 3.4.
SUBPART 2.14. ADDITIONAL AMENDMENT TO SECTION 1.1. Section 1.1 is
amended by adding the following definition of "SECURED DOCUMENTS" in the
appropriate alphabetical order:
"SECURED DOCUMENTS" means the Credit Documents, the Senior Note
Documents and the Additional Facility Documents.
SUBPART 2.15. ADDITIONAL AMENDMENT TO SECTION 1.1. Section 1.1 is
amended by adding the following definition of "SECURED OBLIGATIONS" in the
appropriate alphabetical order:
"SECURED OBLIGATIONS" means the Credit Party Obligations, the
obligations of the Credit Parties under the Senior Note Documents and
the Additional Facility Documents and all other obligations of the
Credit Parties secured by the Collateral Documents.
SUBPART 2.16. ADDITIONAL AMENDMENT TO SECTION 1.1. Section 1.1 is
amended by adding the following definition of "SECURED PARTIES" in the
appropriate alphabetical order:
"SECURED PARTIES" means the Lenders, the Noteholders, the
Additional Creditors and their successors and permitted assigns.
SUBPART 2.17. ADDITIONAL AMENDMENT TO SECTION 1.1 The definition of
"SECURITY AGREEMENT" contained in Section 1.1 is amended in its entirety so
that such definition now reads as follows:
"SECURITY AGREEMENT" means the amended and restated security
agreement dated as of June 1, 1999 executed and delivered by the
Borrower and the Guarantors in favor of the Collateral Agent, for the
benefit of the Secured Parties on a PARI PASSU basis, to secure the
Secured Obligations, as amended, modified, restated or supplemented
from time to time.
SUBPART 2.18. ADDITIONAL AMENDMENT TO SECTION 1.1. Section 1.1 is
amended by adding the following definition of "SENIOR NOTE DOCUMENTS" in the
appropriate alphabetical order:
-5-
<PAGE>
"SENIOR NOTE DOCUMENTS" means the Note Purchase and Guarantee
Agreement, the Senior Notes, the Collateral Documents and all other
mortgages, security agreements, documents, certificates and instruments
relating to, arising out of, or in any way connected therewith or any
of the transactions contemplated thereby.
SUBPART 2.19. ADDITIONAL AMENDMENT TO SECTION 1.1. Section 1.1 is
amended by adding the following definition of "SENIOR NOTES" in the
appropriate alphabetical order:
"SENIOR NOTES" means the $50,000,000 9.06% Guaranteed Senior
Secured Notes issued by the Borrower to the Noteholders pursuant to the
Note Purchase and Guarantee Agreement.
SUBPART 2.20. AMENDMENT TO SECTION 3.3(b). Section 3.3(b) is amended in
its entirety so that such section now reads as follows:
3.3 PREPAYMENTS.
************
(b) MANDATORY PREPAYMENTS.
(i) If at any time, (A) the sum of the aggregate
principal amount of outstanding Revolving Loans PLUS LOC
Obligations outstanding PLUS the aggregate principal amount
of outstanding Swingline Loans shall exceed the Revolving
Committed Amount, (B) the aggregate amount of LOC Obligations
outstanding shall exceed the LOC Committed Amount or (C) the
aggregate amount of Swingline Loans outstanding shall exceed
the Swingline Committed Amount, the Borrower shall
immediately make payment on the Loans and/or to cash
collateral account in respect of the LOC Obligations, in an
amount sufficient to eliminate such excess.
(ii) ISSUANCES OF EQUITY OR DEBT. Immediately upon
receipt by a Consolidated Party of proceeds from any Equity
Issuance or Debt Issuance, the Borrower shall prepay the
Loans in an aggregate amount equal to 100% of the Net Cash
Proceeds of such Equity Issuance or Debt Issuance to the
Lenders (such prepayment to be applied as set forth in clause
(iv) below).
(iii) ASSET DISPOSITIONS. Immediately upon receipt by a
Consolidated Party of proceeds from any Asset Disposition,
the Borrower shall forward 100% of the Net Cash Proceeds of
such
-6-
<PAGE>
Asset Disposition to the Collateral Agent as a prepayment of
the Loans and the Senior Notes (such prepayment to be applied
as set forth in clause (iv) below). Notwithstanding the
foregoing, the Borrower shall not be required to forward to
the Collateral Agent as a prepayment of the Loans Net Cash
Proceeds of Asset Dispositions which do not exceed $500,000,
in the aggregate, during the term of this Credit Agreement.
(iv) APPLICATION OF MANDATORY PREPAYMENTS. All amounts
required to be paid pursuant to Section 3.3(b)(i) and (ii)
shall be applied as follows: FIRST to Revolving Loans, SECOND
to Swingline Loans and THIRD (after all Revolving Loans and
Swingline Loans have been repaid) to a cash collateral
account in respect of LOC Obligations. All amounts required
to be paid pursuant to Section 3.3(b)(iii) shall be applied
pro rata to (A) the Senior Notes and (B) to the Loans and LOC
Obligations as follows: FIRST to Revolving Loans, SECOND to
Swingline Loans and THIRD (after all Revolving Loans and
Swingline Loans have been repaid) to a cash collateral
account in respect of LOC Obligations; PROVIDED, HOWEVER,
each of the Noteholders shall have a right to decline to
accept a mandatory prepayment pursuant to Section 3.3(b)(iii)
in accordance with the terms of the Note Purchase and
Guarantee Agreement, in which case such declined prepayment
shall be allocated and offered pro rata among the Noteholders
that accept such prepayment or, if none of the Noteholders
accept such re-allocated prepayment, then pro rata among the
Lenders in accordance with the foregoing terms of this
Section 3.3(b)(iv). Within the parameters of the applications
(to Loans) set forth above, prepayments shall be applied
first to Base Rate Loans and then to Eurodollar Loans in
direct order of Interest Period maturities. All prepayments
of Loans and LOC Obligations under this Section 3.3(b) shall
be subject to Section 3.12.
SUBPART 2.21. AMENDMENT TO SECTION 6.22. Section 6.22 is amended in its
entirety so that such section now reads as follows:
6.22 FIRST PRIORITY LIEN.
The Collateral Agent on behalf of the Lenders and the Noteholders
will hold a first priority Lien, subject to no other Liens other than
Permitted Liens, in the Collateral.
SUBPART 2.22. AMENDMENT TO SECTION 7.6. Section 7.6 is amended in its
entirety so that such section now reads as follows:
-7-
<PAGE>
7.6 INSURANCE.
(a) Each Credit Party will at all times maintain in full
force and effect insurance (including worker's compensation
insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and
liabilities and with such deductibles or self-insurance retentions
as are in accordance with normal industry practice (or as
otherwise required by the Collateral Documents). The Collateral
Agent shall be named as loss payee or mortgagee, as its interest
may appear, and/or additional insured with respect to any such
insurance providing coverage in respect of any Collateral, and
each provider of any such insurance shall agree, by endorsement
upon the policy or policies issued by it or by independent
instruments furnished to the Collateral Agent, that it will give
the Collateral Agent thirty (30) days prior written notice before
any such policy or policies shall be altered or canceled, and that
no act or default of any Credit Party or any other Person shall
affect the rights of the Collateral Agent or the Secured Parties
under such policy or policies. The present insurance coverage of
the Credit Parties is outlined as to carrier, policy number,
expiration date, type and amount on SCHEDULE 7.6.
(a) In case of any material loss, damage to or destruction of
the Collateral of any Credit Party or any part thereof, such
Credit Party shall promptly give written notice thereof to the
Collateral Agent generally describing the nature and extent of
such damage or destruction. In case of any loss, damage to or
destruction of the Collateral of any Credit Party or any part
thereof, such Credit Party, whether or not the insurance proceeds,
if any, received on account of such damage or destruction shall be
sufficient for that purpose, at such Credit Party's cost and
expense, will promptly repair or replace the Collateral of such
Credit Party so lost, damaged or destroyed; PROVIDED, HOWEVER,
that such Credit Party need not repair or replace the Collateral
of such Credit Party so lost, damaged or destroyed to the extent
the failure to make such repair or replacement (i) is desirable to
the proper conduct of the business of such Credit Party in the
ordinary course and otherwise in the best interest of such Credit
Party; and (ii) would not materially impair the rights and
benefits of the Collateral Agent or the Secured Parties under the
Collateral Documents, any other Credit Document or any Hedging
Agreement. In the event a Credit Party shall receive any proceeds
of such insurance in a net amount in excess of $100,000, such
Credit Party will immediately pay over such proceeds to the
Collateral Agent, for a pro rata payment on the obligations of the
Credit Parties under the Secured Documents; PROVIDED, HOWEVER,
that the Collateral Agent agrees to release such insurance
proceeds to such Credit Party for replacement or restoration of
the portion of the Collateral of such Credit Party lost, damaged
or destroyed if, but only if, (A) no Default or
-8-
<PAGE>
Event of Default shall have occurred and be continuing at the time
of release, (B) written application for such release is received
by the Collateral Agent from such Credit Party within 30 days of
receipt of such proceeds and (C) the Collateral Agent has received
evidence reasonably satisfactory to it that the Collateral lost,
damaged or destroyed has been or will be replaced or restored to
its condition immediately prior to the loss, destruction or other
event giving rise to the payment of such insurance proceeds.
SUBPART 2.23. AMENDMENT TO SECTION 7.12. Section 7.12 is amended in its
entirety so that such section now reads as follows:
7.12 ADDITIONAL CREDIT PARTIES.
As soon as practicable and in any event within 30 days after
any Person becomes a Material Subsidiary of any Credit Party, the
Borrower shall provide the Collateral Agent with written notice
thereof setting forth information in reasonable detail describing
all of the assets of such Person and shall (a) if such Person is a
Domestic Subsidiary of a Credit Party, cause such Person to
execute a Joinder Agreement in substantially the same form as
EXHIBIT 7.12, (b) cause 100% (if such Person is a Domestic
Subsidiary of a Credit Party) or 65% (if such Person is a direct
Material Foreign Subsidiary of a Credit Party) of the Capital
Stock of such Person to be delivered to the Collateral Agent
(together with undated stock powers, if any, signed in blank) and
pledged to the Collateral Agent pursuant to an appropriate pledge
agreement(s) in substantially the form of the Pledge Agreement and
otherwise in form acceptable to the Collateral Agent and (c) cause
such Person to (i) if such Person is a Domestic Subsidiary, to
pledge all of its assets to the Collateral Agent pursuant to a
security agreement in substantially the form of Security Agreement
and otherwise in a form acceptable to the Collateral Agent, (d) if
such Person has any Subsidiaries (i) deliver all of the Capital
Stock of such Domestic Subsidiaries and 65% of the Capital Stock
of such Material Foreign Subsidiaries (together with undated stock
powers signed in blank) to the Collateral Agent and (ii) execute a
pledge agreement in substantially the form of the Pledge Agreement
and otherwise in a form acceptable to the Collateral Agent and (e)
if such Person owns or leases any real property in the United
States of America execute any and all necessary mortgages, deeds
of trust, deeds to secure debt, leasehold mortgages, collateral
assignments or other appropriate real estate collateral
documentation in a form, content and scope satisfactory to the
Collateral Agent and (ii) deliver such other documentation as the
Collateral Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1
financing statements, real estate title insurance policies,
environmental reports, landlord's waivers, certified resolutions
and other organizational and authorizing documents of such Person,
favorable opinions of counsel to such Person (which shall cover,
among other things, the legality, validity, binding effect and
enforceability of the documentation referred to above
-9-
<PAGE>
and the perfection of the Collateral Agent's Liens thereunder),
all in form, content and scope reasonably satisfactory to the
Collateral Agent.
SUBPART 2.24. AMENDMENT TO SECTION 7.14. Section 7.14 is amended in its
entirety so that such section now reads as follows:
7.14 COLLATERAL.
If, subsequent to the Closing Date, a Credit Party shall (a)
acquire any material real property or lease any material real
property or (b) acquire any intellectual property, securities
instruments, chattel paper or other personal property required to
be delivered to the Collateral Agent as Collateral hereunder or
under any of the Collateral Documents, the Borrower shall notify
the Collateral Agent of same in each case as soon as practicable
after the acquisition thereof or execution of such lease
agreement, as appropriate. Each Credit Party shall take such
action as requested by the Collateral Agent and at its own
expense, to ensure that the Collateral Agent has a first priority
perfected Lien in all owned real property (and in such leased real
property as requested by the Collateral Agent, the Required
Lenders or the Noteholders holding more than 50% of the
outstanding principal amount of the Senior Notes) and all personal
property of the Credit Parties (whether now owned or hereafter
acquired), subject only to Permitted Liens.
SUBPART 2.25. AMENDMENT TO SECTION 8.1. Section 8.1 is amended by
adding the following subsection (g) thereto and making the appropriate
punctuation changes:
8.1 INDEBTEDNESS.
The Credit Parties will not permit any Consolidated Party to
contract, create, incur, assume or permit to exist any
Indebtedness, except:
************
(g) Indebtedness arising under the Senior Notes and the other
Senior Note Documents, including, without limitation, any
guarantee obligations of the Guarantors under the Senior Note
Documents; provided, however, the aggregate principal amount of
the Senior Notes shall not exceed $50,000,000.
SUBPART 2.26. AMENDMENT TO SECTION 8.10. Section 8.10 is amended in its
entirety so that such section now reads as follows:
-10-
<PAGE>
8.10 LIMITATION ON RESTRICTED ACTIONS.
The Credit Parties will not permit, other than pursuant to
the Senior Note Documents, any Consolidated Party to, directly or
indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any
such Person to (a) pay dividends or make any other distributions
to any Credit Party on its Capital Stock or with respect to any
other interest or participation in, or measured by, its profits,
(b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell,
lease or transfer any of its properties or assets to any Credit
Party, (e) grant a lien on its properties or assets whether now
owned or hereafter acquired or (f) act as a Guarantor and pledge
its assets pursuant to the Credit Documents or any renewals,
refinancings, exchanges, refundings or extension thereof, except
(in respect of any of the matters referred to in clauses (a)-(f)
above) for such encumbrances or restrictions existing under or by
reason of (i) this Credit Agreement and the other Credit
Documents, or (ii) applicable law. The Credit Parties will not
permit the Senior Note Documents to contain financial covenants
that are more restrictive than the financial covenants set forth
in Section 7.11. The Credit Parties and the Lenders acknowledge
and agree that, as of the Fourth Amendment Effective Date, the
financial covenants set forth in the Senior Note Documents are not
more restrictive than the financial covenants set forth in Section
7.11.
SUBPART 2.27. AMENDMENT TO SECTION 9.1(g). Section 9.1(g) is amended in
its entirety so that such subsection now reads as follows:
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of
the following specified events (each an "EVENT OF DEFAULT"):
************
(g) DEFAULTS UNDER OTHER AGREEMENTS.
(i) Any Credit Party shall default in the performance or
observance (beyond the applicable grace period with respect
thereto, if any) of any material obligation or condition of
any contract or lease which has a Material Adverse Effect;
(ii) With respect to any Indebtedness (other than
Indebtedness outstanding under this Credit Agreement) in
excess of $500,000 in the aggregate for the Consolidated
Parties taken as a whole, (A) any Consolidated Party shall
(1) default in any payment (beyond the applicable grace
period with respect thereto, if any) with respect to any such
-11-
<PAGE>
Indebtedness, or (2) the occurrence and continuance of a
default in the observance or performance relating to such
Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event
or condition shall occur or condition exist, the effect of
which default or other event or condition is to cause, or
permit, the holder or holders of such Indebtedness (or
trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of
time is required), any such Indebtedness to become due prior
to its stated maturity; or (B) any such Indebtedness shall be
declared due and payable, or required to be prepaid other
than by a regularly scheduled required prepayment, prior to
the stated maturity thereof; or
(iii) Any default under the Senior Note Documents or the
Additional Facility Documents shall occur and the applicable
grace period (if any) with respect to such default shall have
expired without such default being cured by the Credit
Parties in a manner acceptable to the necessary percentage of
Noteholders or Additional Creditors, as applicable, or
permanently waived by the necessary percentage of Noteholders
or Additional Creditors, as applicable.
SUBPART 2.28. AMENDMENT TO SECTION 11.5. Section 11.5 is amended in its
entirety so that such subsection now reads as follows:
11.5 EXPENSES; INDEMNIFICATION.
(a) The Borrower agrees to pay on demand all costs and
expenses of the Agent and the Collateral Agent in connection with
the syndication, preparation, execution, delivery, administration,
modification, and amendment of this Credit Agreement, the other
Credit Documents, and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees and
expenses of counsel for the Agent and the Collateral Agent with
respect thereto and with respect to advising the Agent and the
Collateral Agent as to their rights and responsibilities under the
Credit Documents. The Borrower further agrees to pay on demand all
costs and expenses of the Agent, the Collateral Agent and the
Lenders, if any (including, without limitation, reasonable
attorneys' fees and expenses and the cost of internal counsel), in
connection with the enforcement (whether through negotiations,
legal proceedings, or otherwise) of the Credit Documents and the
other documents to be delivered hereunder.
(b) The Borrower agrees to indemnify and hold harmless the
Agent, the Collateral Agent and each Lender and each of their
Affiliates and their respective officers, directors, employees,
agents, and advisors (each, an "INDEMNIFIED PARTY") from and
against any and all claims, damages, losses (other than losses
created by a Lender's internal interest
-12-
<PAGE>
rate management policies and practices), liabilities, costs, and
expenses (including, without limitation, reasonable attorneys'
fees) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection
with or by reason of (including, without limitation, in connection
with any investigation, litigation, or proceeding or preparation
of defense in connection therewith) the Credit Documents, any of
the transactions contemplated herein or the actual or proposed use
of the proceeds of the Loans, except to the extent such claim,
damage, loss, liability, cost, or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to
have resulted from such Indemnified Party's gross negligence or
willful misconduct. In the case of an investigation, litigation or
other proceeding to which the indemnity in this Section 11.5
applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the
Borrower, its directors, shareholders or creditors or an
Indemnified Party or any other Person or any Indemnified Party is
otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. The Borrower agrees not to
assert any claim against the Agent, the Collateral Agent, any
Lender, any of their Affiliates, or any of their respective
directors, officers, employees, attorneys, agents, and advisers,
on any theory of liability, for special, indirect, consequential,
or punitive damages arising out of or otherwise relating to the
Credit Documents, any of the transactions contemplated herein or
the actual or proposed use of the proceeds of the Loans.
(c) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 11.5 shall survive the
repayment of the Loans, LOC Obligations and other obligations
under the Credit Documents and the termination of the Commitments
hereunder.
SUBPART 2.29. AMENDMENTS TO SCHEDULES. SCHEDULE 2.1(a), SCHEDULE 6.12
and SCHEDULE 7.6 of the Existing Credit Agreement are hereby deleted in
their entirety and new schedules in the form of SCHEDULE 2.1(a), SCHEDULE
6.12 and SCHEDULE 7.6 are substituted therefor.
PART III
RELEASE OF FIRST TENNESSEE
SUBPART 3.1. TERMINATION OF COMMITMENT AND RELEASE. Notwithstanding
anything to the contrary in the Credit Documents, the Credit Parties and the
Lenders hereby consent to the termination of the Commitment of First
Tennessee, the repayment of all outstanding Loans, fees and other amounts
owing by the Credit Parties to First Tennessee pursuant to the Credit
Documents and the release of First Tennessee from its obligations
-13-
<PAGE>
as a Lender under the Credit Documents (collectively, the "Release of First
Tennessee"). Each of the Other Lenders agrees that, notwithstanding anything
to the contrary in the Credit Documents, the Release of First Tennessee may
be consummated without any pro rata reduction of the Commitment of such
Other Lender, any pro rata repayment of the outstanding Loans, fees and
other amounts owing to such Other Lender under the Credit Documents or any
release of such Other Lender from its obligations as a Lender under the
Credit Documents. The Credit Parties and the Lenders agree that, upon
receipt by First Tennessee of the payment referenced in SUBPART 4.9, First
Tennessee shall no longer be a Lender for purposes of the Credit Documents.
SUBPART 3.2. REAFFIRMATION OF AMENDMENTS. Each of the Credit Parties
and the Other Lenders hereby agrees that, notwithstanding the fact that
First Tennessee did not execute the Second Amendment and the Third Amendment
and notwithstanding the terms of Section 11.6 of the Credit Agreement, the
amendments and agreements set forth in the Second Amendment and the Third
Amendment are binding on such party, are effective as of the date of the
Second Amendment and the Third Amendment, respectively, and are in full
force and effect on the date hereof.
PART IV
CONDITIONS TO EFFECTIVENESS
SUBPART 4.1. AMENDMENT EFFECTIVE DATE. This Amendment shall be and
become effective as of the date hereof (the "AMENDMENT EFFECTIVE DATE") when
all of the conditions set forth in this PART IV shall have been satisfied,
and thereafter this Amendment shall be known, and may be referred to, as the
"FOURTH AMENDMENT."
SUBPART 4.2. EXECUTION OF COUNTERPARTS OF AMENDMENT. The Agent shall
have received counterparts (or other evidence of execution, including
telephonic message, satisfactory to the Agent) of this Amendment, which
collectively shall have been duly executed on behalf of each of the
Borrower, the Guarantors and the Lenders (including an acknowledgment
signature of First Tennessee).
SUBPART 4.3. AUTHORITY. The Agent shall have received copies of
resolutions of the Board of Directors of each Credit Party approving and
adopting this Amendment, the transactions contemplated herein and
authorizing execution and delivery hereof, certified by a secretary or an
assistant secretary of each Credit Party to be true and correct and in force
and effect as of the date hereof.
SUBPART 4.4. INTERCREDITOR AGREEMENT. The Collateral Agent shall have
received counterparts (or other evidence of execution, including telephonic
message, satisfactory to the Agent) of the Intercreditor Agreement, which
collectively shall have been duly executed on behalf of each of the
Collateral Agent, the Noteholders, the Lenders and the Agent.
-14-
<PAGE>
SUBPART 4.5. SENIOR NOTE DOCUMENTS. The Agent shall have received
executed copies, certified by a secretary or an assistant secretary of the
Borrower, of each of the Senior Note Documents.
SUBPART 4.6. COLLATERAL DOCUMENTS. The Collateral Agent shall have
received (a) counterparts (or other evidence of execution, including
telephonic message, satisfactory to the Collateral Agent) of the Security
Agreement and the Pledge Agreement executed on behalf of each of the Credit
Parties, (b) such UCC financing statements and intellectual property filings
as are necessary, in the Collateral Agent's reasonably discretion, to
perfect the security interests in the Collateral, (c) such other documents
and instruments relating to the perfection of the Collateral Agent's
security interest in the Collateral as the Collateral Agent may reasonably
request.
SUBPART 4.7. INSURANCE CERTIFICATES. The Agent shall have received
copies of certificates of insurance evidencing any insurance policies of the
Credit Parties updated since the Closing Date and meeting the requirements
set forth in the Credit Documents, including, but not limited to, naming the
Collateral Agent as sole loss payee on behalf of the Secured Parties.
SUBPART 4.8. OPINION OF COUNSEL. The Collateral Agent shall have
received (a) an opinion or opinions of counsel to the Credit Parties, dated
as of the Amendment Effective Date, addressed to the Collateral Agent and
the Secured Parties, in form and substance satisfactory to the Collateral
Agent and (b) a reliance letter from counsel to the Credit Parties with
respect to any opinion given by such counsel to the Noteholders permitting
the Collateral Agent and the Lenders to rely on such opinion.
SUBPART 4.9. PAYOFF OF FIRST TENNESSEE. First Tennessee shall have
received (by wire transfer directly from the Borrower or the Agent) payment
in full of all outstanding Loans, fees and other amounts owed by the Credit
Parties to First Tennessee.
SUBPART 4.10. FURTHER ASSURANCES. The Agent and the Collateral Agent
shall have received such other documents, instruments and certificates as
the Agent or the Collateral Agent may reasonably request.
PART V
MISCELLANEOUS
SUBPART 5.1. CROSS-REFERENCES. References in this Amendment to any Part
or Subpart are, unless otherwise specified, to such Part or Subpart of this
Amendment.
SUBPART 5.2. INSTRUMENT PURSUANT TO EXISTING CREDIT AGREEMENT. This
Amendment is a Credit Document executed pursuant to the Existing Credit
Agreement and shall (unless otherwise expressly indicated therein) be
construed, administered and applied in accordance with the terms and
provisions of the Existing Credit Agreement.
-15-
<PAGE>
SUBPART 5.3. REFERENCES IN OTHER CREDIT DOCUMENTS. At such time as this
Amendment shall become effective pursuant to the terms of SUBPART 4.1, all
references in the Existing Credit Agreement and the other Credit Documents
to the "Credit Agreement" shall be deemed to refer to the Existing Credit
Agreement as amended by this Amendment.
SUBPART 5.4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower hereby represents and warrants that (a) the conditions precedent to
the initial Loans were satisfied as of the Closing Date (assuming
satisfaction or waiver, if applicable, of all requirements in such
conditions that an item be in form and/or substance reasonably satisfactory
to the Agent or any Lenders or that any event or action have been completed
or performed to the reasonable satisfaction of the Agent or any Lenders),
(b) the representations and warranties contained in SECTION 6 of the
Existing Credit Agreement (as amended or modified by this Amendment or the
Intercreditor Agreement) are correct in all material respects on and as of
the date hereof (except for those which expressly relate to an earlier date)
as though made on and as of such date and after giving effect to the
amendments contained herein and (c) no Default or Event of Default exists
under the Existing Credit Agreement on and as of the date hereof and after
giving effect to the amendments contained herein.
SUBPART 5.5. ACKNOWLEDGMENT OF GUARANTORS. The Guarantors acknowledge
and consent to all of the terms and conditions of this Fourth Amendment and
agree that this Fourth Amendment and all documents executed in connection
herewith do not operate to reduce or discharge the Guarantors' obligations
under the Credit Documents
SUBPART 5.6. COUNTERPARTS. This Amendment may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement.
SUBPART 5.7. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NORTH
CAROLINA WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SUBPART 5.8. SUCCESSORS AND ASSIGNS. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
[The remainder of this page has been left blank intentionally]
-16-
<PAGE>
Each of the parties hereto has caused a counterpart of this Amendment
to be duly executed and delivered as of the date first above written.
BORROWER: RESORTQUEST INTERNATIONAL, INC.
a Delaware corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President & CFO
--------------------------
GUARANTORS: FIRST RESORT SOFTWARE, INC.,
a Colorado corporation
By:/s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
B&B ON THE BEACH, INC.,
a North Carolina corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
BRINDLEY & BRINDLEY REALTY &
DEVELOPMENT, INC., a North Carolina corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
<PAGE>
COASTAL RESORTS REALTY L.L.C.,
a Delaware limited liability company
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
COASTAL RESORTS MANAGEMENT, INC.,
a Delaware corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
COLLECTION OF FINE PROPERTIES, INC.,
a Colorado corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
TEN MILE HOLDINGS, LTD.,
a Colorado corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
HOTEL CORPORATION OF THE PACIFIC, INC.,
a Hawaii corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
<PAGE>
HOUSTON AND O'LEARY COMPANY,
a Colorado corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
MAUI CONDOMINIUM & HOME REALTY, INC.,
a Hawaii corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
THE MAURY PEOPLE, INC.,
a Massachusetts corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
HOWEY ACQUISITION, INC.,
a Florida corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
REALTY CONSULTANTS, INC.,
a Florida corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
<PAGE>
RESORT PROPERTY MANAGEMENT, INC.,
a Utah corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
TELLURIDE RESORT ACCOMMODATIONS, INC.,
a Colorado corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
TRUPP-HODNETT ENTERPRISES, INC.,
a Georgia corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
THE MANAGEMENT COMPANY,
a Georgia corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
WHISTLER CHALETS LTD.,
a British Columbia corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
<PAGE>
ABBOTT & ANDREWS REALTY, INC.,
a Florida corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
ABBOTT REALTY SERVICES, INC.,
a Florida corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
ABBOTT RESORTS, INC.,
a Florida corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
PLANTATION RESORT MANAGEMENT, INC.,
a Florida corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
TOPS'L SALES GROUP, INC.,
a Florida corporation
By: /s/ Jeffery M. Jarvis
-----------------------------
Name: Jeffery M. Jarvis
---------------------------
Title: Sr. Vice President
--------------------------
<PAGE>
LENDERS: NATIONSBANK, N. A.,
individually in its capacity as a
Lender and in its capacity as Agent
and as Collateral Agent
By: /s/ John E. Ball
-----------------------------
Name: John E. Ball
---------------------------
Title: SVP
--------------------------
<PAGE>
SOCIETE GENERALE,
individually in its capacity as a
Lender and in its capacity as Co-Agent
By: /s/ J. Blaine Shaum
-----------------------------
Name: J. Blaine Shaum
---------------------------
Title: Managing Director
--------------------------
<PAGE>
UNION PLANTERS BANK, N.A.
By: /s/ Elizabeth Rouse
-----------------------------
Name: Elizabeth Rouse
---------------------------
Title: Vice-President
--------------------------
<PAGE>
Acknowledged and consented to for purposes of Subpart 3.1 only:
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By: /s/ James H. Moore, Jr.
--------------------------
Name: James H. Moore, Jr.
------------------------
Title: Vice President
-----------------------
<PAGE>
SCHEDULE 2.1(a)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
LENDER REVOLVING COMMITMENT
- ------------------------------------------------------------------------------------
<S> <C>
NationsBank, N.A. $25,000,000
Independence Center, 15th Floor
NC1-001-15-04
101 North Tryon Street
Charlotte, North Carolina 28255
Attn: Agency Services
- ------------------------------------------------------------------------------------
Societe Generale $20,000,000
One Montgomery St., Suite 3220
San Francisco, CA 94104
Attn: Mary Brickley (Credit Contact)
Societe Generale
2029 Century Park East, Suite 2900
Los Angeles, CA 90067
Attn: Doris Yun (Operations Contact)
- ------------------------------------------------------------------------------------
Union Planters Bank, N.A. $5,000,000
6200 Poplar Avenue
4th Floor
Memphis, TN 38119
- ------------------------------------------------------------------------------------
Totals: $50,000,000
- ------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SCHEDULE 7.6
See Attached
<PAGE>
Exhibit 10.31
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RESORTQUEST INTERNATIONAL, INC.
---------------
NOTE PURCHASE AND GUARANTEE AGREEMENT
----------------
Dated as of June 1, 1999
Re: $50,000,000 9.06% Guaranteed Senior Secured Notes, Due June 16, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 1. AUTHORIZATION OF NOTES; GUARANTEE..............................................................1
Section 2. SALE AND PURCHASE OF NOTES.....................................................................1
Section 3. CLOSING........................................................................................2
Section 4. CONDITIONS TO CLOSING..........................................................................2
Section 4.1 Representations and Warranties......................................................2
Section 4.2 Performance; No Default.............................................................2
Section 4.3 Compliance Certificates.............................................................3
Section 4.4 Opinions of Counsel.................................................................3
Section 4.5 Purchase Permitted By Applicable Law, etc...........................................3
Section 4.6 Sale of Other Notes.................................................................4
Section 4.7 Payment of Special Counsel Fees.....................................................4
Section 4.8 Private Placement Number............................................................4
Section 4.9 Changes in Corporate Structure......................................................4
Section 4.10 Execution of Security Documents.....................................................4
Section 4.11 Filing and Recording................................................................5
Section 4.12 Consent of Holders of Other Securities..............................................5
Section 4.13 Proceedings and Documents...........................................................5
Section 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE GUARANTORS...............................5
Section 5.1 Organization; Power and Authority...................................................5
Section 5.2 Authorization, etc..................................................................6
Section 5.3 Disclosure..........................................................................6
Section 5.4 Organization and Ownership of Shares of Subsidiaries; Affiliates....................6
Section 5.5 Financial Statements................................................................7
Section 5.6 Compliance with Laws, Other Instruments, Property Association Rules and
Regulations, etc....................................................................8
Section 5.7 Governmental Authorizations, etc....................................................8
Section 5.8 Litigation; Observance of Agreements, Statutes and Orders...........................8
Section 5.9 Taxes...............................................................................9
Section 5.10 Title to Property; Leases...........................................................9
Section 5.11 Licenses, Permits, etc..............................................................9
Section 5.12 Compliance with ERISA..............................................................10
Section 5.13 Private Offering by the Company....................................................11
Section 5.14 Use of Proceeds; Margin Regulations................................................11
Section 5.15 Existing Indebtedness; Future Liens................................................12
Section 5.16 Foreign Assets Control Regulations, etc............................................12
Section 5.17 Status under Certain Statutes......................................................12
Section 5.18 Environmental Matters..............................................................12
Section 5.19 Parity of Obligations..............................................................13
Section 5.20 Solvency...........................................................................13
Section 5.21 Consolidated and Integrated Business Plan..........................................14
</TABLE>
-i-
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 5.22 Location of the Assets.............................................................14
Section 5.23 No Burdensome Restrictions.........................................................14
Section 5.24 Year 2000 Compliance...............................................................14
Section 6. REPRESENTATIONS OF THE PURCHASERS.............................................................14
Section 6.1 Purchase for Investment............................................................14
Section 6.2 Source of Funds....................................................................15
Section 7. INFORMATION AS TO COMPANY AND GUARANTORS......................................................16
Section 7.1 Financial and Business Information.................................................16
Section 7.2 Officer's Certificate..............................................................19
Section 7.3 Inspection.........................................................................19
Section 8. PREPAYMENT OF THE NOTES.......................................................................20
Section 8.1 Required Prepayments...............................................................20
Section 8.2 Optional Prepayments with Make-Whole Amount........................................20
Section 8.3 Change in Control..................................................................20
Section 8.4 Allocation of Partial Prepayments..................................................23
Section 8.5 Maturity; Surrender, etc...........................................................23
Section 8.6 Purchase of Notes..................................................................23
Section 8.7 Make-Whole Amount..................................................................23
Section 8.8 Gross-Up...........................................................................24
Section 9. AFFIRMATIVE COVENANTS.........................................................................26
Section 9.1 Compliance with Law................................................................27
Section 9.2 Insurance..........................................................................27
Section 9.3 Maintenance of Properties..........................................................27
Section 9.4 Payment of Taxes and Claims........................................................27
Section 9.5 Corporate Existence, etc...........................................................28
Section 9.6 Notes to Rank Pari Passu...........................................................28
Section 9.7 Maintenance of Office..............................................................28
Section 9.8 Additional Guarantors; Release of Guarantees.......................................28
Section 9.9 Additional Collateral, Release of Collateral.......................................30
Section 10. NEGATIVE COVENANTS............................................................................31
Section 10.1 Transactions with Affiliates.......................................................31
Section 10.2 Merger, Consolidation, etc.........................................................31
Section 10.3 Liens..............................................................................32
Section 10.4 Consolidated Net Worth.............................................................34
Section 10.5 Fixed Charges Coverage Ratio.......................................................34
Section 10.6 Limitations on Debt................................................................34
Section 10.7 Limitations on Subsidiary Debt.....................................................35
Section 10.8 Line of Business...................................................................35
Section 10.9 Limitation on Restricted Payment and Investment....................................35
Section 10.10 Sale of Assets.....................................................................35
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Section 11. EVENTS OF DEFAULT.......................................................................36
Section 12. REMEDIES ON DEFAULT, ETC................................................................39
Section 12.1 Acceleration.......................................................................39
Section 12.2 Other Remedies.....................................................................39
Section 12.3 Rescission.........................................................................39
Section 12.4 No Waivers or Election of Remedies, Expenses, etc..................................40
Section 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES...........................................40
Section 13.1 Registration of Notes..............................................................40
Section 13.2 Transfer and Exchange of Notes.....................................................40
Section 13.3 Replacement of Notes...............................................................41
Section 14. PAYMENT OF NOTES........................................................................41
Section 14.1 Place of Payment...................................................................41
Section 14.2 Home Office Payment................................................................41
Section 15. EXPENSES, ETC...........................................................................42
Section 15.1 Transaction Expenses...............................................................42
Section 15.2 Survival...........................................................................42
Section 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT............................43
Section 17. AMENDMENT AND WAIVER....................................................................43
Section 17.1 Requirements.......................................................................43
Section 17.2 Solicitation of Holders of Notes...................................................43
Section 17.3 Binding Effect, etc................................................................44
Section 17.4 Notes Held by Company, etc.........................................................44
Section 18. NOTICES.................................................................................44
Section 19. REPRODUCTION OF DOCUMENTS...............................................................45
Section 20. CONFIDENTIAL INFORMATION................................................................45
Section 21. SUBSTITUTION OF PURCHASER...............................................................46
Section 22. GUARANTEE...............................................................................47
Section 22.1 Obligations Guaranteed.............................................................47
Section 22.2 Character of Guarantee.............................................................47
Section 22.3 Particular Agreements by the Guarantors............................................48
Section 22.4 Waiver by the Guarantors...........................................................49
Section 22.5 Rights of Contribution.............................................................49
Section 23. CHARACTER OF OBLIGATIONS OF THE GUARANTORS..............................................50
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Section 23.1 Irrevocability.....................................................................50
Section 23.2 No Reduction or Defense............................................................50
Section 23.3 Subrogation........................................................................54
Section 23.4 Judgment Currency Indemnity........................................................54
Section 24. MISCELLANEOUS...........................................................................55
Section 24.1 Successors and Assigns.............................................................55
Section 24.2 Payments Due on Non-Business Days..................................................55
Section 24.3 Severability.......................................................................55
Section 24.4 Construction.......................................................................55
Section 24.5 Counterparts.......................................................................55
Section 24.6 Governing Law; Jurisdiction and Service of Process.................................55
Section 24.7 Agent for Service of Process.......................................................56
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SCHEDULE A - Information Relating to Purchasers
SCHEDULE B - Defined Terms
SCHEDULE C - Guarantors
SCHEDULE D - Pledging Subsidiaries
SCHEDULE 4.9 - Changes in Corporate Structure
SCHEDULE 5.4 - Subsidiaries of the Company
SCHEDULE 5.5 - Financial Statements
SCHEDULE 5.8 - Litigation
SCHEDULE 5.11 - Licenses, Permits, Etc.
SCHEDULE 5.14 - Use of Proceeds
SCHEDULE 5.15 - Existing Financial Indebtedness and Abbott Liens
SCHEDULE 5.22 - Location of Assets
EXHIBIT 1 - Form of 9.06% Guaranteed Senior Secured Note
Due June 16, 2004
EXHIBIT 4.4(a) - Form of Opinion of Special Counsel to the Company and the
Guarantors
EXHIBIT 4.4(b) - Form of Opinion of Special Counsel to the Purchasers
EXHIBIT A - Form of Security Agreement
EXHIBIT B - Form of Pledge Agreement
EXHIBIT C - Form of Intercreditor Agreement
EXHIBIT D - Form of Joinder Agreement
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RESORTQUEST INTERNATIONAL, INC.
530 Oak Court Drive, Suite 360
Memphis, Tennessee 38117
$50,000,000 9.06% Guaranteed Senior Secured Notes, Due June 16, 2004
Dated as of
June 1, 1999
TO EACH OF THE PURCHASERS NAMED IN SCHEDULE A TO THIS AGREEMENT:
Ladies and Gentlemen:
RESORTQUEST INTERNATIONAL, INC., a Delaware corporation (the
"COMPANY"), and certain of its subsidiaries named in Schedule C hereto (the
"GUARANTORS"), agree with the purchasers named in Schedule A to this Agreement
(the "PURCHASERS") as follows:
SECTION 1. AUTHORIZATION OF NOTES; GUARANTEE.
(a) The Company will authorize the issue and sale of $50,000,000
aggregate principal amount of its 9.06% Guaranteed Senior Secured Notes, due
June 16, 2004, such term to include any such notes issued in substitution
therefor pursuant to Section 13 of this Agreement). The Notes shall bear
interest from the date of issue at the rate of 9.06% per annum, payable
semiannually on the sixteenth day of June and December in each year (commencing
December 16, 1999) and at maturity and will bear interest on overdue principal
(including any overdue required or optional prepayment of principal) and
Make-Whole Amount, if any, and (to the extent legally enforceable) on any
overdue installment of interest at the Default Rate after the date due, whether
by acceleration or otherwise, until paid, to be expressed to mature on June 16,
2004, and to be substantially in the form set out in Exhibits 1 and 2,
respectively, in each case with such changes therefrom, if any, as may be
approved by each Purchaser and the Company. Certain capitalized terms used in
this Agreement are defined in Schedule B; references to a "Schedule" or an
"Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit attached
to this Agreement.
(b) The Guarantors shall irrevocably and unconditionally guarantee the
obligations of the Company hereunder and under the Notes pursuant to Section 22
of this Agreement (the "GUARANTEE").
SECTION 2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to each Purchaser, and each Purchaser will purchase from the
Company, at the Closing provided for in Section 3, Notes and in the principal
amount specified opposite each Purchaser's name in
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Schedule A at the purchase price of 100% of the principal amount thereof. The
obligations of each Purchaser hereunder shall be several and not joint and no
Purchaser shall have any obligation or any liability to any Person for the
performance or non-performance by any other Purchaser hereunder.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by each Purchaser
shall occur at the offices of McDermott, Will & Emery, 227 West Monroe, Chicago,
Illinois 60606 at 10:00 a.m, Chicago time, at a closing on June 20, 1999 or on
such other Business Day thereafter on or prior to June ___, 1999 as may be
agreed upon by the Company and each Purchaser (the "CLOSING"). At the Closing,
the Company will deliver to each Purchaser the Notes to be purchased by such
Purchaser as set forth on Schedule A in the form of a single Note (or such
greater number of Notes in denominations of at least $100,000 as such Purchaser
may request) dated the date of such Closing and registered in such Purchaser's
name (or in the name of such Purchaser's nominee), against delivery by such
Purchaser to the Company or its order of immediately available funds in the
amount of the purchase price therefor by wire transfer of immediately available
funds for the account of the Company to account number 3751048664 at
NationsBank, ABA 111 000012. If at the Closing the Company shall fail to tender
such Notes to be purchased to any Purchaser as provided above in this Section 3,
or any of the conditions specified in Section 4 shall not have been fulfilled to
such Purchaser's satisfaction or waived by such Purchaser, such Purchaser shall,
at its election, be relieved of all further obligations under this Agreement,
without thereby waiving any rights such Purchaser may have by reason of such
failure or such non-fulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Each Purchaser's obligation to purchase and pay for the Notes to be
sold to such Purchaser at the Closing is subject to the fulfillment to each
Purchaser's satisfaction, prior to or at the Closing, of the following
conditions:
SECTION 4.1 REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company and the Guarantors in
this Agreement shall be correct when made and at the time of the Closing.
SECTION 4.2 PERFORMANCE; NO DEFAULT.
Each of the Company and the Guarantors shall have performed and
complied with all agreements and conditions contained in this Agreement required
to be performed or complied with by it prior to or at the Closing and after
giving effect to the issue and sale of the Notes (and the application of the
proceeds thereof as contemplated by Section 5.14) no Default or Event of Default
shall have occurred and be continuing. None of the Company, any Subsidiary or
any Guarantor shall have entered into any transaction since the date of the
Memorandum that would have been prohibited by Sections 10.1, 10.3, 10.6 or 10.9
hereof had such Sections applied since such date.
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SECTION 4.3 COMPLIANCE CERTIFICATES.
(a) OFFICER'S CERTIFICATE OF THE COMPANY. The Company shall have
delivered to each Purchaser an Officer's Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections 4.1, 4.2 and
4.9 have been fulfilled.
(b) SECRETARY'S CERTIFICATE OF THE COMPANY. The Company shall have
delivered to each Purchaser a certificate certifying as to the resolutions
attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes, the Agreements and the
Security Documents.
(c) OFFICER'S CERTIFICATES OF THE GUARANTORS. Each Guarantor shall have
delivered to each Purchaser an Officer's Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections 4.1, 4.2 and
4.9 have been fulfilled.
(d) SECRETARY'S CERTIFICATE OF THE GUARANTORS. Each Guarantor shall
have delivered to each Purchaser a certificate certifying as to the
resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Agreements and the Security
Documents.
SECTION 4.4 OPINIONS OF COUNSEL.
Each Purchaser shall have received opinions in form and substance
satisfactory to it, dated the date of the Closing (a) from Akin Gump, special
United States counsel for the Company and the Guarantors and from Montpellier,
McKeen, Varabioff, Talbot & Guiffre, special Canadian counsel, covering the
matters set forth in Exhibit 4.4(a) and covering such other matters incident to
the transactions contemplated hereby as each Purchaser or each Purchaser's
counsel may reasonably request (and the Company and the Guarantors hereby
instruct its counsel to deliver such opinion to each Purchaser), (b) from
McDermott, Will & Emery, Purchasers' special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(b) and covering
such other matters incident to such transactions as each Purchaser may
reasonably request; and (c) from Moore & VanAllen, counsel to the Collateral
Agent, covering such matters incident to the transactions contemplated by the
Intercreditor and Collateral Agency Agreement as the Purchasers or their counsel
may reasonably request.
SECTION 4.5 PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the date of the Closing, each Purchaser's purchase of Notes shall
(a) be permitted by the laws and regulations of each jurisdiction to which you
are subject, without recourse to provisions (such as Section 1405(a)(8) of the
New York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (b) not
violate any applicable law or regulation (including, without limitation,
Regulation U, T or X of the Board of Governors of the Federal Reserve System)
and (c) not subject any Purchaser to any tax, penalty or liability under or
pursuant to any applicable law or regulation, which law or regulation was not in
effect on the date hereof. If requested by any
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Purchaser, such Purchaser shall have received an Officer's Certificate
certifying as to such matters of fact as such Purchaser may reasonably specify
to enable it to determine whether such purchase is so permitted.
SECTION 4.6 SALE OF OTHER NOTES .
Contemporaneously with the Closing, the Company shall sell to the
Purchasers and the Purchasers shall purchase the Notes to be purchased by them
as specified in Schedule A.
SECTION 4.7 PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 15.1, the Company shall have
paid on or before the Closing the fees, charges and disbursements of the
Purchasers' special counsel referred to in Section 4.4 to the extent reflected
in a statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.
SECTION 4.8 PRIVATE PLACEMENT NUMBER.
A Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for the Notes.
SECTION 4.9 CHANGES IN CORPORATE STRUCTURE.
Except as specified in Schedule 4.9, neither the Company nor any
Guarantor shall have changed its jurisdiction of incorporation or been a party
to any merger or consolidation and shall not have succeeded to all or any
substantial part of the liabilities of any other entity, at any time following
the date of the most recent financial statements of the Company and the
Guarantors referred to in Schedule 5.5.
SECTION 4.10 EXECUTION OF SECURITY DOCUMENTS.
On or prior to the Closing:
(a) the Company and the Collateral Agent shall have entered into and
delivered the Security Agreement in form and substance satisfactory to each
Purchaser, and the Security Agreement shall be in full force and effect and
each Purchaser shall have received true, correct and complete copies
thereof;
(b) the Company, the Pledging Subsidiaries and the Collateral Agent
shall have entered into the Pledge Agreement in form and substance
satisfactory to each Purchaser and the Pledge Agreement shall be in full
force and effect and each Purchaser shall have received true, correct and
complete copies thereof; and
(c) the Collateral Agent, the Agent, each of the Lenders (as defined in
the Credit Agreement), and each Purchaser shall have entered into and
delivered the Intercreditor
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and Collateral Agency Agreement, and the Company shall have acknowledged the
execution and delivery of such agreement, and the Intercreditor and
Collateral Agency Agreement shall be in full force and effect, and each
Purchaser shall have received true, correct and complete copies thereof.
SECTION 4.11 FILING AND RECORDING.
The Security Documents (and/or financing statements or similar notices
thereof if and to the extent permitted by applicable law) shall have been
recorded or filed for record in such public offices as may be deemed necessary
or appropriate by each Purchaser and special counsel to the Purchasers in order
to perfect the Liens and security interests granted or conveyed thereby.
SECTION 4.12 CONSENT OF HOLDERS OF OTHER SECURITIES.
Any consents or approvals required to be obtained from any holder or
holders of any outstanding Security of the Company or its Subsidiaries and any
amendment of agreements pursuant to which any Security may have been issued
which shall be necessary to permit the consummation of the transactions
contemplated hereby or by the Security and Collateral Agency Agreement shall
have been obtained and all such consents or amendments shall be reasonably
satisfactory in form and substance to the Purchasers and their counsel.
SECTION 4.13 PROCEEDINGS AND DOCUMENTS.
All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to each Purchaser and special counsel to
the Purchasers, and each Purchaser and special counsel to the Purchasers shall
have received all such counterpart originals or certified or other copies of
such documents as such Purchaser or special counsel to the Purchaser may
reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE GUARANTORS.
The Company and the Guarantors, jointly and severally, represent and
warrant to you that:
SECTION 5.1 ORGANIZATION; POWER AND AUTHORITY.
The Company and each Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and is duly qualified as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is required by law,
other than those jurisdictions as to which the failure to be so qualified or in
good standing would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company and each Guarantor has
the corporate power and authority to own or hold under lease the properties it
purports to own or hold under lease, to
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transact the business it transacts and proposes to transact, to execute and
deliver this Agreement, the Security Documents and the Notes and to perform the
provisions hereof and thereof.
SECTION 5.2 AUTHORIZATION, ETC.
This Agreement and the Security Documents have been duly authorized by
all necessary corporate action on the part of the Company and each Guarantor,
and each of this Agreement and the Security Documents constitute, a legal, valid
and binding obligation of the Company and each Guarantor enforceable against the
Company and each Guarantor in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Upon execution and delivery thereof, each Note will constitute a legal, valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by (a)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or in law).
SECTION 5.3 DISCLOSURE.
The Company, through its agent, Banc of America Securities LLC (the
"AGENT"), has delivered to each Purchaser a copy of a Confidential Private
Placement Memorandum dated March, 1999 (the "MEMORANDUM"), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company and its Subsidiaries. This Agreement, the Security Documents, the
Memorandum, the documents, certificates or other communications made or
delivered to each Purchaser by or on behalf of the Company and the Guarantors in
connection with the transactions contemplated hereby and the financial
statements listed in Schedule 5.5, taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances under
which they were made. Since December 31, 1998, there has been no change in the
financial condition, operations, business or properties of the Company, any
Subsidiary, or any Guarantor except changes that individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
There is no fact known to the Company or any Guarantor that could reasonably be
expected to have a Material Adverse Effect that has not been set forth herein or
in the Memorandum or in the other documents, certificates and other
communications made or delivered to you by or on behalf of the Company or any
Guarantor specifically for use in connection with the transactions contemplated
hereby.
SECTION 5.4 ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES;
AFFILIATES.
(a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each
Subsidiary, the correct name thereof, the jurisdiction of its organization,
and the percentage of shares of each class of its capital stock or similar
equity interests outstanding owned by the Company and each other Subsidiary,
(ii) of the
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Company's Affiliates, other than Subsidiaries, and (iii) of the Company's
directors and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and
clear of any Lien (except as otherwise disclosed in Schedule 5.4). As of
each Closing, all of the pledged stock listed on Schedule A to the Pledge
Agreement is registered on the books of the Company in the name of the
Collateral Agent.
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, and is duly qualified as
a foreign corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. Each such Subsidiary has the corporate or
other power and authority to own or hold under lease the properties it
purports to own or hold under lease and to transact the business it
transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the agreements
listed on Schedule 5.4 and customary limitations imposed by corporate law
statutes) restricting the ability of such Subsidiary to pay dividends out of
profits or make any other similar distributions of profits to the Company or
any of its Subsidiaries that owns outstanding shares of capital stock or
similar equity interests of such Subsidiary.
(e) As of each Closing Date, the Subsidiaries of the Company have not
issued any Securities convertible into, or options or warrants for, any
common or preferred equity Securities thereof. Except as set forth in
Schedule 5.4, there are no agreements, voting trusts or understandings
binding upon the Company or any of its Subsidiaries restricting the transfer
of the voting Securities of any of the Company's Subsidiaries or affecting
in any manner the sale, pledge, assignment or other disposition thereof,
including any right of first refusal, option, redemption, call or other
right with respect thereto, whether similar or dissimilar to any of the
foregoing.
SECTION 5.5 FINANCIAL STATEMENTS.
The Company has delivered to each Purchaser copies of the financial
statements of the Company and its Subsidiaries listed on Schedule 5.5. All of
said financial statements (including in each case the related schedules and
notes) fairly present in all material respects the consolidated financial
position of the Company and its Subsidiaries as of the respective dates
specified in such financial statements and the consolidated results of their
operations and cash flows for the respective periods so specified and have been
prepared in accordance with GAAP consistently applied throughout the periods
involved except as set forth in the notes thereto (subject, in the case of any
interim financial statements, to normal year-end adjustments).
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The Company, through the Agent, delivered to each Purchaser, on May 28,
1999 copies of its revised 1999 and 2000 operational projections. Such
projections were prepared in good faith by the Company and were based on facts
known to the Company on the date the projections were made and on assumptions
that were, in the Company's belief, reasonable and consistent with such facts.
To the knowledge of the Company, such projections are not unreasonable in any
material respect.
SECTION 5.6 COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, PROPERTY ASSOCIATION
RULES AND REGULATIONS, ETC.
(a) The execution, delivery and performance by the Company and the
Guarantors of this Agreement, the Security Documents and the Notes will not (a)
contravene, result in any breach of, or constitute a default under, or, unless
permitted hereunder, result in the creation of any Lien in respect of any
property of the Company, any Subsidiary or any Guarantor under, any indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate
charter or by-laws, or any other agreement or instrument to which the Company,
any Subsidiary or any Guarantor is bound or by which the Company, any Subsidiary
or any Guarantor or any of their respective properties may be bound or affected,
(b) conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator or
Governmental Authority applicable to the Company, any Subsidiary or any
Guarantor or (c) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company, any
Subsidiary or any Guarantor.
(b) The Company, each of the Guarantors and their respective
Subsidiaries are not in violation of and no default exists with respect to any
provision of any charter instrument, by-law, articles of association, operating
agreement or other agreement or arrangement which governs or affects any
property managed or let by the Company, the Guarantors and its Subsidiaries, and
the operation of the business of the Company and its Subsidiaries will not be in
violation of any such agreement or arrangement, including without limitation,
any provision relating to minimum and/or maximum length of stay requirements
relating to the subleasing, subletting or other use of the properties managed or
let by the Company and its Subsidiaries.
SECTION 5.7 GOVERNMENTAL AUTHORIZATIONS, ETC.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Company and the Guarantors of this
Agreement, the Security Documents or the Notes.
SECTION 5.8 LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.
(a) Except as disclosed in Schedule 5.8, there are no actions, suits or
proceedings pending or, to the knowledge of the Company or any Guarantor,
threatened against or affecting the Company, any Subsidiary or any Guarantor
or any property of the Company, any Subsidiary or any Guarantor in any court
or before any arbitrator of any kind or before or by any
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Governmental Authority that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(b) None of the Company, any Subsidiary or any Guarantor is in default
under any term of any agreement or instrument to which it is a party or by
which it is bound, or any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority or is in violation of any applicable
law, ordinance, rule or regulation (including without limitation
Environmental Laws) of any Governmental Authority, which default or
violation, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
SECTION 5.9 TAXES.
The Company, its Subsidiaries and each Guarantor have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (a) the amount
of which is not individually or in the aggregate Material or (b) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company, a Subsidiary or
any Guarantor, as the case may be, has established adequate reserves in
accordance with GAAP. The Company and each Guarantor know of no basis for any
other tax or assessment that could reasonably be expected to have a Material
Adverse Effect. The charges, accruals and reserves on the books of the Company,
its Subsidiaries and each Guarantor in respect of Federal, state or other taxes
for all fiscal periods are adequate. The Federal income tax liabilities of the
Company, its Subsidiaries and each Guarantor have been paid for all fiscal years
up to and including the fiscal year ended December 31, 1998.
SECTION 5.10 TITLE TO PROPERTY; LEASES.
The Company, its Subsidiaries and the Guarantors have good and
sufficient title to their respective properties that individually or in the
aggregate are Material, including all such properties reflected in the most
recent audited balance sheet referred to in Section 5.5 or purported to have
been acquired by the Company, any Subsidiary or the Guarantors after said date
(except as sold or otherwise disposed of in the ordinary course of business), in
each case free and clear of Liens prohibited by this Agreement. All leases are
valid and subsisting and are in full force and effect in all material respects
except for defects in such leases that could not reasonably be expected, in the
aggregate, to have a Material Adverse Effect.
SECTION 5.11 LICENSES, PERMITS, ETC.
Except as disclosed in Schedule 5.11,
(a) the Company, its Subsidiaries and the Guarantors own or possess all
licenses, permits, franchises, authorizations, patents, copyrights, service
marks, trademarks, technology, know-how, processes and trade names, or
rights thereto (collectively
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"Intellectual Property"), that individually or in the aggregate are
Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company and the Guarantors, no product
of the Company or the Guarantors infringes in any material respect any
license, permit, franchise, authorization, patent, copyright, service mark,
trademark, trade name or other right owned by any other Person;
(c) to the best knowledge of the Company and the Guarantors, there is
no Material violation by any Person of any right of the Company, any of its
Subsidiaries or the Guarantors with respect to any Intellectual Property or
other right owned or used by the Company, any of its Subsidiaries or the
Guarantors; and
(d) the Company and each Guarantor owns, or has the legal right to use,
(subject to the common law rights of another user) all Intellectual Property
necessary for each of them to conduct its business as currently conducted
except for those which the failure to own or have such legal right to use
could not have a Material Adverse Effect.
Set forth on Schedule 5.11 is a list of all Intellectual Property owned
by the Company or any Guarantor or that the Company or any Guarantor has the
right to use.
SECTION 5.12 COMPLIANCE WITH ERISA.
(a) The Company, the Guarantors and each ERISA Affiliate have operated
and administered each Plan in compliance with all applicable laws except for
such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. Neither the
Company, the Guarantors nor any ERISA Affiliate has incurred any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions
of the Code relating to employee benefit plans (as defined in Section 3 of
ERISA), and no event, transaction or condition has occurred or exists that
could reasonably be expected to result in the incurrence of any such
liability by the Company, the Guarantors or any ERISA Affiliate, or in the
imposition of any Lien on any of the rights, properties or assets of the
Company, the Guarantors or any ERISA Affiliate, in either case pursuant to
Title I or IV of ERISA or to such penalty or excise tax provisions or to
Section 401(a)(29) or 412 of the Code, other than such liabilities or Liens
as would not be individually or in the aggregate Material.
(b) Neither the Company nor the Guarantors maintained any Plan that is
a defined benefit pension plan subject to Title IV of ERISA.
(c) The Company, the Guarantors and its ERISA Affiliates have not
incurred withdrawal liabilities (and are not subject to contingent
withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance
with Financial Accounting
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Standards Board Statement No. 106, without regard to liabilities
attributable to continuation coverage mandated by section 4980B of the Code)
of the Company, its Subsidiaries and the Guarantors is not Material.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject
to the prohibitions of section 406 of ERISA or in connection with which a
tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The
representation by the Company and the Guarantors in the first sentence of
this Section 5.12(e) is made in reliance upon and subject to (i) the
accuracy of each Purchaser's representation in Section 6.2 as to the sources
of the funds used to pay the purchase price of the Notes to be purchased by
such Purchaser and (ii) the assumption, made solely for the purpose of
making such representation, that Department of Labor Interpretive Bulletin
75-2 with respect to prohibited transactions remains valid in the
circumstances of the transactions contemplated herein.
SECTION 5.13 PRIVATE OFFERING BY THE COMPANY.
Neither the Company, the Guarantors nor anyone acting on their behalf
has offered the Notes or any similar securities for sale to, or solicited any
offer to buy any of the same from, or otherwise approached or negotiated in
respect thereof with, any Person other than the Purchasers and not more than 35
other Institutional Investors, each of which has been offered the Notes at a
private sale for investment. Neither the Company, the Guarantors nor anyone
acting on their behalf has taken, or will take, any action that would subject
the issuance or sale of the Notes to the registration requirements of Section 5
of the Securities Act.
SECTION 5.14 USE OF PROCEEDS; MARGIN REGULATIONS.
The Company will apply the proceeds of the sale of the Notes as set
forth in Schedule 5.14 to repay in full the outstanding balance under the Credit
Facility] and for general corporate purposes. No part of the proceeds from the
sale of the Notes hereunder will be used, directly or indirectly, for the
purpose of buying or carrying any margin stock within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for
the purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Company in a violation of Regulation X of said
Board (12 CFR 224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220). Margin stock does not constitute more
than 5% of the value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention that margin
stock will constitute more than 5% of the value of such assets. As used in this
Section, the terms "margin stock" and "purpose of buying or carrying" shall have
the meanings assigned to them in said Regulation U.
SECTION 5.15 EXISTING INDEBTEDNESS; FUTURE LIENS.
(a) Except as described therein, Schedule 5.15 sets forth a complete
and correct list of all outstanding Indebtedness of the Company, its
Subsidiaries and the Guarantors as of May 31, 1999, since which date there
has been no Material change in the amounts, interest rates, sinking
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funds, installment payments or maturities of the Indebtedness of the
Company, its Subsidiaries and the Guarantors. Neither the Company, any
Subsidiary or the Guarantors is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any
Indebtedness of the Company, such Subsidiary or such Guarantor and no event
or condition exists with respect to any Indebtedness of the Company, any
Subsidiary or any Guarantor that would permit (or that with notice or the
lapse of time, or both, would permit) one or more Persons to cause such
Indebtedness to become due and payable before its stated maturity or before
its regularly scheduled dates of payment.
(b) Except as described in Schedule 5.15, none of the Company, any
Subsidiary or any Guarantor has agreed or consented to cause or permit in
the future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a Lien
not permitted by Section 10.3.
(c) The Guarantors will derive a commercial benefit by their execution
and delivery of this Agreement generally and, in certain other respects, as
more specifically described in Schedule 5.15 hereto.
SECTION 5.16 FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
SECTION 5.17 STATUS UNDER CERTAIN STATUTES.
None of the Company, any Subsidiary or any Guarantor is subject to
regulation under the Investment Company Act of 1940, as amended, the Public
Utility Holding Company Act of 1935, as amended, the Interstate Commerce Act, as
amended, or the Federal Power Act, as amended.
SECTION 5.18 ENVIRONMENTAL MATTERS.
As of the date of the Closing, none of the Company, any Subsidiary or
any Guarantor has knowledge of any claim or has received any notice of any
claim, and no proceeding has been instituted raising any claim against the
Company, any of its Subsidiaries or any Guarantor or any of their respective
real properties now or formerly owned, leased or operated by any of them or
other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. As of the date of the Closing,
except as otherwise disclosed to the Purchasers in writing,
(a) none of the Company, any Subsidiary or any Guarantor has knowledge
of any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating from,
occurring on or in any way related to real properties now or formerly owned,
leased or operated by any of them or to other
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assets or their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) none of the Company, any of its Subsidiaries or any Guarantor has
stored or has knowledge of any storage of any Hazardous Materials on real
properties now or formerly owned, leased or operated by any of them and has
not disposed, nor has any knowledge of any disposal, of any Hazardous
Materials in a manner contrary to any Environmental Laws in each case in any
manner that could reasonably be expected to result in a Material Adverse
Effect; and
(c) none of the Company, any of its Subsidiaries or any Guarantor has
knowledge that any buildings on any real properties now owned, leased or
operated by the Company, any of its Subsidiaries or any Guarantor are not in
compliance with applicable Environmental Laws, except where failure to
comply could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.19 PARITY OF OBLIGATIONS.
All obligations hereunder and under the Security Documents and the
Notes are direct and secured obligations of the Company and the Guarantors
ranking pari passu as against the assets of the Company and the Guarantors with
the obligations of the Company and the Guarantors under the Credit Documents and
Hedging Agreements (as defined in the Credit Agreement) with any Lender.
SECTION 5.20 SOLVENCY.
Each of the Company and the Guarantors is, and upon giving effect to
the issuance of the Notes and the execution of this Agreement and the Security
Documents will be, a "solvent institution", as said term is used in section
1405(c) of the New York State Insurance Law, whose "obligations are not in
default as to principal or interest", as said terms are used in said section
1405(c). Each of the Company and the Guarantors has capital not unreasonably
small in relation to its respective business or any contemplated or undertaken
transaction and has assets having a value both at fair valuation and at present
fair salable value greater than the amount required to pay its debts as they
become due and greater than the amount that will be required to pay its
respective probable liability on its existing debts as they become absolute and
matured. Neither the Company nor any of the Guarantors intends to incur, or
believes or should have believed that it will incur, debts beyond its ability to
pay such debts as they become due. Neither the Company nor any of the Guarantors
will be rendered insolvent by the execution and delivery of, and performance of
its respective obligations under this Agreement, the Notes and the Security
Documents.
SECTION 5.21 CONSOLIDATED AND INTEGRATED BUSINESS PLAN.
The Company and the Guarantors operate under a shared business plan,
with common corporate direction, integrated operating goals and with a
consolidated effort. The Company and
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the Guarantors prepare consolidated financial statements and present their
financial reporting on a consolidated basis.
SECTION 5.22 LOCATION OF THE ASSETS.
Set forth on Schedule 5.22(a) is a list of all locations where any
tangible personal property of the Company or any Guarantor is located, including
county and state where located. Set forth on Schedule 5.22(b) is the chief
executive office and principal place of business of the Company and each
Guarantor.
SECTION 5.23 NO BURDENSOME RESTRICTIONS.
Neither the Company nor any Guarantor is a party to any agreement or
instrument or subject to any other obligation or any charter or corporate
restriction or any provision of any applicable law, rule or regulation which,
individually or in the aggregate, could have a Material Adverse Effect.
SECTION 5.24 YEAR 2000 COMPLIANCE.
The Company has (a) initiated a review and assessment of all areas
within its and each of its Subsidiaries' business and operations (including
those affected by suppliers, vendors and customers) that could be adversely
affected by the "YEAR 2000 PROBLEM" (that is, the risk that computer
applications used by the Company or any of its Subsidiaries (or suppliers,
vendors and customers) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999) and (b) has developed a plan and timeline for addressing the
Year 2000 problem on a timely basis. Based on the foregoing, the Company
believes that all computer applications (including those of its suppliers,
vendors and customers) that are Material to its or any of its Subsidiaries'
business and operations are reasonably expected on a timely basis to be able to
perform properly date-sensitive functions for all dates before and after January
1, 2000 (that is, be "YEAR 2000 COMPLIANT"), except to the extent that a failure
do so could not reasonably be expected to have a Material Adverse Effect.
SECTION 6. REPRESENTATIONS OF THE PURCHASERS.
SECTION 6.1 PURCHASE FOR INVESTMENT.
Each Purchaser represents that it is purchasing the Notes for its own
account or for one or more separate accounts maintained by it for the account of
one or more pension or trust funds and not with a view to the distribution
thereof, PROVIDED THAT the disposition of such Purchaser's property shall at all
times be within its control. Each Purchaser understands that the Notes have not
been registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes.
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SECTION 6.2 SOURCE OF FUNDS.
Each Purchaser represents that at least one of the following statements
is an accurate representation as to each source of funds (a "SOURCE") to be used
by such Purchaser to pay the purchase price of the Notes to be purchased by such
Purchaser hereunder:
(a) the Source is an "INSURANCE COMPANY GENERAL ACCOUNT" within the
meaning of Department of Labor Prohibited Transaction Exemption ("PTE")
95-60 (issued July 12, 1995) and there is no employee benefit plan, treating
as a single plan, all plans maintained by the same employer or employee
organization, with respect to which the amount of the general account
reserves and liabilities for all contracts held by or on behalf of such
plan, exceed ten percent (10%) of the total reserves and liabilities of such
general account (exclusive of separate account liabilities) plus surplus, as
set forth in the NAIC Annual Statement filed by such Purchaser with such
Purchaser's state of domicile; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii) a
bank collective investment fund, within the meaning of the PTE 91-38 (issued
July 12, 1991) and, except as such Purchaser has disclosed to the Company in
writing pursuant to this paragraph (b), no employee benefit plan or group of
plans maintained by the same employer or employee organization beneficially
owns more than 10% of all assets allocated to such pooled separate account
or collective investment fund; or
(c) the Source constitutes assets of an "INVESTMENT FUND" (within the
meaning of Part V of the "QPAM Exemption") managed by a "QUALIFIED
PROFESSIONAL ASSET MANAGER" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that are included in such
investment fund, when combined with the assets of all other employee benefit
plans established or maintained by the same employer or by an affiliate
(within the meaning of Section V(c)(1) of the QPAM Exemption) of such
employer or by the same employee organization and managed by such QPAM,
exceed 20% of the total client assets managed by such QPAM, the conditions
of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM
nor a person controlling or controlled by the QPAM (applying the definition
of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more
interest in the Company and (i) the identity of such QPAM and (ii) the names
of all employee benefit plans whose assets are included in such investment
fund have been disclosed to the Company in writing pursuant to this
paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each
of which has been identified to the Company in writing pursuant to this
paragraph (e); or
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(f) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
If any Purchaser or any subsequent transferee of the Notes indicates
that such Purchaser or such transferee is relying on any representation
contained in paragraph (b), (c) or (e) above, the Company shall deliver on the
appropriate date of Closing and on the date of any applicable transfer a
certificate, which shall either state that (i) it is neither a party in interest
nor a "disqualified person" (as defined in Section 4975(e)(2) of the Internal
Revenue Code of 1986, as amended), with respect to any plan identified pursuant
to paragraphs (b) or (e) above, or (ii) with respect to any plan, identified
pursuant to paragraph (c) above, neither it nor any "affiliate" (as defined in
Section V(c) of the QPAM Exemption) has at such time, and during the immediately
preceding one year, exercised the authority to appoint or terminate said QPAM as
manager of any plan identified in writing pursuant to paragraph (c) above or to
negotiate the terms of said QPAM's management agreement on behalf of any such
identified plan. As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO COMPANY AND GUARANTORS.
SECTION 7.1 FINANCIAL AND BUSINESS INFORMATION.
The Company shall deliver to each Holder:
(a) QUARTERLY STATEMENTS -- within 45 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the
last quarterly fiscal period of each such fiscal year), duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and its Subsidiaries, for such
quarter and (in the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP applicable to quarterly financial
statements generally, and certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows,
subject to changes resulting from year-end adjustments;
(b) ANNUAL STATEMENTS -- within 120 days after the end of each fiscal
year of the Company, duplicate copies of,
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(i) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and its Subsidiaries, for such
year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied by
(A) an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall
state that such financial statements present fairly, in all
material respects, the financial position of the Company and its
subsidiaries and their results of operations and cash flows and
have been prepared in conformity with GAAP, and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted
auditing standards, and that such audit provides a reasonable
basis for such opinion in the circumstances; and
(B) a certificate of such accountants stating that they have
reviewed this Agreement and stating further whether, in making
their audit, they have become aware of any condition or event that
then constitutes a Default or an Event of Default, and, if they
are aware that any such condition or event then exists, specifying
the nature and period of the existence thereof (it being
understood that such accountants shall not be liable, directly or
indirectly, for any failure to obtain knowledge of any Default or
Event of Default unless such accountants should have obtained
knowledge thereof in making an audit in accordance with generally
accepted auditing standards or did not make such an audit);
(c) AUDIT REPORTS -- promptly upon receipt thereof, one copy of each
interim or special audit made by the independent accountants of the books of
the Company and its Subsidiaries and any management letter received from
such accountants;
(d) SEC AND OTHER REPORTS -- promptly upon their becoming available,
one copy of (i) each financial statement, report, notice or proxy statement
sent by the Company, any Subsidiary or any Guarantor to public securities
holders generally, and (ii) each regular or periodic report, each
registration statement (without exhibits except as expressly requested by
such holder), and each prospectus and all amendments thereto filed by the
Company, any Subsidiary or any Guarantor with the Securities and Exchange
Commission and of all press releases and other statements made available
generally by the Company, any Subsidiary or any Guarantor to the public
concerning developments that are Material;
(e) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- promptly, and in any event
within five days after a Responsible Officer becoming aware of the existence
of any Default or
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Event of Default or that any Person has given any notice or taken any action
with respect to a claimed default hereunder or that any Person has given any
notice or taken any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying the nature and
period of existence thereof and what action the Company or Guarantor is
taking or proposes to take with respect thereto;
(f) NOTICE OF ERISA MATTERS -- promptly, and in any event within five
days after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if any, that
the Company, a Guarantor or an ERISA Affiliate proposes to take with respect
thereto:
(i) with respect to any Plan, any reportable event, as defined in
section 4043(b) of ERISA and the regulations thereunder, for which
notice thereof has not been waived pursuant to such regulations as in
effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company, a
Guarantor or any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by the PBGC with respect to such
Multiemployer Plan; or
(iii) any event, transaction or condition that could result in the
incurrence of any liability by the Company, a Guarantor or any ERISA
Affiliate pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the Code relating to employee benefit plans, or in
the imposition of any Lien on any of the rights, properties or assets
of the Company, a Guarantor or any ERISA Affiliate pursuant to Title I
or IV of ERISA or such penalty or excise tax provisions, if such
liability or Lien, taken together with any other such liabilities or
Liens then existing, could reasonably be expected to have a Material
Adverse Effect;
(g) NOTICES FROM GOVERNMENTAL AUTHORITY -- promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company, any
Subsidiary or any Guarantor from any Federal or state Governmental Authority
relating to any order, ruling, statute or other law or regulation that could
reasonably be expected to have a Material Adverse Effect; and
(h) REQUESTED INFORMATION -- with reasonable promptness, such other
data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Company, any of its
Subsidiaries or any of the Guarantors or relating to the ability of the
Company and the Guarantors to perform its obligations hereunder and under
the Notes as from time to time may be reasonably requested by any such
Holder.
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SECTION 7.2 OFFICER'S CERTIFICATE.
Each set of financial statements delivered to a Holder pursuant to
SECTION 7.1 shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) COVENANT COMPLIANCE -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section __ through Section __ hereof,
inclusive, during the quarterly or annual period covered by the statements
then being furnished (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms of such
Sections, and the calculation of the amount, ratio or percentage then in
existence); and
(b) EVENT OF DEFAULt -- a statement that such officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company, its
Subsidiaries and the Guarantors from the beginning of the quarterly or
annual period covered by the statements then being furnished to the date of
the certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or
an Event of Default or, if any such condition or event existed or exists
(including, without limitation, any such event or condition resulting from
the failure of the Company, any Subsidiary or any Guarantor to comply with
any Environmental Law), specifying the nature and period of existence
thereof and what action the Company, the Subsidiary or the Guarantor shall
have taken or proposes to take with respect thereto.
SECTION 7.3 INSPECTION.
The Company shall permit the representatives of each Holder:
(a) NO DEFAULT -- if no Default or Event of Default then exists, at the
expense of such Holder and upon reasonable prior notice to the Company
during normal business hours, to visit the principal executive office of the
Company or the Guarantor, as the case may be, to discuss the affairs,
finances and accounts of the Company, its Subsidiaries and the Guarantors
with the Company's and such Guarantor's officers, and (with the consent of
the Company and the Guarantors, which consent will not be unreasonably
withheld) their independent public accountants, and (with the consent of the
Company and the Guarantors, which consent will not be unreasonably withheld)
to visit the other offices and properties of the Company, each Subsidiary
and each Guarantor, all at such reasonable times and as often as may be
reasonably requested in writing; PROVIDED THAT the Company is notified prior
to any such visits with any Guarantor or any Subsidiary and has the
opportunity to attend such meeting; and
(b) DEFAULT -- if a Default or Event of Default then exists, at the
expense of the Company and the Guarantors, to visit and inspect any of the
offices or properties of the Company, any Subsidiary or any Guarantor, to
examine all their respective books of account, records, reports and other
papers, to make copies and extracts therefrom, and to
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discuss their respective affairs, finances and accounts with their
respective officers and independent public accountants (and by this
provision the Company and each Guarantor authorizes said accountants to
discuss the affairs, finances and accounts of the Company, its Subsidiaries
and the Guarantors), all at such times and as often as may be requested.
SECTION 8. PREPAYMENT OF THE NOTES.
SECTION 8.1 REQUIRED PREPAYMENTS.
No prepayments are scheduled with respect to the Notes.
SECTION 8.2 OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT.
The Company may, at its option, upon notice as provided below, prepay
at any time all, or from time to time any part of, the Notes, in an amount not
less than $5,000,000 in aggregate principal amount of the Notes then outstanding
in the case of a partial prepayment, at 100% of the principal amount so prepaid,
together with interest accrued thereon to the date of such prepayment, plus the
greater of (i) zero and (ii) the Make-Whole Amount determined for the prepayment
date with respect to such principal amount. The Company will give each Holder of
Notes written notice of each optional prepayment under this Section 8.2 not less
than 30 days and not more than 60 days prior to the date fixed for such
prepayment. Each such notice shall specify such date, the aggregate principal
amount of the Notes to be prepaid on such date, the principal amount of each
Note held by such Holder to be prepaid (determined in accordance with Section
8.4), and the interest to be paid on the prepayment date with respect to such
principal amount being prepaid, and shall be accompanied by a certificate of a
Senior Financial Officer as to the estimated Make-Whole Amount due in connection
with such prepayment (calculated as if the date of such notice were the date of
the prepayment), setting forth the details of such computation. Two Business
Days prior to such prepayment, the Company shall deliver to each Holder of Notes
a certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
SECTION 8.3 CHANGE IN CONTROL.
(a) NOTICE OF CHANGE IN CONTROL OR CONTROL EVENT.
The Company will, within two Business Days after any Responsible
Officer of the Company or of any Guarantor has knowledge of the occurrence of
any Change in Control give written notice of such Change in Control to each
Holder of Notes. Such notice shall contain and constitute an offer to purchase
Notes as described in subparagraph (b) of this Section 8.3 and shall be
accompanied by the certificate described in subparagraph (e) of this Section
8.3.
(b) OFFER TO PURCHASE NOTES.
The offer to purchase Notes contemplated by subparagraph (a) of this
Section 8.3 shall be an offer to purchase, in accordance with and subject to
this Section 8.3, all, but not less than all, of the Notes held by each holder
(in this case only, "HOLDER" in respect of any Note registered in
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the name of a nominee for a disclosed beneficial owner shall mean such
beneficial owner) on a date specified in such offer (the "PROPOSED PURCHASE
DATE"). Such date shall be not less than 30 days after the date of such offer
(if the Proposed Purchase Date shall not be specified in such offer, the
Proposed Purchase Date shall be the date of occurrence of the Change in
Control).
(c) ACCEPTANCE.
Each Holder may accept or reject the offer to purchase made pursuant to
this Section 8.3 by causing a notice of such acceptance or rejection to be
delivered to the Company at least 15 days prior to the Proposed Purchase Date. A
failure by any Holder to respond to an offer to purchase made pursuant to this
Section 8.3 shall be deemed to constitute a rejection of such offer by such
Holder.
(d) PURCHASE.
Purchase of the Notes to be purchased pursuant to this Section 8.3
shall be at 100% of the principal amount of such Notes together with interest on
such Notes accrued to the date of purchase. The purchase shall be made on the
Proposed Purchase Date.
(e) OFFICER'S CERTIFICATE.
Each offer to purchase the Notes pursuant to this Section 8.3 shall be
accompanied by a certificate, executed by a Senior Financial Officer of the
Company and dated the date of such offer, specifying: (i) the Proposed Purchase
Date; (ii) that such offer is made pursuant to this Section 8.3; (iii) the
principal amount of each Note offered to be purchased; (iv) the interest that
would be due on each Note offered to be purchased, accrued to the Proposed
Purchase Date; (v) that the conditions of this Section 8.3 have been fulfilled;
and (vi) in reasonable detail, the nature and date or proposed date of the
Change in Control.
(f) DEFINITIONS.
"CHANGE IN CONTROL" means the occurrence of any of the following
events: (i) any Person or two or more Persons acting in concert shall have
acquired "beneficial ownership," directly or indirectly, of, or shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their acquisition of,
control over, Voting Stock of the Company (or other securities convertible into
such Voting Stock) sufficient to elect a majority of the Company's Board of
Directors or (ii) during any period of up to 24 consecutive months, commencing
after the Closing Date, individuals who at the beginning of such 24 month period
were directors of the Company (together with any new director whose election by
the Company's Board of Directors or whose nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the directors of the
Company then in office. As used herein, "beneficial ownership" shall have the
meaning provided in Rule 13d-3 of the Securities and Exchange Commission under
the Securities Act of 1934.
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SECTION 8.4 ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes pursuant to Section
8.2, the principal amount of the Notes to be prepaid shall be allocated among
all of the Series of Notes, pro rata, at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore prepaid.
SECTION 8.5 MATURITY; SURRENDER, ETC.
In the case of each prepayment or purchase of Notes pursuant to this
Section 8, the principal amount of each Note to be prepaid or purchased shall
mature and become due and payable on the date fixed for such prepayment or
purchase, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid, purchased or
prepaid in full shall be surrendered to the Company and cancelled and shall not
be reissued, and no Note shall be issued in lieu of any prepaid or purchased
principal amount of any Note.
SECTION 8.6 PURCHASE OF NOTES.
The Company will not and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except upon the purchase, payment or prepayment of the Notes
in accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.
SECTION 8.7 MAKE-WHOLE AMOUNT.
"MAKE-WHOLE AMOUNT" means, with respect to a Note of any Series, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of the Note of such
Series over the amount of such Called Principal, PROVIDED that the Make-Whole
Amount may in no event be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to a Note of any Series, the
principal of the Note of such Series that is to be prepaid or purchased pursuant
to Section 8.2 or Section 8.3 or has become or is declared to be immediately due
and payable pursuant to Section 12.1, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal of a
Note of any Series, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective scheduled
due dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
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(applied on the same periodic basis as that on which interest on such Notes is
payable) equal to the Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called Principal of a
Note of any Series, 1.00% over the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time) on the second Business Day
preceding the Settlement Date with respect to such Called Principal, on the
display designated as Screen PX1 on the Bloomberg Financial Markets Services
System (or such other display as may replace Screen PX1 on Bloomberg Financial
Markets Services System) for actively traded U.S. Treasury securities having a
maturity equal to the maturity of such Called Principal as of such Settlement
Date, or (ii) if such yields are not reported as of such time or the yields
reported as of such time are not ascertainable, the Treasury Constant Maturity
Series Yields reported, for the latest day for which such yields have been so
reported as of the second Business Day preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve Statistical Release H.15
(519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the maturity of such
Called Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between (1) the actively traded U.S. Treasury security
with the maturity closest to and greater than the maturity of such Called
Principal and (2) the actively traded U.S. Treasury security with the maturity
closest to and less than the maturity of such Called Principal.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the Called
Principal of a Note of any Series, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with respect to
such Called Principal if no payment or purchase of such Called Principal were
made prior to its scheduled due date, PROVIDED that if such Settlement Date is
not a date on which interest payments are due to be made under the terms of the
Notes of such Series, then the amount of the next succeeding scheduled interest
payment will be reduced by the amount of interest accrued to such Settlement
Date and required to be paid on such Settlement Date pursuant to Section 8.2,
8.3 or 12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal of a Note
of any Series, the date on which such Called Principal is to be prepaid or
purchased pursuant to Section 8.2 or Section 8.3 or has become or is declared to
be immediately due and payable pursuant to Section 12.1, as the context
requires.
SECTION 8.8 GROSS-UP.
All payments by the Guarantors (the "PAYORS") pursuant to the Guarantee
shall be made in Dollars without deduction or withholding for or on account of
any present or future taxes, levies, imposts, duties, fees or charges of any
nature whatsoever (other than income taxes of the United States or any political
subdivision thereof) (hereinafter called "TAX") imposed by or for any Taxing
Jurisdiction (as defined below) unless any withholding or deduction for or on
account of Tax is required by law.
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(a) If Payor shall be obligated by law to make any such withholding or
deduction for any Tax imposed, levied, collected, assessed or withheld by or
within the jurisdiction in which such Payor is organized or resident for tax
purposes or in Canada or any political subdivision or taxing authority
thereof or therein or by any other country or jurisdiction (or any taxing
authority thereof or therein) from or through which payments hereunder by
such Payor are actually made (each, a "TAXING JURISDICTION"), then such
Payor will promptly (i) pay over to the relevant Taxing Jurisdiction the
full amount required to be deducted, withheld or otherwise paid in by such
Payor (including the full amount required to be deducted or withheld from or
otherwise paid by such Payor in respect of any Additional Payment (as
defined below) required to be made pursuant to clause (ii) hereof), and (ii)
save as provided below, pay to each Person entitled under this Agreement to
receive the payment from which the amount referred to in clause (i) has been
so deducted, withheld or otherwise paid such additional amount (the
"ADDITIONAL PAYMENT") as is necessary in order that the amount received by
such Person after any required deduction, withholding or other payment of
Tax (including any required deduction, withholding or other payment of Tax
on or with respect to such additional amount), shall equal the amount such
Person would have received had no such deduction, withholding or other
payment of Tax been paid, PROVIDED that in no event shall such Payor be
obligated to make any Additional Payment to any Holder of a Note not
resident in the United States in excess of the amount which such Payor would
have been obligated to pay if the Holder of such Note had been resident in
the United States and eligible for and claimed the benefits of the double
tax treaty between Canada and the United States as in effect on the date
hereof.
(b) Notwithstanding the provisions of this Section 8.8, no such
Additional Payments shall be payable for or on account of:
(i) any Tax which would not have been imposed but for the
existence of any present or former connection (other than the mere
passive holding of a Note or other Securities of other issuers) between
such Holder (or a fiduciary, settler, beneficiary, member of,
shareholder of, or possessor of a power over, such Holder, if such
Holder is an estate, trust, partnership or corporation, or any person
other than the Holder to whom the relevant Note or any amount payable
thereon are attributable for the purposes of such Tax, assessment or
charge) and such Taxing Jurisdiction, PROVIDED that this paragraph (i)
shall not be applicable if the relevant payment is made other than from
either the United States or Canada;
(ii) any Tax that is imposed or withheld by reason of the failure
of the Holder or any other person mentioned in paragraph (a) above to
make a declaration of non-residence or other similar claim or comply
with any reporting requirement (as notified in writing to the Holders
of the Notes by or on behalf of any Payor giving the Holders of the
Notes sufficient time to satisfy such requirements and providing the
Holders of the Notes with any forms, certificates, documents,
applications or returns required to be filed or submitted in order to
avoid such withholding or deduction), as is required (A) by statute,
treaty or regulation of Canada existing on the date hereof, or which
are not substantially more onerous than those existing on the date
hereof and which do not impose an unreasonable burden (in time,
resources or otherwise) on such Holder, or (B) by statute, treaty or
regulation in any other relevant Taxing Jurisdiction to
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the extent the requirements thereof are not substantially more onerous
than those of Canada existing on the date hereof and which do not
impose an unreasonable burden (in time, resources or otherwise) on such
holder as a precondition to exemption from all or part of such Tax;
PROVIDED, the obligation of you and any other holder under sub-clause
(A) to this paragraph (ii) shall be deemed to be satisfied by
completing and filing Form FD-13 (U.S. Corporate) with the United
States Internal Revenue Service no later than 90 days prior to any
payment to such holder by any Guarantor which is domiciled in the
United Kingdom; or
(iii) a combination of items (i) and (ii) above.
(c) For the avoidance of doubt, nothing herein shall restrict the right
of any Person to arrange its tax affairs as it shall think fit or require
any Person to disclose any information regarding its tax affairs or
computations to the Payors that, in such Holder's sole judgment, constitutes
confidential information.
(d) As soon as reasonably practicable after the date of any payment by
the Payors of any Tax, the Payors shall furnish to each Affected Holder a
certified copy of the original tax receipt (if such a receipt has been
issued and, if such tax receipt has not then been issued, the Payor shall
furnish a copy thereof to such Affected Holder as soon as reasonably
practicable after such tax receipt is so issued).
(e) In connection with any claim, reporting or filing requirement
referred to in sub-clause (ii) of Section 8.8(b), the Payors will provide
each Holder with all publicly available forms and accompanying instructions
issued by the relevant Taxing Jurisdiction as to the proper completion of
such forms (together with an English translation thereof, if applicable)
necessary to comply with such claim, reporting or filing requirement.
(f) Subject to Section 8.8(b), if any Holder pays any amount in respect
of any Tax imposed by a Taxing Jurisdiction under this Agreement, the
Security Documents or any Note, or penalties or interest thereon (to the
extent such penalties or interest arise by virtue of a default or delay by
the Payors hereunder), then the Payors shall reimburse such Holder for that
payment upon demand accompanied by an official receipt (or a copy thereof
certified by such Holder to be a true and complete copy) issued by the
relevant Taxing Jurisdiction.
(g) The obligations of the Payors under this Section 8.8 will survive
the payment or transfer of any Note and the termination of this Agreement or
the Security Documents.
SECTION 9. AFFIRMATIVE COVENANTS.
The Company and each Guarantor covenant that so long as any of the
Notes are outstanding:
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SECTION 9.1 COMPLIANCE WITH LAW.
The Company and each Guarantor will, and will cause each of its
Subsidiaries to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 9.2 INSURANCE.
The Company and each Guarantor will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
SECTION 9.3 MAINTENANCE OF PROPERTIES.
The Company and each Guarantor will, and will cause each of its
Subsidiaries to, maintain and keep, or cause to be maintained and kept, their
respective properties in good repair, working order and condition (other than
ordinary wear and tear), so that the business carried on in connection therewith
may be properly conducted at all times, PROVIDED that this Section shall not
prevent the Company, any Subsidiary or any Guarantor from discontinuing the
operation and the maintenance of any of its properties if such discontinuance is
desirable in the conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
SECTION 9.4 PAYMENT OF TAXES AND CLAIMS.
The Company and each Guarantor will, and will cause each of its
Subsidiaries to, file all tax returns required to be filed in any jurisdiction
and to pay and discharge all taxes shown to be due and payable on such returns
and all other taxes, assessments, governmental charges, or levies imposed on
them or any of their properties, assets, income or franchises, to the extent
such taxes and assessments have become due and payable and before they have
become delinquent and all claims for which sums have become due and payable that
have or might become a Lien on properties or assets of the Company, any
Subsidiary or any Guarantor, PROVIDED that none of the Company, any Subsidiary
or any Guarantor need pay any such tax or assessment or claims if (a) the
amount, applicability or validity thereof is contested by the Company, such
Subsidiary or such Guarantor on a timely basis in good faith and in appropriate
proceedings, and the Company, a Subsidiary or any Guarantor has established
adequate reserves therefor in accordance with GAAP on the books of the Company,
such Subsidiary or such Guarantor or (b) the nonpayment
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of all such taxes and assessments in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
SECTION 9.5 CORPORATE EXISTENCE, ETC.
The Company and each Guarantor will at all times preserve and keep in
full force and effect its corporate existence. Subject to Sections 10.2 and
10.10, the Company and the Guarantors will at all times preserve and keep in
full force and effect the corporate existence of each of its Subsidiaries and
all rights and franchises of the Company and its Subsidiaries unless, in the
good faith judgment of the Company, the termination of or failure to preserve
and keep in full force and effect such corporate existence, right or franchise
could not, individually or in the aggregate, have a Material Adverse Effect.
SECTION 9.6 NOTES TO RANK PARI PASSU.
The Notes, the Guarantee and all other obligations of the Company and
of the Guarantors under this Agreement are and at all times shall remain direct
and secured obligations of the Company and the Guarantors, as the case may be,
ranking pari passu as against the assets of the Company or the Guarantors, as
the case may be, with the obligations of the Company and the Guarantors under
the Credit Agreement.
SECTION 9.7 MAINTENANCE OF OFFICE.
Each of the Company and the Guarantors will maintain an office at the
address of the Company, as provided in Section 18, where notices, presentations
and demands in respect hereof and the Notes may be made upon it. Such office
will be maintained at such address until such time as the Company or any
Guarantor shall notify the Holders of the Notes and the Collateral Agent of any
change of location of such office, which will in any event be located within the
United States.
SECTION 9.8 ADDITIONAL GUARANTORS; RELEASE OF GUARANTEES.
(a) In the event that additional Subsidiaries of the Company are to
execute and deliver Guaranties under and pursuant to the Credit Agreement (a
"BANK GUARANTOR") subsequent to the date hereof, the Company and the
Guarantors shall cause each such Bank Guarantor to deliver a Joinder
Agreement and the supporting documentation required by this Section 9.8 at
the time of its execution of such Guaranty. Subject to compliance with
Section 9.8(c) hereof, in the event that a Subsidiary at any time ceases to
be a Bank Guarantor and no Default or Event of Default shall have occurred
and be continuing, the Company may request that the Holders terminate the
Guarantee of such Bank Guarantor and upon evidence reasonably satisfactory
to the Required Holders that such Bank Guarantor has indeed ceased to be a
Bank Guarantor, the Holders will terminate the Guarantee so long as any
consideration which is paid to the Lenders (as defined in the Credit
Agreement) in connection with such release is also paid on a pro rata basis
to the Holders, it being the intent of this Section 9.8 that at all times
the Company and the Guarantors shall cause all Subsidiaries which are Bank
Guarantors to be Guarantors in accordance with and pursuant to the
provisions of this Section 9.8. Subject to
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compliance with Section 9.8(c) hereof, the Company and/or the Guarantors
may, so long as no Default or Event of Default shall have occurred and be
continuing, request that the Holders terminate the Guarantee of any
Guarantor which is not a Bank Guarantor and the Holders will terminate such
Guarantee to which such Guarantor is a party.
(b) In connection with the delivery of each additional Guarantee and
Joinder Agreement, the Company and the Guarantors shall cause each Guarantor
to deliver to each of the Holders (1) such documents and evidence with
respect to such Guarantor as any Holder may reasonably request in order to
establish the existence and good standing of such Guarantor and evidence
that the Board of Directors of such Guarantor has adopted resolutions
authorizing the execution and delivery of the Guarantee and the Joinder
Agreement to which such Guarantor is a party, (2) compliance and secretarial
certificates, dated the date of the delivery of such Joinder Agreement,
signed by the President or a Vice President of such Guarantor substantially
in the forms of such certificates delivered by the Guarantors at the
Closing, (3) such certificates or other evidence as any Holder may
reasonably request to establish that the transactions contemplated by the
Guarantee and the Joinder Agreement to which such Guarantor is a party shall
not subject any such holder to any tax, penalty, liability or other onerous
condition under or pursuant to any applicable law or governmental
regulation, (4) opinions of independent counsel and internal counsel (which
opinions and counsel shall be reasonably satisfactory to the Holders)
substantially in the forms thereof delivered by counsel to the Guarantors at
the Closing, and (5) all other documents and showings reasonably requested
by the Holders in connection with the execution and delivery of the Joinder
Agreement to which such Guarantor is a party, which documents shall be
satisfactory in form and substance to the Required Holders, and each Holder
shall have received a copy (executed or certified as may be appropriate) of
all of the foregoing legal documents.
(c) The Company and the Guarantors will not permit any Guarantor whose
Guarantee has been terminated under and pursuant to the terms of this
Section 9.8 to be or become liable in respect of any other Guaranty after
the date of termination of such Guarantee; PROVIDED, HOWEVER, that such
Guarantor may execute and deliver such subsequent Guaranty so long as the
Company and the Guarantors shall contemporaneously therewith cause such
Guarantor to execute and deliver a Joinder Agreement evidencing such
Guarantor's Guarantee, and such Guarantor shall so execute and deliver to
the Holders a Joinder Agreement together with all other documents,
agreements, certificates and opinions in compliance with the terms and
provisions of this Section 9.8 in the same form as and to the same effect as
if such subsequent Joinder Agreement and Guarantee and related documents,
agreement, certificates and opinions were delivered at the Closing. It being
the intent of this Section 9.8 that at all times the Company and the
Guarantors shall cause all Subsidiaries which have executed and delivered
Guaranties to holders of Debt of the Company and/or its Subsidiaries to be
Guarantors in accordance with and pursuant to the provisions of this Section
9.8.
(d) All reasonable out-of-pocket fees and expenses of the Holders,
including, without limitation, the reasonable fees and expenses of special
counsel to the Holders, incurred in connection with the execution and
delivery of the Joinder Agreement, any releases and the related agreements
and opinions described above shall be borne by the Company and the
Guarantors.
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SECTION 9.9 ADDITIONAL COLLATERAL, RELEASE OF COLLATERAL.
(a) As soon as practicable and in any event within 30 days after any
Person becomes a Material Subsidiary of the Company or of any Guarantor, the
Company shall provide the Collateral Agent and the Holders with written
notice thereof setting forth information in reasonable detail describing all
of the assets of such Person and shall cause 100% (if such Person is a
Domestic Subsidiary of the Company or of any Guarantor) or 65% (if such
Person is a Foreign Subsidiary of the Company or of any Guarantor) of the
Capital Stock of such Person and 100% and 65%, as the case may be, of all
Capital Stock owned by such Person in its Subsidiaries to be delivered to
the Collateral Agent (together with undated stock powers, if any, signed in
blank) and pledged to the Collateral Agent pursuant to an appropriate pledge
agreement in substantially the form of the Pledge Agreement and to cause
such Person, if such Person is a Domestic Subsidiary, to pledge all of its
assets to the Collateral Agent pursuant to a security agreement in
substantially the form of the Security and Collateral Agency Agreement or
other security instrument including mortgages, deeds of trust, leasehold
mortgages, collateral assignments or other appropriate security instruments
and documentation in a form, content and scope satisfactory to the
Collateral Agent, together with all such other documentation as the
Collateral Agent and the Holders may reasonably request in connection with
the foregoing and the perfection of the security interests granted
thereunder, including, without limitation, appropriate UCC-1 financing
statements, real estate title insurance policies, trademark, patent and
other intellectual property title and security interest searches and
reports, environmental reports, landlord's waivers, certified resolutions
and other organizational and authorizing documents of such Person, favorable
opinions of counsel to such Person (which shall cover, among other things,
the legality, validity, binding effect and enforceability of the
documentation referred to above and the perfection of the Collateral Agent's
first priority liens thereunder), all in form, content and scope reasonably
satisfactory to the Collateral Agent and the Holders.
(b) If, subsequent to the Closing, the Company or any Guarantor shall
acquire any Material asset or if the Company or any Guarantor shall be
required to pledge any additional collateral or asset to the Collateral
Agent under and pursuant to the Credit Agreement, the Company shall notify
the Collateral Agent and the Holders of the same and in each case shall take
such action as is required to grant a first perfected security interest in
such asset and/or collateral to the Collateral Agent in accordance with the
terms and provisions of clause (a) above.
(c) In the event that assets of the Company or any Subsidiary at any
time cease to be Collateral under the Credit Agreement, the Company may
request that the Holders release their interests in the security interests
in such Collateral granted to the Collateral Agent upon evidence reasonably
satisfactory to the Required Holders that such assets have indeed ceased to
be Collateral under the Credit Agreement, and the Holders will release such
security interests so long as any consideration which is paid to the Lenders
(as defined in the Credit Agreement) in connection with such release is also
paid on a pro rata basis to the Holders, it being the intent of this Section
9.9 that at all times the Company and the Guarantors shall cause all assets
of the Company and its Subsidiaries which is Collateral under the Credit
Agreement to be Collateral under this Agreement in accordance with and
pursuant to the provisions of this Section 9.9.
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(d) All reasonable out-of-pocket fees and expenses of the Holders and
the Collateral Agent, including, without limitation, the reasonable fees and
expenses of special counsel to the Holders, incurred in connection with the
execution and delivery of the collateral documentation, any releases and the
related agreements and opinions described above shall be borne by the
Company and the Guarantors.
SECTION 10. NEGATIVE COVENANTS.
The Company and each Guarantor covenants that so long as any of the
Notes are outstanding:
SECTION 10.1 TRANSACTIONS WITH AFFILIATES.
The Company and each Guarantor will not, and will not permit any
Subsidiary to, enter into directly or indirectly any transaction or Material
group of related transactions (including without limitation the purchase, lease,
sale or exchange of properties of any kind or the rendering of any service) with
any Affiliate (other than the Company or another Guarantor), except in the
ordinary course and pursuant to the reasonable requirements of the Company's or
such Guarantor's business and upon fair and reasonable terms no less favorable
to the Company or such Guarantor than would be obtainable in a comparable
arm's-length transaction with a Person not an Affiliate.
SECTION 10.2 MERGER, CONSOLIDATION, ETC.
The Company and each Guarantor shall not, and shall not permit any
Subsidiary to, consolidate with or merge with any other corporation or convey,
transfer or lease substantially all of its assets in a single transaction or
series of transactions to any Person unless:
(a) (i) in the case of the Company, the successor formed by such
consolidation or the survivor of such merger or the Person that acquires by
conveyance, transfer or lease substantially all of the assets of the Company
as an entirety, as the case may be, shall be a solvent corporation organized
and existing under the laws of the United States or any State thereof
(including the District of Columbia), and, if such corporation is not the
Company, (x) such corporation shall have executed and delivered to each
Holder its assumption of the due and punctual performance and observance of
each covenant and condition of this Agreement and the Notes and (y) shall
have caused to be delivered to each Holder an opinion of nationally
recognized independent counsel, or other independent counsel reasonably
satisfactory to the Required Holders, to the effect that all agreements or
instruments effecting such assumption are enforceable in accordance with
their terms and comply with the terms hereof and (ii) in the case of any
Guarantor or any Subsidiary, any Subsidiary may merge or consolidate with
the Company or another Wholly-Owned Subsidiary;
(b) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing.
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No such conveyance, transfer or lease of substantially all of the assets of the
Company or any Guarantor shall have the effect of releasing the Company, such
Guarantor or any successor corporation that shall theretofore have become such
in the manner prescribed in this Section 10.2 from its liability under this
Agreement, the Security Documents or the Notes.
SECTION 10.3 LIENS.
The Company and each Guarantor will not, and will not permit any of its
Subsidiaries to, directly or indirectly create or incur, or suffer to be
incurred or to exist (upon the happening of a contingency or otherwise), any
Lien on or with respect to any of its or their property or assets (including,
without limitation, any document or instrument in respect of goods or accounts
receivable), whether now owned or hereafter acquired or upon any income or
profits therefrom, or transfer any property for the purpose of subjecting the
same to the payment of obligations in priority to the payment of its or their
general creditors, or acquire or agree to acquire, or permit any of its
Subsidiaries to acquire, any property or assets upon conditional sales
agreements or other title retention devices, except:
(a) Liens for property taxes, assessments or governmental charges or
levies which are not yet due and payable or the payment of which is not at
the time required by Section 9.4;
(b) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other similar Liens, in each case, incurred in
the ordinary course of business for sums not yet due and payable or the
payment of which is not at the time required by Section 9.4;
(c) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business (i) in connection with workers'
compensation, unemployment insurance and other types of social security or
retirement benefits, or (ii) to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations, surety bonds,
appeal bonds, bids, leases (other than Capital Leases), performance bonds,
purchase, construction or sales contracts and other similar obligations, in
each case not incurred or made in connection with the borrowing of money,
the obtaining of advances or credit or the payment of the deferred purchase
price of property;
(d) any attachment or judgment Lien, unless the judgment it secures
shall not, within 60 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall not have been discharged
within 60 days after the expiration of any such stay;
(e) leases, licenses or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or encumbrances, in
each case incidental to, and not interfering with, the ordinary conduct of
the business of the Company or any of its
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Subsidiaries, PROVIDED THAT such Liens do not, in the aggregate, materially
detract from the value of such property;
(f) Liens on property or assets of any Wholly-Owned Subsidiary securing
Debt of such Wholly-Owned Subsidiary owing to another Wholly-Owned
Subsidiary or to the Company;
(g) (i) Liens securing Debt of the Company or any Subsidiary existing
as of the date hereof and reflected on Schedule 5.15 hereto, (ii) Liens
evidenced by the Security Agreement and the Pledge Agreement and (iii) the
Abbott Liens;
(h) any Lien created after the date hereof to secure all or any part of
the purchase price, or to secure Debt incurred or assumed to pay all or any
part of the purchase price or cost of construction, of tangible property (or
any improvement thereon) acquired or constructed by the Company or any
Subsidiary after the date of the Closing, PROVIDED THAT
(i) any such Lien shall extend solely to the item or items of such
property (or improvement thereon) so acquired or constructed and, if
required by the terms of the instrument originally creating such Lien,
other property (or improvement thereon) which is an improvement to or
is acquired for specific use in connection with such acquired or
constructed property (or improvement thereon) or which is real property
being improved by such acquired or constructed property (or improvement
thereon),
(ii) the principal amount of the Debt secured by any such Lien
shall at no time exceed an amount equal to the lesser of (A) the cost
to the Company or such Subsidiary of the property (or improvement
thereon) so acquired or constructed and (B) the fair market value (as
determined in good faith by the board of directors of the Company) of
such property (or improvement thereon) at the time of such acquisition
or construction, and
(iii) any such Lien shall be created contemporaneously with, or
within 180 days after, the acquisition or construction of such
property;
(i) Liens securing Acquired Subsidiary Debt;
(j) Liens created or incurred after the Closing given to secure Debt of
the Company or any Subsidiary in addition to the Liens permitted by clauses
(a) through (i) hereof, PROVIDED THAT the sum of (i) Debt secured by such
Liens and (ii) Debt of Subsidiaries (other than Debt of Subsidiaries to the
Company or Debt of Subsidiaries to any other Subsidiaries) does not exceed
15% of Adjusted Consolidated Net Worth; and
(k) any extension, renewal or refunding of any Lien permitted by the
preceding clauses (g) or (h) of this Section 10.3 in respect of the same
property theretofore subject to such Lien in connection with the extension,
renewal or refunding of the Debt secured
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thereby; PROVIDED THAT (1) such extension, renewal or refunding of Debt
shall be without increase in the principal amount remaining unpaid as of the
date of such extension, renewal or refunding, (2) the time remaining until
the maturity of such Debt shall not be reduced, (3) such Lien shall attach
solely to the same such property, and (4) immediately after the consummation
of the extension, renewal or refunding and after giving effect thereto, no
Default or Event of Default would exist.
If, notwithstanding the prohibition contained herein, the Company
shall, or shall permit any of its Subsidiaries to, directly or indirectly,
create, incur, assume or permit to exist any Lien, other than those Liens
permitted by the provisions of paragraphs (a) through (k) of this Section 10.3,
it will make or cause to be made effective provision whereby the Notes will be
secured equally and ratably with any and all other obligations thereby secured,
such security to be pursuant to agreements reasonably satisfactory to the
Required Holders and, in any such case, the Notes shall have the benefit, to the
fullest extent that, and with such priority as, the Holders of the Notes may be
entitled under applicable law, of an equitable Lien on such property. Such
violation of this Section 10.3 will constitute an Event of Default, whether or
not provision is made for an equal and ratable Lien pursuant to this Section
10.3.
SECTION 10.4 CONSOLIDATED NET WORTH.
The Company will not, at any time, permit Adjusted Consolidated Net
Worth to be less than the sum of (a) $85,000,000, and (b) an aggregate amount
equal to 50% of its Consolidated Adjusted Net Income (but, in each case, only if
income and not loss) for each completed fiscal year ending after the fiscal year
ended December 31, 1998.
SECTION 10.5 FIXED CHARGES COVERAGE RATIO.
As calculated on the last day of each fiscal quarter, the Company shall
not permit the ratio of (a) Consolidated Income Available for Fixed Charges to
(b) Consolidated Fixed Charges to be less than 2.0 to 1.0 for the period
consisting of such fiscal quarter and the immediately preceding three fiscal
quarters, treated as a single accounting period.
SECTION 10.6 LIMITATIONS ON DEBT.
The Company will not permit the ratio of (i) Consolidated Debt as of
the end of each fiscal quarter to (ii) Consolidated Operating Cash Flow for the
period consisting of such fiscal quarter and the preceding three fiscal
quarters, treated as a single accounting period, to be greater than 3.0 to 1.0.
If, during the period over which Consolidated Operating Cash Flow is being
calculated, the Company or a Subsidiary has acquired one or more Persons (or the
assets thereof) resulting in such Persons becoming, or otherwise resulting in,
Subsidiaries, compliance with this covenant will be determined by calculating
Consolidated Operating Cash Flow on a pro forma basis as if all (but not less
than all) of such Subsidiaries had become Subsidiaries at the beginning of the
four fiscal quarters most recently ended.
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SECTION 10.7 LIMITATIONS ON SUBSIDIARY DEBT.
The Company will not at any time permit any Subsidiary to, directly or
indirectly, create, incur, assume, guarantee, have outstanding or otherwise
become or remain directly or indirectly liable with respect to, any Debt other
than:
(a) (i) Debt of a Subsidiary owed to the Company or to a Wholly-Owned
Subsidiary, (ii) Abbott Indebtedness and (iii) Guaranties of a Subsidiary
under and pursuant to the Credit Agreement so long as such Subsidiary has
provided a Guarantee hereunder;
(b) Debt of a Person outstanding at the time such Person becomes a
Subsidiary, PROVIDED THAT (i) such Debt shall not have been incurred in
contemplation of such Person becoming a Subsidiary and (ii) immediately
after such Person becomes a Subsidiary no Default or Event of Default shall
exist; and
(c) Debt of a Subsidiary in addition to that described in clauses (a)
and (b) above, PROVIDED THAT the sum of (i) the aggregate principal amount
of such Debt of Subsidiaries outstanding pursuant to the provisions of this
clause (c), PLUS (ii) the aggregate principal amount of all Debt of the
Company and its Subsidiaries secured by Liens pursuant to Section 10.3(j)
shall not at any time exceed 15% of Adjusted Consolidated Net Worth.
SECTION 10.8 LINE OF BUSINESS.
The Company and each of the Guarantors will not, and will not permit
any Subsidiary to, engage in any business if, as a result, the general nature of
the business in which the Company, its Subsidiaries and the Guarantors, taken as
a whole, would then be engaged would be substantially changed from the general
nature of the business in which the Company, its Subsidiaries and the
Guarantors, taken as a whole, are engaged on the date of this Agreement as
described in the Memorandum.
SECTION 10.9 LIMITATION ON RESTRICTED PAYMENT AND INVESTMENT.
The Company shall not, and shall not permit any Subsidiary to, make or
declare, or incur any liability to declare or make, any Restricted Payment or
Restricted Investment unless immediately after giving effect to such action, no
Default or Event of Default would exist.
SECTION 10.10 SALE OF ASSETS.
(a) Except as permitted under Section 10.2, the Company will not, and
will not permit any of its Subsidiaries to, sell, lease or otherwise dispose
of assets of the Company and its Subsidiaries (other than sales, leases or
other dispositions in the ordinary course of business), unless:
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(i) in the good faith opinion of the Company, such sale, lease or
other disposition is in exchange for consideration having a fair market
value at least equal to that of the property exchanged and is in the
best interest of the Company or such Subsidiary;
(ii) immediately prior to and after giving effect to such sale,
lease or other disposition, no Default or Event of Default would exist;
and
(iii) immediately prior to and after giving effect to such sale,
lease or other disposition, the book value of all property that was the
subject of such sale, lease or other disposition occurring during the
most recently ended twelve consecutive months would not exceed 10% of
Consolidated Assets determined as of the end of the immediately
preceding fiscal year.
Computations under this Section 10.10(a) shall not include sales,
leases or other dispositions of assets for fair market value, to the extent of
the portion of the proceeds of such transaction which is applied, within 180
days after the date of such transaction, at the discretion of the Company to
either (i) the purchase, acquisition or construction of similar productive
assets which are to be used in the business of the Company and its Subsidiaries,
or (ii) the repayment or prepayment of unsubordinated Secured Debt of the
Company or a Subsidiary; PROVIDED that the Company has, on or prior to the
application of any such proceeds to the repayment or prepayment of any other
unsubordinated Secured Debt, offered to repay or prepay the Notes, pro rata with
all other unsubordinated Secured Debt then being repaid or prepaid (which
repayment or prepayment of the Notes shall be made in accordance with the terms
of Section 8.2).
(b) The Company or any Subsidiary may sell property and lease, as
lessee, the same property, within 180 days following the acquisition or
construction of such property PROVIDED THAT the Company shall have complied
with the terms and provisions of clause (a) above with respect to such sale.
SECTION 11. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" shall exist if any of the following conditions or
events shall occur:
(a) the Company or the Guarantors default in the payment of any
principal or Make-Whole Amount, if any, on any Note when the same becomes
due and payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise;
(b) the Company or the Guarantors default in the payment of any
interest on any Note for more than three Business Days after the same
becomes due and payable;
(c) the Company or the Guarantors default in the performance of or
compliance with any term contained in Section 7.1(e), 10 or 22;
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(d) the Company or any Guarantor defaults in the performance of or
compliance with any term contained herein (other than those referred to in
paragraphs (a), (b) and (c) of this Section 11) and such default is not
remedied within 30 days after the occurrence of such default;
(e) any representation or warranty made in writing by or on behalf of
the Company or any Guarantor or by any officer of the Company or any
Guarantor in this Agreement, the Security Documents or in any writing
furnished in connection with the transactions contemplated hereby proves to
have been false or incorrect in any material respect on the date as of which
made;
(f) (i) the Company, any Subsidiary or any Guarantor is in default (as
principal or as guarantor or other surety) in the payment of any principal
of or premium or make-whole amount or interest on any Indebtedness that is
outstanding in an aggregate principal amount exceeding 5% of the Adjusted
Consolidated Net Worth beyond any period of grace provided with respect
thereto, or (ii) the Company, any Subsidiary or any Guarantor is in default
in the performance of or compliance with any term of any evidence of any
Indebtedness in an aggregate outstanding principal amount exceeding 5% of
the Adjusted Consolidated Net Worth or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and as a
consequence of such default or condition such Indebtedness has become, or
has been declared (or one or more Persons are entitled to declare such
Indebtedness to be), due and payable before its stated maturity or before
its regularly scheduled dates of payment, or (iii) as a consequence of the
occurrence or continuation of any event or condition (other than the passage
of time or the right of the holder of Indebtedness to convert such
Indebtedness into equity interests), (x) the Company, any Subsidiary or any
Guarantor has become obligated to purchase or repay Indebtedness before its
regular maturity or before its regularly scheduled dates of payment in an
aggregate outstanding principal amount exceeding 5% of the Adjusted
Consolidated Net Worth, or (y) one or more Persons have the right to require
the Company, any Subsidiary or any Guarantor so to purchase or repay such
Indebtedness;
(g) the Company, any Material Subsidiary or any Guarantor (i) is
generally not paying, or admits in writing its inability to pay, its debts
as they become due, (ii) files, or consents by answer or otherwise to the
filing against it of, a petition for relief or reorganization or arrangement
or any other petition in bankruptcy, for liquidation or to take advantage of
any bankruptcy, insolvency, reorganization, moratorium or other similar law
of any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing;
(h) a court or governmental authority of competent jurisdiction enters
an order appointing, without consent by the Company, any of its Material
Subsidiaries or any Guarantor, a custodian, receiver, trustee or other
officer with similar powers with respect
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to it or with respect to any substantial part of its property, or
constituting an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the Company, any of
its Material Subsidiaries or any Guarantor, or any such petition shall be
filed against the Company, any of its Material Subsidiaries or any Guarantor
and such petition shall not be dismissed within 60 days;
(i) a final judgment or judgments for the payment of money aggregating
in excess of $2,000,000 are rendered against one or more of the Company, its
Material Subsidiaries or any Guarantor and which judgments are not, within
60 days after entry thereof, bonded, discharged or stayed pending appeal, or
are not discharged within 60 days after the expiration of such stay;
(j) any Plan shall fail to satisfy the minimum funding standards of
ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
section 412 of the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the PBGC
shall have instituted proceedings under ERISA section 4042 to terminate or
appoint a trustee to administer any Plan or the PBGC shall have notified the
Company, any Guarantor or any ERISA Affiliate that a Plan may become a
subject of any such proceedings, (iii) the aggregate "amount of unfunded
benefit liabilities" (within the meaning of section 4001(a)(18) of ERISA)
under all Plans, determined in accordance with Title IV of ERISA, shall
exceed 5% of Consolidated Net Worth, (iv) the Company, any Guarantor or any
ERISA Affiliate shall have incurred or is reasonably expected to incur any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, (v) the Company,
any Guarantor or any ERISA Affiliate withdraws from any Multiemployer Plan,
or (vi) the Company, any Guarantor or any Subsidiary establishes or amends
any employee welfare benefit plan that provides post-employment welfare
benefits in a manner that would increase the liability of the Company, any
Guarantor or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or together
with any other such event or events, could reasonably be expected to have a
Material Adverse Effect; or
(k) (i) any Security Document shall for any reason (other than pursuant
to the terms of Section 9.9 hereof) cease to create a valid security
interest in the Collateral purported to be covered thereby or such security
interest shall for any reason cease to be a perfected security interest
(having the priority provided for therein) subject only to Liens permitted
pursuant to Section 10.3, or (ii) any material provision of any Security
Document shall for any reason cease to be valid and binding on or
enforceable against the Company or any Subsidiary or Guarantor party thereto
or the Company, any Subsidiary or any Guarantor shall so state in writing or
bring an action to limit its obligations or liabilities thereunder.
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As used in Section 11(j), the terms "EMPLOYEE BENEFIT PLAN" and "EMPLOYEE
WELFARE BENEFIT PLAN" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
SECTION 12.1 ACCELERATION.
(a) If an Event of Default described in paragraph (g) or (h) of Section
11 (other than an Event of Default described in clause (i) of paragraph (g)
or described in clause (vi) of paragraph (g) by virtue of the fact that such
clause encompasses clause (i) of paragraph (g)) has occurred, all the Notes
then outstanding shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
Holder or Holders of more than 51% in principal amount of the Notes at the
time outstanding may at any time at its or their option, by notice or
notices to the Company, declare all the Notes then outstanding to be
immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any Holder or Holders of Notes at
the time outstanding affected by such Event of Default may at any time, at
its or their option, by notice or notices to the Company, declare all the
Notes held by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (i) all accrued and
unpaid interest thereon and (ii) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each Holder has the right to
maintain its investment in the Notes free from repayment by the Company (except
as herein specifically provided for) and that the provision for payment of a
Make-Whole Amount by the Company in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
SECTION 12.2 OTHER REMEDIES.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, any Holder may proceed to protect and
enforce the rights of such Holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein or in any Note, or for an injunction against a violation of any
of the terms hereof or thereof, or in aid of the exercise of any power granted
hereby or thereby or by law or otherwise.
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SECTION 12.3 RESCISSION.
At any time after any Notes have been declared due and payable pursuant
to clause (b) or (c) of Section 12.1, the Holders of not less than 51% in
principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes of such Series that are due and payable
and are unpaid other than by reason of such declaration, and all interest on
such overdue principal and Make-Whole Amount, if any, and (to the extent
permitted by applicable law) any overdue interest in respect of the Notes, at
the Default Rate, (b) all Events of Default and Defaults, other than non-payment
of amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 17, and (c) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes. No rescission and annulment under this Section 12.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.
SECTION 12.4 NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.
No course of dealing and no delay on the part of any Holder in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such Holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any Holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to each Holder on demand such further amount as shall be sufficient to
cover all costs and expenses of such Holder incurred in any enforcement or
collection under this Section 12, including, without limitation, reasonable
attorneys' fees, expenses and disbursements.
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
SECTION 13.1 REGISTRATION OF NOTES.
The Company shall keep at its principal executive office a register for
the registration and registration of transfers of Notes. The name and address of
each Holder of each transfer thereof and the name and address of each transferee
of one or more Notes shall be registered in such register. Prior to due
presentment for registration of transfer, the Person in whose name any Note
shall be registered shall be deemed and treated as the owner and Holder thereof
for all purposes hereof, and the Company shall not be affected by any notice or
knowledge to the contrary. The Company shall give to any Holder promptly upon
request therefor, a complete and correct copy of the names and addresses of all
registered Holders.
SECTION 13.2 TRANSFER AND EXCHANGE OF NOTES.
Each Holder agrees that so long as no Event of Default has occurred and
is continuing hereunder, it will not knowingly (after reasonable investigation)
sell any Notes or portions thereof to a Competitor. Upon surrender of any Note
at the principal executive office of the
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Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered Holder or his attorney
duly authorized in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), the Company shall execute and deliver,
at the Company's expense (except as provided below), one or more new Notes (as
requested by the holder thereof) in such Series in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
Holder may request and shall be substantially in the form of Exhibit 1 or 2, as
the case may be. Each such new Note shall be dated and bear interest from the
date to which interest shall have been paid on the surrendered Note or dated the
date of the surrendered Note if no interest shall have been paid thereon. The
Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $100,000, provided that
if necessary to enable the registration of transfer by a Holder of its entire
holding of Notes, one Note may be in a denomination of less than $100,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representation set forth in
Section 6.2.
SECTION 13.3 REPLACEMENT OF NOTES.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the Holder is, or is a nominee for, an
original Purchaser or another Holder with a minimum net worth of at least
$25,000,000, such Person's own unsecured agreement of indemnity shall be
deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note of such Series, dated and bearing interest from the date to which interest
shall have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest shall
have been paid thereon.
SECTION 14. PAYMENT OF NOTES.
SECTION 14.1 PLACE OF PAYMENT.
Subject to Section 14.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made in
Memphis, Tennessee at the principal office of the Company in such jurisdiction.
The Company may at any time, by notice to each Holder, change the place of
payment of the Notes so long as such place of payment shall be
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either the principal office of the Company in such jurisdiction or the principal
office of a bank or trust company in such jurisdiction.
SECTION 14.2 HOME OFFICE PAYMENT.
So long as any Purchaser or its nominee shall be a Holder, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in Schedule A, or by such other
method or at such other address as such Purchaser or nominee shall have from
time to time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, such
Purchaser or nominee shall surrender such Note for cancellation, reasonably
promptly after any such request, to the Company at its principal executive
office or at the place of payment most recently designated by the Company
pursuant to Section 14.1. Prior to any sale or other disposition of any Note,
any Purchaser or its nominee will, at its election, either endorse thereon the
amount of principal paid thereon and the last date to which interest has been
paid thereon or surrender such Note to the Company in exchange for a new Note or
Notes pursuant to Section 13.2. The Company will afford the benefits of this
Section 14.2 to any Institutional Investor that is the direct or indirect
transferee of any Note purchased by each Purchaser under this Agreement and that
has made the same agreement relating to such Note as each Purchaser has made in
this Section 14.2.
SECTION 15. EXPENSES, ETC.
SECTION 15.1 TRANSACTION EXPENSES.
Whether or not the transactions contemplated hereby are consummated,
the Company will pay all costs and expenses (including reasonable attorneys'
fees of a special counsel and, if reasonably required, local or other counsel)
incurred by each Purchaser or Holder in connection with such transactions and in
connection with any amendments, waivers or consents under or in respect of this
Agreement or the Notes (whether or not such amendment, waiver or consent becomes
effective), including, without limitation: (a) the costs and expenses incurred
in enforcing or defending (or determining whether or how to enforce or defend)
any rights under this Agreement or the Notes or in responding to any subpoena or
other legal process or informal investigative demand issued in connection with
this Agreement or the Notes, or by reason of being a Holder, and (b) the costs
and expenses, including financial advisors' fees, incurred in connection with
the insolvency or bankruptcy of the Company, any Subsidiary or any Guarantor or
in connection with any work-out or restructuring of the transactions
contemplated hereby and by the Notes. The Company will pay, and will save each
Purchaser or other Holder harmless from, all claims in respect of any fees,
costs or expenses if any, of brokers and finders (other than those retained by
such Purchaser or other Holder).
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SECTION 15.2 SURVIVAL.
The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement, the Security Documents and the Notes,
the purchase or transfer by any Purchaser of any Note or portion thereof or
interest therein and the payment of any Note, and may be relied upon by any
subsequent Holder, regardless of any investigation made at any time by or on
behalf of any Purchaser or any other Holder. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company or any
Guarantor pursuant to this Agreement or the Security Documents shall be deemed
representations and warranties of the Company or any Guarantor, as the case may
be, under this Agreement.
Subject to the preceding sentence, this Agreement, the Security
Documents and the Notes embody the entire agreement and understanding between
you, the Company and the Guarantors and supersede all prior agreements and
understandings relating to the subject matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
SECTION 17.1 REQUIREMENTS.
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, and the Notes may be amended and the observance of any term of
the Notes may be waived (either retroactively or prospectively), with and only
with the written consent of the Company and the Required Holders, except that
(a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6
or 21 hereof, or any defined term (as it is used therein), will be effective as
to each Purchaser unless consented to by each Purchaser in writing, and (b) no
such amendment or waiver may, without the written consent of the Holder of each
Note at the time outstanding affected thereby, (i) subject to the provisions of
Section 12 relating to acceleration or rescission, change the amount or time of
any prepayment or payment of principal of, or reduce the rate or change the time
of payment or method of computation of interest or of the Make-Whole Amount on,
the Notes, (ii) change the percentage of the principal amount of the Notes, the
Holders of which are required to consent to any such amendment or waiver or
(iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.
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SECTION 17.2 SOLICITATION OF HOLDERS OF NOTES.
(a) SOLICITATION.
The Company will provide each Holder of the Notes (irrespective of the
amount of Notes then owned by it) with sufficient information, sufficiently far
in advance of the date a decision is required, to enable such Holder to make an
informed and considered decision with respect to any proposed amendment, waiver
or consent in respect of any of the provisions hereof or of the Notes. The
Company will deliver executed or true and correct copies of each amendment,
waiver or consent effected pursuant to the provisions of this Section 17 to each
Holder of outstanding Notes promptly following the date on which it is executed
and delivered by, or receives the consent or approval of, the requisite Holders
of Notes.
(b) PAYMENT.
The Company will not directly or indirectly pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, or grant any security, to any Holder of Notes as consideration for or
as an inducement to the entering into by any Holder of Notes of any waiver or
amendment of any of the terms and provisions hereof or of the Notes unless such
remuneration is concurrently paid, or security is concurrently granted, on the
same terms, ratably to each Holder of Notes then outstanding whether or not such
Holder consented to such waiver or amendment.
SECTION 17.3 BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all Holders of Notes and is binding upon them and upon each
future Holder of Notes and upon the Company and the Guarantors without regard to
whether such Note has been marked to indicate such amendment or waiver. No such
amendment or waiver will extend to or affect any obligation, covenant,
agreement, Default or Event of Default not expressly amended or waived or impair
any right consequent thereon. No course of dealing between the Company and the
Guarantors and any Holder nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any Holder. As used
herein, the term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
SECTION 17.4 NOTES HELD BY COMPANY, ETC.
Solely for the purpose of determining whether the Holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the Holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
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SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to a Purchaser or its nominee, to such Purchaser or its
nominee at the address specified for such communications in Schedule A,
or at such other address as such Purchaser or its nominee shall have
specified to the Company in writing,
(ii) if to any other Holder, to such Holder at such address as
such other Holder shall have specified to the Company in writing,
(iii) if to the Company, to the Company at its address set forth
at the beginning hereof to the attention of Jeffery M. Jarvis, or at
such other address as the Company shall have specified to the Holder of
each Note in writing, or
(iv) if to any Guarantor, to such Guarantor at its address and to
the attention as set forth on Schedule 5.22 with a copy to the Company,
or at such other address as such Guarantor shall have specified to the
Holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
SECTION 19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by each Holder at either Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to any Holder, may be reproduced
by such Holder by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and such Holder may destroy any original
document so reproduced. The Company and the Guarantors agree and stipulate that,
to the extent permitted by applicable law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such
reproduction was made by such Holder in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the
Company, a Guarantor or any Holder from contesting any such reproduction to the
same extent that it could contest the original, or from introducing evidence to
demonstrate the inaccuracy of any such reproduction.
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SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "CONFIDENTIAL INFORMATION" means
information delivered to each Holder by or on behalf of the Company, any
Subsidiary or any Guarantor in connection with the transactions contemplated by
or otherwise pursuant to this Agreement that is proprietary in nature and that
was clearly marked or labeled or otherwise adequately identified when received
by such Holder as being confidential information of the Company, such Subsidiary
or such Guarantor, PROVIDED that such term does not include information that (a)
was publicly known or otherwise known to such Holder prior to the time of such
disclosure, (b) subsequently becomes publicly known through no act or omission
by such Holder or any Person acting on such Holder's behalf, (c) otherwise
becomes known to such Holder other than through disclosure by the Company, any
Subsidiary or any Guarantor or (d) constitutes financial statements delivered to
such Holder under Section 7.1 that are otherwise publicly available.
Each Holder will use its best efforts to maintain the confidentiality
of such Confidential Information in accordance with procedures adopted by such
Holder in good faith to protect confidential information of third parties
delivered to such Holder, PROVIDED THAT such Holder may deliver or disclose
Confidential Information to (i) each Holder's directors, trustees, officers,
employees, agents, attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment represented by each
Holder's Notes), (ii) each Holder's financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20, (iii) any other
Holder, (iv) any Institutional Investor to which any Holder sells or offers to
sell such Note or any part thereof or any participation therein (if such Person
has agreed in writing prior to its receipt of such Confidential Information to
be bound by the provisions of this Section 20), (v) any Person from whom any
Holder offers to purchase any security of the Company or any Guarantor (if such
Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (vi) any federal
or state regulatory authority having jurisdiction over any Holder, (vii) the
National Association of Insurance Commissioners or any similar organization, or
any nationally recognized rating agency that requires access to information
about such Holder's investment portfolio or (viii) any other Person to which
such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to any Holder, (x)
in response to any subpoena or other legal process, (y) in connection with any
litigation to which any Holder is a party or (z) if an Event of Default has
occurred and is continuing, to the extent any Holder may reasonably determine
such delivery and disclosure to be necessary or appropriate in the enforcement
or for the protection of the rights and remedies under your Notes and this
Agreement. Each Holder, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 20 as
though it were a party to this Agreement.
SECTION 21. SUBSTITUTION OF PURCHASER.
Each Purchaser shall have the right to substitute any one of its
Affiliates as the purchaser of the Notes that such Purchaser has agreed to
purchase hereunder, by written notice to the Company, which notice shall be
signed by both such Purchaser and such Affiliate, shall contain such Affiliate's
agreement to be bound by this Agreement and shall contain a confirmation by
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such Affiliate of the accuracy with respect to it of the representations set
forth in Section 6. Upon receipt of such notice, wherever the word "Purchaser"
is used in this Agreement (other than in this Section 21), such word shall be
deemed to refer to such Affiliate in lieu of the previous Purchaser. In the
event that such Affiliate is so substituted as a purchaser hereunder and such
Affiliate thereafter transfers to any Purchaser all of the Notes then held by
such Affiliate, upon receipt by the Company of notice of such transfer, wherever
the word "Purchaser" is used in this Agreement (other than in this Section 21),
such word shall no longer be deemed to refer to such Affiliate, but shall refer
to the Purchaser, and the Purchaser shall have all the rights of an original
Holder under this Agreement.
SECTION 22. GUARANTEE.
SECTION 22.1 OBLIGATIONS GUARANTEED.
In consideration of each Holder of a Note entering into and performing
their respective obligations under or in connection with this Agreement, each
Guarantor hereby jointly and severally guarantees and indemnifies, irrevocably,
absolutely and unconditionally:
(a) the full and prompt payment in Dollars in the manner specified in
this Agreement and the Notes of (i) the principal of, the Make-Whole Amount,
if any, and interest (including overdue interest) on each of the Notes, as
and when due and payable, whether at maturity, by mandatory or optional
prepayment, by acceleration or otherwise in accordance with this Agreement
and the Notes, (ii) any and all other obligations, indebtedness or
liabilities (including fees and out of pocket expenses) now or hereafter due
and payable by the Company to any Holder of a Note under this Agreement, the
Security Documents or the Notes, including without limitation, liability for
breach of covenant or warranty, arising pursuant to or with respect to this
Agreement, the Security Documents or the Notes, all in Dollars, (iii) any
and all other obligations, indebtedness or liabilities now or hereafter
incurred by the Company to any Holder of a Note pursuant to any waiver,
modification, amendment or change of any provision of this Agreement, the
Security Documents or the Notes and (iv) all reasonable attorneys' fees,
costs and expenses of collection incurred in connection therewith and in
connection with the enforcement of this Section 22, including without
limitation fees, costs and expenses incurred in any insolvency or bankruptcy
case or proceeding against the Guarantors or the Company; and
(b) the full and prompt performance and observance by the Company of
each and all of the covenants and agreements required to be performed or
observed by the Company under the terms of this Agreement, the Security
Documents and the Notes.
Notwithstanding any provision to the contrary contained herein or in
any Note, the obligations of each Guarantor hereunder shall be limited to an
aggregate amount equal to the greatest amount that would not render its
obligations hereunder subject to avoidance under Section 548 of the Bankruptcy
Code or any comparable provisions of any applicable state law.
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SECTION 22.2 CHARACTER OF GUARANTEE.
The obligations of the Guarantors under this Agreement and the Security
Documents are joint and several, absolute and unconditional. The Guarantee
constitutes a primary obligation of each Guarantor, is not a guarantee of
collection and, accordingly, each Guarantor waives any right to require that any
action be brought against the Company or any other Person or to require that
resort be had to any direct or indirect security. If for any reason whatsoever
the Company shall fail or be unable duly, punctually and fully to pay such
amounts as and when the same shall become due and payable under this Agreement,
the Security Documents or the Notes or to perform or comply with any obligation,
covenant, term, condition or undertaking required to be performed or complied
with by it under this Agreement, the Security Documents or the Notes, any Holder
of a Note may, at its option, proceed against the Guarantors in the first
instance to collect money or otherwise enforce this Agreement, the Security
Documents or the Notes, the payment of which is guaranteed hereby, without first
making demand on or proceeding against the Company or any other Person, and
without first resorting to any direct or indirect security or to any other
remedies, including, by way of example but not of limitation, any right of
set-off at the same or at different times, as any Holder of a Notete may deem
advisable, and the liability of the Guarantors hereunder shall in no way be
affected or impaired by any acceptance by any Holder of a Note of any direct or
indirect security for, or other guarantees of, any indebtedness, liability or
obligation of the Company, or by any failure, delay, neglect or omission by any
Holder of a Note to realize upon or protect any such indebtedness, liability or
obligation, or any notes or other instruments evidencing the same or any direct
or indirect security therefor or by any approval, consent, waiver, or other
action taken, or omitted to be taken, by any Holder of a Note. In the event that
any Holder of a Note is required to repay or return any amount previously paid
to such Holder of a Note, the payment of which amount is guaranteed under the
provisions hereof, then, immediately upon such repayment or return, the
Guarantee shall be reinstated with respect to such amount, in full force and
effect, as though such payment had not been made.
SECTION 22.3 PARTICULAR AGREEMENTS BY THE GUARANTORS.
The Guarantors hereby agree that the respective parties to this
Agreement from time to time, before or after any Default by the Company, with or
without any further notice to or assent from the Guarantors may, without in any
manner affecting the liability of the Guarantors, to the full extent permitted
by law and upon such terms and conditions the parties to this Agreement may
agree:
(a) extend in whole or in part (by renewal or otherwise), modify,
change, compromise or release any indebtedness, liability or obligation of
the Company under this Agreement, the Security Documents or the Notes or of
any other Person secondarily or otherwise liable for any indebtedness,
liability or obligation of the Company, or waive any default with respect
thereto, or waive, modify, amend or change any provision of this Agreement,
the Security Documents or the Notes;
(b) sell, release, surrender, modify, impair, exchange, substitute or
extend the duration or the time for the performance or payment of any and
all property and rights of any nature and from whomsoever received, held by,
or on behalf of, any holder of a Note
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as direct or indirect security for the payment or performance of any
indebtedness, liability or obligation of the Company, or of any other Person
secondarily or otherwise liable for any indebtedness, liability or
obligation of the Company; and
(c) settle, adjust or compromise any claim of any Holder of a Note
against the Company or any other Person secondarily or otherwise liable for
any indebtedness, liability or obligation of the Company. Each Guarantor
hereby waives any and all defenses, counterclaims or offsets which such
Guarantor might or could have by reason of any such extension, renewal,
change, release, waiver, surrender, exchange, modification, amendment,
impairment, substitution, settlement, adjustment or compromise, it being
understood that the Guarantors shall at all times be bound by this Agreement
and remain liable to any Holder of a Note hereunder to the extent that any
obligation of the Company to any Holder of a Note under this Agreement, the
Security Documents or the Notes, or any obligation of the Guarantors to any
Holder of a Note hereunder, shall remain outstanding.
SECTION 22.4 WAIVER BY THE GUARANTORS.
Each Guarantor hereby waives:
(a) notice of acceptance of the Guarantee by any Holder of a Note or of
the creation, renewal or accrual of any liability of the Company, present or
future, or of the reliance of any such Holder upon the Guarantee (it being
understood that every indebtedness, liability and obligation of the Company
to any such Holder of a Note created pursuant to this Agreement, the
Security Documents or the Notes shall be conclusively presumed to have been
created, contracted or incurred in reliance upon the execution by the
Guarantors of the Guarantee);
(b) demand of payment by any Holder of a Note from the Company or any
other Persons indebted in any manner on or for any of the indebtedness,
liabilities or obligations hereby guaranteed; and
(c) presentment for payment by any Holder of a Note or any other Person
of any instrument of the Company or any other Person, protest thereof, and
notice of its dishonor to any party hereto.
SECTION 22.5 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment, such Guarantor shall have a right of contribution
from each other Guarantor in an amount equal to such other Guarantor's
Contribution Share of such Excess Payment. The payment obligations of any
Guarantor under this Section 22.5 shall be subordinate and subject in right of
payment to the prior payment in full to the Purchasers of the Guaranteed
Obligations, and none of the Guarantors shall exercise any right or remedy under
this Section 22.5 against any other Guarantor until payment and satisfaction in
full of all of such Guaranteed Obligations. For purposes of this Section 22.5,
(a) "GUARANTEED OBLIGATIONS" shall mean any obligations arising
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under the other provisions of this Section 22; (b) "EXCESS PAYMENT" shall mean
the amount paid by any Guarantor in excess of its Pro Rata Share of any
Guaranteed Obligations; (c) "PRO RATA SHARE" shall mean, for any Guarantor in
respect of any payment of Guaranteed Obligations, the ratio (expressed as a
percentage) as of the date of such payment of Guaranteed Obligations of (i) the
amount by which the aggregate present fair salable value of all of its assets
and properties exceeds the amount of all debts and liabilities of such Guarantor
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Guarantor hereunder) to (ii) the amount by
which the aggregate present fair salable value of all assets and other
properties of the Company and all of the Guarantors exceeds the amount of all of
the debts and liabilities (including contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the obligations of the Company and the
Guarantors hereunder) of the Company and all of the Guarantors; PROVIDED,
HOWEVER, that, for purposes of calculating the Pro Rata Shares of the Guarantors
in respect of any payment of Guaranteed Obligations, any Guarantor that became a
Guarantor subsequent to the date of any such payment shall be deemed to have
been a Guarantor on the date of such payment and the financial information for
such Guarantor as of the date such Guarantor became a Guarantor shall be
utilized for such Guarantor with such payment; and (d) "CONTRIBUTION SHARE"
shall mean, for any Guarantor in respect of any Excess Payment made by any other
Guarantor, the ratio (expressed as a percentage) as of the date of such Excess
Payment of (i) the amount by which the aggregate present fair salable value of
all of its assets and properties exceeds the amount of all debts and liabilities
of such Guarantor (including contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (ii) the amount by which the aggregate present fair salable value
of all assets and other properties of the Company and all of the Guarantors
other than the maker of such Excess Payment exceeds the amount of all of the
debts and liabilities, (including contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the obligations of the Company and the
Guarantors hereunder) of the Company and all of the Guarantors other than the
maker of such Excess Payment; PROVIDED, HOWEVER, that, for purposes of
calculating the Contribution Shares of the Guarantors in respect of any Excess
Payment, any Guarantor that became a Guarantor subsequent to the date of any
Excess Payment shall be deemed to have been a Guarantor on the date of such
Excess Payment and the financial information for such Guarantor as of the date
such Guarantor became a Guarantor shall be utilized for such Guarantor in
connection with such Excess Payment. This Section 22.5 shall not be deemed to
affect any right of subrogation, indemnity, reimbursement or contribution that
any Guarantor may have under applicable law against the Company in respect of
any payment of Guaranteed Obligations. Notwithstanding the foregoing, all rights
of contribution against any Guarantor shall terminate from and after such time,
if ever, that such Guarantor shall be relieved of its obligations pursuant to
Section 22.5.
SECTION 23. CHARACTER OF OBLIGATIONS OF THE GUARANTORS
SECTION 23.1 IRREVOCABILITY.
The obligations of the Guarantors under this Agreement are irrevocable,
absolute, unconditional and continuing under any and all circumstances, and no
such obligation shall be to any extent or in any way discharged, impaired or
otherwise affected, except by performance in full thereof.
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SECTION 23.2 NO REDUCTION OR DEFENSE.
The obligations of the Guarantors under this Agreement, and the rights
of any Holder of a Note to enforce such obligations by any proceedings, whether
by action at law, suit in equity or otherwise, shall not be subject to any
reduction, limitation, impairment or termination, whether by reason of any claim
of any character whatsoever or otherwise, including, without limitation, claims
of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense, set-off, counterclaim, recoupment or termination
whatsoever.
Without limiting the generality of the foregoing, the obligations of
the Guarantors shall not be discharged or impaired by:
(a) any Default, failure or delay, willful or otherwise, in the
performance of any obligations by the Company;
(b) any creditors' rights, bankruptcy, receivership or other insolvency
proceeding of the Company or any merger, consolidation, reorganization,
dissolution, liquidation or winding up or change in corporate constitution
or corporate identity or loss of corporate identity of the Company;
(c) impossibility or illegality of performance on the part of the
Company under this Agreement, the Security Documents or the Notes;
(d) the invalidity, irregularity or unenforceability of the Notes, this
Agreement, the Security Documents or any documents referred to therein or
herein;
(e) in respect of the Company or any Guarantor, any change of
circumstances, whether or not foreseen or foreseeable, whether or not
imputable to the Company or such Guarantor, or other impossibility of
performance through fire, explosion, accident, labor disturbance, floods,
droughts, embargoes, wars (whether or not declared), civil commotions, acts
of God or the public enemy, delays or failure of suppliers or carriers,
inability to obtain materials or any other causes affecting performance, or
any other force majeure, whether or not beyond the control of the Company or
such Guarantor and whether or not of the kind hereinbefore specified;
(f) any attachment, claim, demand, charge, lien, order, process,
encumbrance or any other happening or event or reason, similar or dissimilar
to the foregoing, or any withholding or diminution at the source, by reason
of any taxes, assessments, expenses, indebtedness, obligations or
liabilities of any character, foreseen or unforeseen, and whether or not
valid, incurred by or against any Person, corporation or entity, or any
claims, demands, charges, liens or encumbrances of any nature, foreseen or
unforeseen, incurred by any Person, or against any sums payable under the
Guarantee, so that such sums would be rendered inadequate or would be
unavailable to make the payments herein provided;
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(g) any order, judgment, decree, ruling or regulation (whether or not
valid) of any court of any nation or of any political subdivision thereof or
any body, agency, department, official or administrative or regulatory
agency of any nation or any political subdivision thereof or any other
action, happening, event or reason whatsoever which shall delay, interfere
with, hinder or prevent, or in any way adversely affect, the performance by
the Company of any of its obligations under this Agreement, the Security
Documents or the Notes;
(h) any Default or Event of Default under this Agreement or the
Security Documents, or the taking of action under this Agreement or the
Security Documents in respect thereof;
(i) any suit or action by, or in favor of, any Holder of a Note;
(j) the genuineness, validity, regularity or enforceability of the
Notes or of this Agreement or the Security Documents against any other
Guarantor or any of the terms of any thereof, the continuance of any
obligation on the part of the Company, any other Guarantor or any other
Person on the Notes or under the Security Documents or under this Agreement
or the power or authority or the lack of power or authority of the Company
to issue the Notes or execute and deliver this Agreement or the Security
Documents or to perform any of its obligations hereunder or the existence or
continuance of the Company, any other Guarantor or any other Person as a
legal entity;
(k) any failure or lack of diligence in collection or protection,
failure in presentment or demand for payment, protest, notice of protest,
notice of default and of nonpayment, any failure to give notice to the
Guarantors of failure of the Company, any Guarantor or any other Person to
keep and perform any obligation, covenant or agreement under the terms of
the Notes or this Agreement or the Security Documents or failure to resort
for payment to the Company, any Guarantor or any other Person or to any
other Agreement or the Security Documents or to any property, security,
liens or other rights or remedies;
(l) the acceptance of any additional security or other agreement, the
advance of additional money to the Company, any Guarantor or any other
Person, the renewal or extension of the Notes or amendments, modifications,
consents or waivers with respect to the Notes or this Agreement or the
Security Documents, or the sale, release, substitution or exchange of any
security for the Notes;
(m) any defense whatsoever that the Company, any Guarantor or any other
Person might have to the payment of the Notes (principal, premium, if any,
or interest), other than payment in cash thereof, or to the performance or
observance of any of the provisions of this Agreement or the Security
Documents, whether through the satisfaction or purported satisfaction by the
Company, any Guarantor or any other Person of its debts due to any cause
such as bankruptcy, insolvency, receivership, merger, consolidation,
reorganization, dissolution, liquidation, winding-up or otherwise;
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(n) any act or failure to act with regard to the Notes, this Agreement
or the Security Documents or anything which might vary the risk of the
Guarantors; or
(o) any:
(1) variation of the terms of any of the obligations guaranteed
hereunder or of any obligations guaranteed hereunder of any other
Person under any related security;
(2) failure on the part of any Holder (whether intentional or not)
to take, perfect or realize (whether in full or in part) any related
security now or in the future agreed to be taken by such Holder;
(3) incapacity or change in the constitution of the Company or the
Guarantors or the absorption of any Holder into or its amalgamation
with any other Person or the acquisition of all or part of the
undertaking of any Holder by any other Person;
(4) of the obligations guaranteed hereunder or any obligation of
any Person under any related security being or becoming invalid,
illegal, void or unenforceable for any reason;
(5) time or other indulgence given or agreed to be given by any
Holder to, or any composition or other arrangement made with or
accepted from, either the Company in respect of any of the obligations
guaranteed hereunder or any Person in respect of obligations under this
Agreement, the Security Documents or any related security;
(6) waiver, release, discharge or exchange of any of the
obligations guaranteed hereunder or any obligation of any Person under
this Agreement, the Security Documents or any related security; or
(7) any Change in Control or any merger, consolidation,
reorganization, sale of substantially all of the assets of or any
similar transaction or event involving the Company; or
(8) other act, event or omission which, but for this provision,
would or might operate to offer any legal or equitable defense for or
impair or discharge the obligations of the Guarantors under this
Agreement or the Security Documents or any Person under any related
security;
PROVIDED THAT the specific enumeration of the above-mentioned acts, failures or
omissions shall not be deemed to exclude any other acts, failures or omissions,
though not specifically mentioned above, it being the purpose and intent of this
Agreement that the obligations of the Guarantors shall be absolute and
unconditional and shall not be discharged, impaired or varied except by the
payment of the principal of, premium and/or Make-Whole Amount, if any, and
interest on the
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Notes in accordance with their respective terms whenever the same shall become
due and payable as provided in the Notes, at the place specified in and all in
the manner and with the effect provided in the Notes and this Agreement, as
amended or modified from time to time. Without limiting the foregoing, it is
understood that repeated and successive demands may be made and recoveries may
be had hereunder as and when, from time to time, the Company shall default under
the terms of the Notes or this Agreement or the Security Documents and that
notwithstanding recovery hereunder for or in respect of any given default or
defaults by the Company under the Notes or this Agreement or the Security
Documents, this guarantee shall remain in full force and effect and shall apply
to each and every subsequent default.
SECTION 23.3 SUBROGATION.
The Guarantors hereby irrevocably and unconditionally waive all rights
they may have to be subrogated to the rights of the Holder of a Note, and all
other remedies that they may have against the Company, in respect of which any
payment is made hereunder, until the obligations guaranteed hereunder shall have
been indefeasibly paid in full. If any amount shall be paid to the Guarantors on
account of any such subrogation rights or other remedy before the obligations
guaranteed hereunder shall have been indefeasibly paid in full, notwithstanding
the waiver thereof, such amount shall be received in trust for the benefit of
the Holders of the Notes and shall forthwith be paid to such Holders to be
credited and applied upon the obligations guaranteed hereby, whether matured or
unmatured, in accordance with the terms hereof. The Guarantors agree that their
obligations under this Section 23.3 shall be automatically reinstated if and to
the extent that for any reason any payment by or on behalf of the Company is
rescinded or must be otherwise restored by any Holder of a Note, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise, all as
though such amount had not been paid.
SECTION 23.4 JUDGMENT CURRENCY INDEMNITY.
Any payment on account of an amount that is payable hereunder in
Dollars which is made to or for the account of any Holder of a Note in lawful
currency of any other jurisdiction (the "OTHER CURRENCY") whether as a result of
any judgment or order or the enforcement thereof or the realization of any
security or the liquidation of any Guarantor or the Company shall constitute a
discharge of the Guarantor's or the Company's obligation under the Guarantee,
and the Notes only to the extent of the amount of Dollars which such Holder
could purchase in the New York foreign exchange markets with the amount of the
Other Currency in accordance with normal banking procedures at the rate of
exchange prevailing on the first day (other than a Saturday) on which banks in
New York are generally open for business following receipt of the payment first
referred to above. If the amount of Dollars that could be so purchased is less
than the amount of Dollars originally due to such Holder, the Guarantors and the
Company shall indemnify and save harmless such Holder from and against all loss
or damage arising out of or as a result of such deficiency. This indemnity shall
constitute an obligation separate and independent from the other obligations
contained in this Agreement, shall give rise to a separate and independent cause
of action, shall apply irrespective of any indulgence granted by any Holder of a
Note from time to time and shall continue in full force and effect
notwithstanding any judgment or order for a liquidated sum in respect of an
amount due hereunder or under any judgment or order.
-53-
<PAGE>
SECTION 24. MISCELLANEOUS.
SECTION 24.1 SUCCESSORS AND ASSIGNS.
All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
Holder) whether so expressed or not.
SECTION 24.2 PAYMENTS DUE ON NON-BUSINESS DAYS.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-Whole Amount or interest on
any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.
SECTION 24.3 SEVERABILITY.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 24.4 CONSTRUCTION.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
SECTION 24.5 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
SECTION 24.6 GOVERNING LAW; JURISDICTION AND SERVICE OF PROCESS.
This Agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of New
York, excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction
-54-
<PAGE>
other than such State. The Company and the Guarantors hereby irrevocably and
unconditionally agree that any suit, action or proceeding with respect to this
Agreement, or any proceeding to execute or otherwise enforce any judgment in
respect of any breach thereof, brought by any registered Holder of a Note
against the Company or any Guarantor or any of its property, may be brought by
such Holder of a Note in the United States District Court for the Southern
District of New York or any New York State Court sitting in the Borough of
Manhattan in New York City, as such Holder of a Note may in its sole discretion
elect, and by the execution and delivery of this Agreement, each of the Company
and the Guarantors irrevocably submits to the jurisdiction of each such court;
and agrees that process served either personally or by registered mail shall
constitute, to the extent permitted by law, adequate service of process in any
such suit. In addition, each of the Company and the Guarantors hereby
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of venue in any suit, action or
proceeding arising out of or relating to this Agreement or any Note, brought in
the said courts, and hereby irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. Nothing herein shall in any way be deemed to limit the
ability of any registered Holder of a Note to serve any such writs, process or
summonses, in any manner permitted by applicable law or to obtain jurisdiction
over the Company or the Guarantors in such other jurisdiction, and in such
manner, as may be permitted by applicable law.
SECTION 24.7 AGENT FOR SERVICE OF PROCESS.
WITHOUT LIMITING THE FOREGOING, EACH OF THE GUARANTORS AND THE COMPANY
HEREBY APPOINTS, IN THE CASE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN THE
COURTS OF OR IN THE STATE OF NEW YORK, CT CORPORATION TO RECEIVE, FOR IT AND ON
ITS BEHALF, SERVICE OF PROCESS IN THE STATE OF NEW YORK WITH RESPECT THERETO,
PROVIDED THE GUARANTORS AND THE COMPANY MAY, AND IN THE EVENT THAT CT
CORPORATION IS AT ANY TIME NO LONGER DOMICILED IN THE STATE OF NEW YORK, THE
GUARANTORS AND THE COMPANY SHALL, APPOINT CT CORPORATION OR ANY OTHER PERSON,
REASONABLY ACCEPTABLE TO THE REQUIRED HOLDERS, WITH OFFICES IN THE STATE OF NEW
YORK TO REPLACE SUCH AGENT FOR SERVICE OF PROCESS UPON DELIVERY TO THE HOLDERS
OF A REASONABLY ACCEPTABLE AGREEMENT OF SUCH NEW AGENT AGREEING SO TO ACT. IF
SERVICE OF PROCESS IS MADE BY ANY HOLDER OF A NOTE UPON SUCH APPOINTEE, A COPY
THEREOF SHALL ALSO BE PROVIDED TO THE GUARANTORS AND THE COMPANY, BY REGISTERED
OR CERTIFIED MAIL, OR BY INTERNATIONALLY-RECOGNIZED EXPEDITED DELIVERY SERVICE;
PROVIDED THAT THE FAILURE OF SUCH HOLDER TO PROVIDE SUCH COPY TO THE GUARANTORS
AND THE COMPANY SHALL NOT IMPAIR OR AFFECT IN ANY WAY THE VALIDITY OF SUCH
SERVICE OF PROCESS OR ANY JUDGMENT RENDERED IN ANY SUCH SUIT, ACTION, OR
PROCEEDING. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF
ANY HOLDER OF A NOTE TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY MANNER
PERMITTED BY APPLICABLE LAW, OR TO OBTAIN JURISDICTION OVER THE COMPANY, IN SUCH
-55-
<PAGE>
OTHER JURISDICTION, AND IN SUCH MANNER, AS MAY BE PERMITTED BY APPLICABLE LAW.
* * * * *
-56-
<PAGE>
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
RESORTQUEST INTERNATIONAL, INC.
By: /s/ Jeffery M. Jarvis
----------------------------
Its: Sr. Vice President, CFO
---------------------------
<PAGE>
GUARANTORS (the signature
below is on behalf of each
and every Guarantor listed
on Schedule C hereto)
By: /s/ Jeffery M. Jarvis
-----------------------------
Title: Sr. Vice President
--------------------------
<PAGE>
The foregoing is hereby agreed to as of the date thereof.
TEACHERS INSURANCE AND ANNUITY ASSOCIATION
By: /s/ Kevin R. Lorenz
--------------------------------------
Its: Kevin R. Lorenz, CFA
Managing Director - High Yield Team
-------------------------------------
<PAGE>
PPM AMERICA, INC., as attorney in fact, on behalf
of Jackson National Life Insurance Company
By: [illegible]
---------------------------------
Its: Managing Director
--------------------------------
<PAGE>
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: CIGNA INVESTMENTS, INC. (authorized agent)
By: /s/ Stephen A. Osborn
---------------------------------
Its: Stephen A. Osborn
Managing Director
--------------------------------
LIFE INSURANCE COMPANY OF NORTH AMERICA
By: CIGNA INVESTMENTS, INC. (authorized agent)
By: /s/ Stephen A. Osborn
---------------------------------
Its: Stephen A. Osborn
Managing Director
--------------------------------
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: /s/ Mary Ann McCarthy
---------------------------------
Its: Mary Ann McCarthy
Managing Director
--------------------------------
<PAGE>
CM LIFE INSURANCE COMPANY
By: /s/ Mary Ann McCarthy
---------------------------------
Its: Investment Officer
--------------------------------
<PAGE>
UNITED OF OMAHA LIFE INSURANCE COMPANY
By: /s/ Edwin H. Garrison, Jr.
---------------------------------
Its: Edwin H. Garrison, Jr.
First Vice President
--------------------------------
<PAGE>
SCHEDULE A
(to Note Purchase Agreement)
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA $15,000,000
730 Third Avenue
New York, New York 10017-3263
Attention: Securities Division
Dierdre Macdonald
Facsimile Number: (212) 916-6581
Confirmation Number: (212) 916-4883 or (212) 490-9000
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds at the opening of business on the
due date thereof (identifying each payment as "ResortQuest International, Inc.,
9.06% Guaranteed Senior Secured Notes, due June ____, 2004, PPN 761183 A* 3,
principal, premium or interest") to:
The Chase Manhattan Bank ABA #021-000-021
Account No. 900-0-000200
For further credit to TIAA Account No. G07040
Notices
Contemporaneous with the above electronic funds transfer, mail or fax the
following information setting forth: (1) the full name, private placement
number, interest rate and maturity date of the Notes or other obligations; (2)
the allocation of payment between principal, interest, premium and any special
payment; and (3) the name and address of the Bank (or Trustee) from which such
transfer was sent, to:
Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, New York 10017-3206
Attention: Securities Accounting Division
Telephone Number: (212) 916-4188
Facsimile Number: (212) 916-6955
All other notices and communications to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None.
Taxpayer I.D. Number: 13-1624203
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
JACKSON NATIONAL LIFE $12,500,000
INSURANCE COMPANY
5901 Executive Drive
Lansing, MI 48909
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds at the opening of business on the
due date thereof (identifying each payment as "ResortQuest International, Inc.,
9.06% Guaranteed Senior Secured Notes, due June ____, 2004, PPN 761183 A* 3,
principal, premium or interest") to:
NORTHERN TRUST CHGO
ABA #071-000-152
Credit Account #5186041000 (General ledger for all clients of Northern Trust)
For further credit to: 26-91241/Jackson National Life Insurance Company
Attention: Tarsa Lewis
Interest and principal payment notices should be faxed to the operations contact
and custodian bank as follows:
Susan Perrino, Private Placements
PPM America Inc.
225 West Wacker Drive
Chicago, Illinois 60606
Telephone Number: (312) 634-1205
Facsimile Number: (312) 634-0054
and
Oscell Owens
Northern Trust Company
801 S. Canal Street
Floor C1N
Chicago, Illinois 60607
Telephone Number: (312) 444-5754
Facsimile Number: (312) 630-8179
A-2
<PAGE>
Notices
One copy of all notices, documents, notes, waivers, amendments, consents, as
well as periodical financial information and covenant compliance certificates
should be sent to:
Joseph Dimberio
Vice President, Private Placements
PPM America, Inc.
225 West Wacker Drive, Suite 1200
Chicago, Illinois 60606
Telephone Number: (312) 634-2597
Facsimile Number: (312) 634-0054
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 38-1659835
A-3
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
UNITED OF OMAHA LIFE
INSURANCE COMPANY $7,500,000
Mutual of Omaha Plaza
Omaha, Nebraska 68175-1011
Attention: 4-Investment Division Administration
Facsimile Number: (402) 351-2913
Confirmation Number: (402) 351-2504
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds at the opening of business on the
due date thereof (identifying each payment as "ResortQuest International, Inc.,
9.06% Guaranteed Senior Secured Notes, due June ____, 2004, PPN 761183 A* 3,
principal, premium or interest") to:
The Chase Manhattan Bank ABA #021-000-021
Private Income Processing
For further credit to United of Omaha Life Insurance Company
Account No. #900-9000200
a/c: G07097
CUSIP/PPN:
--------------
Interest Amount:
--------------
Principal Amount:
--------------
Notices
All notices and communications with respect to payments and written confirmation
of each such payment, to be addressed to:
The Chase Manhattan Bank
4 New York Plaza - 13th Floor
New York, NY 10004
Attn: Income Processing - a/c: G07097 J. Pipperato
All other notices and communications to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-0322111
A-4
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
LIFE INSURANCE COMPANY
OF NORTH AMERICA $1,650,000
c/o CIGNA Investments, Inc.
Hartford, Connecticut 06152-2307
Attention: Private Securities Division - S-307
Facsimile Number: (860) 726-7203
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds at the opening of business on the
due date thereof (identifying each payment as "ResortQuest International, Inc.,
9.06% Guaranteed Senior Secured Notes, due June ____, 2004, PPN 761183 A* 3,
principal, premium or interest") to:
The Chase Manhattan Bank ABA #021-000-021
Account No. 900 9-001802
Notices
Contemporaneous with the above electronic funds transfer, mail or fax the
following information setting forth: (1) the full name, private placement
number, interest rate and maturity date of the Notes or other obligations; (2)
the allocation of payment between principal, interest, premium and any special
payment; and (3) the name and address of the Bank (or Trustee) from which such
transfer was sent, to:
Life Insurance Company of North America
c/o CIGNA Investments, Inc.
Attention: Securities Processing S-309
900 Cottage Grove Road
Hartford, CT 06152-2309
All other notices and communications to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: CIG & Co.
Taxpayer I.D. Number: 13-3574027
A-5
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY Denominations
c/o CIGNA Investments, Inc. $2,325,000
Hartford, Connecticut 06152-2307 $2,100,000
Attention: Private Securities Division - S-307 $1,125,000
Facsimile Number: (860) 726-7203 $ 300,000
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds at the opening of business on the
due date thereof (identifying each payment as "ResortQuest International, Inc.,
9.06% Guaranteed Senior Secured Notes, due June ____, 2004, PPN 761183 A* 3,
principal, premium or interest") to:
The Chase Manhattan Bank ABA #021 000 021
Account No. 900 9-001802
Notices
Contemporaneous with the above electronic funds transfer, mail or fax the
following information setting forth: (1) the full name, private placement
number, interest rate and maturity date of the Notes or other obligations; (2)
the allocation of payment between principal, interest, premium and any special
payment; and (3) the name and address of the Bank (or Trustee) from which such
transfer was sent, to:
Connecticut General Life Insurance Company
c/o CIGNA Investments, Inc.
Attention: Securities Processing S-309
900 Cottage Grove Road
Hartford, CT 06152-2309
All other notices and communications to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: CIG & Co.
Taxpayer I.D. Number: 13-3574027
A-6
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
MASSACHUSETTS MUTUAL LIFE INSURANCE $3,600,000
COMPANY
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Mary Ann McCarthy, Managing Director
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds identifying each payment as
"ResortQuest International, Inc., 9.06% Guaranteed Senior Secured Notes, due
June __, 2004, PPN 761183 A* 3, principal or interest" to:
Citibank, N.A.
111 Wall Street
New York, New York 10043
Account Number 4067-3488
ABA No. 021000089
For Mass Mutual Long Term Pool
With telephone advice of payments to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561
Notices
All notices and communications to be addressed as first provided above except
with respect to payments to be addressed to:
Attention: Securities Custody and Collection Department F381
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 041590850
A-7
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of Series of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
MASSACHUSETTS MUTUAL LIFE INSURANCE $700,000
COMPANY
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Mary Ann McCarthy, Managing Director
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds identifying each payment as
"ResortQuest International, Inc., 9.06% Guaranteed Senior Secured Notes, due
June __, 2004, PPN 761183 A* 3, principal or interest" to:
Chase Manhattan Bank, N.A.
4 Chase Metro Tech Center
New York, New York 10081
ABA No. 021000021
For Mass Mutual Pension Management
Account No. 910-2594018
With telephone advice of payments to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561
Notices
All notices and communications to be addressed as first provided above except
with respect to payments to be addressed to:
Attention: Securities Custody and Collection Department F381
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 041590850
A-8
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY $2,600,000
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Mary Ann McCarthy, Managing Director
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds identifying each payment as
"ResortQuest International, Inc., 9.06% Guaranteed Senior Secured Notes, due
June __, 2004, PPN 761183 A* 3, principal or interest" to:
Chase Manhattan Bank, N.A.
4 Chase Metro Tech Center
New York, New York 10081
ABA No. 021000021
For Mass Mutual IFM Non-Traditional
Account No. 910-2509073
With telephone advice of payments to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561
Notices
All notices and communications to be addressed as first provided above except
with respect to payments to be addressed to:
Attention: Securities Custody and Collection Department F381
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 041590850
A-9
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
CM LIFE INSURANCE COMPANY
C/O MASSACHUSETTS MUTUAL LIFE INSURANCE $600,000
COMPANY
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Mary Ann McCarthy, Managing Director
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds identifying each payment as
"ResortQuest International, Inc., 9.06% Guaranteed Senior Secured Notes, due
June __, 2004, PPN 761183 A* 3, principal or interest" to:
Citibank, N.A.
111 Wall Street
New York, New York 10043
Account No. 4068-6561
ABA No. 021000089
For Segment 43 - Universal Life
With telephone advice of payments to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561
Notices
All notices and communications to be addressed as first provided above except
with respect to payments to be addressed to:
Attention: Securities Custody and Collection Department F381
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 06-1041383
A-10
<PAGE>
SCHEDULE B
(to Note Purchase Agreement)
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"ABBOTT INDEBTEDNESS" means the Indebtedness of Abbott Realty Services,
Inc., a Florida corporation in an aggregate principal amount not to exceed
$5,734,000.
"ABBOTT LIENS" means the Liens securing the Abbott Indebtedness on the
assets described on SCHEDULE 5.15 hereto.
"ACQUIRED SUBSIDIARY DEBT" means all Secured Debt of any Person which
becomes a Subsidiary or is merged into the Company or a Subsidiary after the
date of the Closing and which (a) is outstanding on the date such Person becomes
a Subsidiary or is so merged (or such corporation is at such time contractually
bound, in writing, to incur such Debt), (b) has not been (or is not being)
incurred, extended or renewed in contemplation of or as a result of such Person
becoming a Subsidiary or so being merged and (c) such Lien shall attach solely
to the property of such Person which was owned by such Person prior to the date
on which it became a Subsidiary.
"ADDITIONAL PAYMENT" is defined in Section 8.8(a).
"ADJUSTED CONSOLIDATED NET WORTH" shall mean the sum of (i) the par
value of the Capital Stock (excluding treasury stock and Capital Stock
subscribed and unissued) of the Company and its Subsidiaries; (ii) the amount of
paid in capital and retained earnings shown on the consolidated balance sheet of
the Company and its Subsidiaries in accordance with GAAP, and MINUS (iii) the
amount by which outstanding Restricted Investments exceed 10% of consolidated
stockholders' equity of the Company and its Subsidiaries determined in
accordance with GAAP.
"AFFILIATE" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company.
"BANK GUARANTOR" is defined in Section 9.8(a).
<PAGE>
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York, New York, or Memphis, Tennessee, are
required or authorized to be closed.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CAPITAL LEASE OBLIGATIONS" means the amount of the obligations of a
Person as lessee under all Capital Leases which would be required to be
reflected as a liability on a balance sheet in accordance with GAAP.
"CAPITAL STOCK" means (a) in the case of a corporation, capital stock,
(b) in the case of an association or business entity, any and all shares,
interests, participation, rights or other equivalents (however designated) of
capital stock, (c) in the case of a partnership, partnership interests (whether
general or limited), (d) in the case of a limited liability company, membership
interests and (e) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"CLOSING" is defined in Section 3.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"COLLATERAL" means all of the Capital Stock and assets of the Company
and its Material Subsidiaries.
"COLLATERAL AGENT" means NationsBank, N.A., and its permitted
successors and assigns.
"COMPANY" means ResortQuest International, Inc., a Delaware
corporation.
"COMPETITOR" means any Person which is predominantly engaged in the
resort or lodging businesses, including without limitation Thayer Capital
Partners, PROVIDED THAT:
(a) the provision of investment advisory services by a Person to a
Plan which is owned or controlled by a Person which would otherwise be
a Competitor shall not of itself cause the person providing such
services to be deemed to be a Competitor; and
(b) in no event shall an Institutional Investor within the meaning
of clause (a) or (c) of that definition be deemed a Competitor.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
B-2
<PAGE>
"CONSOLIDATED ADJUSTED NET INCOME" means (without duplication) for any
period consolidated net income (or loss) of the Company and its Subsidiaries, as
determined in accordance with GAAP, after excluding the sum of (i) net earnings
(or losses) of any Subsidiary accrued prior to the date it becomes a Subsidiary
or is merged with or consolidated into the Company or any Subsidiary; (ii) the
net earnings (or losses) of any Subsidiary in which the Company or any other
Subsidiary has an ownership interest that has not been received in the form of
cash; (iii) the undistributed earnings of any Subsidiary which are unavailable
for payment to the Company; (iv) any restoration to income of any contingency
reserve (other than reserves established in the normal course of business, such
as allowances for uncollectable accounts), except to the extent that such
reserve was established during such period; (v) any gain on the sale or
disposition of Investments or fixed or capital assets, including any tax effect;
(vi) any gains resulting from any write-up of assets; (vii) the proceeds of any
life insurance policy; (viii) any gain arising from the acquisition of any
securities of the Company or Subsidiary; (ix) any net income or gain resulting
from changes in GAAP, any extraordinary items, or any discounted operations; (x)
any deferred or other credit representing the excess of the equity in any
Subsidiary over the cost of the investment at the acquisition date; (xi) in the
case of a successor to the Company by consolidation or merger, any earnings of
the successor corporation prior to such consolidation or merger; and (xii) any
income not freely convertible into Dollars.
"CONSOLIDATED ASSETS" means as of the date of determination thereof all
assets of the Company and its Subsidiaries, after eliminating intercompany items
in accordance with GAAP.
"CONSOLIDATED DEBT" means as of the date of any determination thereof
all Debt of the Company and its Subsidiaries, after eliminating intercompany
items in accordance with GAAP.
"CONSOLIDATED FIXED CHARGES" means with respect to any period, the sum
of (i) Consolidated Interest Expense and (ii) Consolidated Lease Rentals, for
such period.
"CONSOLIDATED INCOME AVAILABLE FOR FIXED CHARGES" means for any period
the sum of (i) Consolidated Adjusted Net Income, (ii) Consolidated Income Tax
Expense and (iii) Consolidated Fixed Charges.
"CONSOLIDATED INTEREST EXPENSE" means for any period (without
duplication) all interest (including the interest component of rentals on
Capital Leases) and all amortization of debt discount and expense on all
Indebtedness (including, without limitation, payment-in-kind, zero coupon and
other like Securities) of the Company and its Subsidiaries.
"CONSOLIDATED INCOME TAX EXPENSE" means for any period (without
duplication) all income tax expense of the Company and its Subsidiaries.
"CONSOLIDATED LEASE RENTALS" means with respect to any period, the sum
of the minimum amount of rental and other obligations required to be paid during
such period by the Company or its Subsidiaries as lessee under all leases of
real or personal property (other than Capital Lease Obligations), excluding any
amounts required to be paid by the lessee (whether or not designated as rental)
which are (i) on account of maintenance and repairs, insurance, taxes,
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<PAGE>
assessments, water rates and similar charges, or (ii) which are based on
profits, revenues or sales realized by the lessee from all leased property or
otherwise based on the performance of the lessee.
"CONSOLIDATED OPERATING CASH FLOW" means the sum of (i) Consolidated
Adjusted Net Income and (ii) the amount of all Consolidated Interest Expenses,
depreciation, amortization, income taxes, deferred items and other non-cash
items of the Company and its Subsidiaries deducted in the determination of net
income.
"CONTRIBUTION SHARE" is defined in Section 22.5.
"CREDIT AGREEMENT" means the Credit Agreement dated as of May 26, 1998,
as amended by the First Amendment dated September 30, 1998, the Second Amendment
dated December 7, 1998, the Third Amendment dated April 6, 1999 and the Fourth
Amendment dated June 16, 1999 as amended among the Company, the Guarantors (as
defined therein) and NationsBank, N.A., as Agent for the Lenders (as defined
therein), as such Credit Agreement may be renewed or extended.
"DEBT" means, without duplication and in respect to any Person, the sum
of (i) liabilities for borrowed money; (ii) its liabilities for the deferred
purchase price of property acquired by such Person (other than in the ordinary
course of business); (iii) Capitalized Lease Obligations; (iv) all liabilities
for borrowed money secured by any Lien on property owned; and (v) any Guaranty
of such Person with respect to liabilities described in (i) through (iv) hereof.
"DEFAULT" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"DEFAULT RATE" means that rate of interest that is the greater of (i)
2% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (ii) 2% over the rate of interest publicly announced
by Chase Manhattan Bank in New York, New York as its "base" or "prime" rate.
"DOLLARS" means lawful currency of the United States of America.
"DOMESTIC SUBSIDIARY" means a Subsidiary which is incorporated under
the laws of a State of the United States.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
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<PAGE>
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"EVENT OF DEFAULT" is defined in Section 11.
"EXCESS PAYMENT" is defined in Section 22.5.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FOREIGN SUBSIDIARY" means any Subsidiary other than a Domestic
Subsidiary.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary,
or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"GUARANTEE" is defined in Section 1.1(b).
"GUARANTEED OBLIGATIONS" is defined in Section 22.5.
"GUARANTOR" means any Subsidiary that is a party to the Agreement,
whether now or in the future.
"GUARANTY" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
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<PAGE>
(a) to purchase such Indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such Indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such Indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of any other Person to make payment of the
Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or
obligation against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the obligor under
any Guaranty, the Indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or any other substances that pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
restricted, prohibited or penalized by any applicable law (including, without
limitation, asbestos, urea formaldehyde foam insulation and polycholorinated
biphenyls).
"HOLDER" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.
"INDEBTEDNESS" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the
ordinary course of business but including all liabilities created or
arising under any conditional sale or other title retention agreement
with respect to any such property);
(c) all Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities);
B-6
<PAGE>
(e) all its liabilities in respect of drawn letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (f) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 5% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT" means the Intercreditor
and Collateral Agency Agreement, dated as of June 1, 1999, by and among the
Company, the Collateral Agent, the Lenders (as defined in the Credit Agreement),
the Purchasers and such other Persons that become parties thereto in accordance
with the terms thereof, substantially in the form of Exhibit C hereto.
"INVESTMENT" means any investment, made in cash or by delivery of
property, by the Company or any of its Subsidiaries in (i) any Person, whether
by acquisition of stock, Debt or other obligations or security, or by loan,
guaranty, advance, capital contribution or otherwise, or (ii) any property.
"JOINDER AGREEMENT" means a Joinder Agreement substantially in the form
of Exhibit D attached hereto.
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"MAKE-WHOLE AMOUNT" is defined in Section 8.7.
"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries
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<PAGE>
taken as a whole, or (b) the ability of the Company to perform its obligations
under this Agreement, the Security Documents and the Notes, or (c) the validity
or enforceability of this Agreement, the Security Documents or the Notes.
"MATERIAL SUBSIDIARY" means any Subsidiary that accounts for more than
(i) 10% of the consolidated assets of the Company and its Subsidiaries or (ii)
10% of consolidated revenue of the Company and its Subsidiaries.
"MEMORANDUM" is defined in Section 5.3.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"NOTES" is defined in Section 1.
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Company or a Subsidiary as the context
shall require, whose responsibilities extend to the subject matter of such
certificate.
"OTHER CURRENCY" is defined in Section 23.4.
"PAYORS" is defined in Section 8.8.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERSON" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"PLEDGE AGREEMENT" means the Amended and Restated Pledge Agreement
substantially in the form attached hereto as Exhibit B dated as of June 1, 1999.
"PLEDGING SUBSIDIARIES" means the Subsidiaries of the Company which own
capital stock of the Subsidiaries and, as of the date of the Agreement, are
those Subsidiaries set forth in Schedule D.
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<PAGE>
"PREFERRED STOCK" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"PRO RATA SHARE" is defined in Section 22.5.
"PROPERTY" or "PROPERTIES" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"REQUIRED HOLDERS" means, at any time, the holders of at least a
majority in principal amount of the Notes at the time outstanding (exclusive of
Notes then owned by the Company or any of its Affiliates).
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"RESTRICTED INVESTMENTS" means all Investments except (i) property to
be used in the ordinary course of business; (ii) current assets arising from the
sale of goods and services in the ordinary course of business, including
Investments in prepaid expenses, negotiable instruments, leases, utilities,
workers' compensation and other similar deposits in the ordinary course of
business; (iii) Investments in one or more Subsidiaries or any Person that
concurrently becomes a Subsidiary; (iv) Investments existing as of the date
hereof; (v) Investments in obligations, maturing within one year from the date
of acquisition, issued by or guaranteed by the United States of America or an
agency thereof; (vi) Investments in municipal securities, maturing within one
year, which are rated in one of the top two rating classifications by at least
one national rating agency; (vii) Investments in certificates of deposit or
banker's acceptances issued by commercial banks, maturing within 365 days from
the date of acquisition, which are rated in one of the top two rating
classifications by at least one national rating agency; (viii) Investments in
commercial paper, maturing within 270 days, rated in one of the top two rating
classifications by at least one national rating agency; (ix) investments in
money market instrument programs which are classified as current assets in
accordance with GAAP; (x) treasury stock; and (xi) Investments in bank accounts.
"RESTRICTED PAYMENTS" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
the Company or any Subsidiary, now or hereafter outstanding, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of the Company or any Subsidiary, now or hereafter outstanding, and (iii)
any payment made to retire, or obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class or Capital
Stock of the Company or any Subsidiary, now or hereafter outstanding.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
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<PAGE>
"SECURED DEBT" means Debt secured by a Lien.
"SECURITY" has the meaning set forth in section 2(a)(1) of the
Securities Act.
"SECURITY AGREEMENT" means the Amended and Restated Security Agreement
dated as of June 1, 1999 substantially in the form attached hereto as Exhibit A.
"SECURITY DOCUMENTS" mean, collectively, (a) the Intercreditor and
Collateral Agency Agreement, (b) the Pledge Agreement, (c) the Security
Agreement and (d) all other instruments and documents delivered pursuant to
Section 9.8 and 9.9 to secure any of the Notes, including, without limitation,
the Guarantee provided in Section 22 of the Agreement.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"SWAPS" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"TAX" is defined in Section 8.8.
"TAXING JURISDICTION" is defined in Section 8.8(a).
"WHOLLY-OWNED SUBSIDIARY" means, at any time, any Subsidiary one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of
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<PAGE>
which are owned by any one or more of the Company and the Company's other
Wholly-Owned Subsidiaries at such time.
B-11
<PAGE>
Schedule C
(to Note Purchase Agreement)
GUARANTORS
Abbott & Andrews Realty, Inc.
Abbott Realty Services, Inc.
Abbott Resorts, Inc.
B&B on the Beach, Inc.
Brindley & Brindley Realty & Development, Inc.
Coastal Resorts Management, Inc.
Coastal Resorts Realty, L.L.C.
Collection of Fine Properties, Inc.
First Resort Software, Inc.
Hotel Corporation of the Pacific, Inc.
Houston & O'Leary Company
Howey Acquisition, Inc.
Maui Condominium & Home Realty, Inc.
Plantation Resort Management, Inc.
Realty Consultants, Inc.
Resort Property Management, Inc.
Telluride Resort Accommodations, Inc.
Ten Mile Holdings, Ltd.
The Management Company, Inc.
The Maury People, Inc.
The Tops'l Group, Inc.
Trupp-Hodnett Enterprises, Inc.
Whistler Chalets Ltd.
<PAGE>
EXHIBIT 2
(to Note Purchase Agreement)
FORM OF NOTE
RESORTQUEST INTERNATIONAL, INC.
9.06 % GUARANTEED SENIOR SECURED NOTE, DUE JUNE 16, 2004
No. [_____] [Date]
$[_______] PPN 761183 A* 3
FOR VALUE RECEIVED, the undersigned, ResortQuest International, Inc.
(herein called the "Company"), a corporation organized and existing under the
laws of the State of Delaware, hereby promises to pay to [___], or registered
assigns, the principal sum of [___] DOLLARS on [_____________ __,] [____], with
interest (computed on the basis of a 360-day year of twelve 30-day months) (a)
on the unpaid balance thereof at the rate of 9.06% per annum from the date
hereof, payable semiannually, on the sixteenth day of June and December in each
year, commencing with the June 16 or December 16 next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) to
the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 2% and (ii) 2% over the rate of interest publicly
announced by Chase Manhattan Bank from time to time in New York, New York as its
"base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at New York, New York or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the Note
Purchase Agreement referred to below.
This Note is one of a series of Guaranteed Senior Secured Notes,
(herein called the "Notes") issued pursuant to the Note Purchase and Guarantee
Agreement, dated as of June 1, 1999 (as from time to time amended, the "Note
Purchase Agreement"), between the Company and the Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will be deemed, by
its acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreement and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the
<PAGE>
purpose of receiving payment and for all other purposes, and the Company will
not be affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise. This Note is not subject to mandatory prepayment.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Note is equally and ratably secured by the Security Documents (as
defined in the Note Purchase Agreement). Reference is hereby made to the
Security Documents for a description of the collateral thereby mortgaged,
warranted, bargained, sold, released, conveyed, assigned, transferred, pledged
and hypothecated, the nature and extent of the security for the Notes, the
rights of the Holders, the Collateral Agent (as defined in the Note Purchase
Agreement) in respect of such security and otherwise.
This Agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of New
York, excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
RESORTQUEST INTERNATIONAL, INC.
By:
-----------------------------
Its:
----------------------------
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<PAGE>
EXHIBIT 4.4(a)
(to Note Purchase Agreement)
FORM OF OPINION OF SPECIAL COUNSEL
TO THE COMPANY AND THE GUARANTORS
DESCRIPTION OF CLOSING OPINION
OF SPECIAL UNITED STATES AND CANADIAN COUNSEL TO THE COMPANY AND THE GUARANTORS
The closing opinion of Akin Gump, special United States counsel and of
Montpellier, McKeen, Varabioff, Talbott & Guiffre, special Canadian counsel to
the Company and the Guarantors, called for by Section 4.4(a) of the Note
Purchase and Guarantee Agreement, shall be dated the date of Closing and
addressed to the Purchasers, shall be satisfactory in form and substance to the
Purchasers and shall be to the effect that:
1. The Company is a corporation, duly organized, validly existing and
in good standing under the laws of the State of Delaware, has the corporate
power and the corporate authority to execute and perform the Note Purchase and
Guarantee Agreement and the Security Documents and to issue the Notes and has
the full corporate power and the corporate authority to conduct the activities
in which it is now engaged and is duly licensed or qualified and is in good
standing as a foreign corporation in each jurisdiction in which the character of
the properties owned or leased by it or the nature of the business transacted by
it makes such licensing or qualification necessary.
2. Each Subsidiary is a corporation, duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation and is
duly licensed or qualified and is in good standing in each jurisdiction in which
the character of the properties owned or leased by it or the nature of the
business transacted by it makes such licensing or qualification necessary and
all of the issued and outstanding shares of capital stock of each such
Subsidiary have been duly issued, are fully paid and non-assessable and are
owned by the Company, by one or more Subsidiaries, or by the Company and one or
more Subsidiaries.
3. The Note Purchase Agreement and the Security Documents have been
duly authorized by all necessary corporate action on the part of the Company and
the Guarantors, have been duly executed and delivered by the Company and the
Guarantors and constitute the legal, valid and binding contract of the Company
and the Guarantors enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
creditors' rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law).
4. The Notes have been duly authorized by all necessary corporate
action on the part of the Company, have been duly executed and delivered by the
Company and constitute the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
<PAGE>
5. No approval, consent or withholding of objection on the part of, or
filing, registration or qualification with, any governmental body, Federal,
state or local, is necessary in connection with the execution, delivery and
performance of the Note Purchase and Guarantee Agreement, the Security Documents
or the Notes.
6. The issuance and sale of the Notes and the execution, delivery and
performance by the Company and the Guarantors of the Note Purchase and Guarantee
Agreement, the Security Documents do not conflict with or result in any breach
of any of the provisions of or constitute a default under or result in the
creation or imposition of any Lien upon any of the property of the Company or
any Guarantor pursuant to the provisions of the Articles of Incorporation or
By-laws of the Company or any Guarantor or any agreement or other instrument to
which the Company or any Guarantor is a party or by which the Company or any
Guarantor may be bound.
7. The issuance, sale and delivery of the Notes under the circumstances
contemplated by the Note Purchase and Guarantee Agreement does not, under
existing law, require the registration of the Notes under the Securities Act of
1933, as amended, or the qualification of an indenture under the Trust Indenture
Act of 1939, as amended.
8. The issuance of the Notes and the use of the proceeds of the sale of
the Notes in accordance with the provisions of and contemplated by the Note
Purchase and Guarantee Agreement do not violate or conflict with Regulation T, U
or X of the Board of Governors of the Federal Reserve System.
9. There is no litigation pending or, to the best knowledge of such
counsel, threatened which in such counsel's opinion could reasonably be expected
to have Material Adverse Effect on the Guarantor's or Company's business or
assets or which would impair the ability of the Company or the Guarantors to
issue and deliver the Notes or to comply with the provisions of the Note
Purchase and Guarantee Agreement.
10. The Company is not an "investment company" or a company
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended.
11. The Guarantors have the power to submit, and pursuant to the
Agreement, have legally, validly, effectively and irrevocably submitted, to the
non-exclusive jurisdiction of the courts of the State of New York and of the
courts of the United States of America having jurisdiction in the State of New
York in respect of any legal action or proceeding arising out of the Agreement,
the Security Documents or the Notes.
12. The choice of New York as the governing law of the Agreement, the
Security and Collateral Agency Agreement and the Notes is valid and will be
recognized and applied by the courts of New York and of the United States.
13. The Company is not, nor will it become, solely by reason of
entering into or performing its respective obligations under the Agreement or
the carrying out of any of the
4.4(a)-2
<PAGE>
transactions contemplated thereby, a "public utility company" or a "holding
company" under the Public Utility Holding Company Act of 1935, as amended.
14. Each Guarantor is a corporation, duly incorporated, validly
existing and in good standing under the laws of the United States or Canada, has
the corporate power and the corporate authority to execute and perform the
Agreement and has the full corporate power and the corporate authority to
conduct the activities in which it is now engaged and is duly licensed or
qualified and is in good standing as a foreign corporation in each jurisdiction
in which the character of the properties owned or leased by it or the nature of
the business transacted by it makes such licensing or qualification necessary.
15. No approval, consent or withholding of objection on the part of, or
filing, registration or qualification with, any Canadian governmental body,
federal, state or local, is necessary in connection with the execution, delivery
and performance of the Agreement or the Notes.
16. The courts of Canada will entertain suit upon a final and
conclusive judgment validly and properly rendered against any Canadian
Guarantors for a sum certain in money by a court of competent jurisdiction in
the United States of America based on service of process made in compliance with
the Agreements and will enforce such judgment in such suit without
reconsideration of the merits, absent fraud or violation of rules of natural
justice.
17. The performance by the Canadian Guarantors of the transactions
contemplated by the Agreements are not contrary to the public policy of Canada.
18. To ensure the legality, validity, enforceability or admissibility
into evidence of the Agreement and the Notes, it is not necessary that said
documents or any other documents be registered, notarized, filed or recorded
with any court or other authority or that any stamp or similar tax be paid with
respect thereto.
19. Neither the execution and the delivery by the Guarantors of the
Agreement and of the Notes nor the performance by the Guarantors thereof
(including the making of any payments to the Holders of the Notes, under and
pursuant to the Agreement or the Notes) are subject to any tax, duty, fee,
withholding or other charge, including, without limitation, any registration or
transfer tax, stamp duty or similar levy, imposed by Canada or any taxing
authority thereof or any political subdivision or any state thereof.
20. The obligations of the Guarantors and the Company under the
Agreements and the Notes rank PARI PASSU in right of payment with all other
Indebtedness (actual or contingent) of the Guarantors and the Company which is
not secured or the subject of any statutory trust or preference or which is not
expressly subordinated in right of payment to any other Indebtedness of the
Guarantors.
21. The choice of New York as the governing law of the Agreements and
the Notes is valid and will be recognized and applied by the courts of Canada.
4.4(a)-3
<PAGE>
22. Counsel shall opine that the Collateral Agent has a perfected
security interest in the Collateral subject to reasonable qualifications and
limitations acceptable to the Purchasers.
The opinion of such counsel shall cover such other matters relating to the sale
of the Notes as the Purchasers may reasonably request. With respect to matters
of fact on which such opinion is based, such counsel shall be entitled to rely
on appropriate certificates of public officials and officers of the Company.
4.4(a)-4
<PAGE>
EXHIBIT 4.4(b)
(to Note Purchase Agreement)
FORM OF OPINION OF SPECIAL COUNSEL TO THE PURCHASERS
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of McDermott, Will & Emery, special counsel to the
Purchasers, called for by Section 4.4(b) of the Agreement, shall be dated the
date of Closing and addressed to the Purchasers, shall be satisfactory in form
and substance to the Purchasers and shall be to the effect that:
1. The Company is a corporation, validly existing and in good standing
under the laws of the State of Delaware and has the corporate power and the
corporate authority to execute and deliver the Agreement and to issue the Notes.
2. The Agreement has been duly authorized by all necessary corporate
action on the part of the Company, has been duly executed and delivered by the
Company and constitutes the legal, valid and binding contract of the Company
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of
principles is considered in a proceeding in equity or at law).
3. Assuming that (a) the Guarantors have the power and authority to
execute, deliver and perform their obligations under the Agreement and that the
Guarantors have taken all necessary action to authorize the execution, delivery
and performance of the Agreement, (b) the Agreement has been duly executed and
delivered by the Guarantors and constitutes the legal, valid and binding
contract of the Guarantors and (c) the execution, delivery and performance by
the Guarantors of the Agreement does not violate or conflict with any provision
of the charter documents of the Guarantors or any other agreement or instrument
by which the Guarantors are bound, the Agreement is enforceable against the
Guarantors in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting creditors' rights generally, and
general principals of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
4. The Notes have been duly authorized by all necessary corporate
action on the part of the Company, have been duly executed and delivered by the
Company and constitute the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
5. The issuance, sale and delivery of the Notes under the circumstances
contemplated by the Agreement does not, under existing law, require the
registration of the Notes under the Securities Act of 1933, as amended, or the
qualification of an indenture under the Trust Indenture Act of 1939, as amended.
<PAGE>
The opinion of McDermott, Will & Emery shall also state that the
opinion of Akin Gump is satisfactory in scope and form to McDermott, Will &
Emery and that, in their opinion, the Purchasers are justified in relying
thereon.
In rendering the opinion set forth in paragraph 1 above, McDermott,
Will & Emery may rely solely upon an examination of the Certificate of
Incorporation certified by, and a certificate of good standing of the Company
from, the Secretary of State of the State of Delaware, the By-laws of the
Company and the opinion of Akin Gump. The opinion of McDermott, Will & Emery is
limited to the laws of the State of New York and the Federal laws of the United
States.
With respect to matters of fact upon which such opinion is based,
McDermott, Will & Emery may rely on appropriate certificates of public officials
and officers of the Company and the Guarantors.
4.4(b)-2
<PAGE>
Exhibit 10.32
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- --------------------------------------------------------------------------------
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
Dated as of June 1, 1999
By and Among
NATIONSBANK, N.A.,
as Collateral Agent,
THE NOTEHOLDERS,
NATIONSBANK, N.A.
as Agent for the Lenders,
THE LENDERS,
AND
ADDITIONAL CREDITORS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Recitals ...........................................................................................1
Section 1. Definitions................................................................................2
Section 1.1. Definitions.......................................................................2
Section 1.2. Effectiveness of this Agreement...................................................6
Section 2. Relationships Among Secured Parties........................................................6
Section 2.1. Restrictions on Actions...........................................................6
Section 2.2. Representations and Warranties....................................................7
Section 2.3. Cooperation; Accountings..........................................................8
Section 2.4. Termination of Credit Agreement, Note Purchase and Guarantee Agreement or
Additional Facilities.............................................................8
Section 2.5. Additional Creditor...............................................................8
Section 3. Appointment and Authorization of Collateral Agent..........................................8
Section 4. Agency Provisions..........................................................................9
Section 4.1. Delegation of Duties..............................................................9
Section 4.2. Exculpatory Provisions............................................................9
Section 4.3. Reliance by Collateral Agent......................................................9
Section 4.4. Knowledge or Notice of Default, Event of Default or Special Event of Default.....10
Section 4.5. Non-Reliance on Collateral Agent and Other Secured Parties.......................10
Section 4.6. Indemnification..................................................................11
Section 4.7. Collateral Agent in Its Individual Capacity......................................11
Section 4.8. Successor Collateral Agent.......................................................11
Section 5. Actions by the Collateral Agent...........................................................12
Section 5.1. Duties and Obligations...........................................................12
Section 5.2. Notification of Default..........................................................12
Section 5.3. Exercise of Remedies.............................................................13
Section 5.4. Instructions from Secured Parties................................................13
Section 5.5. Emergency Actions................................................................13
Section 5.6. Changes to Security Documents....................................................13
Section 5.7. Release of Collateral............................................................13
Section 5.8. Other Actions....................................................................14
Section 5.9. Cooperation......................................................................14
Section 5.10. Distribution of Proceeds.........................................................14
Section 5.11. Senior Preferential Payments and Special Trust Account...........................15
Section 5.12. Authorized Investments...........................................................15
Section 5.13. Restoration of Obligations.......................................................16
Section 5.14. Bankruptcy, Preferences, etc.....................................................16
Section 6. Bankruptcy Proceedings....................................................................16
Section 7. Miscellaneous.............................................................................17
Section 7.1. Secured Parties; Other Collateral................................................17
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Section 7.2. Marshalling......................................................................17
Section 7.3. Consents, Amendments, Waivers....................................................17
Section 7.4. Parties in Interest..............................................................17
Section 7.5. Counterparts.....................................................................17
Section 7.6. Termination......................................................................18
Section 7.7. Notices..........................................................................18
Section 7.8. Establishing Outstanding Amount of Senior Secured Obligations....................19
Section 7.9. Governing Law....................................................................19
SCHEDULE I INFORMATION RELATING TO NOTEHOLDERS
</TABLE>
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<PAGE>
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
THIS INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT, dated as of June 1,
1999 (this "AGREEMENT"), is entered into by and among NationsBank, N.A.
("NATIONSBANK"), in its capacity as Collateral Agent (the "COLLATERAL AGENT"),
NationsBank, N.A., as the agent under the Credit Agreement described below
(together with its permitted successors, transferees and assigns, the "AGENT"),
each of the Noteholders set forth on the signature pages hereof (together with
their permitted successors, transferees and assigns, the "NOTEHOLDERS"), each of
the Lenders described below set forth on the signature pages hereof (together
with their permitted successors, transferees and assigns, the "LENDERS") and the
Additional Creditors (as described below).
RECITALS:
A. Pursuant to the Note Purchase and Guarantee Agreement, dated as
of June 1, 1999 (the "NOTE PURCHASE AND GUARANTEE AGREEMENT"), entered into by
ResortQuest International, Inc. (the "COMPANY") and certain subsidiaries of the
Company as guarantors (the "GUARANTORS"), with each of the Noteholders, the
Noteholders will purchase $50,000,000 9.06% Guaranteed Senior Secured Notes, Due
June 16, 2004 (collectively, the "SENIOR SECURED NOTES") from the Company.
B. The Company has entered into that certain Credit Agreement, dated
May 28, 1998, as amended by the First Amendment dated September 30, 1998, the
Second Amendment dated December 7, 1998, the Third Amendment dated April 16,
1999 and the Fourth Amendment dated June 16, 1999 (the "CREDIT AGREEMENT"), with
the Lenders and the Agent, pursuant to which the Lenders are providing to the
Company various credit facilities.
C. The Company contemplates that from time to time after the date
hereof, the Company may, subject to compliance with the terms, conditions and
covenants of the Note Purchase and Guarantee Agreement and of the Credit
Agreement, incur additional Funded Debt (as defined in the Note Purchase and
Guarantee Agreement) (the "ADDITIONAL FUNDED DEBT") which the Company desires to
secure by the Collateral. Such Funded Debt shall be permitted to be secured by
the Collateral if the obligees of such Funded Debt (the "ADDITIONAL CREDITORS")
execute and deliver and become a party to this Agreement pursuant to the
requirements of Section 2.5 hereof.
D. The obligations of the Company to the Noteholders under the Note
Purchase and Guarantee Agreement and under the Senior Note Documents (as
hereinafter defined) including, without limitation, the obligations evidenced by
the Senior Secured Notes, and the obligations of the Company to the Lenders
under the Credit Agreement and under the Loan Documents (as hereinafter defined)
including, without limitation, the obligations evidenced by the promissory notes
issued under the Credit Agreement (together with amendments, modifications, and
replacements thereof, the "CREDIT AGREEMENT NOTES"), and the obligations of the
Company to the Additional Creditors under the agreements evidencing such
additional Funded Debt (the "ADDITIONAL FACILITIES") will be secured PARI PASSU
pursuant to the Security Documents described below. The Noteholders and the
Agent desire to appoint NationsBank as Collateral Agent to act on behalf of the
Secured Parties regarding the Collateral (as hereinafter defined), all as more
fully provided herein. The parties hereto have entered into this Agreement to,
among other things, further define the rights, duties, authority and
responsibilities of the Collateral Agent and the relationship among the Secured
Parties regarding their PARI PASSU interests in the Collateral.
<PAGE>
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS.
SECTION 1.1. DEFINITIONS. The following terms shall have the meanings
assigned to them below in this Section 1 or in the provisions of this Agreement
referred to below:
"ADDITIONAL CREDITORS" shall have the meaning assigned thereto in the
Introductory Paragraph hereof.
"ADDITIONAL FACILITIES" shall have the meaning assigned thereto in the
Introductory Paragraph hereof.
"ADDITIONAL FACILITY DOCUMENTS" shall mean all outstanding Additional
Facilities, the Security Documents and all other mortgages, security agreements,
documents, certificates and instruments relating to, arising out of, or in any
way connected therewith or any of the transactions contemplated thereby.
"ADDITIONAL FACILITY NOTES" shall mean the obligations of the Company
which are evidenced by the promissory notes issued under the Additional
Facilities.
"AFFILIATE" shall mean, with respect to any Person, any other Person
that, directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, such first Person.
"AGENT" shall have the meaning assigned thereto in the Recitals hereof.
"AGREEMENT" shall mean this Intercreditor and Collateral Agency
Agreement as amended or modified in accordance with the terms hereof.
"BANKRUPTCY PROCEEDING" shall mean, with respect to any Person, a
general assignment by such Person for the benefit of its creditors, or the
institution by or against such Person of any proceeding seeking its relief as
debtor, or seeking to adjudicate such Person as bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment or composition of such Person or
its debts, under any law relating to bankruptcy, insolvency, reorganization or
relief of debtors, or seeking appointment of a receiver, trustee, custodian or
other similar official for such Person or for any substantial part of its
property.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in New York, New York or Charlotte, North Carolina
are required or authorized to be closed.
"CASH EQUIVALENT INVESTMENTS" shall mean, (a) direct obligations of the
United States Government or any agencies thereof and obligations guaranteed by
the United States Government, in each case having remaining terms to maturity of
not more than thirty days; and
-2-
<PAGE>
(b) certificates of deposit, time deposits and acceptances, including Eurodollar
deposits, having remaining terms to maturity of not more than sixty days issued
by a United States bank which has a combined capital and surplus of at least
$750,000,000 and whose long-term certificates of deposit are rated "A" or better
by Standard & Poor's Corporation or "A2" or better by Moody's Investors Service,
Inc.
"CLOSING DATE" shall have the meaning assigned thereto in Section 3 of
the Note Purchase and Guarantee Agreement.
"COLLATERAL" shall mean all collateral under the Security Documents.
"COLLATERAL AGENT" shall have the meaning assigned thereto in the
Introductory Paragraph hereof.
"COMMITMENT" shall mean the commitment of the Lenders to make advances
to the Company in accordance with the Credit Agreement.
"COMPANY" shall mean ResortQuest International, Inc., a Delaware
corporation and any Person who succeeds to all, or substantially all, of the
assets and business of such entity.
"CORPORATION" shall mean a corporation, joint stock association or
business trust.
"CREDIT AGREEMENT" shall have the meaning assigned thereto in the
Recitals hereof, and shall include such agreement as amended, modified, restated
or renewed in accordance with its terms.
"CREDIT AGREEMENT NOTES" shall have the meaning assigned thereto in the
Recitals hereof.
"DEFAULT" shall mean any event or condition, the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
"EVENT OF DEFAULT" shall mean any event or occurrence which would
constitute an "Event of Default" under the terms of the Credit Agreement, the
Note Purchase and Guarantee Agreement or any Additional Facility.
"GUARANTORS" shall have the meaning assigned thereto in the Recitals
hereof.
"LENDERS" shall have the meaning assigned thereto in the Introductory
Paragraph hereof.
"LIEN" upon the property or assets (or the income or profits therefrom)
of any Person shall mean (in each case, whether the same is consensual or
non-consensual or arises by contract, operation of law, legal process or
otherwise) any mortgage, lien, pledge, attachment, charge or other security
interest or encumbrance or other type of preferential arrangement of any kind on
or in respect of any property of such Person, or upon the income or profits
therefrom, including, without limitation, the lien or retained security title of
a conditional vendor and any covenant, right of way or other encumbrance on
title to real property.
-3-
<PAGE>
"LOAN DOCUMENTS" shall mean the Credit Agreement, the Credit Agreement
Notes, the Security Documents and all other mortgages, security agreements,
documents, certificates and instruments relating to, arising out of, or in any
way connected therewith or any of the transactions contemplated thereby.
"MAKE-WHOLE AMOUNT" shall have the meaning assigned thereto in Section
8.7 of the Note Purchase and Guarantee Agreement.
"NOTE PURCHASE AND GUARANTEE AGREEMENT" shall have the meaning assigned
thereto in the Recitals hereof, and shall include such agreements as amended or
modified in accordance with their respective terms.
"NOTEHOLDERS" shall have the meaning assigned thereto in the
Introductory Paragraph hereof.
"NOTICE OF DEFAULT" shall mean a notice pursuant to SECTION 5.2 hereof
from the Collateral Agent or the Required Secured Parties to the Secured Parties
of the occurrence of a Default, an Event of Default or a Special Event of
Default.
"PERSON" shall mean an individual, corporation, partnership, trust or
unincorporated organization, and a government or agency or political subdivision
thereof.
"PLEDGE AGREEMENT" shall mean the Amended and Restated Pledge Agreement
dated as of June 1, 1999 among the Company, the Pledgors (as therein defined)
and the Collateral Agent.
"REQUIRED SECURED PARTIES" shall mean (a) Noteholders holding more than
50% of the outstanding principal amount of the Senior Secured Notes, (b) Lenders
holding more than 50% of the sum of (1) the outstanding principal amount of the
Credit Agreement Notes, and (2) the unborrowed portion of the Commitment that
would be permitted to be borrowed by the Company under the provisions of the
Credit Agreement on the date of determination of "REQUIRED SECURED PARTIES" and
(c) those Additional Creditors holding more than 50% of the outstanding
principal amount of the Additional Funded Debt which are not affiliated with the
Company.
"SECURED PARTY" shall mean any Lender, any Noteholder, any Additional
Creditor and any permitted successor and assign to the interests in the Senior
Secured Obligations owing to any such Lender, Noteholder or Additional Creditor,
and "SECURED PARTIES" shall mean all Secured Parties, collectively.
"SECURITY" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"SECURITY AGREEMENT" shall mean the Amended and Restated Security
Agreement dated as of June 1, 1999 among the Company, the Guarantors (as therein
defined) and the Collateral Agent.
"SECURITY DOCUMENTS" shall mean the Security Agreement, the Pledge
Agreement, any Hedging Agreements (as defined in the Credit Agreement), the
guarantees executed, delivered and granted by the Guarantors by Section 22 of
the Note Purchase and Guarantee Agreement, the guarantees executed, delivered
and granted by the Guarantors as evidenced under Section 4 of
-4-
<PAGE>
the Credit Agreement, any and all other agreements, documents and instruments
granting to the Collateral Agent Liens to secure the Senior Secured Obligations,
whether now or hereafter executed, each as amended or amended and restated in
conjunction herewith, or as may be amended from time to time hereafter in
accordance with the terms hereof, and any and all ancillary documents and
instruments relating thereto such as stock powers and financing statements and
all extensions, renewals, amendments, substitutions and replacements to and of
any of the foregoing; PROVIDED, HOWEVER, that Security Documents shall not
include the Credit Agreement, the Credit Agreement Notes, the Note Purchase and
Guarantee Agreement, the Senior Secured Notes or the Additional Facilities.
"SENIOR NOTE DOCUMENTS" shall mean the Note Purchase and Guarantee
Agreement, the Senior Secured Notes, the Security Documents and all other
mortgages, security agreements, documents, certificates and instruments relating
to, arising out of, or in any way connected therewith or any of the transactions
contemplated thereby.
"SENIOR PREFERENTIAL PAYMENT" shall mean any payments, or proceeds of
the Collateral, from the Company or any other source with respect to the Senior
Secured Obligations (including from the exercise of any set-off) which are:
(a) received by a Secured Party within 90 days prior to (1) the
commencement of a Bankruptcy Proceeding with respect to the Company or
(2) the acceleration of the Senior Secured Notes or the obligations
under the Credit Agreement and the Credit Agreement Notes, and which
payment reduces the amount of the Senior Secured Obligations owed to
such Secured Party below the amount owed to such Secured Party as of
the 90th day prior to such commencement or acceleration,
(b) received by a Secured Party (1) within 90 days prior to the
occurrence of any Event of Default which has not been waived or cured
within 30 days after the occurrence thereof and which payment reduces
the amount of the Senior Secured Obligations owed to such Secured Party
below the amount owed to such Secured Party as of the 90th day prior to
the occurrence of such Event of Default or (2) within 30 days after the
occurrence of such Event of Default, or
(c) received by a Secured Party after the occurrence of a Special
Event of Default except as provided in SECTION 5.11(b).
"SENIOR SECURED NOTES" shall have the meaning assigned thereto in the
Recitals hereof.
"SENIOR SECURED OBLIGATIONS" shall mean collectively the indebtedness,
obligations and liabilities of the Company to the Lenders under the Loan
Documents (whether for principal, interest, fees, expenses or otherwise), the
indebtedness, obligations and liabilities of the Company to the Noteholders
under the Senior Note Documents (including, but not limited to, all unpaid
principal of, premium, if any, and accrued and unpaid interest on the Senior
Secured Notes) and the indebtedness, obligations and liabilities of the Company
to the Additional Creditors under the Additional Facilities, in each case
whether now existing or hereafter arising, joint or several, direct or indirect,
absolute or contingent, due or to become due, matured or unmatured, liquidated
or unliquidated, arising by contract, operation of law or otherwise, and all
obligations of the Company to the Secured Parties or the Collateral Agent
arising out of any extension, refinancing or refunding of any of the foregoing
obligations.
-5-
<PAGE>
"SPECIAL EVENT OF DEFAULT" shall mean (a) the commencement of a
Bankruptcy Proceeding with respect to the Company, (b) any other Event of
Default which has not been waived or cured within 30 days after the occurrence
thereof, or (c) the acceleration of the Senior Secured Notes or the obligations
under the Credit Agreement and the Credit Agreement Notes or under the
Additional Facilities.
"SPECIAL TRUST ACCOUNT" shall mean that certain restricted account
maintained by the Collateral Agent for the purpose of receiving and holding
Senior Preferential Payments.
The term "SUBSIDIARY" shall mean as to any particular parent
corporation or partnership, any corporation of which more than 50% (by number of
votes) of the Voting Stock shall be beneficially owned, directly or indirectly,
by such parent corporation or partnership. The term "SUBSIDIARY" shall mean a
subsidiary of the Company.
"VOTING STOCK" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
SECTION 1.2. EFFECTIVENESS OF THIS AGREEMENT. The effectiveness of this
Agreement is conditioned upon the execution and delivery of (a) this Agreement
by the Collateral Agent, the Agent, the Lenders and the Noteholders, (b) the
execution, delivery and effectiveness of the Note Purchase and Guarantee
Agreement, the Fourth Amendment to the Credit Agreement and the Security
Documents by the parties thereto and (c) the execution and delivery of the
Acknowledgment of this Agreement by the Company.
SECTION 2. RELATIONSHIPS AMONG SECURED PARTIES.
SECTION 2.1. RESTRICTIONS ON ACTIONS. Each Secured Party agrees that,
so long as any Senior Secured Obligations are outstanding or available, the
provisions of this Agreement shall provide the exclusive method by which any
Secured Party may exercise rights and remedies under the Security Documents.
Therefore, each Secured Party shall, for the mutual benefit of all Secured
Parties, except as permitted under this Agreement:
(a) refrain from taking or filing any action, judicial or
otherwise, to enforce any rights or pursue any remedy under the
Security Documents, except for delivering notices hereunder;
(b) refrain from (1) selling any Senior Secured Obligations to the
Company or any Affiliate of the Company (except as set forth in Section
8.3 of the Note Purchase and Guarantee Agreement) and (2) accepting any
guaranty (other than the guarantees contemplated by the Note Purchase
and Guarantee Agreement and the Credit Agreement) of, or any other
security for, the Senior Secured Obligations from the Company or any
Affiliate of the Company, except any guaranty or security granted to
the Collateral Agent for the benefit of all Secured Parties; and
(c) refrain from exercising any rights or remedies under the
Security Documents which have or may have arisen or which may arise as
a result of a Default or Event of Default or otherwise;
-6-
<PAGE>
PROVIDED, HOWEVER, that nothing contained in subsections (a) through (c) above,
shall prevent any Secured Party from imposing a default rate of interest in
accordance with the Credit Agreement or the Note Purchase and Guarantee
Agreement, as applicable, or prevent a Secured Party from raising any defenses
in any action in which it has been made a party defendant or has been joined as
a third party, except that the Collateral Agent may, but shall not be obligated
to, direct and control any defense directly relating to the Collateral or any
one or more of the Security Documents, which shall be governed by the provisions
of this Agreement.
SECTION 2.2. REPRESENTATIONS AND WARRANTIES. (a) Each of the Secured
Parties represents and warrants to the other parties hereto that:
(1) It (i) is either (x) a corporation duly organized, existing
and in good standing under the laws of the jurisdiction of its
incorporation or (y) a national banking association duly incorporated
and existing under the laws of the United States of America, and (ii)
has all requisite power (corporate or otherwise) to own its property
and conduct its business as now conducted and as presently
contemplated.
(2) The execution, delivery and performance by such Secured Party
of this Agreement has been authorized by all necessary proceedings
(corporate or otherwise) and does not and will not contravene any
provision of law, its charter or by-laws or any amendment thereof, or
of any indenture, agreement, instrument or undertaking binding upon
such Secured Party.
(3) The execution, delivery and performance by such Secured Party
of this Agreement will result in a valid and legally binding obligation
of such Secured Party enforceable in accordance with its terms.
(b) The Collateral Agent hereby represents and warrants that:
(1) The Collateral Agent is a national association duly organized,
validly existing, and in good standing under the laws of the United
States.
(2) The Collateral Agent has full power, authority and legal right
under the laws of the United States to execute, deliver, and perform
this Agreement and has taken all necessary action to authorize the
execution, delivery, and performance by it of this Agreement.
(3) The execution, delivery and performance by the Collateral
Agent of this Agreement and the Security Documents to which it is a
party will not contravene any law, rule or regulation of the United
States or any United States government authority or agency regulating
the Collateral Agent's banking or trust powers or any judgment or order
applicable to or binding on the Collateral Agent and will not
contravene or result in any breach of, or constitute a default under,
the Collateral Agent's articles of association or by-laws or the
provision of any indenture, mortgage, contract or other agreement to
which it is a party or by which it or any of its properties is bound.
(4) The execution, delivery and performance by the Collateral
Agent of this Agreement and the Security Documents to which it is a
party will not require the authorization, consent, or approval of, the
giving of notice to, the filing or registration
-7-
<PAGE>
with, or the taking of any other action in respect of, any governmental
authority or agency.
(5) This Agreement and the Security Documents to which it is a
party have been duly executed and delivered by the Collateral Agent and
constitute the legal, valid, and binding agreements of the Collateral
Agent, enforceable in accordance with their respective terms, subject
to bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered
in a proceeding in equity or at law).
SECTION 2.3. COOPERATION; ACCOUNTINGS. Each of the Secured Parties
will, upon the reasonable request of another Secured Party, from time to time
execute and deliver or cause to be executed and delivered such further
instruments, and do and cause to be done such further acts as may be necessary
or proper to carry out more effectively the provisions of this Agreement. The
Secured Parties agree to provide to each other upon reasonable request a
statement of all payments received in respect of Senior Secured Obligations.
SECTION 2.4. TERMINATION OF CREDIT AGREEMENT, NOTE PURCHASE AND
GUARANTEE AGREEMENT OR ADDITIONAL FACILITIES. Upon final payment in full of all
Senior Secured Obligations owing to any Secured Party, and, in the case of any
Lender, after the termination of such Lender's ratable share of the Commitment,
such Secured Party shall cease to be a party to this Agreement; PROVIDED,
HOWEVER, if all or any part of any payments to such Secured Party are
invalidated or set aside or required to be repaid to any Person in any
Bankruptcy Proceeding or otherwise, then this Agreement shall be renewed as of
such date and shall thereafter continue in full force and effect to the extent
of the Senior Secured Obligations so invalidated, set aside or repaid.
SECTION 2.5. ADDITIONAL CREDITOR. Additional Creditors may, upon
compliance with the relevant provisions of the Note Purchase and Guarantee
Agreement, the Credit Agreement and any outstanding Additional Facility, become
"Secured Parties" hereunder by executing and delivering to each of the then
existing Secured Parties (a) a copy of this Agreement so executed and (b) a copy
of the Additional Facility or Additional Facilities to which such Person is a
party. Accordingly, upon the execution and delivery of any such copy of this
Agreement by any such Person, such Person, shall, upon delivery thereof to the
then existing Secured Parties, thereinafter become a Secured Party for all
purposes of this Agreement.
SECTION 3. APPOINTMENT AND AUTHORIZATION OF COLLATERAL AGENT.
(a) Each Secured Party hereby irrevocably designates and appoints
NationsBank as the Collateral Agent of such Secured Party under this
Agreement and the Security Documents, and each Secured Party hereby
irrevocably authorizes NationsBank as the Collateral Agent for such
Secured Party to execute and enter into each of the Security Documents
and all other instruments relating to said Security Documents and (i)
to take action on its behalf and exercise such powers as are expressly
permitted hereunder and under the Security Documents and all
instruments relating hereto and thereto and (ii) to exercise such
powers and perform such duties as are, in each case, expressly
delegated to the Collateral Agent by the terms hereof and thereof
together with such other powers as are reasonably incidental hereto and
thereto.
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(b) Notwithstanding any provision to the contrary elsewhere in
this Agreement or the Security Documents, the Collateral Agent shall
not have any duties or responsibilities except those expressly set
forth herein or therein or any fiduciary relationship with any Secured
Party, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any
Security Document or otherwise exist against the Collateral Agent.
SECTION 4. AGENCY PROVISIONS.
SECTION 4.1. DELEGATION OF DUTIES. The Collateral Agent may exercise
its powers and execute any of its duties under this Agreement and the Security
Documents by or through employees, agents or attorneys-in-fact and shall be
entitled to take and to rely on advice of counsel concerning all matters
pertaining to such powers and duties. The Collateral Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care. The Collateral Agent may utilize the
services of such Persons as the Collateral Agent in its sole discretion may
determine, and all reasonable fees and expenses of such Persons shall be borne
by the Company.
SECTION 4.2. EXCULPATORY PROVISIONS. Neither the Collateral Agent nor
any of the Collateral Agent's officers, directors, employees, agents,
attorneys-in-fact or Affiliates (or officers, directors, employees, agents or
attorneys-in-fact of such Affiliates) shall be (a) liable for any action taken
or omitted to be taken by it or such Person under or in connection with this
Agreement or any Security Document or any Collateral (except for its or such
Person's own gross negligence or willful misconduct), or (b) responsible in any
manner to any of the Secured Parties for any recitals, statements,
representations or warranties made by the Company or any officer thereof
contained in, or made or deemed made in connection with, any Loan Document,
Senior Note Document, Additional Facility Document or Security Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Collateral Agent under or in connection with, this
Agreement or any Loan Document, Senior Note Document, Additional Facility
Document or Security Document, or for the due execution, legality, value,
validity, effectiveness, genuineness, enforceability or sufficiency of the Loan
Documents, the Senior Note Documents, Additional Facility Document or the
Security Documents or any other document or instrument furnished pursuant
thereto or for any failure of the Company to perform its obligations thereunder.
The Collateral Agent shall be under no obligation to the Secured Parties to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, statements made in, or conditions of, the Loan
Documents, the Senior Note Documents, the Additional Facility Documents or the
Security Documents or to inspect the property (including the books and records)
of the Company.
SECTION 4.3. RELIANCE BY COLLATERAL AGENT The Collateral Agent shall be
entitled to rely, and shall be fully protected and shall incur no liability in
acting and relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation reasonably believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Company), independent accountants and other
experts selected by the Collateral Agent. Without limiting the generality of the
foregoing, the Collateral Agent may treat the payee of any Credit Agreement
Note, any Senior Secured Note or any Additional Facility Note as the registered
holder thereof until it receives notice or otherwise has actual knowledge that
such payee is no longer the registered holder of such Credit Agreement Note,
such Senior Secured
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Note or such Additional Facility Note. Notwithstanding anything to the contrary
contained herein or in any Security Document, the Collateral Agent shall be
fully justified in failing or refusing to take action that is contrary to this
Agreement, the Security Documents or applicable law or to take any other action
under this Agreement or the Security Documents (including, without limitation,
the exercise of any rights or remedies under, or the entering into of any
agreement amending, modifying, supplementing, waiving any provision of, or the
giving of consent pursuant to, any of the Security Documents) unless it shall
first receive instructions of the Required Secured Parties as is contemplated by
Section 5 hereof and it shall first be indemnified to its reasonable
satisfaction by the Secured Parties against any and all liability and expense
which may be incurred by it by reason of taking, continuing to take or
refraining from taking any such action. The Collateral Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and the Security Documents in accordance with the provisions of Section 5.5
hereof AND in accordance with written instructions of the Required Secured
Parties pursuant to SECTION 5.3 hereof, and such instructions and any action
taken or failure to act pursuant thereto shall be binding upon all the Secured
Parties and all other holders from time to time of the Credit Agreement Notes,
the Senior Secured Notes and the Additional Facility Notes.
SECTION 4.4. KNOWLEDGE OR NOTICE OF DEFAULT, EVENT OF DEFAULT OR
SPECIAL EVENT OF DEFAULT. The Collateral Agent shall not be deemed to have
actual, constructive, direct or indirect knowledge or notice of the occurrence
of any Default, Event of Default or Special Event of Default unless and until
the Collateral Agent has received written notice from a Secured Party or the
Company referring to the Credit Agreement, the Note Purchase and Guarantee
Agreement or the Additional Facilities, describing such Default, Event of
Default or Special Event of Default, setting forth in reasonable detail the
facts and circumstances thereof and stating that the Collateral Agent may rely
on such notice without further inquiry; PROVIDED that if NationsBank is the
Collateral Agent hereunder, the Collateral Agent shall be deemed to have actual
knowledge and notice of the occurrence of any Default or Event of Default (as
defined in the Credit Agreement) under the Credit Agreement if the Agent or the
Collateral Agent has actual knowledge of such Default or Event of Default or has
declared an Event of Default under the Credit Agreement. The Collateral Agent
shall have no obligation or duty prior to or after receiving any such notice to
inquire whether a Default, Event of Default or Special Event of Default has in
fact occurred and shall be entitled to rely, and shall be fully protected in so
relying, on any such notice furnished to it.
SECTION 4.5. NON-RELIANCE ON COLLATERAL AGENT AND OTHER SECURED
PARTIES. Each Secured Party expressly acknowledges that, except as expressly set
forth in this Agreement, neither the Collateral Agent nor any of the Collateral
Agent's officers, directors, employees, agents, attorneys-in-fact or Affiliates
(or officers, directors, employees, agents or attorneys-in-fact of such
Affiliates) has made any representations or warranties to it and that no act by
the Collateral Agent hereinafter taken, including any review of the affairs of
the Company, shall be deemed to constitute any representation or warranty by the
Collateral Agent to any Secured Party. Each Secured Party represents that it
has, independently and without reliance upon the Collateral Agent or any other
Secured Party, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Company and made its own decision to enter into this Agreement, the Loan
Documents, the Senior Note Documents and the Additional Facilities. Each Secured
Party also represents that it will, independently and without reliance upon the
Collateral Agent or any other Secured Party, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
the Loan Documents, the Senior Note Documents, the Additional Facilities
and the Security
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Documents and this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and credit-worthiness of the Company. Except for notices,
reports and other documents expressly required to be furnished to the Secured
Parties by the Collateral Agent hereunder, the Collateral Agent shall not have
any duty or responsibility to provide the Secured Parties with any credit or
other information concerning the business, operations, property, financial and
other condition or credit-worthiness of the Company which may come into the
possession of the Collateral Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
SECTION 4.6. INDEMNIFICATION. The Secured Parties agree to indemnify
the Collateral Agent in its capacity as such (to the extent not reimbursed by
the Company and without limiting any obligation of the Company to do so),
ratably according to the Secured Parties' respective share of (a) the aggregate
outstanding principal amount of the Credit Agreement Notes plus the unborrowed
portion of the Commitment that would be permitted to be borrowed by the Company
under the provisions of the Credit Agreement at such time, and (b) the aggregate
outstanding principal amount of the Senior Secured Notes and (c) the aggregate
outstanding principal amount of the Additional Facility Notes, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Senior Secured Obligations) be imposed on, incurred by or
asserted against the Collateral Agent in any way relating or arising out of any
of the Loan Documents, the Senior Note Documents, the Additional Facilities or
the Security Documents or actions or omissions of the Collateral Agent
specifically required by this Agreement or permitted pursuant to SECTION 5.3,
SECTION 5.5 or SECTION 5.7 or specifically directed by written instructions of
the Required Secured Parties pursuant to Section 5.3 hereof (including, without
limitation, costs incurred in accordance with the provisions of SECTION 4.1);
provided that no Secured Party shall be liable for the payment of any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from the Collateral
Agent's gross negligence or willful misconduct. The agreements in this SECTION
4.6 shall survive the payment of the Senior Secured Obligations.
SECTION 4.7. COLLATERAL AGENT IN ITS INDIVIDUAL CAPACITY. NationsBank
and its Affiliates may make loans to and generally engage in any kind of
business with the Company as though such Person was not the Collateral Agent
hereunder and without any duty to account therefor to the Secured Parties. With
respect to any Credit Agreement Note issued to it and advances made by it under
the Credit Agreement, NationsBank shall have the same rights and powers under
this Agreement as any Secured Party and may exercise the same as though it were
not the Collateral Agent, and the terms "SECURED PARTY" and "SECURED PARTIES"
shall include NationsBank in its individual capacity.
SECTION 4.8. SUCCESSOR COLLATERAL AGENT. (a) The Collateral Agent may
resign at any time upon sixty days' notice to the Secured Parties and the
Company and may be removed at any time, with or without cause, by the Required
Secured Parties by written notice delivered to the Company, the Collateral Agent
and the Secured Parties. If the Collateral Agent is also a Lender, then the
Noteholders may remove the Collateral Agent at any time upon a vote of the
holders of 66-2/3% or more of the aggregate principal amount of outstanding
Senior Secured Notes. If the Collateral Agent is also a Noteholder, then the
Lenders may remove the Collateral Agent at any time upon a vote of the holders
of 66-2/3% or more of the Indebtedness evidenced by the Credit Agreement. After
any resignation or removal hereunder of the Collateral Agent, the provisions of
this Section 4 shall continue to inure to its benefit as to any actions taken or
omitted to be taken by it
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in connection with its agency hereunder while it was the Collateral Agent under
this Agreement and it shall be entitled to be paid promptly when due any amounts
owing to it pursuant to SECTION 4.6.
(b) Upon receiving notice of any such resignation or removal, a
successor Collateral Agent shall be appointed by the Required Secured
Parties; PROVIDED, HOWEVER, that such successor Collateral Agent shall
be (i) a bank or trust company having a combined capital and surplus of
at least $500,000,000, subject to supervision or examination by a
federal or state banking authority; and (ii) authorized under the laws
of the jurisdiction of its incorporation or organization to assume the
functions of the Collateral Agent. If the appointment of such successor
shall not have become effective (as hereafter provided) within such
sixty day period after the Collateral Agent's resignation or upon
removal of the Collateral Agent, then the Collateral Agent may assign
the Liens and its duties hereunder and under the Security Documents to
the Secured Parties, as their interests may appear, and in such case
all references herein to "Collateral Agent" shall be deemed to refer to
"Required Secured Parties." Any Secured Party may petition a court of
competent jurisdiction for the appointment of a successor Collateral
Agent. Such court shall, after such notice as it may deem proper,
appoint a successor Collateral Agent meeting the qualifications
specified in this SECTION 4.8(b). The Secured Parties hereby consent to
such petition and appointment so long as such criteria are met.
(c) The resignation or removal of a Collateral Agent shall become
effective upon the execution and delivery of such documents or
instruments as are necessary to transfer the rights and obligations of
the Collateral Agent under the Security Documents, including, without
limitation, the delivery and recordation of all amendments,
instruments, mortgages, financing statements, continuation statements
and other documents necessary to maintain the perfection of the
security interests held by the Collateral Agent hereunder. Copies of
each such document or instrument shall be delivered to all Secured
Parties. The appointment of a successor Collateral Agent pursuant to
this SECTION 4.8 shall become effective upon the acceptance of the
appointment as Collateral Agent hereunder by a successor Collateral
Agent. Upon such effective appointment, the successor Collateral Agent
shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent and the retiring
Collateral Agent shall be discharged from its rights, powers,
privileges and duties under this Agreement and the other Security
Documents, but shall remain liable for (subject to the terms of this
SECTION 4) its actions prior to and including such date of discharge.
SECTION 5. ACTIONS BY THE COLLATERAL AGENT.
SECTION 5.1. DUTIES AND OBLIGATIONS. The duties and obligations of the
Collateral Agent are only those set forth in this Agreement and in the Security
Documents.
SECTION 5.2. NOTIFICATION OF DEFAULT. If the Collateral Agent has been
notified in a writing conforming to the requirements of SECTION 4.4 by any
Secured Party that a Default, an Event of Default or a Special Event of Default
has occurred, the Collateral Agent shall furnish to the Secured Parties a copy
of such written notice and may, but is under no obligation to, furnish to the
Company a copy of the notice received by the Collateral Agent and a copy of the
Collateral Agent's notice to the Secured Parties. The failure of any Secured
Party having knowledge of the occurrence of a Default, an Event of Default or a
Special Event of Default to notify the Collateral Agent or any Secured Party of
such occurrence, however, does not constitute a waiver of such Default, Event of
Default or a Special Event of Default by the Secured Parties. Upon receipt of a
notice conforming to the requirements of SECTION 4.4 from a Secured Party of the
occurrence of a Default, an Event of Default or a Special Event of Default, the
Collateral Agent shall (in addition
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to the action required by the first sentence of this Section 5.2) promptly (and
in any event no later than three Business Days after receipt of such notice)
issue its Notice of Default to all Secured Parties. Such Notice of Default shall
indicate whether such Default or Event of Default is a Special Event of Default.
The Notice of Default may contain a recommendation of actions to be taken by the
Secured Parties and/or request instructions from the Secured Parties and shall
specify the date on which responses are due in order to be timely within
Section 5.4 hereof. If time is not of the essence, the Collateral Agent shall
deliver a duplicate Notice of Default to those Secured Parties which have not
responded in such timely manner.
SECTION 5.3. EXERCISE OF REMEDIES. Except as otherwise provided in
Section 5.5, the Collateral Agent shall take only such actions and exercise only
such remedies under the Security Documents as are specifically directed in
written instructions delivered to the Collateral Agent and signed by the
Required Secured Parties. In the event that the Collateral Agent shall determine
in good faith that taking the actions specified in such instructions is contrary
to law, it may refrain (and shall be fully protected in so refraining) from
taking such action and shall immediately give notice of such fact to each of the
Secured Parties. In the event that instructions received by the Collateral Agent
are in its good faith judgment ambiguous or conflict with other instructions
received by the Collateral Agent, the Collateral Agent (a) shall promptly notify
the Secured Parties of such ambiguity or conflict and request clarifying
instructions, and (b) may either (1) delay taking any such action or exercising
any such remedy pending the receipt of such clarifying instructions (and shall
be fully protected in so delaying) or (2) take such actions as it is entitled
under SECTION 5.5. In the event the Collateral Agent does not comply with such
written instructions, the Collateral Agent may be removed pursuant to SECTION
4.8 hereof or the Required Secured Parties shall be authorized to act on the
Collateral Agent's behalf.
SECTION 5.4. INSTRUCTIONS FROM SECURED PARTIES. If any Secured Party
does not respond in a timely manner to any notice (including, without
limitation, a Notice of Default) from the Collateral Agent or request for
instructions within the time period specified by the Collateral Agent in such
notice or request for instructions (which shall be a minimum of five Business
Days for each notice delivered), such Secured Party shall be deemed to have
given a negative response to such notice or request. Any action properly taken
or not taken without the affirmative vote of a Secured Party or Secured Parties
hereunder shall nevertheless be binding on such Secured Party or Secured
Parties.
SECTION 5.5. EMERGENCY ACTIONS. If the Collateral Agent has asked the
Secured Parties for instruction and if the Required Secured Parties have not yet
responded to such request, the Collateral Agent shall be authorized to take, but
shall not be required to take and shall in no event have any liability for the
taking or the failure to take, such actions (other than any action described or
permitted under SECTION 5.7 hereof) with regard to a Default, Event of Default
or a Special Event of Default which the Collateral Agent, in good faith,
believes to be reasonably required prior to the receipt of such instructions on
an emergency basis to promote and protect the interests of the Secured Parties
and to maximize both the value of the Collateral and the present value of the
recovery by the Secured Parties on the Senior Secured Obligations and shall give
the Secured Parties appropriate notice of such action; PROVIDED that once
instructions with respect to such request have been received by the Collateral
Agent from the Required Secured Parties, the actions of the Collateral Agent
shall be governed thereby and the Collateral Agent shall not take any further
action which would be contrary thereto .
SECTION 5.6. CHANGES TO SECURITY DOCUMENTS Any term of the Security
Documents may be amended, and the performance or observance by the parties to a
Security Document of
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any term of such Security Document may be waived (either generally or in a
particular instance and either retroactively or prospectively) by the Collateral
Agent only upon the written consent of the Required Secured Parties; PROVIDED
that no amendment to the Security Documents which directly or indirectly narrows
the description of the Collateral or the obligations being secured thereby,
changes the priority of payments to the Secured Parties or the Collateral Agent
under the Security Documents or amends the definition of "REQUIRED SECURED
PARTIES" may be made without the written consent of all of the Secured Parties.
SECTION 5.7. RELEASE OF COLLATERAL. (a) Unless a Default has occurred
and is continuing, the Collateral Agent may, without the approval of the Secured
Parties as otherwise required by Section 5.3 hereof, release any Collateral
under the Security Documents which is permitted to be sold or disposed of by the
Company pursuant to both the Credit Agreement and the Note Purchase and
Guarantee Agreement and execute and deliver such releases as may be necessary to
terminate of record the Secured Parties' security interest in such Collateral.
In determining whether any such release is permitted, the Collateral Agent may
rely upon instructions from the Required Lenders (as defined in the Credit
Agreement) as to the Credit Agreement or Noteholders holding more than 50% of
the outstanding principal amount of the Senior Secured Notes as to the Note
Purchase and Guarantee Agreement.
(b) The release of any Collateral (other than a release permitted by
(a) above) by the Collateral Agent shall be prohibited unless the Required
Secured Parties expressly consent in writing thereto and unless all of the terms
relating to and conditions precedent to such release set forth in the Note
Purchase and Guarantee Agreement and the Credit Agreement have been satisfied in
full.
SECTION 5.8. OTHER ACTIONS. Except as set forth in SECTION 5.5 hereof,
the Collateral Agent shall only have the right to take such actions, or omit to
take such actions, hereunder and under the Security Documents which are (i)
specifically directed by the written instructions of the Required Secured
Parties delivered pursuant to SECTION 5.3 hereof or the terms of this Agreement
or (ii) actions the Collateral Agent deems necessary or appropriate to perfect
or continue the perfection of the Liens on the Collateral for the benefit of the
Secured Parties.. Except as otherwise provided by applicable law, the Collateral
Agent shall have no duty as to any Collateral, the collection or protection of
the Collateral or any income thereon (including any duty to ascertain or take
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Collateral, whether or not the Collateral Agent
has or is deemed to have knowledge of such matters), nor as to the preservation
of rights against prior parties, nor as to the preservation of rights pertaining
to the Collateral beyond the safe custody of any Collateral in the Collateral
Agent's actual possession.
SECTION 5.9. COOPERATION. To the extent that the exercise of the
rights, powers and remedies of the Collateral Agent in accordance with this
Agreement requires that any action be taken by any Secured Party, such Secured
Party shall take such action and cooperate with the Collateral Agent to ensure
that the rights, powers and remedies of all Secured Parties are exercised in
full.
SECTION 5.10. DISTRIBUTION OF PROCEEDS. All amounts owing with respect
to the Senior Secured Obligations shall be secured pro rata by the Collateral
without distinction as to whether some Senior Secured Obligations are then due
and payable and other Senior Secured Obligations are not then due and payable.
Upon any realization upon the Collateral, the Secured Parties agree that the
proceeds thereof shall be applied (a) FIRST, to the amounts owing to the
Collateral
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Agent by the Company or the Secured Parties solely in its capacity as
Collateral Agent hereunder pursuant to this Agreement or the Security
Documents; (b) SECOND, ratably to the payment of all amounts of interest
(other than any Make-Whole Amount) outstanding which constitute the Senior
Secured Obligations according to the aggregate amounts of such interest then
owing to each Secured Party; (C) THIRD, ratably to all amounts of principal
outstanding under the Senior Secured Obligations according to the aggregate
amounts of such principal then owing to each Secured Party including the cash
collateralization or payment of obligations of the Company under the Credit
Agreement relating to Letters of Credit issued thereunder; (d) FOURTH,
ratably to all other amounts then due to the Secured Parties under the Credit
Agreement, the Note Purchase and Guarantee Agreement and the Additional
Facilities (including fees, expenses and premiums, including Make-Whole
Amounts, if any) (e) FIFTH, the balance, if any, shall be returned to the
Company or such other Persons as are entitled thereto. Upon the request of
the Collateral Agent prior to any distribution under this SECTION 5.10, each
Secured Party shall provide to the Collateral Agent certificates, in form and
substance reasonably satisfactory to the Collateral Agent, setting forth the
respective amounts referred to in clauses (b) through (d) above which each
such Secured Party believes it is entitled to receive.
SECTION 5.11. SENIOR PREFERENTIAL PAYMENTS AND SPECIAL TRUST ACCOUNT.
(a) After the receipt by each Secured Party of a Notice of Default
pursuant to SECTION 5.2 stating that a Special Event of Default has occurred,
all Senior Preferential Payments other than those payments received pursuant
to subsection (b) of this SECTION 5.11 shall be delivered to the Collateral
Agent for deposit into the Special Trust Account.
(b) If (i) such Special Event of Default is waived by the Lenders and
the Noteholders and if no other Event of Default has occurred and is
continuing, (ii) such Special Event of Default is cured by the Company or by
any amendment of the Credit Agreement or the Note Purchase and Guarantee
Agreement, as the case may be, and if no other Event of Default has occurred
and is continuing or (iii) any or all of the Senior Secured Obligations have
not been accelerated and the Required Secured Parties have not instructed the
Collateral Agent to foreclose on a substantial portion of the Collateral,
seek the appointment of a receiver, commence litigation against the Company,
liquidate the Collateral, commence a Bankruptcy Proceeding against the
Company, seize Collateral, or exercise other remedies of similar character
prior to the 180th day following such Special Event of Default, the
Collateral Agent thereupon shall return all amounts, together with their pro
rata share of any interest earned thereon, held in the Special Trust Account
representing payment of any Senior Secured Obligations to the Secured Party
initially entitled thereto, and no payments thereafter received by a Secured
Party shall constitute a Senior Preferential Payment by reason of such cured
or waived Special Event of Default. No payment returned to a Secured Party
for which such Secured Party has been obligated to make a deposit into the
Special Trust Account shall thereafter ever be characterized as a Senior
Preferential Payment.
(c) Each Secured Party agrees that upon the occurrence of a Special
Event of Default it shall (i) promptly notify the Collateral Agent of the
receipt of any Senior Preferential Payments, (ii) hold such amounts in trust
for the Secured Parties and act as agent of the Secured Parties during the
time any such amounts are held by it, and (iii) deliver promptly to the
Collateral Agent such amounts for deposit into the Special Trust Account as
soon as practicable.
(d) If the Senior Secured Obligations have been accelerated or the
Required Secured Parties have instructed the Collateral Agent to foreclose on
a substantial portion of the Collateral,
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seek the appointment of a receiver, commence litigation against the Company,
liquidate the Collateral, commence a Bankruptcy Proceeding against the
Company, seize Collateral, or exercise other remedies of similar character,
then all funds, together with interest earned thereon, held in the Special
Trust Account and all subsequent Senior Preferential Payments shall be
applied in accordance with the provisions of SECTION 5.10 above.
SECTION 5.12. AUTHORIZED INVESTMENTS. Any and all funds held by the
Collateral Agent in its capacity as Collateral Agent, whether pursuant to any
provision of this Agreement or any of the Security Documents, shall to the
extent feasible within a reasonable time be invested by the Collateral Agent in
Cash Equivalent Investments. Prior to making such investment or to the extent it
is not feasible to invest such funds in Cash Equivalent Investments, the
Collateral Agent shall hold any such funds in an interest bearing account. Any
interest earned on such funds shall be disbursed to the Secured Parties in
accordance with SECTION 5.10 or SECTION 5.11, as applicable. The Collateral
Agent shall have no duty to place funds held and invested pursuant to this
SECTION 5.12 in investments which provide a maximum return. The Collateral Agent
shall not be responsible for any loss of any funds invested in accordance with
this SECTION 5.12.
SECTION 5.13. RESTORATION OF OBLIGATIONS. For the purposes of
determining the amount of outstanding Senior Secured Obligations, if any Secured
Party is required to deposit any Senior Preferential Payment in the Special
Trust Account, then the obligations intended to be satisfied by such Senior
Preferential Payment shall be revived, as of the date of the deposit of such
amount with the Collateral Agent, in the amount of such Senior Preferential
Payment and such obligation shall continue in full force and effect (and bear
interest from such deposit date at the non-default rate as provided in the
Senior Secured Notes, in the Credit Agreement, or in the Additional Facility as
the case may be) as if such Secured Party had not received such payment. All
such revived obligations shall be included as Senior Secured Obligations for
purposes of allocating any payments under SECTION 5.10 and for applying the
definitions of Required Secured Parties and Required Secured Parties. If any
such revived obligation shall not be allowed as a claim under the Bankruptcy
Code due to the fact that the Senior Preferential Payment has in fact been made
by the Company, the Secured Parties shall make such other equitable arrangements
for the purchase and sale of participations in the Senior Secured Obligations to
effectuate the intent of this SECTION 5.13.
SECTION 5.14. BANKRUPTCY, PREFERENCES, ETC. If any payment to a Secured
Party is subsequently invalidated, declared to be fraudulent or preferential or
set aside and is required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or Federal law, common law or equitable cause,
and such Secured Party has previously made a deposit in respect of such payment
into the Special Trust Account pursuant to SECTION 5.11, then the Collateral
Agent shall distribute to such Secured Party proceeds from the Special Trust
Account in an amount equal to such deposit or so much thereof as is affected by
such events and if, due to previous disbursements to the Secured Parties
pursuant to SECTION 5.11(d), the proceeds in the Special Trust Account are
insufficient for such purpose, then each other Secured Party shall pay to such
Secured Party upon demand an amount equal to a ratable portion of such
disbursements of the deposit which was distributed to each such Secured Party
according to the aggregate amounts so distributed to each such Secured Party.
SECTION 6. BANKRUPTCY PROCEEDINGS.
The following provisions shall apply during any Bankruptcy Proceeding
of the Company:
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(a) The Collateral Agent shall represent all Secured Parties in
connection with all matters directly relating to the Collateral,
including without limitation, use, sale or lease of Collateral, use of
cash collateral, relief from the automatic stay and adequate
protection. The Collateral Agent shall act on the instructions of the
Required Secured Parties; PROVIDED that such instructions by the
Required Secured Parties shall not treat any Secured Party differently
with respect to rights in the Collateral from any other Secured Party;
and PROVIDED FURTHER that if action is required prior to the time such
instructions are received or if the Required Secured Parties fail to
give instructions with respect to any matter, the Collateral Agent
shall be authorized to act, or refrain from acting, in accordance with
and pursuant to the terms and provisions of SECTION 5.5 hereof.
(b) Each Secured Party shall be free to act independently on any
issue not directly relating to the Collateral, including without
limitation, matters relating to appointment of a trustee, conversion of
a case, filing of claims, and plans of reorganization. Each Secured
Party shall give prior notice to the Collateral Agent of any action
hereunder to the extent that such notice is possible. If such prior
notice is not given, such Secured Party shall give prompt notice
following any action taken hereunder.
SECTION 7. MISCELLANEOUS
SECTION 7.1. SECURED PARTIES; OTHER COLLATERAL. The Secured Parties
agree that all of the provisions of this Agreement shall apply to any and all
properties, assets and rights of the Company in which the Collateral Agent at
any time acquires a security interest or Lien pursuant to the Security
Documents, the Credit Agreement, the Additional Facilities or the Note Purchase
and Guarantee Agreement, including, without limitation, real property or rights
in, on or over real property, notwithstanding any provision to the contrary in
any mortgage, leasehold mortgage or other document purporting to grant or
perfect any lien in favor of the Secured Parties or any of them or the
Collateral Agent for the benefit of the Secured Parties.
SECTION 7.2. MARSHALLING. The Collateral Agent shall not be required to
marshal any present or future security for (including, without limitation, the
Collateral), or guaranties of, the Senior Secured Obligations or any of them, or
to resort to such security or guaranties in any particular order; and all of
each of such Person's rights in respect of such securities and guaranties shall
be cumulative and in addition to all other rights, however existing or arising.
To the extent that they lawfully may, the Secured Parties hereby agree that they
will not invoke any law relating to the marshalling of collateral which might
cause delay in or impede the enforcement of the Secured Parties' rights under
the Security Documents or under any other instrument evidencing any of the
Senior Secured Obligations or under which any of the Senior Secured Obligations
is outstanding or by which any of the Senior Secured Obligations is secured or
guaranteed.
SECTION 7.3. CONSENTS, AMENDMENTS, WAIVERS. Except as provided in
SECTION 5.7(b), all amendments, waivers or consents of any provision of this
Agreement shall be effective only if the same shall be in writing and signed by
the Required Secured Parties and the Company.
SECTION 7.4. PARTIES IN INTEREST. All terms of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto, including, without limitation, any
future holder of the Credit Agreement Notes, of the Senior Secured Notes or of
the Additional Facility Notes; PROVIDED that no Secured Party
-17-
<PAGE>
may assign or transfer its rights hereunder or under the Security Documents
without such assignees or transferees agreeing, by executing an instrument in
form and substance reasonably acceptable to the Collateral Agent, to be bound by
the terms of this Agreement as though named herein.
SECTION 7.5. COUNTERPARTS. This Agreement and any amendment hereof may
be executed in several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, but all of
which together shall constitute one instrument. In proving this Agreement, it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.
SECTION 7.6. TERMINATION. Upon the later of the payment in full of the
Senior Secured Obligations in accordance with their terms and the termination of
the Commitment this Agreement shall terminate.
SECTION 7.7. NOTICES. Except as otherwise expressly provided herein,
all notices, consents and waivers and other communications made or required to
be given pursuant to this Agreement shall be in writing and shall be delivered
by hand, mailed by United States registered or certified first-class mail,
postage prepaid, or sent by overnight courier or by telecopy, telegraph or telex
and confirmed by letter, addressed as follows:
If to the Collateral Agent at:
NationsBank, N.A.
Independence Center, 15th Floor
NCI-001-1504
101 North Tryon Street
Charlotte, North Carolina 28255
Attention: Agency Services
Telephone: 704-386-8958
Telecopy: 704-386-9923
or at such other address for notice as the Collateral Agent shall last have
furnished in writing to the Person giving the notice; and
If to any Noteholder, at: Such address as set forth on
Schedule I hereto
If to any lender at: Such address as set forth in the
Credit Agreement
If to the Agent, at: NationsBank, N.A.
Independence Center, 15th Floor
NCI-001-1504
101 North Tryon Street
Charlotte, North Carolina 28255
Attention: Agency Services
Telephone: 704-386-8958
Telecopy: 704-386-9923
-18-
<PAGE>
If to the Company, at: ResortQuest International, Inc.
530 Oak Court Drive, Suite 360
Memphis, Tennessee 38117
Attn:
or at such other address for notice as such Secured Party or the Collateral
Agent shall last have furnished in writing to the Person giving such notice.
Any such notice, consent, waiver or demand shall be deemed to have been
duly given or made and to have become effective (a) if delivered by hand to a
responsible officer of the party to which it is directed, at time of the receipt
thereof by such officer, (b) if sent by registered or certified first class
mail, postage prepaid, on the earlier of (i) the time of receipt thereof if a
Business Day or, if not a Business Day, the next succeeding Business Day, or
(ii) five Business Days after the posting thereof, and (c) if sent by telecopy,
telex or cable, at the time of receipt thereof if a Business Day or, if not a
Business Day, the next succeeding Business Day. Notices given by telecopy shall
be promptly confirmed in writing sent by courier.
SECTION 7.8. ESTABLISHING OUTSTANDING AMOUNT OF SENIOR SECURED
OBLIGATIONS. In order to establish what constitutes the Required Secured
Parties, the Collateral Agent may request from time to time, and the Secured
Parties agree to provide, certificates setting forth the amount of Senior
Secured Obligations held or represented by each Secured Party, which
certificates the Collateral Agent shall be entitled to rely upon.
SECTION 7.9. GOVERNING LAW. This Agreement shall be deemed to be a
contract under seal and shall for all purposes be governed by and construed in
accordance with the laws of the State of New York.
-19-
<PAGE>
NATIONSBANK, N.A.,
individually in its capacity as a Lender
and in its capacity as Agent and Collateral
Agent.
By: /s/ John E. Ball
--------------------------------------
Name: John E. Ball
--------------------------------------
Title: SVP
--------------------------------------
Intercreditor Agreement
<PAGE>
SOCIETE GENERAL,
individually in its capacity as a Lender
and in its capacity as Co-Agent
By: /s/ J. Blaine Shaum
-----------------------------------------
Name: J. Blaine Shaum
-----------------------------------------
Title: Managing Director
-----------------------------------------
Intercreditor Agreement
<PAGE>
UNION PLANTERS BANK, N.A.,
as Lender
By: /s/ Elizabeth Rouse
-----------------------------------------
Name: Elizabeth Rouse
-----------------------------------------
Title: Vice President
-----------------------------------------
Intercreditor Agreement
<PAGE>
TEACHERS INSURANCE AND ANNUITY ASSOCIATION,
as Noteholder
By: /s/ Kevin R. Lorenz
-----------------------------------------
Kevin R. Lorenz, CFA
Its Managing Director High Yield Team
---------------------------------------
Intercreditor Agreement
<PAGE>
PPM AMERICA, INC., as attorney in fact, on
behalf of Jackson National Life Insurance
Company, as Noteholder
By [illegible]
-----------------------------------------
Its Managing Director
--------------------------------------
Intercreditor Agreement
<PAGE>
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY, as Noteholder
By: CIGNA INVESTMENTS, INC. (authorized
agent)
By /s/ Stephen A. Osborn
-----------------------------------------
Stephen A. Osborn
Its Managing Director
--------------------------------------
Intercreditor Agreement
<PAGE>
LIFE INSURANCE COMPANY OF NORTH
AMERICA, as Noteholder
By: CIGNA INVESTMENTS, INC. (authorized
agent)
By /s/ Stephen A. Osborn
-----------------------------------------
Stephen A. Osborn
Its Managing Director
--------------------------------------
Intercreditor Agreement
<PAGE>
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY, as Noteholder
By /s/ Mary Ann McCarthy
-----------------------------------------
Mary Ann McCarthy
Its Managing Director
--------------------------------------
Intercreditor Agreement
<PAGE>
CM LIFE INSURANCE COMPANY
COMPANY, as Noteholder
By /s/ Mary Ann McCarthy
-----------------------------------------
Its Investment Officer
--------------------------------------
Intercreditor Agreement
<PAGE>
UNITED OF OMAHA LIFE INSURANCE
COMPANY, as Noteholder
By /s/ Edwin A. Garrison, Jr.
-----------------------------------------
Edwin A. Garrison, Jr.
Its First Vice President
--------------------------------------
Intercreditor Agreement
<PAGE>
ACKNOWLEDGMENT
The undersigned hereby acknowledges and agrees to the terms of the
foregoing Agreement.
RESORTQUEST INTERNATIONAL, INC.
By /s/ Jeffery M. Jarvis
-----------------------------------------
Its Sr. Vice President, CFO
--------------------------------------
Intercreditor Agreement
<PAGE>
SCHEDULE I
(to Intercreditor Agreement)
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA $15,000,000
730 Third Avenue
New York, New York 10017-3263
Attention: Securities Division
Dierdre Macdonald
Facsimile Number: (212) 916-6581
Confirmation Number: (212) 916-4883 or (212) 490-9000
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds at the opening of business on the
due date thereof (identifying each payment as "ResortQuest International, Inc.,
9.06% Guaranteed Senior Secured Notes, due June 16, 2004, PPN 761183 A* 3,
principal, premium or interest") to:
The Chase Manhattan Bank ABA #021-000-021
Account No. 900-0-000200
For further credit to TIAA Account No. G07040
Notices
Contemporaneous with the above electronic funds transfer, mail or fax the
following information setting forth: (1) the full name, private placement
number, interest rate and maturity date of the Notes or other obligations; (2)
the allocation of payment between principal, interest, premium and any special
payment; and (3) the name and address of the Bank (or Trustee) from which such
transfer was sent, to:
Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, New York 10017-3206
Attention: Securities Accounting Division
Telephone Number: (212) 916-4188
Facsimile Number: (212) 916-6955
All other notices and communications to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None.
Taxpayer I.D. Number: 13-1624203
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
JACKSON NATIONAL LIFE $12,500,000
INSURANCE COMPANY
5901 Executive Drive
Lansing, MI 48909
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds at the opening of business on the
due date thereof (identifying each payment as "ResortQuest International, Inc.,
9.06% Guaranteed Senior Secured Notes, due June 16, 2004, PPN 761183 A* 3,
principal, premium or interest") to:
NORTHERN TRUST CHGO
ABA #071-000-152
Credit Account #5186041000 (General ledger for all clients of Northern Trust)
For further credit to: 26-91241/Jackson National Life Insurance Company
Attention: Tarsa Lewis
Interest and principal payment notices should be faxed to the operations contact
and custodian bank as follows:
Susan Perrino, Private Placements
PPM America Inc.
225 West Wacker Drive
Chicago, Illinois 60606
Telephone Number: (312) 634-1205
Facsimile Number: (312) 634-0054
and
Oscell Owens
Northern Trust Company
801 S. Canal Street
Floor C1N
Chicago, Illinois 60607
Telephone Number: (312) 444-5754
Facsimile Number: (312) 630-8179
I-2
<PAGE>
Notices
One copy of all notices, documents, notes, waivers, amendments, consents, as
well as periodical financial information and covenant compliance certificates
should be sent to:
Joseph Dimberio
Vice President, Private Placements
PPM America, Inc.
225 West Wacker Drive, Suite 1200
Chicago, Illinois 60606
Telephone Number: (312) 634-2597
Facsimile Number: (312) 634-0054
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 38-1659835
I-3
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
UNITED OF OMAHA LIFE
INSURANCE COMPANY $7,500,000
Mutual of Omaha Plaza
Omaha, Nebraska 68175-1011
Attention: 4-Investment Division Administration
Facsimile Number: (402) 351-2913
Confirmation Number: (402) 351-2504
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds at the opening of business on the
due date thereof (identifying each payment as "ResortQuest International, Inc.,
9.06% Guaranteed Senior Secured Notes, due June 16, 2004, PPN 761183 A* 3,
principal, premium or interest") to:
The Chase Manhattan Bank ABA #021-000-021
Private Income Processing
For further credit to United of Omaha Life Insurance Company
Account No. #900-9000200
a/c: G07097
CUSIP/PPN:
------------
Interest Amount:
------------
Principal Amount:
------------
Notices
All notices and communications with respect to payments and written confirmation
of each such payment, to be addressed to:
The Chase Manhattan Bank
4 New York Plaza - 13th Floor
New York, NY 10004
Attn: Income Processing - a/c: G07097 J. Pipperato
All other notices and communications to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-0322111
I-4
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
LIFE INSURANCE COMPANY
OF NORTH AMERICA $1,650,000
c/o CIGNA Investments, Inc.
Hartford, Connecticut 06152-2307
Attention: Private Securities Division - S-307
Facsimile Number: (860) 726-7203
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds at the opening of business on the
due date thereof (identifying each payment as "ResortQuest International, Inc.,
9.06% Guaranteed Senior Secured Notes, due June 16, 2004, PPN 761183 A* 3,
principal, premium or interest") to:
The Chase Manhattan Bank ABA #021-000-021
Account No. 900 9-001802
Notices
Contemporaneous with the above electronic funds transfer, mail or fax the
following information setting forth: (1) the full name, private placement
number, interest rate and maturity date of the Notes or other obligations; (2)
the allocation of payment between principal, interest, premium and any special
payment; and (3) the name and address of the Bank (or Trustee) from which such
transfer was sent, to:
Life Insurance Company of North America
c/o CIGNA Investments, Inc.
Attention: Securities Processing S-309
900 Cottage Grove Road
Hartford, CT 06152-2309
All other notices and communications to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: CIG & Co.
Taxpayer I.D. Number: 13-3574027
I-5
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY Denominations
c/o CIGNA Investments, Inc. $2,325,000
Hartford, Connecticut 06152-2307 $2,100,000
Attention: Private Securities Division - S-307 $1,125,000
Facsimile Number: (860) 726-7203 $ 300,000
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds at the opening of business on the
due date thereof (identifying each payment as "ResortQuest International, Inc.,
9.06% Guaranteed Senior Secured Notes, due June 16, 2004, PPN 761183 A* 3,
principal, premium or interest") to:
The Chase Manhattan Bank ABA #021 000 021
Account No. 900 9-001802
Notices
Contemporaneous with the above electronic funds transfer, mail or fax the
following information setting forth: (1) the full name, private placement
number, interest rate and maturity date of the Notes or other obligations; (2)
the allocation of payment between principal, interest, premium and any special
payment; and (3) the name and address of the Bank (or Trustee) from which such
transfer was sent, to:
Connecticut General Life Insurance Company
c/o CIGNA Investments, Inc.
Attention: Securities Processing S-309
900 Cottage Grove Road
Hartford, CT 06152-2309
All other notices and communications to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: CIG & Co.
Taxpayer I.D. Number: 13-3574027
I-6
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
MASSACHUSETTS MUTUAL LIFE INSURANCE $3,600,000
COMPANY
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Mary Ann McCarthy, Managing Director
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds identifying each payment as
"ResortQuest International, Inc., 9.06% Guaranteed Senior Secured Notes, due
June 16, 2004, PPN 761183 A* 3, principal or interest" to:
Citibank, N.A.
111 Wall Street
New York, New York 10043
Account Number 4067-3488
ABA No. 021000089
For Mass Mutual Long Term Pool
With telephone advice of payments to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561
Notices
All notices and communications to be addressed as first provided above except
with respect to payments to be addressed to:
Attention: Securities Custody and Collection Department F381
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 041590850
I-7
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
MASSACHUSETTS MUTUAL LIFE INSURANCE $700,000
COMPANY
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Mary Ann McCarthy, Managing Director
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds identifying each payment as
"ResortQuest International, Inc., 9.06% Guaranteed Senior Secured Notes, due
June 16, 2004, PPN 761183 A* 3, principal or interest" to:
Chase Manhattan Bank, N.A.
4 Chase Metro Tech Center
New York, New York 10081
ABA No. 021000021
For Mass Mutual Pension Management
Account No. 910-2594018
With telephone advice of payments to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561
Notices
All notices and communications to be addressed as first provided above except
with respect to payments to be addressed to:
Attention: Securities Custody and Collection Department F381
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 041590850
I-8
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY $2,600,000
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Mary Ann McCarthy, Managing Director
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds identifying each payment as
"ResortQuest International, Inc., 9.06% Guaranteed Senior Secured Notes, due
June 16, 2004, PPN 761183 A* 3, principal or interest" to:
Chase Manhattan Bank, N.A.
4 Chase Metro Tech Center
New York, New York 10081
ABA No. 021000021
For Mass Mutual IFM Non-Traditional
Account No. 910-2509073
With telephone advice of payments to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561
Notices
All notices and communications to be addressed as first provided above except
with respect to payments to be addressed to:
Attention: Securities Custody and Collection Department F381
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 041590850
I-9
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
- ----------------------------- ---------------------
<S> <C>
CM LIFE INSURANCE COMPANY
C/O MASSACHUSETTS MUTUAL LIFE INSURANCE $600,000
COMPANY
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Mary Ann McCarthy, Managing Director
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds identifying each payment as
"ResortQuest International, Inc., 9.06% Guaranteed Senior Secured Notes, due
June 16, 2004, PPN 761183 A* 3, principal or interest" to:
Citibank, N.A.
111 Wall Street
New York, New York 10043
Account No. 4068-6561
ABA No. 021000089
For Segment 43 - Universal Life
With telephone advice of payments to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561
Notices
All notices and communications to be addressed as first provided above except
with respect to payments to be addressed to:
Attention: Securities Custody and Collection Department F381
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 06-1041383
I-10
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report dated March 31, 1999 incorporated by reference in this registration
statement and to all references to our Firm included in this registration
statement. Our report dated February 25, 1999 included in ResortQuest
International, Inc.'s Form 10-K for the year ended December 31, 1998,
incorporated by reference in this registration statement, is no longer
appropriate since restated financial statements have been presented giving
effect to business combinations accounted for under the pooling of interests
method.
ARTHUR ANDERSEN LLP
Memphis, Tennessee,
July 16, 1999.
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports included in ResortQuest
International, Inc.'s Form 10-K for the year ended December 31, 1998, for
Brindley & Brindley Realty and Development, Inc. and B&B On The Beach, Inc.,
dated July 24, 1998; Coastal Resorts Mangement, Inc. and Coastal Resorts Realty
L.L.C., dated July 15, 1998; Collection of Fine Properties, Inc., dated July 15,
1998; First Resort Software, Inc., dated July 17, 1998; Houston and O'Leary
Company dated July 17, 1998; The Maury People, Inc., dated July 24, 1998; Howey
Acquisition, Inc., dated July 17, 1998; Resort Property Management, Inc., dated
July 15, 1998; Telluride Resort Accommodations, Inc., dated July 15, 1998; and
Trupp-Hodnett Enterprises, Inc. and THE Management Company, dated July 17, 1998,
and to all references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Houston, Texas,
July 16, 1999.
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report for Collection of Fine
Properties, Inc., dated January 23, 1998, and to all references to our Firm
included in this registration statement.
MORRISON, BROWN, ARGIZ AND COMPANY
Boulder, Colorado,
July 14, 1999.
