EXHIBIT 99.3
CONSENT AND FORBEARANCE AGREEMENT
As of September 8, 2003
ResortQuest International, Inc.
000 Xxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to those certain Note Purchase and Guarantee
Agreements, dated as of June 1, 1999, as amended by a certain Modification
Agreement dated as of July 24, 2000, and further amended by a certain Second
Modification Agreement dated as of October 30, 2001, and further amended by a
certain Third Modification Agreement dated as of March 14, 2003 (collectively,
the "NOTE PURCHASE AND GUARANTEE Agreement"), entered into by ResortQuest
International, Inc. (the "COMPANY"), the Guarantors (as defined therein) and
each of the Noteholders set forth on the signature pages hereof (together with
their permitted successors, transferees and assigns, the "NOTEHOLDERS"),
pursuant to which the Noteholders purchased $50,000,000 in the aggregate
principal amount of the Company's 9.06% Guaranteed Senior Secured Notes, Due
June 16, 2004 (as amended, the "NOTES").
The Company, Xxxxxxx Entertainment Company ("XXXXXXX") and GET Merger
Sub, Inc. ("SUB") have entered into that certain Agreement and Plan of Merger
dated as of August 4, 2003 (the "MERGER AGREEMENT"). Contemporaneously herewith,
the Company, Xxxxxxx and Sub are entering into that certain Subordinated Loan
and Reimbursement Agreement of even date herewith (the "SUBORDINATED LOAN
AGREEMENT"). Capitalized terms used herein without definition shall have the
respective meanings ascribed to them in the Note Purchase and Guarantee
Agreement.
I. CONSENT TO ENTERING INTO THE MERGER AGREEMENT; NO AMENDMENTS.
The Company has requested the Noteholders agree to consent to the
Company entering into the Merger Agreement with Xxxxxxx and Sub. Subject to the
provisions of Section III of this Consent and Forbearance Agreement, the
Noteholders hereby consent to the Company entering into the Merger Agreement in
the form previously delivered to the Noteholders, provided, that, the Company
agrees not to enter into an amendment of the Merger Agreement (or any agreement
to terminate, or which could result in the termination of, the Merger Agreement)
without the Required Holders' prior written consent.
II. FORBEARANCE.
The Company has requested the Noteholders agree to forbear from
exercising rights and remedies arising as a result of the occurrence of any
Events of Default under the Note Purchase and Guarantee Agreement caused solely
by the failure of the Company to comply with (a) the provisions of Section
7.11(a), (b), (c) and (e) of the Credit Agreement and/or the provisions of
Section 8.1 or Section 8.4 of the Credit Agreement, and (b) the provisions of
Section 10.4, 10.5 and Section 10.6 of the Note Purchase and Guarantee
Agreement, in each case, with respect to the period commencing on the date
hereof and continuing until the earliest date on which any of the following
events occur: (i) any Event of Default (other than those Events of Default
specified in clauses (a) and (b) above) under the Note Purchase Agreement or the
Credit Agreement; (ii) the termination of the Merger Agreement for any reason;
(iii) any default by the Company under the Subordinated Loan Agreement or under
any other document executed in connection therewith; (iv) any failure by the
Company to comply with the terms of this Consent and Forbearance Agreement; (v)
any material breach of any representation or warranty made by the Company under
this Consent and Forbearance Agreement; or (vi) any default under the Bank
Waiver (as defined below) or any termination of any of the waivers granted
thereunder (items (i) - (vi) are individually and collectively referred to as a
"FORBEARANCE DEFAULT"). The period from and after the date hereof until, but
excluding, the date of the occurrence of any Forbearance Default shall be known
as the "FORBEARANCE PERIOD".
During the Forbearance Period, but not thereafter, the Noteholders
agree to forbear from exercising any rights and remedies arising as a result of
the occurrence of any Events of Default specified in clauses (a) and (b) above,
subject to the terms and conditions set forth in this Consent and Forbearance
Agreement.
III. CONSENT TO INCURRENCE OF THE SUBORDINATED INDEBTEDNESS AND CONSUMMATION
OF THE MERGER.
The Company has further requested that the Noteholders consent to (a)
the Company obtaining a non-revolving line of credit in the maximum principal
amount of Ten Million and 00/100 Dollars ($10,000,000.00) and the Company
obtaining a letter of credit in the face amount of Five Million and 00/100
Dollars ($5,000,000.00) from Bank of America for the benefit of Borrower and in
favor of Paymentech, L.P, all as more particularly set forth in the Subordinated
Loan Agreement, and (b) the consummation of the merger of the Company with Sub
pursuant to the terms of the Merger Agreement.
The Noteholders consent to the foregoing, provided, that, the
Noteholders' consent with respect to the consummation of the merger described in
clause (b) above is expressly subject to and conditioned upon satisfaction on or
prior to the Closing Date (as defined in the Merger Agreement) of the following
conditions precedent: (i) the Company shall have prepaid all of the Notes
pursuant to Section 8.2 of the Note Purchase and Guarantee Agreement or
purchased all of the Notes pursuant to Section 8.3 of the Note Purchase and
Guarantee Agreement, in either case, in accordance with the terms hereof and
thereof, and shall have paid all other amounts then due pursuant the Note
Purchase and Guarantee Agreement or any other agreement executed and delivered
in connection therewith and have performed and satisfied in
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full all other obligations required to be performed and satisfied by it under
the Note Purchase Agreement and any such other agreement; (ii) the Company shall
have paid all amounts due under or in connection with the Credit Agreement; and
(iii) the Company shall have paid all costs and expenses of the Noteholders and
its special counsel in connection herewith and/or the consummation of such
merger.
IV. CHANGE IN CONTROL AND OFFER TO PURCHASE.
The parties hereto agree and acknowledge that, notwithstanding anything
to the contrary in the Note Purchase and Guarantee Agreement or the Notice of
Change in Control and Offer to Purchase Notes dated August 6, 2003 (the "OFFER
TO PURCHASE"), the Proposed Purchase Date (as defined in the Note Purchase and
Guarantee Agreement) shall be deemed to be the Closing Date and each holder of
the Notes may accept or reject the Offer to Purchase at any time on or prior to
the Closing Date (as defined in the Merger Agreement) by delivering notice to
the Company of such rejection or acceptance. Further notwithstanding anything to
the contrary in the Note Purchase and Guarantee Agreement or the Offer to
Purchase, in no event shall any failure to respond to the Offer to Purchase be
deemed to constitute a rejection of such Offer to Purchase.
V. EFFECTIVENESS OF THIS CONSENT AND FORBEARANCE AGREEMENT.
The effectiveness of this Consent and Forbearance Agreement is
expressly subject to satisfaction of the following conditions precedent: (a)
this Consent and Forbearance Agreement shall have been executed and delivered by
all of the parties hereto, (b) the Subordinated Loan Agreement shall have been
executed and delivered by all of the parties thereto, shall be in form and
substance satisfactory to the Noteholders and a true and complete copy thereof
shall have been delivered to the Noteholders; (c) that certain Limited Waiver
dated as of September 8, 2003 (the "BANK WAIVER") in form and substance
satisfactory to the Noteholders shall have been duly executed by the parties
thereto, and neither the Agent nor any of the Lenders shall have received any
fees or other compensation of any kind in connection with the delivery of the
Bank Waiver; (d) no Event of Default, or event which with the passage of time or
the giving of notice (or both) could result in an Event of Default, shall be in
existence; (e) the Company shall have paid all costs and expenses of the
Noteholders in connection with the preparation of this Consent and Forbearance
Agreement and the other documents to be delivered in connection herewith,
including, without limitation, the reasonable fees and expenses of special
counsel for the Noteholders; and (f) the Company and the Guarantors shall have
executed and delivered such documents, instruments and certificates as the
Noteholders may request in connection herewith and all proceedings taken in
connection with the execution and delivery of this Consent and Forbearance
Agreement and the transactions contemplated hereby shall be satisfactory to the
Noteholders and their special counsel, and the Noteholders and their special
counsel shall have received copies of such documents and information as they may
reasonably request in connection therewith.
VI. MISCELLANEOUS.
Without limiting the generality of the provisions of Sections 12.4 and
17.1 of the Note Purchase and Guarantee Agreement, the agreement to forbear by
the Noteholders set forth
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herein shall be limited precisely as written, and nothing in this Consent and
Forbearance Agreement shall be deemed to (a) constitute an agreement to forbear
with respect to compliance by the Company and the Guarantors of any other term,
provision or condition of the Note Purchase and Guarantee Agreement, the Notes,
the Security Documents or any other instrument or agreement referred to therein,
or (b) prejudice any right or remedy that the Noteholders may now have or may
have in the future under or in connection with the Note Purchase and Guarantee
Agreement, the Notes, the Security Documents or any other instrument or
agreement referred to therein or in equity or at law. Upon the occurrence of a
Forbearance Default, each of the Noteholders shall be immediately entitled to
exercise each and every right or remedy available to it under the Note Purchase
Agreement or applicable law in respect of such Forbearance Default and/or in
respect of any other Event of Default then existing under the Note Purchase
Agreement.
Except as expressly set forth in this Consent and Forbearance
Agreement, the terms, provisions and conditions of the Note Purchase and
Guarantee Agreement, the Notes and Security Documents shall remain in full force
and effect without amendment and such terms, provisions and conditions are
hereby ratified and confirmed by the Company and the Guarantors.
To induce the Noteholders to enter into this Consent and Forbearance
Agreement, the Company, by its execution of a counterpart of this Consent and
Forbearance Agreement, represents and warrants that after giving effect to this
Consent and Forbearance Agreement and the Bank Waiver (a) all representations
and warranties contained in the Note Purchase and Guarantee Agreement, the Notes
and the Security Documents shall be true, correct and complete in all material
respects on and as of the date hereof except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date, and (b) the Company shall have performed all agreements to be performed on
its part as set forth in the Note Purchase and Guarantee Agreement, the Notes
and the Security Documents.
By its execution of a counterpart of this Consent and Forbearance
Agreement, each Guarantor acknowledges that it has read this Consent and
Forbearance Agreement and consents to the terms hereof and further confirms and
agrees that, notwithstanding the effectiveness of this Consent and Forbearance
Agreement, the obligations of such Guarantor under the Note Purchase and
Guarantee Agreement, the Notes and the Security Documents to which it is a party
shall not be impaired or affected and each of the Note Purchase and Guarantee
Agreement, the Notes and the Security Documents is, and shall continue to be, in
full force and effect and is hereby confirmed and ratified in all respects.
This Consent and Forbearance Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
This Consent and Forbearance Agreement shall be effective only when
executed and delivered by the Company and consented to by each Guarantor and the
percentage of Required
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Holders specifically required to consent hereto pursuant to Section 17.1 of the
Note Purchase and Guarantee Agreement.
THIS CONSENT AND FORBEARANCE AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
(Balance of Page Intentionally Left Blank)
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If the foregoing accurately sets forth our agreement, please sign and
return the enclosed copy of this Consent and Forbearance Agreement.
NOTEHOLDERS:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION
By: /s/ Xxxxxxx XxxXxxxxx
--------------------------
Its: Director
--------------------
XXXXXXX NATIONAL LIFE INSURANCE
COMPANY
By: PPM AMERICA, INC., as attorney in fact,
on behalf of Xxxxxxx National Life
Insurance Company
By: /s/ illegible
---------------------------------------
Its: Executive Vice President
---------------------------------
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
By: CIGNA INVESTMENTS, INC.
(authorized agent)
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Its: Managing Director
---------------------------------
LIFE INSURANCE COMPANY OF NORTH
AMERICA
By: CIGNA INVESTMENTS, INC.
(authorized agent)
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Its: Managing Director
---------------------------------
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: Xxxxx X. Xxxxxx & Company Inc.,
Its Investment Advisor
By: /s/ Xxxx X. Xxxxx
---------------------------------------
Its: Managing Director
---------------------------------------
C.M. LIFE INSURANCE COMPANY
By: Xxxxx X. Xxxxxx & Company Inc.,
Its Investment Sub-Advisor
By: /s/Xxxx X. Xxxxx
---------------------------------------
Its: Managing Director
--------------------------------
UNITED OF OMAHA LIFE INSURANCE
COMPANY
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
--------------------------------------
Its: First Vice President
--------------------------------
CONFIRMED AND AGREED:
COMPANY:
RESORTQUEST INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ Xxxxx Xxxxxxx
---------------------------
Name: Xxxxx Xxxxxxx
---------------------
Title: Vice President
---------------------
GUARANTORS
Xxxxxx & Xxxxxxx Realty, Inc.
Xxxxxx Realty Services, Inc.
Xxxxxx Resorts, Inc.
Advantage Vacation Homes by Styles, Inc.
B&B on the Beach, Inc.
Bluebill Properties, Inc.
Bluebill Vacation Properties, Inc.
Xxxxxxxx & Xxxxxxxx Realty & Development, Inc.
Coastal Resorts Management, Inc.
Coastal Resorts Realty, L.L.C.
Xxxxxx, Xxxx & Xxxxxxx, Inc.
Collection of Fine Properties, Inc.
CRW Property Management, Inc.
First Resort Software, Inc.
Hotel Corporation of the Pacific, Inc.
Houston & X'Xxxxx Company
Xxxxx Acquisition, Inc.
Maui Condominium & Home Realty, Inc.
Plantation Resort Management, Inc.
Xxxxxxxxx Xxxxxx Realty, Inc.
R & R Resort Rental Properties, Inc.
Realty Consultants, Inc.
Resort Property Management, Inc.
Shoreline Rentals, Inc.
Styles Estates, Ltd., Inc.
Telluride Resort Accommodations, Inc.
Ten Mile Holdings, Ltd.
The Management Company, Inc.
The Maury People, Inc.
The Tops'l Group, Inc.
Xxxxx-Xxxxxxx Enterprises, Inc.
Whistler Chalets Ltd.
Worthy Owner Realty Group, Inc.
The following signature is on behalf of each of the foregoing Guarantors
By: /s/ Xxxxx Xxxxxxx
----------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
Its Authorized Officer
