Exhibit 10.1



 





Exhibit 10.1



STOCK PURCHASE AGREEMENT




BY AND AMONG




VACATION HOLDINGS HAWAII, INC.,




INTERVAL ACQUISITION CORP.




RESORTQUEST INTERNATIONAL, INC.




AND




GAYLORD ENTERTAINMENT COMPANY




April 18, 2007




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1 PURCHASE AND SALE OF SHARES
	 	 	1	 
	1.1   Transfer of Shares
	 	 	1	 
	ARTICLE 2 CONSIDERATION
	 	 	1	 
	2.1   Purchase Price
	 	 	1	 
	2.2   Purchase Price Adjustment
	 	 	2	 
	ARTICLE 3 CLOSING; OBLIGATIONS OF THE PARTIES
	 	 	4	 
	3.1   Closing Date
	 	 	4	 
	3.2   Obligations of the Parties at the Closing
	 	 	4	 
	ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF GEC AND SELLER
	 	 	5	 
	4.1   Status
	 	 	5	 
	4.2   Authority
	 	 	5	 
	4.3   No Conflict; Required Filings and Consents
	 	 	5	 
	4.4   Capitalization
	 	 	6	 
	4.5   Financial Statements
	 	 	8	 
	4.6   Title to Assets and Properties
	 	 	8	 
	4.7   Material Contracts
	 	 	9	 
	4.8   Real Property; Leases; Managed Property
	 	 	10	 
	4.9   Intellectual Property; Information Systems
	 	 	11	 
	4.10 Litigation; Claims and Proceedings
	 	 	13	 
	4.11 Environmental Safety and Health Matters
	 	 	13	 
	4.12 Compliance with Law; Licenses and Permits
	 	 	14	 
	4.13 Employee Matters and Benefit Plans
	 	 	14	 
	4.14 Taxes
	 	 	16	 
	4.15 Absence of Undisclosed Liabilities; Capital Commitments
	 	 	18	 
	4.16 Absence of Certain Changes
	 	 	19	 
	4.17 Labor Matters
	 	 	19	 
	4.18 Finder’s Fee
	 	 	19	 
	4.19 Insurance
	 	 	20	 
	4.20 Accounts Receivable
	 	 	20	 
	4.21 Related Party Transactions
	 	 	20	 
	4.22 Books and Records
	 	 	20	 
	4.23 Hawaiian Operations
	 	 	20	 
	4.24 Payment Card Industry Data Security Standard
	 	 	20	 
	4.25 Amendment to Waimea Plantation Cottages Management Agreement
	 	 	21	 
	ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF INTERVAL AND PURCHASER
	 	 	21	 
	5.1   Corporate Status
	 	 	21	 
	5.2   Authority
	 	 	21	 
	5.3   No Conflict
	 	 	21	 
	5.4   Compliance with Law
	 	 	22	 
	5.5   Consents
	 	 	22	 
	5.6   Sufficient Funds
	 	 	22	 
	5.7   Finder’s Fee
	 	 	22	 






 









 





Table of Contents

(Continued)




	 	 	 	 	 
	 	 	Page	 
	5.8   No Reliance
	 	 	23	 
	5.9   Investment Intent
	 	 	23	 
	5.10 Litigation, Claims and Proceedings
	 	 	23	 
	ARTICLE 6 COVENANTS
	 	 	23	 
	6.1   Interim Operations of the Companies
	 	 	23	 
	6.2   Consents
	 	 	26	 
	6.3   Publicity
	 	 	27	 
	6.4   Access to Records and Properties
	 	 	27	 
	6.5   Further Action
	 	 	28	 
	6.6   Expenses
	 	 	28	 
	6.7   Notification of Certain Matters
	 	 	28	 
	6.8   Employee Benefit Plans
	 	 	28	 
	6.9   Intercompany Indebtedness
	 	 	30	 
	6.10 Debt and Guaranties
	 	 	30	 
	6.11 Supplements to Disclosure Schedule
	 	 	30	 
	6.12 Guaranties by GEC and Interval
	 	 	31	 
	6.13 Retention and Access to Books and Records
	 	 	31	 
	6.14 Non-Competition; Non-Solicit and Confidentiality
	 	 	32	 
	6.15 RHAC Holdings, LLC; Waipouli Holdings LLC
	 	 	35	 
	ARTICLE 7 CLOSING CONDITIONS
	 	 	36	 
	7.1   Conditions to Obligations of Seller and Purchaser to Consummate the Transaction
	 	 	36	 
	7.2   Additional Conditions to Obligations of Purchaser
	 	 	36	 
	7.3   Additional Conditions to Obligations of Seller
	 	 	38	 
	ARTICLE 8 CERTAIN TAX MATTERS
	 	 	38	 
	8.1   Tax Indemnity Obligations
	 	 	38	 
	8.2   Responsibility for Filing Tax Returns
	 	 	39	 
	8.3   Cooperation on Tax Matters
	 	 	40	 
	8.4   Refunds and Tax Benefits
	 	 	41	 
	8.5   Section 338(h)(10) Election and Purchase Price Allocation
	 	 	41	 
	8.6   Transfer Taxes
	 	 	42	 
	8.7   Termination of Tax Sharing Agreements
	 	 	42	 
	8.8   Tax Proceedings
	 	 	43	 
	8.9   Treatment of Indemnity Payment
	 	 	43	 
	8.10 Withholding
	 	 	43	 
	8.11 Conflict with Article 10
	 	 	43	 
	ARTICLE 9 TERMINATION 
	 	 	44	 
	9.1   Termination
	 	 	44	 
	9.2   Effect of Termination and Abandonment
	 	 	44	 
	ARTICLE 10 INDEMNIFICATION
	 	 	44	 
	10.1 Survival of Representations and Warranties
	 	 	44	 
	10.2 Indemnification Provisions for Benefit of Purchaser
	 	 	45	 
	10.3 Indemnification Provisions for Benefit of Seller
	 	 	45	 






 









 





Table of Contents

(Continued)




	 	 	 	 	 
	 	 	Page	 
	10.4   Procedure for Matters Involving Third Parties
	 	 	45	 
	10.5   Limitations on Seller’s and GEC’s Indemnification Liability
	 	 	46	 
	10.6   Limitations on Purchaser’s Indemnification Liability
	 	 	47	 
	10.7   Determination of Losses
	 	 	47	 
	10.8   Exclusive Remedy
	 	 	48	 
	10.9   Indemnification Obligations of Seller
	 	 	48	 
	ARTICLE 11 MISCELLANEOUS
	 	 	48	 
	11.1   Notices
	 	 	48	 
	11.2   Certain Definitions; Interpretation
	 	 	49	 
	11.3   Severability
	 	 	52	 
	11.4   Entire Agreement; No Third-Party Beneficiaries
	 	 	53	 
	11.5   Amendment; Waiver
	 	 	53	 
	11.6   Binding Effect; Assignment
	 	 	53	 
	11.7   Disclosure Schedule
	 	 	53	 
	11.8   Governing Law; Jurisdiction
	 	 	53	 
	11.9   Construction
	 	 	54	 
	11.10 Counterparts
	 	 	54	 
	11.11 Enforcement
	 	 	54	 






 









 





TABLE OF DEFINED TERMS

Continued




	 	 	 	 	 	 	 
	Term	 	Section Page	 	 	 	 
	Accountants

	 	Section 2.2(b)(iii)
	 	 	3	 
	Action

	 	Section 11.2(a)(i)
	 	 	48	 
	Affiliate Group

	 	Section 11.2(a)(iii)
	 	 	49	 
	Affiliate

	 	Section 11.2(a)(ii)
	 	 	49	 
	Agreement

	 	Preamble
	 	 	1	 
	Allocation

	 	Section 8.5(b)
	 	 	41	 
	Ancillary Agreements

	 	Section 11.2(a)(iv)
	 	 	49	 
	Applicable Rate

	 	Section 11.2(a)(v)
	 	 	49	 
	Blue Sky

	 	Section 4.3(b)
	 	 	6	 
	Cap

	 	Section 10.5(a)
	 	 	46	 
	Claim Notice

	 	Section 10.4(e)
	 	 	45	 
	Closing Date Balance Sheet

	 	Section 2.2(b)(i)
	 	 	2	 
	Closing Date RQ Working Capital

	 	Section 2.2(b)(i)
	 	 	2	 
	Closing Date

	 	Section 3.1
	 	 	4	 
	Closing

	 	Section 3.1
	 	 	4	 
	Code

	 	Section 11.2(a)(vi)
	 	 	49	 
	Companies

	 	Preamble
	 	 	1	 
	Company Covered Employees

	 	Section 6.8(a)
	 	 	28	 
	Company

	 	Preamble
	 	 	1	 
	Confidential Information

	 	Section 6.14(e)
	 	 	34	 
	Confidentiality Agreement

	 	Section 6.2(a)
	 	 	26	 
	Control

	 	Section 11.2(a)(vii)
	 	 	49	 
	Deductible

	 	Section 10.5(b)
	 	 	46	 
	Disclosure Schedule Supplement

	 	Section 6.11
	 	 	30	 
	DOJ

	 	Section 6.2(a)
	 	 	26	 
	Employment Agreement

	 	Preamble
	 	 	1	 
	Encumbrances

	 	Section 4.3(a)
	 	 	6	 
	Environmental Law

	 	Section 4.11(a)
	 	 	13	 
	ERISA Affiliate

	 	Section 4.13(e)
	 	 	16	 
	ERISA

	 	Section 11.2(a)(viii)
	 	 	49	 
	Estimated Closing Date Balance Sheet

	 	Section 2.2(a)
	 	 	2	 
	Estimated RQ Working Capital

	 	Section 2.2(a)
	 	 	2	 
	Financial Statements

	 	Section 4.5(a)
	 	 	8	 
	FTC

	 	Section 6.2(a)
	 	 	26	 
	GAAP

	 	Section 2.2(a)
	 	 	2	 
	GEC

	 	Preamble
	 	 	1	 
	Governmental Authority

	 	Section 11.2(a)(ix)
	 	 	49	 
	Governmental Order

	 	Section 11.2(a)(x)
	 	 	49	 
	Hazardous Substance

	 	Section 4.11(a)
	 	 	13	 
	HSR Act

	 	Section 4.3(a)
	 	 	6	 
	Indemnified Party

	 	Section 10.4(a)
	 	 	45	 
	Indemnifying Party

	 	Section 10.4(a)
	 	 	45	 
	Intellectual Property

	 	Section 4.9
	 	 	12	 






 









 





TABLE OF DEFINED TERMS

Continued




	 	 	 	 	 	 	 
	Term	 	Section Page	 	 	 	 
	Interval

	 	Preamble
	 	 	1	 
	IRS

	 	Section 4.13(a)
	 	 	15	 
	Law

	 	Section 11.2(a)(xii)
	 	 	49	 
	License Agreement

	 	Section 7.2(i)
	 	 	36	 
	LLC Conversion

	 	Section 8.5(a)
	 	 	41	 
	Losses

	 	Section 10.2
	 	 	44	 
	Material Adverse Effect

	 	Section 6.11
	 	 	30	 
	Material Contract

	 	Section 4.7
	 	 	9	 
	Multiemployer Plan

	 	Section 4.13(e)
	 	 	16	 
	PCI DSS

	 	Section 4.24
	 	 	20	 
	Permit

	 	Section 11.2(a)(xiii)
	 	 	49	 
	Permitted Encumbrances

	 	Section 4.6
	 	 	8	 
	Person

	 	Section 11.2(a)(xiv)
	 	 	50	 
	Plans

	 	Section 4.13(a)
	 	 	14	 
	Purchase Price

	 	Section 2.1
	 	 	1	 
	Purchaser Indemnified Parties

	 	Section 10.2
	 	 	44	 
	Purchaser Material Adverse Effect

	 	Section 11.2(a)(xv)
	 	 	50	 
	Purchaser

	 	Preamble
	 	 	1	 
	Real Property

	 	Section 4.8
	 	 	10	 
	Reference Balance Sheet

	 	Section 4.5(a)
	 	 	8	 
	Registered Intellectual Property

	 	Section 4.9
	 	 	11	 
	Related Person

	 	Section 4.21
	 	 	20	 
	RQIH

	 	Preamble
	 	 	1	 
	RQIH Shares

	 	Section 1.1
	 	 	1	 
	RQRE

	 	Preamble
	 	 	1	 
	RQRE Shares

	 	Section 1.1
	 	 	1	 
	Section 338(h)(10) Elections

	 	Section 8.5(a)
	 	 	40	 
	Seller Indemnified Parties

	 	Section 10.3
	 	 	44	 
	Seller Material Adverse Effect

	 	Section 11.2(a)(xvi)
	 	 	50	 
	Seller

	 	Preamble
	 	 	1	 
	Shares

	 	Section 1.1
	 	 	1	 
	Specified Properties

	 	Section 4.8(f)
	 	 	11	 
	Straddle Periods

	 	Section 8.1(a)
	 	 	38	 
	Subsidiary

	 	Section 11.2(a)(xvii)
	 	 	50	 
	Tax Return

	 	Section 11.2(a)(xx)
	 	 	51	 
	Taxes

	 	Section 11.2(a)(xviii)
	 	 	50	 
	Taxing Authority

	 	Section 11.2(a)(xix)
	 	 	51	 
	Termination Date

	 	Section 9.1(b)
	 	 	43	 
	Third Party Acquirer

	 	Section 6.14
	 	 	31	 
	Third-Party Claim

	 	Section 10.4(a)
	 	 	45	 
	Transition Services Agreement

	 	Section 7.2(f)
	 	 	36	 
	Working Capital

	 	Section 11.2(a)(xxi)
	 	 	51	 









 









 








Index of the Disclosure Schedule




Section

4.3 – No Conflict

4.4(c) – Listing of Subsidiaries

4.5(a)(i) – Financial Statements

4.5(a)(ii) – Accounting Policies

4.5(b) – Non-Compliance with GAAP

4.6 – Title to Assets and Properties

4.7(a) – Material Contracts

4.7(b) – Breach or Termination of Material Contracts

4.8(a) – Real Property; Leases

4.8(d) – Right of Use/Occupancy Contracts

4.8(f)(i) – Specified Managed Properties

4.8(f)(ii) – Specified Managed Properties

4.9 – Intellectual Property

4.10 – Litigation, Claims and Proceedings

4.11 – Environmental and Safety and Health Matters

4.12 – Compliance with Law; Licenses and Permits

4.13(a) – Employee Matters and Benefit Plans

4.13(b) – Plan Creation/Modification

4.13(c) – ERISA Compliance

4.13(d) – Post-Termination Benefits

4.13(e) – Multiemployer Plans

4.13(f) – Acceleration of Benefits

4.14 – Taxes

4.15 – Absence of Undisclosed Liabilities

4.16 – Absence of Certain Changes

4.17 – Labor Matters

4.19 – Insurance

4.21 – Related Party Transactions

4.23 – Hawaiian Operations

6.1 – Interim Operations of the Companies

6.10 – Debt and Guaranties

6.14(c) – Mainland Properties

7.2(d) – Required Consents




Index of Exhibits




Exhibit A – Form of Transition Services Agreement

Exhibit B – Form of Opinion of Counsel

Exhibit C – Form of Trademark and Domain Name License Agreement

Exhibit D – Third Amendment to Waimea Plantation Cottages Management Agreement




 









 





STOCK PURCHASE AGREEMENT




     THIS STOCK PURCHASE AGREEMENT (“Agreement”) is made this 18th day of April,
2007, by and among Interval Acquisition Corp., a Delaware corporation (“Interval”),
Vacation Holdings Hawaii, Inc., a Delaware corporation and indirect wholly owned subsidiary of
Interval (“Purchaser”), Gaylord Entertainment Company, a Delaware corporation
(“GEC”), and ResortQuest International, Inc., a Delaware corporation and indirect wholly
owned subsidiary of GEC (“Seller”).



     WHEREAS, Seller owns all of the issued and outstanding shares of the capital stock of RQI
Holdings, Ltd., a Hawaii corporation (“RQIH”), and ResortQuest Real Estate of Hawaii, Inc.,
a Hawaii corporation (“RQRE”; each of RQIH and RQRE is a “Company” and,
collectively, the “Companies”); and



     WHEREAS, Purchaser desires to acquire from Seller, and Seller desires to sell to Purchaser,
all of the issued and outstanding shares of the capital stock of the Companies upon and subject to
the terms and conditions contained in this Agreement.




     NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements herein
contained, the parties agree as follows:



ARTICLE 1

PURCHASE AND SALE OF SHARES




     1.1 Transfer of Shares.



     1.2 On the terms and subject to conditions of this Agreement, at the
Closing (as defined in Section 3.1), Seller shall sell, transfer and convey to Purchaser,
and Purchaser shall purchase and acquire from Seller, 1,000 shares of common stock of RQIH (the
“RQIH Shares”), which constitute all of the issued and outstanding shares of capital stock
of RQIH, and 10 shares of common stock of RQRE (the “RQRE Shares,” and, collectively with
the RQIH Shares, the “Shares”), which constitute all the issued and outstanding capital
stock of RQRE.



ARTICLE 2

CONSIDERATION




     2.1 Purchase Price. The aggregate purchase price (the “Purchase Price”) for the
Shares shall be $109,125,000, prior to adjustment



 









 




pursuant to Section 2.2(a) and
2.2(b) below. The Purchase Price, as adjusted pursuant to Section 2.2(a) but prior
to adjustment pursuant to Section 2.2(b), shall be paid at the Closing to Seller, by wire
transfer of immediately available funds pursuant to the wire transfer instructions provided in
advance by Seller.





2.2 Purchase Price Adjustment.




     (a) Closing Date Purchase Price Adjustment. At least five (5) business days
prior to the Closing Date, Seller shall prepare and deliver to Purchaser an estimated
combined balance sheet of the Companies and their Subsidiaries as of the month end
immediately preceding the Closing Date (the “Estimated Closing Date Balance Sheet”),
which shall include the Working Capital as of such month-end date (“Estimated RQ Working
Capital”). The Estimated Closing Date Balance Sheet and the Estimated RQ Working
Capital shall be prepared in good faith and in accordance with United States generally
accepted accounting principles (“GAAP”) applied on a basis consistent with the
Financial Statements. Within 24 hours of notice, Seller shall provide Purchaser access to
all relevant documents and information reasonably requested by Purchaser in connection with
its review of the Estimated Closing Date Balance Sheet. No later than two (2) business days
prior to the Closing Date, Purchaser shall notify Seller of any objections to the Estimated
Closing Date Balance Sheet, which notice shall state in reasonable detail the basis for
Purchaser’s objections. If Purchaser has any objections, Purchaser and Seller shall attempt
in good faith to resolve any such objections; provided, however, that in the event that any
such objections are not resolved prior to Closing, the Estimated Closing Date Balance Sheet
shall remain as initially delivered to Purchaser for all purposes hereunder. The Purchase
Price to be paid at Closing by Purchaser shall, (i) if the Estimated RQ Working Capital is a
positive amount, be increased by such amount, or, (ii) if the Estimated RQ Working Capital
is a negative amount, be decreased by such amount.




     (b) Post-Closing Date Purchase Price Adjustment.




     (i) Within 90 days following the Closing Date, Purchaser shall prepare and
deliver to GEC a combined balance sheet of the Companies and their Subsidiaries as
of the Closing Date (the “Closing Date Balance Sheet”), which shall include
the Working Capital as of the Closing Date (the “Closing Date RQ Working
Capital”). The Closing Date Balance Sheet and the Closing Date RQ Working
Capital shall be prepared in accordance with GAAP applied on a basis consistent with
the Financial Statements.




     (ii) If, within 30 days following delivery of the Closing Date Balance Sheet,
GEC has not given Purchaser written notice of its objection as to the Closing Date
Balance Sheet or calculation of the Closing Date RQ Working Capital (which notice
shall state in reasonable detail the basis of GEC’s



 









 






objection), then the Closing Date Balance Sheet and Purchaser’s calculation of the Closing Date RQ Working
Capital as of the Closing Date shall be binding and conclusive on the parties for
all purposes hereunder. Upon prior reasonable notice, Purchaser shall provide GEC
access to all relevant documents and information reasonably requested by GEC in
connection with its review of the Closing Date Balance Sheet.




     (iii) If GEC duly gives Purchaser such notice of objection within the 30-day
period, and if GEC and Purchaser fail to resolve the issues outstanding
with respect to the Closing Date Balance Sheet and Purchaser’s calculation of
the Closing Date RQ Working Capital within 30 days of Purchaser’s receipt of GEC’s
objection notice, GEC and Purchaser shall submit the issues remaining in dispute to
a nationally recognized certified public accounting firm mutually determined by GEC
and Purchaser that has not performed accounting, tax or audit services for
Purchaser, GEC, Seller or any of their respective Affiliates during the past three
years (the “Accountants”), for resolution in accordance with the terms of
the Agreement and GAAP applied on a basis consistent with the Financial Statements.
If issues are submitted to the Accountants for resolution, (A) GEC and Purchaser
shall furnish or cause to be furnished to the Accountants such work papers and other
documents and information relating to the disputed issues as the Accountants may
request and are available to that party or its agents and shall be afforded the
opportunity to present to the Accountants any material relating to the disputed
issues and to discuss issues with the Accountants; (B) the determination by the
Accountants, as set forth in a notice to be delivered to both GEC and Purchaser
within 60 days of the submission to the Accountants of the issues remaining in
dispute, shall be final, binding and conclusive on the parties and shall be used in
calculation of the Closing Date RQ Working Capital; and (C) GEC and Purchaser will
each bear fifty percent (50%) of the fees and costs of the Accountants for such
determination.




     (iv) Within three business days after the Closing Date Balance Sheet becomes
binding and conclusive pursuant to this Section 2.2(b), the following
adjustments to the Purchase Price shall be made:




	 	(A)	 	In the event that the Closing Date RQ Working
Capital is less than the Estimated Closing Date RQ Working Capital,
then GEC shall pay an amount equal to the difference between the
Estimated Closing Date RQ Working Capital and the Closing Date RQ
Working Capital to Purchaser by wire transfer of immediately available
funds pursuant to the wire transfer instructions provided by Purchaser;
or
	 
	 	(B)	 	In the event that the Closing Date RQ Working
Capital is greater than the Estimated Closing Date RQ Working Capital,
then Purchaser shall pay an amount equal to the difference between the
Closing Date





 









 





	 	 	 	RQ Working Capital and the Estimated Closing Date RQ
Working Capital to GEC by wire transfer of immediately available funds
pursuant to the wire transfer instructions provided by GEC.






     (c) Any payments made under this Section 2.2 shall be treated by GEC, Seller
and Purchaser as an adjustment to the Purchase Price for tax purposes, unless a final
determination (which shall include the execution of a Form 870-AD or successor form) with
respect to the recipient of such payment causes any such payment not to be treated as an
adjustment to the Purchase Price for tax purposes.



ARTICLE 3

CLOSING; OBLIGATIONS OF THE PARTIES




     3.1 Closing Date. The closing (the “Closing”) shall take place at 10:00 a.m., local
time, at the offices of Bass, Berry & Sims PLC, Nashville, Tennessee, on the immediately succeeding
last business day of the month following satisfaction or, to the extent permitted by applicable
Law, waiver of all conditions to Closing set forth in Article 7, or at such other place or
at such other time or on such other date as Purchaser and Seller mutually may agree in writing.
The date on which the Closing takes place shall be referred to as the “Closing Date.” The
effective time of the Closing will be 11:59 p.m. (Central time) on (a) the Closing Date, if the
Closing Date is the last day of the month, or (b) the last day of the month immediately following
the Closing Date, if the business day on which the Closing occurs is not the last day of the month.



     3.2 Obligations of the Parties at the Closing.





(a) At the Closing, Purchaser shall deliver to Seller:




     (i) payment of the Purchase Price, prior to adjustment pursuant to Section
2.2(b), as set forth in Section 2.1;




     (ii) a copy of resolutions of the Board of Directors of Purchaser, certified by
Purchaser’s secretary, authorizing the execution, delivery and performance of this
Agreement and the other documents referred to herein to be executed by Purchaser,
and the consummation of the transactions contemplated hereby; and




     (iii) executed Ancillary Agreements to which Purchaser is a party.




(b) At the Closing, Seller shall deliver to Purchaser:




     (i) stock certificates representing the Shares, which certificates shall be
duly endorsed to Purchaser or accompanied by a duly executed stock power;




     (ii) a copy of resolutions of the Board of Directors of Seller, certified by
Seller’s secretary, authorizing the execution, delivery and performance of this
Agreement and the other documents referred to herein to be executed by Seller, and
the consummation of the transactions contemplated hereby;




 










 






          (iii) the certificate of incorporation, certificate of formation or other
organizing document and a certificate of good standing for each of the Companies and
their Subsidiaries, each dated within ten (10) days of the Closing Date and
certified by the Secretary of State or other appropriate official of the
jurisdiction of organization or formation of such Company or such Subsidiary; and




          (iv) executed Ancillary Agreements to which Seller, any Company or any
Subsidiary of a Company is a party.



ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF GEC AND SELLER




     Except as disclosed in the Disclosure Schedule attached hereto, GEC and Seller, jointly and
severally, represent and warrant to Purchaser as follows:



     4.1 Status. Each of GEC, Seller, each of the Companies and each Subsidiary of the Companies
is a corporation or limited liability company duly organized or formed, validly existing and in
good standing under the laws of the jurisdiction of its organization and has all requisite
corporate or limited liability company power and authority to own, operate or lease its properties
and assets and to carry on its business as it is now being conducted. Each of the Companies and
each Subsidiary of the Companies is duly qualified to do business and is in good standing in each
of the jurisdictions in which the ownership, operation or leasing of its properties and assets and
the conduct of its business requires it to be so qualified, licensed or authorized, except where
the failure to be so qualified, licensed or authorized would not reasonably be expected to have a
Seller Material Adverse Effect. Seller has made available to Purchaser true, correct and complete
copies of the certificate of incorporation, bylaws, limited liability company agreement (or similar
organizing documents) of each of the Companies and each Subsidiary of the Companies, each as in
effect on the date hereof.



     4.2 Authority. Each of GEC and Seller has all requisite corporate power and authority to
enter into this Agreement and each of the Ancillary Agreements to which it is a party, to perform
its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and each of the Ancillary Agreements by GEC
and/or Seller, as applicable, and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by the Board of Directors of GEC, the Board of
Directors of Seller and the sole shareholder of Seller, and no other corporate proceedings are
necessary to authorize this Agreement and any of the Ancillary Agreements or to consummate the
transactions contemplated hereby and thereby. This Agreement and any Ancillary Agreements executed
as of the date hereof have been, and the Ancillary Agreements to be executed and delivered at
Closing upon execution will have been, duly executed and delivered by each of GEC, Seller and/or
the Companies, as applicable, and (assuming due authorization and delivery by Purchaser) this
Agreement and the Ancillary Agreements executed on the date hereof constitute, and the Ancillary
Agreements to be executed and delivered at Closing will constitute, the legal, valid and binding
obligations of GEC, Seller and/or the Companies, as applicable, enforceable against each of them
that it is a party to in accordance with their respective terms, subject to general principles of
equity and except as the



 









 







enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws of general application relating to creditors’
rights.



     4.3 No Conflict; Required Filings and Consents.




     (a) Except as set forth in Section 4.3 of the Disclosure Schedule, neither the
execution, delivery and performance by GEC and Seller of this Agreement and the Ancillary
Agreements to which they are a party, nor the consummation by GEC and Seller of the
transactions contemplated hereby and thereby, will (i) violate, conflict with or result in
the breach of any term or provision of the certificate of incorporation, bylaws,
limited liability company agreement (or similar organizing documents) of GEC, Seller,
the Companies or any Subsidiary of the Companies, each as in effect on the date hereof and
as may be further amended prior to the Closing, (ii) assuming the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder (the “HSR Act”), has expired or been terminated,
conflict with or violate any Law applicable to GEC, Seller, the Companies or any Subsidiary
of the Companies or any of their respective assets, properties or businesses or (iii)
conflict with or violate, result in the breach of any term or provision of, or constitute a
default (or event which with the giving of notice or lapse of time, or both, would become a
default) under, or give to others any rights of termination, amendment, acceleration,
consent, suspension, revocation or cancellation of, or result in the creation of any
mortgage, pledge, hypothecation, claim, security interest, encumbrance, interest, option,
lien or other restriction (collectively, “Encumbrances”) on any of the Shares or on
any of the assets or properties of the Companies or any Subsidiary of any of the Companies
or pursuant to any Material Contract (as defined in Section 4.7); except, in the
case of clauses (ii) and (iii) only, for such violations, conflicts, breaches, defaults,
rights of termination, amendment, acceleration, consent, suspension, revocation or
cancellation or creation of any Encumbrance that (A) would not, individually or in the
aggregate, reasonably be expected to have a Seller Material Adverse Effect or (B) would
become applicable solely as a result of the business or activities in which Purchaser
engages in or the status of any facts pertaining to Purchaser.




     (b) Except as set forth in Section 4.3 of the Disclosure Schedule, neither GEC
nor Seller is required to file, seek or obtain any notice, authorization, approval, order,
permit or consent of or with any Governmental Authority in connection with the execution,
delivery and performance by GEC and Seller of this Agreement and the Ancillary Agreements to
which they are a party or the consummation of the transactions contemplated hereby or
thereby, except for (i) any filings required to be made under the HSR Act, (ii) such filings
as may be required by any applicable federal or state securities or “blue sky” laws,
(iii) where failure to obtain such consent, approval, authorization or action, or to make
such filing or notification, would not, individually or in the aggregate, reasonably be
expected to have a Seller Material Adverse Effect or (iv) as may be necessary as a result of
any facts or circumstances relating to Purchaser or any of its Affiliates.



 









 





     4.4 Capitalization.




     (a) The authorized capital stock of RQIH consists of 1,000 shares of common stock,
which have no stated par value. The authorized capital stock of RQRE consists of 1,000
shares of common stock, $1.00 par value per share. All of the Shares are validly issued,
fully paid and nonassessable and are not subject to any preemptive rights, rights of first
offer or rights of first refusal. The Shares constitute all of the issued and outstanding
capital stock of the Companies. Seller is the record and beneficial owner of the Shares,
free and clear of any Encumbrance. Upon delivery to Purchaser of certificates evidencing
the Shares duly endorsed for transfer at the Closing in exchange for Purchaser’s payment of
the Purchase Price, Purchaser shall acquire good, valid and
marketable title to the Shares, free and clear of any Encumbrance other than
Encumbrances created by Purchaser.




     (b) There are (i) no outstanding obligations, options, warrants, convertible securities
or other rights, agreements, arrangements or commitments of any kind relating to the capital
stock of a Company or securities convertible or exchangeable into capital stock of a Company
or obligating a Company to issue or sell any shares of capital stock of, or any other
interest in, a Company, (ii) no outstanding contractual obligations of a Company to
repurchase, redeem or otherwise acquire any shares of its capital stock or to provide funds
to, or make any investment (in the form of a loan, capital contribution or otherwise) in,
any other Person, other than as set forth in Section 4.4(c) of the Disclosure
Schedule or (iii) no voting trusts, stockholder agreements, registration rights agreements,
proxies or other agreements or understandings in effect with respect to the voting or
transfer of any of the capital stock of a Company.




     (c) Section 4.4(c) of the Disclosure Schedule sets forth a true and complete
list of (i) all Subsidiaries of the Companies, listing for each Subsidiary its name, its
jurisdiction of organization or formation, each jurisdiction (other than its jurisdiction of
organization or formation) in which it is qualified to do business, the percentage of stock
or other equity interest of each Subsidiary owned by the Companies or a Subsidiary of a
Company and, for each Subsidiary that is a corporation, the authorized and outstanding
capital stock of each such Subsidiary and (ii) all other Persons in which the Companies or
any of their Subsidiaries own, of record or beneficially, any direct or indirect equity or
other similar interest or any right (contingent or otherwise) to acquire the same, listing
for each Person its name, its jurisdiction of organization, each jurisdiction (other than
its jurisdiction of organization) in which it is qualified to do business, the percentage of
stock or other equity interest of each Person owned by the Companies (as well as
identification of which Company owns such interest) or a Subsidiary of the Companies and,
for each Person that is a corporation, the authorized and outstanding capital stock of each
such Person. Other than the Subsidiaries and other entities set forth in Section
4.4(c) of the Disclosure Schedule, there are no other corporations, limited liability
companies, partnerships, joint ventures, associations or other similar entities in which a
Company owns or any of their Subsidiaries own, of record or beneficially, any direct or
indirect equity or other similar interest or any right (contingent or otherwise) to acquire
the same. All of the issued and outstanding shares (or voting securities) of each of the
Subsidiaries of the Companies that are corporations are validly issued, fully paid



 









 







and nonassessable and are not subject to any preemptive rights, rights of first offer or rights
of first refusal. Except as set forth in Section 4.4(c) of the Disclosure Schedule,
(w) the Companies, or one of their Subsidiaries, own beneficially and of record all of the
outstanding shares of capital stock (or voting securities), or securities convertible or
exchangeable into capital stock (or voting securities), of each of the Companies’
Subsidiaries free and clear of any Encumbrances, (x) there are no outstanding obligations,
options, warrants, convertible securities or other rights, agreements or commitments of any
kind relating to the capital stock, or securities convertible or exchangeable into capital
stock, of any Subsidiary of the Companies or obligating the Companies or any Subsidiary of
the Companies to issue or sell any shares of capital stock of, or any other interest in, any
such Subsidiary of the Companies, (y) there are no outstanding
contractual obligations of any Subsidiary of the Companies to repurchase, redeem or
otherwise acquire any shares of its capital stock or to provide funds to, or make any
investment (in the form of a loan, capital contribution or otherwise) in, any other Person,
and (z) except as set forth in Section 4.4(c) of the Disclosure Schedule, there are
no voting trusts, stockholder agreements, proxies or other agreements or understandings in
effect with respect to the voting or transfer of any of the equity interests of any
Companies or any Subsidiary thereof.



     4.5 Financial Statements.




     (a) Attached hereto as Section 4.5(a)(i) of the Disclosure Schedule are true
and complete copies of the unaudited combined balance sheets as of December 31, 2004, 2005
and 2006 and related unaudited combined statements of operations for the Companies and their
Subsidiaries for the fiscal years then ended (collectively, the “Financial
Statements”). The December 31, 2006 balance sheet is referred to herein as the
“Reference Balance Sheet.” Section 4.5(a)(ii) of the Disclosure Schedule
contains a complete and accurate description of the significant accounting policies used in
the preparation of the Financial Statements.




     (b) The Financial Statements (i) have been prepared based on the books and records of
the Companies and their Subsidiaries, (ii) have been prepared in accordance with GAAP as
applied consistent with the past practice of Seller and GEC and the Companies’ normal
accounting practices (except as set forth on Section 4.5(b) of the Disclosure
Schedule or as may be indicated in the Financial Statements and except for the absence of
notes) and (iii) present fairly and accurately, in all material respects, the combined
financial position and results of operations of the Companies and their Subsidiaries as of
the dates indicated or for the periods indicated therein.



     4.6 Title to Assets and Properties. Except as set forth in Section 4.6 of the
Disclosure Schedule, the Companies and their Subsidiaries have good and marketable title to, or
valid leasehold interests in, their assets and properties sufficient to operate such properties and
to conduct their businesses as currently conducted, except for (a) the Permitted Encumbrances (as
defined below) and (b) other defects in such titles, or any easements, restrictive covenants or
similar encumbrances that have not had and would not reasonably be expected to be materially
adverse to the Companies and their Subsidiaries and their respective assets. For purposes of this



 









 




Agreement, “Permitted Encumbrances” mean: (i) encumbrances for assessments, taxes, water,
sewer and other similar charges not yet delinquent or that either Company or any of their
Subsidiaries is contesting in good faith through appropriate proceedings; provided that adequate
reserves have been established with respect thereto; (ii) easements or reservations thereof, rights
of way, highway and railroad crossings, sewers, electric and other utility lines, telegraph and
telephone lines, zoning, building code and other covenants, conditions and restrictions as to the
use of the Real Property that do not affect or interfere in an material way with the use of such
Real Property by the Companies and their Subsidiaries; (iii) encumbrances listed on Section
4.6 of the Disclosure Schedule; (iv) liens securing the claims of materialmen, landlords and
others provided payment is not yet delinquent; (v) any leases, subleases or licenses listed on
Section 4.6 of the Disclosure Schedule; (vi) all encumbrances relating to liens securing
borrowed money to be released at or prior to the Closing, all of which are listed on Section
4.6 of the Disclosure
Schedule; (vii) any and all matters and encumbrances (including, without limitation, fee
mortgages or ground leases) affecting the leased real property of the Companies or their
Subsidiaries, not created or granted by the Companies or their Subsidiaries, but only to the extent
that such matters and encumbrances (1) do not materially interfere with the right of the Companies
or their Subsidiaries to use any of the leased real property, or (2) are not Known to Seller (it
being understood that reasonable investigation for purposes of this clause (vii) will not require
GEC or Seller to conduct title searches with respect to such real property); and (viii) any
subordination or attornment agreement between either of the Companies or any of their Subsidiaries
and the lender for any of the landlords of either of the Companies or any of their Subsidiaries,
all of which are listed on Section 4.6 of the Disclosure Schedule.




     4.7 Material Contracts.




     (a) Section 4.7(a) of the Disclosure Schedule sets forth a true and complete
list of all the Material Contracts of the Companies and the Subsidiaries of the Companies.
As used herein, “Material Contract” means any of the following:




          (i) each material agreement or arrangement of either Company or any Subsidiary
of either Company that was not entered into in the ordinary course of business;




          (ii) each agreement related to indebtedness for borrowed money, or
guaranteeing, or providing security for, any indebtedness of any Person;




          (iii) each partnership, joint venture or other similar agreement to which a
Company or any Subsidiary of either Company is a party or by which any of them is
otherwise bound;




          (iv) each agreement, arrangement, contract or commitment of either Company or
any Subsidiary of either Company restricting or otherwise affecting the ability of
either Company or any Subsidiary of either Company to compete in any jurisdiction;



 









 






          (v) each employment agreement to which either Company or a Subsidiary of either
Company is a party;




          (vi) each agreement for the sale of a material asset that has not yet been
consummated and was not entered into in the ordinary course of business as presently
conducted;




          (vii) all agreements between any of the Companies and their Subsidiaries, on
the one hand, and any of GEC, Seller or their respective Affiliates (other than the
Companies and their Subsidiaries), on the other hand;




          (viii) all hotel management agreements to which either Company or a Subsidiary
of either Company is a party;




          (ix) all condominium association management agreements to which either Company
or a Subsidiary of either Company is a party;




          (x) all front-desk leases to which either Company or a Subsidiary of either
Company is a party; and




          (xi) each other existing agreement, not otherwise covered by clauses (i)
through (x), that (A) requires payments by or to a Company or any Subsidiary of
either Company in excess of One Hundred Fifty Thousand Dollars ($150,000.00) during
any twelve (12)-month period or (B) is material to the Companies and their
Subsidiaries, taken as a whole.



        (b) Except as disclosed in Section 4.7(b) of the Disclosure Schedule:




          (i) none of the Companies or any Subsidiary of either Company party to any
Material Contract, nor, to the Knowledge of Seller, any other party thereto, is in
breach thereof or default thereunder, or has given notice of breach or default to
any other party thereunder, and, to the Knowledge of Seller, no event has occurred
and no condition or state of facts exists which, with the passage of time or the
giving of notice or both, would constitute such a default;




          (ii) no party to a Material Contract has given notice to the Companies or any
Subsidiaries of the Companies of its intent, nor, to the Knowledge of Seller,
intends, to terminate any Material Contract or not to renew any Material Contract
upon expiration of its term; and




          (iii) each Material Contract is valid and binding on and in full force and
effect with respect to either Company or a Subsidiary of either Company party
thereto and, to the Knowledge of Seller, each respective counterparty thereto,
subject to general principles of equity and except as the enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws of general application relating to creditors’ rights.



 









 






     (c) Seller has made available to Purchaser (i) complete and accurate copies of all
Material Contracts and (ii) representative samples of individual agency rental agreements,
rental agreements and wholesale agreements of the Companies.



     4.8 Real Property; Leases; Managed Property.




     (a) Section 4.8(a) of the Disclosure Schedule sets forth a complete and
accurate list of the locations of all real property owned and leased by the Companies or any
of their Subsidiaries (collectively with all improvements located thereon and appurtenances
thereto, the “Real Property”), including whether such Real Property is owned or
leased and the location of, and a brief description of the nature of the activities
conducted on, such Real Property. Except as set forth on Section 4.8(a) of the
Disclosure Schedule, one of the Companies or one of their Subsidiaries has good and
marketable fee simple title to or a valid leasehold interest in the Real Property, free and clear of
all Encumbrances except Permitted Encumbrances.




     (b) The Real Property is not subject to any order to be sold nor is it being condemned,
expropriated or otherwise taken by any Governmental Authority with or without payment or
compensation therefor, nor, to the Knowledge of Seller, has any such condemnation,
expropriation or taking been threatened or proposed.




     (c) There are no pending or, to the Knowledge of Seller, threatened condemnation
proceedings, lawsuits, or administrative actions relating to any of the Real Property which
would reasonably be expected to be material to the Companies and their Subsidiaries.




     (d) Except as described in Section 4.8(d) of the Disclosure Schedule, none of
the Companies nor any of their Subsidiaries has entered into any material contract,
agreement or arrangement granting to any person the right of or use or occupancy of any
portion of the Real Property.




     (e) There are no material latent defects or material adverse physical conditions
affecting the Real Property. All structures and buildings on the Real Property are
adequately maintained and are in good operating condition and repair in all material
respects for the requirements of the business of the Companies and their Subsidiaries as
currently conducted.




     (f) Except as set forth on Section 4.8(f)(i) of the Disclosure Schedule, to the
Knowledge of Seller, none of the owners of any of the properties listed on Section
4.8(f)(ii) of the Disclosure Schedule (the “Specified Properties ”) that are
managed or maintained by either Company or any of their Subsidiaries plans or intends to
cease or interrupt the operations of any of such properties in any material respect or
otherwise close or make unavailable a material portion of any such property for purposes of
renovations or otherwise.



 









 





     4.9 Intellectual Property; Information Systems.




     (a) Section 4.9 of the Disclosure Schedule sets forth a true and complete list
of all patents and patent applications, registered trademarks, registered trade names and
service marks, domain names, and registered copyrights, together with applications to
register the same, owned by one or both of the Companies or a Subsidiary of a Company
(“Registered Intellectual Property”), and all other material Intellectual Property
(as defined below) owned by one or both of the Companies or a Subsidiary of a Company and
used in or necessary for the conduct of their businesses (excluding “clickwrap” or
“shrinkwrap” agreements or agreements contained in or pertaining to “off-the-shelf”
software, trade secrets or the terms of use or service for any website). A Company or a
Subsidiary of a Company is the exclusive owner of all Registered Intellectual Property and
other material Intellectual Property listed on Section 4.9 of the Disclosure
Schedule with respect to which the Companies or such Subsidiary is indicated as the owner on
Section 4.9 of the Disclosure Schedule. To Seller’s Knowledge, the Registered
Intellectual Property is valid and enforceable and is not now involved in any
opposition or cancellation proceeding and, to the Knowledge of Seller, no such proceeding is
or has been threatened in writing with respect thereto. There are no pending actions
against a Company or any Subsidiary of a Company of which a Company or any Subsidiary of a
Company has been given written notice that assert that a Company or any Subsidiary of a
Company has or may have violated, infringed, misappropriated or diluted the Intellectual
Property rights or rights or privacy, rights of publicity, or other rights of others, or
challenging or questioning the validity or enforceability of any Registered Intellectual
Property or any other material Intellectual Property right of a Company or any Subsidiary.
To the Knowledge of Seller, none of the Companies nor any Subsidiary of a Company has
infringed upon, misappropriated, diluted, or unlawfully used any Intellectual Property owned
by another Person or violated rights of privacy, rights of publicity, or other rights of
others. Except as set forth in Section 4.9 of the Disclosure Schedule, to the
Knowledge of Seller, none of the Companies nor any Subsidiary of a Company has received any
written notice alleging any infringement upon or unlawful use of any intellectual property
owned or claimed by another Person that remains unresolved on the date hereof. Except as
set forth in Section 4.9 of the Disclosure Schedule, to the Knowledge of Seller, no
third party is misappropriating, infringing, or diluting any Intellectual Property rights of
a Company or any Subsidiary in a material manner. No loss or expiration of any of the
material Intellectual Property rights is pending or, to the Knowledge of Seller, threatened.
The Companies and their Subsidiaries have taken reasonable steps to protect their rights in
the Intellectual Property and to maintain the confidentiality of any trade secret of the
Companies or their Subsidiaries. Except as set forth in Section 4.9 of the
Disclosure Schedule, the Intellectual Property owned by or licensed to either Company or
their Subsidiaries constitutes all the material Intellectual Property rights necessary for
the conduct and support of the business as it is currently conducted. As used herein,
“Intellectual Property” shall mean all Registered Intellectual Property, together
with (a) trade names and unregistered trademarks and service marks, (b) unregistered
copyrights, (c) inventions, discoveries, technical data, processes, methods, formulae, and
other trade secrets, (d) database rights, publicity rights and all other intellectual and



 









 







industrial property rights, whether protected, created or arising under the laws of the
United States or any other jurisdiction, and (e) information technology systems and software
excluding “off-the-shelf” software, used in the Companies’ and their Subsidiaries’
operations and that has not been customized or otherwise modified by or for the Companies or
such Subsidiaries.




     (b) Section 4.9 of the Disclosure Schedule contains a true and complete list of
all material agreements and contracts to which any Company or any Subsidiary of any Company
is a party under which any Company or any Subsidiary of any Company licenses the
Intellectual Property (as a licensor or licensee) (“Intellectual Property
Contracts”). All of the Intellectual Property Contracts are in full force and effect.
Neither the execution nor delivery of this Agreement nor the consummation of the
transactions contemplated hereby will result in the breach, termination, or suspension of
any of the Intellectual Property Contracts. Except as set forth in Section 4.9 of
the Disclosure Schedule, following the Closing Date, Purchaser will be permitted to exercise
all of the rights of the Companies and their Subsidiaries under the Intellectual Property
Contracts.



     4.10 Litigation; Claims and Proceedings.



     Except as set forth in Section 4.10 of the
Disclosure Schedule, there are no actions, lawsuits, proceedings or investigations that have been
brought by or against any Governmental Authority or any other Person pending or, to the Knowledge
of Seller, threatened, against or by either Company or any Subsidiary of a Company or any of their
properties, assets or businesses, except those that would not, individually or in the aggregate,
reasonably be expected to be material to the Companies and their Subsidiaries, taken as a whole.
There are no existing Governmental Orders naming a Company or any Subsidiary of a Company as an
affected party.



     4.11 Environmental Safety and Health Matters.



     Except as disclosed in Section 4.11 of the Disclosure Schedule:




     (a) “Environmental Law” means any applicable law in effect on the date hereof
relating to (i) the pollution, protection, investigation or restoration of the environment
or natural resources, or (ii) the handling, use, presence, disposal, treatment, storage,
release or threatened release of any material defined as hazardous or toxic in any statute
or regulation pertaining to the environment, including, but not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act, the Federal Water
Pollution Control Act and the Clean Air Act. “Hazardous Substance” means any
substance that is (x) listed, classified or regulated pursuant to any Environmental Law, (y)
any petroleum product or by-product and (z) any other substance which is the subject of
regulatory action by any Governmental Authority pursuant to any Environmental Law.




     (b) Section 4.11 of the Disclosure Schedule lists all material environmental
Permits and the identity of the holder of each such Permit held by a Company, a Subsidiary
of a Company or Seller or its Affiliates (other than the Companies and their



 









 







Subsidiaries)
for the benefit of either Company or any Subsidiary of a Company or for use in the
businesses of the Companies and their Subsidiaries. The Companies and their Subsidiaries
have obtained and are in material compliance with all material Permits that are required
under any Environmental Law for the operation of their businesses as currently being
conducted. To Seller’s Knowledge, (i) all such Permits are valid and in full force and
effect and (ii) no circumstances exist which could cause any such Permit to be revoked,
modified or rendered non-renewable upon payment of the permit fee.




     (c) Each of the Companies, their Subsidiaries and the Real Property is in material
compliance with all applicable Environmental Laws. To the Knowledge of Seller, no fact or
circumstance exists which would reasonably be expected to involve the Companies or any of
their Subsidiaries in any material environmental litigation, or impose any material
environmental liability.




     (d) Neither the Companies nor any Subsidiary of a Company nor, to the Knowledge of
Seller, any other Person has had a material disposal or release of any Hazardous Substances
on, under, in, from or about the Real Property.




     (e) Neither the Companies nor any Subsidiary of a Company nor, to the Knowledge of
Seller, any other Person has disposed or arranged for the disposal of
Hazardous Substances on any third-party property that has subjected or, to the
Knowledge of Seller, may subject the Companies or a Subsidiary of a Company to material
liability under any Environmental Law.




     (f) Neither the Companies nor any Subsidiary of a Company has received any written
notice, demand, letter, claim or request for information relating to the Real Property
alleging a violation of or liability under any Environmental Law and neither the Companies
nor any Subsidiary of a Company is party to any written proceedings, actions, orders,
decrees or injunctions alleging material liability under any Environmental Law.



     4.12 Compliance with Law; Licenses and Permits.



     Except as disclosed in Section 4.12
of the Disclosure Schedule, since November 20, 2003, the businesses of the Companies and their
Subsidiaries have been conducted in compliance in all material respects with all Laws and
Governmental Orders applicable to the Companies and their Subsidiaries. Except as disclosed in
Section 4.12 of the Disclosure Schedule, since November 20, 2003, none of the Companies nor
any Subsidiary of a Company has received any outstanding or uncured written notice alleging any
default or violation of any Law or Governmental Order, nor are there any circumstances Known to
Seller that would reasonably be expected to result in any such defaults or violations, except any
such defaults or violations which would not, individually or in the aggregate, reasonably be
expected to have a Seller Material Adverse Effect. Except as disclosed in Section 4.12 of
the Disclosure Schedule, as of the date hereof, there is no pending change of Law that, to the
Knowledge of the Seller, would reasonably be expected to have a Seller Material Adverse Effect.
The Companies and the Subsidiaries of the Companies have all material Permits, whether federal,
state or local, relating to the ownership and operation of the Companies and their Subsidiaries as
are necessary or required for the conduct of the businesses of the Companies and their
Subsidiaries, except where the failure



 









 




to have such Permits would not reasonably be expected to be
material to the Companies and their Subsidiaries, taken as a whole. As of the date hereof, there
has not been any actual, nor to Seller’s Knowledge is there any pending, threat of loss of any
Permit held or enjoyed by the Companies or a Subsidiary of the Companies which loss was or would
reasonably be expected to be material to the Companies and their Subsidiaries, taken as a whole.




     4.13 Employee Matters and Benefit Plans.




     (a) Section 4.13(a) of the Disclosure Schedule identifies (i) each employment,
bonus, deferred compensation, pension, stock option, stock appreciation right, stock
purchase, profit-sharing, retirement, supplemental retirement, or other similar employee
benefit plan, program, arrangement or practice, (ii) each health, life or disability
insurance, vacation, retiree medical or life insurance, severance, termination pay or
similar plan, program, arrangement or practice, and (iii) each other agreement or fringe
benefit plan, in each case, whether written or unwritten, that is maintained, sponsored,
contributed to or required to be contributed to by a Company, Seller, GEC or a Subsidiary of
a Company and which covers any current or former employee, officer, director or consultant
of a Company or a Subsidiary of a Company, or with respect to which a Company or a
Subsidiary of a Company could reasonably be expected to have any liability (contingent or
otherwise), including all “employee benefit plans” as defined
by Section 3(3) of ERISA (collectively, the “Plans”); provided, however, that
there shall be no obligation to identify on Section 4.13(a) of the Disclosure
Schedule any Plan that is not material. For each Plan, correct and complete copies of the
plan documents and summary plan descriptions, the two most recent Form 5500 annual reports,
the two most recent actuarial reports, if applicable, all related trust agreements,
insurance contracts and funding agreements that implement each such Plan, and the most
recent determination letter or opinion letter issued by the Internal Revenue Service
(“IRS”), if any, have been made available to Purchaser.




     (b) Neither of the Companies nor any Subsidiary of a Company has any commitment,
whether formal or informal, (i) to create any new Plan; (ii) to modify or change any Plan;
or (iii) to maintain for any period of time any Plan, except as described in Section
4.13(b) of the Disclosure Schedule.




     (c) Except as disclosed in Section 4.13(c) of the Disclosure Schedule, (i)
neither Company nor any Subsidiary of a Company, or, to the Knowledge of Seller, any Plan or
any trustee, third party administrator, fiduciary or sponsor of any Plan, has engaged in any
prohibited transactions as defined in Section 406 of ERISA or Section 4975 of the Code for
which there is no statutory exemption under Section 408 of ERISA or Section 4975 of the Code
for which a Company or a Subsidiary of a Company has incurred or could incur any material
liability; (ii) all material filings, reports and descriptions as to such Plans (including
Form 5500 annual reports, summary plan descriptions, and summary annual reports) required,
since January 1, 2005, to have been made or distributed to participants, the IRS, the United
States Department of Labor and other governmental agencies have been made in a timely
manner; (iii) there is no material litigation, disputed claim, governmental proceeding or
investigation pending or, to the



 









 






Knowledge of Seller, threatened with respect to any Plan,
any related trust, or any fiduciary, trustee, administrator or sponsor of any Plan; and (iv)
the Plans have been established, maintained and administered in all material respects in
accordance with their governing documents and all applicable laws, including ERISA and the
Code. Each Plan that is intended to qualify under Section 401 of the Code has received a
favorable determination or opinion letter from the IRS and, to the
Knowledge of Seller, nothing has occurred with respect to the operation of any such Plan that would reasonably be
expected to cause the loss of such qualification or exemption or the imposition of any
material liability, penalty or tax under ERISA or the Code. All contributions (including
all employer contributions and employee salary reduction contributions) required to have
been made under any of the Plans to any funds or trusts established thereunder or in
connection therewith have been timely made, other than a failure to make contributions that
is not material.




     (d) Except as disclosed in Section 4.13(d) of the Disclosure Schedule, none of
the Plans that are “welfare benefit plans,” within the meaning of Section 3(1) of ERISA,
provide for continuing benefits or coverage after termination or retirement from employment,
except for COBRA rights under a “group health plan” as defined in Section 4980B(g) of the
Code and Section 607 of ERISA. The Companies and any Subsidiaries of the Companies have
complied in all material respects with the provisions of Part 6 of Title I of ERISA,
Sections 4980B, 9801, 9802, 9811 and 9812 of the Code,
and the Health Insurance Portability and Accountability Act (including regulations
thereunder).




     (e) Except as disclosed in Section 4.13(e) of the Disclosure Schedule, none of
the Companies, any Subsidiary of a Company nor any entity required to be aggregated with the
Companies or any Subsidiary of a Company under Section 414(b), (c), (m) or (o) of the Code
(“ERISA Affiliate”) has in the last six (6) years sponsored, participated in,
contributed to or incurred any material liability (contingent or otherwise) with respect to
either a plan subject to Title IV of ERISA, or a “multiemployer plan” as defined in Section
4001(a)(3) of ERISA (“Multiemployer Plan”), and none of the Companies, any
Subsidiary of a Company nor any ERISA Affiliate has in the last six (6) years withdrawn in a
partial or complete withdrawal from a Multiemployer Plan and incurred any material liability
as a result of any such partial or complete withdrawal by the Companies, any Subsidiary of a
Company or any ERISA Affiliate from a Multiemployer Plan as described under Sections 4201,
4203, or 4205 of ERISA. None of the Companies nor any Subsidiary of a Company has incurred
any outstanding material liability under Section 4062 of ERISA to the Pension Benefit
Guaranty Corporation or to a trustee appointed under Section 4042 of ERISA. None of the
Companies, any Subsidiary of a Company nor any ERISA Affiliate has engaged in any
transaction described in Section 4069 of ERISA. All contributions required to have been
made under any Multiemployer Plan to any funds or trusts established thereunder or in
connection therewith have been timely made.




     (f) Except as set forth in Section 4.13(f) of the Disclosure Schedule, there
will be no payment, accrual of additional benefits, acceleration of payments or vesting of
any



 









 






benefit under any Plan or any other agreement or arrangement to which a Company is a
party, and no employee, officer, director or consultant of a Company or any Subsidiary of
the Companies will become entitled to severance, termination allowance or similar payments,
solely by reason of entering into or in connection with the transactions contemplated by
this Agreement (whether alone or in combination with any other event). No payment or
benefit that will or may be made in connection with the transactions contemplated by this
Agreement (either alone or in combination with any other events) by a Company, a Subsidiary
of the Companies, Seller or any of its Affiliates with respect to any employee, officer,
director or consultant of a Company or any Subsidiary of the Companies will be characterized
as a “parachute payment,” within the meaning of Section 280G(b)(2) of the Code.




     (g) Each Plan that is a “nonqualified deferred compensation plan” (within the meaning
of Section 409A of the Code) has been operated in good faith compliance with Sections
409A(a)(2), (3), and (4) of the Code.




4.14 Taxes.




     (a) Each Company and each Subsidiary has timely filed all Tax Returns that it was
required to file and such Tax Returns are true, correct, and complete in all material
respects. All Taxes due or payable by or with respect to the Companies and their
Subsidiaries have been or will be timely paid. There is an adequate accrual on the
Financial Statements in accordance with GAAP for all Taxes (other than income Taxes and
payroll Taxes) of the Companies and their Subsidiaries that were not yet due or payable as
of the date of the Financial Statements. Seller has made available to Purchaser true and
correct copies of all (i) federal and state income Tax Returns of the Companies and their
Subsidiaries that are prepared on a consolidated basis or combined basis on a pro forma
basis and only covering the operations of the Companies and their Subsidiaries and relating
to all periods since November 20, 2003, (ii) federal, state and local income Tax Returns
filed by or with respect to the Companies and their Subsidiaries on a stand-alone basis for
all periods since November 20, 2003, and (iii) all other material Tax Returns filed by
either or both of the Companies and/or any of their Subsidiaries. There are no pending
audits or administrative or judicial proceedings relating to Taxes of a Company or any
Subsidiary of a Company. There are no existing penalty, interest or deficiency assessments
relating to U.S. federal Taxes of a Company or any Subsidiary of a Company, and the Seller
has not received any notice of such assessments relating to foreign, state, or local Taxes
of any Company or any Subsidiary and to the Knowledge of Seller, there are no such
assessments. None of Seller, the Companies or any of their Subsidiaries has received
written notice from any Taxing Authority that it intends to commence such an audit or
proceeding.




     (b) None of the Companies or any of their Subsidiaries is a party to any Tax
allocation, sharing, indemnity or similar agreement or arrangement pursuant to which any of
them will have any obligation to make any payments after the Closing.



 









 






     (c) None of the Companies or any of their Subsidiaries is a “foreign person” for
purposes of Section 1445 of the Code, except as set forth in Section 4.14 of the
Disclosure Schedule.




     (d) None of the Companies or any of their Subsidiaries has been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.




     (e) Except with respect to any Affiliated Group of which Seller, its parent or a
Company is the common parent, neither Company nor their Subsidiaries (i) has been a member
of an Affiliated Group or (ii) has liability for the Taxes of any Person under Treas. Reg.
Section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee
or successor, by contract or otherwise.




     (f) Each Affiliated Group has timely filed all material Tax Returns that it was
required to file for each taxable period during which a Company was a member of that
Affiliated Group, all such Tax Returns are true, complete and accurate in all material
respects, and each Affiliated Group has paid all material Taxes due and payable with respect
to each member of the Affiliated Group. With respect to Taxes and Tax Returns of the
Company and its Subsidiaries, the foregoing representation is true, accurate, and complete
without regard to any materiality qualifiers.




     (g) Each of the Companies and their Subsidiaries has withheld and paid to each
appropriate Taxing Authority all Taxes required to have been withheld and paid to
such authorities in connection with amounts paid or owed to any employee, independent
contractor, creditor, stockholder, member or other third party, except as set forth on
Section 4.14 of the Disclosure Schedule.




     (h) None of the Companies nor any of their Subsidiaries has constituted either a
“distributing corporation” or a “controlled corporation” (within the meaning of Section
355(a)(1)(A) of the Code) in a distribution of stock intended to qualify for tax-free
treatment under Section 355 of the Code (i) in the two (2) years prior to the date of this
Agreement or (ii) in a distribution which could otherwise constitute part of a “plan” or
“series of related transactions” (within the meaning of Section 355(e) of the Code) in
conjunction with the transactions contemplated by this Agreement.




     (i) None of the Companies nor any of their Subsidiaries has participated in any
“reportable transaction” as defined in Treas. Reg. § 1.6011-4(b).




     (j) None of the Companies nor any of their Subsidiaries will be required to include any
item of income in, or exclude any item of deduction from, taxable income for any taxable
period (or portion thereof) ending after the Closing Date as a result of any installment
sale or open transaction disposition made on or prior to the Closing Date or prepaid amount
received on or prior to the Closing Date. None of the Companies nor any of their
Subsidiaries nor any other Person on any of their behalf has (i) agreed to or is required to
make any adjustments pursuant to Section 481(a) of the Code or any similar provision of Law
or (ii) executed or entered into a closing agreement pursuant to



 









 






Section 7121 of the Code or
any similar provision of Law with respect to the Companies or their Subsidiaries.




     (k) Each Company and each of its Subsidiaries is member of the “Selling Consolidated
Group” (within the meaning of Section 338(h)(10)(B) and Treas. Reg. § 1.338(h)(10)-1(b)(2))
that includes the Seller.




     (l) ResortQuest Hawaii, LLC is, and has at all times since its conversion from a C
corporation in 2002 been, properly treated for federal, state, and local income tax purposes
as an entity that is disregarded as separate from its owner pursuant to Treas. Reg. §
301.7701-3.




     (m) The transactions contemplated by this Agreement are not subject to the tax
withholding provisions of the Code or the tax withholding provisions of Hawaii state law.
To the Knowledge of Seller, the transactions contemplated by this Agreement are not subject
to the withholding provisions of any other state, local or foreign law.




4.15 Absence of Undisclosed Liabilities; Capital Commitments.




      Except as disclosed in
Section 4.15 of the Disclosure Schedule, and except for liabilities or obligations (i) that
are reflected in, accrued, reserved against or otherwise described in the Reference Balance Sheet,
(ii) that were incurred after the date of the Reference Balance Sheet in the ordinary course of
business and consistent with past practices, (iii) arising pursuant to the terms of contracts or
agreements of any Company or a Subsidiary of any Company entered into in the ordinary course of
business consistent with past practices that are not required to be
reflected as liabilities on a balance sheet, or disclosed in the notes thereto, prepared in
accordance with GAAP, or (iv) that are being paid or satisfied by Seller or its Affiliates at
Closing in accordance with the terms hereof, none of the Companies or any of their Subsidiaries has
any material liabilities or obligations, whether accrued or fixed, absolute or contingent, matured
or unmatured or determined or determinable.




4.16 Absence of Certain Changes.




      Except as disclosed in Section 4.16 of the
Disclosure Schedule, since the date of the Reference Balance Sheet, (a) neither Company nor any
Subsidiary of a Company has (i) split, combined or reclassified its capital stock, (ii) materially
changed its accounting principles, practices or methods, except as required by GAAP or applicable
Law, (iii) declared or paid any dividend or other distribution of cash or other assets or made any
payments to Seller or its Affiliates (in each case, on a net basis), except for participation in
Seller’s and/or its Affiliates’ cash management program pursuant to which cash collected by a
Company is swept by Seller and/or its Affiliates, which shall continue until Closing, or (iv)
suffered any change constituting a Seller Material Adverse Effect and (b) the business of the
Companies and their Subsidiaries has been conducted, in all material respects, in the ordinary
course of business consistent with past practice.




4.17 Labor Matters.




 










 





     Except as disclosed in Section 4.17 of the Disclosure Schedule,
neither of the Companies nor any Subsidiary of a Company is a party to any collective bargaining
agreement or other labor union contract. There is no labor strike, slowdown or stoppage in
progress or, to the Knowledge of Seller, threatened, against or involving either Company or any
Subsidiary of a Company. Since November 20, 2003, neither Company nor any Subsidiary of a Company
has experienced any labor strike, slowdown or stoppage. Seller has no Knowledge of any material
activities or proceedings of any labor union to organize any employees of a Company or any
Subsidiary of a Company. Except as set forth in Section 4.17 of the Disclosure Schedule,
since January 1, 2006, there has been no request for collective bargaining or for a representation
election from any employee, union or the National Labor Relations Board. All individuals who are
performing consulting or other services for a Company or any Subsidiary of a Company are or were
correctly classified as either “independent contractors” or “employees,” as the case may be, and,
immediately prior to the Closing, will qualify for such classification with immaterial exceptions.
Seller is not aware that any officer or key employee, or that any group of key employees, currently
intends to terminate his or her employment with a Company or any Subsidiary of a Company, nor does
a Company or any Subsidiary of a Company have a present intention to terminate the employment of
any of the foregoing. Section 4.17 of the Disclosure Schedule sets forth all employment,
consulting or other material agreements, written or oral, between a Company or any Subsidiary of a
Company and any employee, officer, director or consultant and identifies each such employee or
consultant whose employment or services may not be terminated on less than three months’ notice
without compensation. Each Company and each Subsidiary of a Company is in compliance in all
material respects with all applicable Laws respecting employment, termination of employment,
employment practices, terms and conditions of employment and wages and hours. There are no
pending, or to the Knowledge of Seller,
threatened, material claims or actions against a Company or any Subsidiary of a Company under
any workers’ compensation policy or long-term disability policy.



     4.18 Finder’s Fee. Except for fees payable to Citigroup Global Markets Inc., which fees are
payable by GEC or Seller, neither GEC, Seller, the Companies nor any Subsidiary of the Companies
has incurred any liability to any party for any brokerage or finder’s fee or agent’s commission, or
the like, in connection with the transaction contemplated by this Agreement based upon arrangements
made by or on behalf of Seller or either Company.



     4.19 Insurance. Section 4.19 of the Disclosure Schedule contains a true and complete
list of all policies of property, fire and casualty, product liability, workers’ compensation, and
other forms of insurance held by the Companies or their Subsidiaries as of the date hereof. Seller
has heretofore provided Purchaser with a summary of the coverage and terms of each such policy.
All such policies are in full force and effect, no notice of default or termination has been
received in respect thereof, and all premiums due thereupon have been paid. Seller has made
available to Purchaser (a) true and complete copies or binders of all such insurance policies and
(b) a list of all claims paid under the insurance policies of the Companies and their Subsidiaries
since January 1, 2005 and all claims pending as of the date hereof.



     4.20 Accounts Receivable. The accounts receivable reflected on the Reference Balance Sheet or
the accounting records of the Companies and their Subsidiaries as of the Closing represent or will
represent valid obligations for monies due for goods sold and delivered or services actually
performed by the Companies or their Subsidiaries in the ordinary course of



 









 




business. There is no
material contest, claim, defense or right of set off relating to the amount or validity of any such
accounts receivable.




     4.21 Related Party Transactions. Except as set forth in Section 4.21 of the
Disclosure Schedule, (a) neither GEC, Seller nor any of their Affiliates, nor any officer or
director of GEC, Seller or their Affiliates, nor any officer or director of a Company or the
Subsidiaries of a Company (any such person, a “Related Person”), is involved, either
directly or indirectly, in any material business arrangement or relationship with (i) the Companies
or their Subsidiaries (except in connection with their service as an officer or director, as
applicable), (ii) any Person that purchases from or sells, licenses or furnishes to the Companies
or any of their Subsidiaries any material amount of goods, property, technology, intellectual or
other property rights or (iii) any contract or agreement to which either Company or any of their
Subsidiaries is a party or by which it may be bound or affected, and (b) no Related Person owns any
material property or right, tangible or intangible, used by the Companies or their Subsidiaries in
the conduct of their business.



     4.22 Books and Records. The Companies and their Subsidiaries have made and kept (and given
Purchaser access to) their true, correct and complete books and records and accounts, which
accurately and fairly reflect, in reasonable detail, the activities of the Companies and their
Subsidiaries in all material respects.



     4.23 Hawaiian Operations. Except as set forth in Section 4.23 of the Disclosure
Schedule, the Companies and their Subsidiaries own or lease all assets used in the conduct of the
Hawaiian operations of Seller, GEC and their respective Subsidiaries.



     4.24 Payment Card Industry Data Security Standard. Neither Company nor any of their
Subsidiaries has received notice from any credit card company or credit card processor that (a)
either Company or any Subsidiary is not in compliance with the applicable guidelines and standards
established by the Payment Card Industry Data Security Standards (“PCI DSS”) or (b) such
credit card company or credit card processor intends to assess a fine with respect to, or
terminate, the credit card processing operations of either Company or any Subsidiary.



     4.25 Amendment to Waimea Plantation Cottages Management Agreement. ResortQuest Hawaii, LLC
has entered into a Third Amendment to Waimea Plantation Cottages Management Agreement with Waimea
Plantation Cottages, LLC in the form attached hereto as Exhibit E, and has agreed to
contribute the sum of $125,000 to Waimea Plantation Cottages, LLC for purposes of property
improvements pursuant to the terms of such agreement.



ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF INTERVAL AND PURCHASER




     Interval and Purchaser, jointly and severally, represent and warrant to Seller as follows:



     5.1 Corporate Status. Each of Interval and Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation, has all
requisite corporate power under the laws of its jurisdiction of incorporation and authority to own,
operate or lease all of its properties and assets and to carry on its business



 









 




as it is now being
conducted, and is duly qualified to do business and is in good standing in each of the
jurisdictions in which the ownership, operation or leasing of its properties and assets and the
conduct of its business requires it to be so qualified, licensed or authorized, except where the
failure to have such power and authority or to be so qualified, licensed or authorized would
not reasonably be expected to have a Purchaser Material Adverse Effect.




     5.2 Authority. Each of Interval and Purchaser has all requisite corporate power and authority
to enter into this Agreement and the Ancillary Agreements to which it is a party and to consummate
the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and
the Ancillary Agreements to which it is a party by each of Interval and Purchaser and the
consummation of the transactions contemplated hereby and thereby have been duly and validly
authorized by each of Interval and Purchaser, and no other corporate proceedings are necessary to
authorize this Agreement or any of the Ancillary Agreements to which it is a party or to consummate
the transactions contemplated hereby and thereby. This Agreement and the Ancillary Agreements to
which it is a party that have been executed as of the date hereof have been, and the Ancillary
Agreements to which Purchaser will be a party that will be executed at Closing will be, duly
executed and delivered by each of Interval and Purchaser, and (assuming due authorization and
delivery by GEC and Seller) this Agreement and the Ancillary Agreements to which each of Interval
and Purchaser is a party that have been executed as of the date hereof constitute, and the
Ancillary Agreements to which Purchaser will be a party that will be executed at Closing will
constitute, the legal, valid and binding obligations of each of Interval and Purchaser, enforceable
against each of them in accordance with their terms, subject to general principles of equity and
except as the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws of general application relating to creditors’ rights.



     5.3 No Conflict. Except for the notification requirements of the HSR Act, neither the
execution, delivery and performance of this Agreement and the Ancillary Agreements to which it is a
party by each of Interval and Purchaser nor the consummation by each of Interval and Purchaser of
the transactions contemplated hereby and thereby will (a) violate, conflict with or result in the
breach of any term or provision of the certificate of incorporation or bylaws of either Interval or
Purchaser, (b) conflict with or violate, in any material respect, any Law applicable to either
Interval or Purchaser or any of its assets, properties or business, or (c) conflict with or
violate, result in the breach of any term or provision of, or constitute a default (or event which
with the giving of notice or lapse of time, or both, would become a default) under, or give to
others any rights of termination, amendment, acceleration, consent, suspension, revocation or
cancellation of, or result in the creation of any Encumbrances on any of the assets or properties
of either Interval or Purchaser pursuant to, any material note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which either Interval or
Purchaser is a party or by which its properties or assets may be bound, except, in the case of
clauses (b) and (c) only, for such conflicts, violations, breaches, defaults, rights of
termination, amendment, acceleration, consent, suspension, revocation or cancellation or creation
of any Encumbrance that would not, individually or in the aggregate, reasonably be expected to have
a Purchaser Material Adverse Effect.



     5.4 Compliance with Law. Each of Interval and Purchaser has complied in all material respects
with all applicable Laws or Governmental Orders that would affect its ability to



 









 




perform its
respective obligations under this Agreement or the Ancillary Agreements to which it is a party.
There is no Action pending or, to the Knowledge of Interval and Purchaser, threatened
against either Interval or Purchaser affecting its ability to perform its obligations
hereunder and thereunder.




     5.5 Consents. Except for the requirements of the HSR Act, no action, approval, consent or
authorization by either Interval or Purchaser, including, but not limited to, any action, approval,
consent or authorization by, or any other order of, filing with or notification to any Governmental
Authority, is or will be necessary to make this Agreement, the Ancillary Agreements or any of the
agreements or instruments to be executed, performed and delivered by either Interval or Purchaser
pursuant hereto a legal, valid and binding obligation of either Interval or Purchaser, subject to
general principles of equity and except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws of general application relating to
creditors’ rights, or to consummate the transactions contemplated hereunder, except where the
failure to obtain such actions, approvals, consents or authorizations or orders of, or the failure
to make such filings or notifications, would not have a Purchaser Material Adverse Effect.



     5.6 Sufficient Funds. As of the date hereof, Purchaser has, and as of the Closing Purchaser
will have, sufficient funds available (through existing credit arrangements or otherwise) to enable
it to consummate the transactions contemplated by this Agreement.



     5.7 Finder’s Fee. Neither Interval nor Purchaser has not entered into nor will enter into any
contract, agreement, arrangement or understanding with any broker, finder or similar agent or any
Person that will result in the obligation of GEC, Seller, the Companies, their Subsidiaries or any
of their respective stockholders, option holders, directors, officers or other Affiliates to pay
any finder’s fee, brokerage fees or commission or similar payment in connection with the
transactions contemplated hereby.



     5.8 No Reliance. Each of Interval and Purchaser acknowledges that, except as set forth in
this Agreement or the Disclosure Schedule, Purchaser is not relying on any representation or
warranty regarding the Companies or their Subsidiaries or their respective assets, properties and
businesses. Without limiting the generality of the foregoing, neither GEC, Seller, the Companies
nor any other Person has made a representation or warranty to Interval or Purchaser with respect to
(a) any projections, estimates or budgets for the Companies’ or their Subsidiaries’ businesses, (b)
any material, documents or information relating to either of the Companies or any Subsidiary of a
Company made available to each of Interval and Purchaser or their counsel, accountants or advisors
in Seller’s data room or otherwise, except as expressly covered by a representation or warranty set
forth in Article 4, or (c) the information contained in Seller’s Confidential Information
Memorandum dated October 2006.



     5.9 Investment Intent. Purchaser has such knowledge and experience in financial and business
matters that it is capable of evaluating the risks and merits associated with the acquisition of
the Shares and is acquiring the Shares for its own account for investment, with no present
intention of making a public distribution thereof. Purchaser shall not offer to sell, sell or
otherwise dispose of the Shares in violation of the Securities Act of 1933, as amended, or any
state securities laws.



 









 





     5.10 Litigation, Claims and Proceedings. There are no claims or actions that have been
brought by or against any Governmental Authority or any other Person pending or, to the Knowledge
of Interval and Purchaser, threatened against or by either Interval or Purchaser or any of its
Subsidiaries or assets that would, individually or in the aggregate, reasonably be expected to have
a Purchaser Material Adverse Effect. To the Knowledge of Interval and Purchaser, there are no
existing Governmental Orders naming Interval, Purchaser or any of their respective Subsidiaries as
an affected party that, individually or in the aggregate, have had or would reasonably be expected
to have a Purchaser Material Adverse Effect. There are no outstanding judgments against Interval,
Purchaser or any of their respective Subsidiaries that, individually or in the aggregate, have had
or would reasonably be expected to have a Purchaser Material Adverse Effect.



ARTICLE 6

COVENANTS




     6.1 Interim Operations of the Companies. Seller covenants and agrees that, after the date
hereof and prior to the Closing Date or earlier termination of this Agreement pursuant to its terms
(unless Purchaser shall otherwise approve in writing, which approval shall not be unreasonably
withheld, conditioned or delayed, or unless as otherwise contemplated by this Agreement or
disclosed in Section 6.1 of the Disclosure Schedule):




     (a) the businesses of the Companies and their Subsidiaries shall be conducted in all
material respects in the ordinary course of business consistent with past practice;




     (b) the Companies and their Subsidiaries shall not (i) amend their articles of
incorporation, bylaws, limited liability company agreements or similar organizing documents;
(ii) split, combine, subdivide or reclassify their outstanding shares of capital stock or
other equity interests; or (iii) repurchase, redeem or otherwise acquire, or make any
dividends or distributions on account of, any shares of their capital stock, equity
interests or any securities convertible into their capital stock or equity interests (it
being understood that this provision shall not prohibit (a) dividends of cash from the
Companies’ Subsidiaries or any other entities in which the Companies or their Subsidiaries
have invested, or (b) any inter-company cash management or other payments made by the
Companies and their Subsidiaries to GEC or its Affiliates in the ordinary course of
business);




     (c) except as required by applicable Law, the Companies and their Subsidiaries shall
not: (i) enter into, renew, adopt or amend (except for renewals on substantially identical
terms) any employee welfare, pension, retirement, profit-sharing or similar plan, program,
agreement, policy or arrangement (including those containing severance or change in control
provisions); (ii) enter into, modify, adopt or amend (except for renewals on substantially
identical terms) any employee benefit plan; (iii) enter into, modify or amend any employment
or consulting agreement (except for renewals on substantially identical terms) with, or
grant or announce any increase in the salaries, bonuses, retention or success pay or other
benefits payable by the Companies or any of their Subsidiaries to any of their officers,
directors, consultants or employees, other than as required by Law and except for merit or
other increases in compensation or



 









 







benefits in the ordinary course of business, consistent with past practice, but in any
event, not in excess of 3% in the aggregate for any Person, pursuant to any plans, programs
or agreements existing on the date hereof; or (iv) hire any employee outside of the scope of
the budget of the Companies and their Subsidiaries previously
provided to Purchaser (excluding any person hired as a
replacement for an employee who has left the employ of the Companies or their Subsidiaries);




     (d) the Companies and their Subsidiaries shall not (i) incur or assume any long-term or
short-term debt, issue any debt securities or incur any indebtedness for borrowed or
purchase money or letters of credit, except for borrowings from GEC, Seller or its
Affiliates in the ordinary course of business consistent with past practice (through
participation in GEC’s, Seller’s and their Affiliates’ cash management program); (ii)
assume, guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the material obligations of any other Person except as set
forth in Section 6.1 of the Disclosure Schedule; (iii) make any material loans,
advances or capital contributions to, or investments in, any other Person, whether by
purchase of stock or securities, contributions to capital, property transfer or otherwise;
(iv) mortgage, pledge or otherwise encumber any of their assets, create any Encumbrance of
any kind with respect to any such asset other than Permitted Encumbrances, or sell, transfer
or otherwise dispose of any of their assets except in the ordinary course of business
consistent with past practice; (v) authorize, or make any commitment with respect to, any
single capital expenditure that is in excess of $125,000 or capital expenditures in excess
of $700,000 for the Companies and their Subsidiaries taken as a whole; or (vi) make any
prepayments with respect to, or advance any funds under, any agreement or arrangement to
which the Companies or their Subsidiaries is a party;




     (e)
the Companies and their Subsidiaries shall not issue, deliver, sell or encumber shares of any class of their capital stock, equity interests or any securities convertible
or exchangeable into, or any rights, warrants or options to acquire, any such shares or
interests;




     (f) the Companies and their Subsidiaries shall not acquire any business, corporation,
partnership, limited liability company, other business organization or any division thereof,
whether by merger, consolidation, the purchase of a substantial portion of the assets of
such business or otherwise;




     (g) the Companies and their Subsidiaries shall not change their accounting policies,
practices or methods except as required by GAAP or by the rules and regulations of the
United States Securities and Exchange Commission;




     (h) the Companies and their Subsidiaries shall not make, change or revoke any Tax
election, enter into any closing agreement, settle or compromise any Tax claim or
assessment, file any amended Tax Return, change any Tax reporting method policy or procedure
or consent to any extension or waiver of the limitation period applicable to any claim or
assessment in respect of material Taxes;




     (i) Seller shall not pledge or otherwise encumber the Shares;



 









 






     (j) the Companies and their Subsidiaries shall not adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization or otherwise permit its corporate or limited liability company existence to
be suspended, lapsed or revoked;




     (k) the Companies and their Subsidiaries shall not (i) enter into any contract,
agreement or arrangement that would be a Material Contract if entered into prior to the date
hereof or (ii) modify, amend or terminate any Material Contract;




     (l) the Companies and their Subsidiaries shall not sell, lease, license, transfer or
otherwise dispose of assets of the Companies or their Subsidiaries with a value in excess of
$100,000 individually or in the aggregate;




     (m) the Companies and their Subsidiaries shall not take any action to replace any
property management system;




     (n) GEC, Seller, the Companies and their Subsidiaries shall not take any action or fail
to take any action within their control which would cause any representation or warranty of
GEC or Seller in this Agreement to be or become untrue in any material respect; and




     (o) the Companies shall not enter into, or permit any of their Subsidiaries to enter
into, any commitments or agreements to do any of the foregoing.



     In addition, between the date hereof and the Closing: (x) GEC shall complete all reasonably
necessary documentation to transfer all right, title and interest in (1) the approximately forty
(40) time clocks used by ResortQuest Hawaii, LLC to ResortQuest Hawaii, LLC so as to allow for
ResortQuest Hawaii LLC’s use thereof in conjunction with its license of the Kronos time-keeping
software following the Closing; and (2) the two (2) check printers and two (2) check sealing
machines currently used by ResortQuest Hawaii, LLC for their continued use by ResortQuest Hawaii,
LLC following the Closing, and (y) where reasonably requested to do so by Purchaser, GEC shall
cooperate with Purchaser to provide it with adequate documentation of professional liability
coverage afforded the Companies and their Subsidiaries by GEC and its predecessors on a historical
basis, where reasonably available to GEC, so as to allow Purchaser the opportunity to obtain
endorsement of the Companies and their Subsidiaries, at the sole cost and expense of Purchaser, for
conduct occurring prior to the Closing.



     6.2 Consents.




     (a) Each of the parties hereto shall use all commercially reasonable efforts to take,
or cause to be taken, all appropriate action to do, or cause to be done, all things
necessary, proper or advisable under applicable Law or otherwise to consummate and make
effective the transactions contemplated by this Agreement and the Ancillary Agreements as
promptly as practicable, including using all commercially reasonable efforts to (i) obtain
from Governmental Authorities and other Persons all consents, approvals, authorizations,
qualifications and orders as are necessary for the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements, (ii) promptly make all
necessary filings, and thereafter make any other



 









 







required submissions, with respect to this Agreement required under any applicable Law
(other than the HSR Act), and (iii) in no event later than ten (10) business days following
the date hereof, file or cause to be filed with the United States Federal Trade Commission
(the “FTC”) and the United States Department of Justice (the “DOJ”) the
notification and report form pursuant to the HSR Act, required for the transactions
contemplated hereby; and (iv) as promptly as practicable, comply with any request for
additional information and documents pursuant to the HSR Act. Each of the parties hereto
shall inform the others promptly of any communication made by or on behalf of such party to
(including permitting the other party to review such communication in advance), or received
from, the FTC or the DOJ and shall furnish to the other such information and assistance as
the other may reasonably request in connection with its preparation of any filing,
submission or other act that is necessary or advisable under the HSR Act to the extent
permitted by applicable Law. The parties hereto shall keep each other timely apprised of
the status of any communications with, and any inquiries or requests for additional
information from, the FTC or the DOJ to the extent permitted by applicable Law, and shall
comply promptly with any such inquiry or request. No party shall agree to participate in
any meeting with any Governmental Authority in respect of any filings, investigation or
other inquiry unless it consults with the other party in advance and, to the extent
permitted by such Governmental Authority, gives the other party the opportunity to attend
and participate thereat. Subject to the Mutual Non-Disclosure Agreement, dated as of
October 13, 2006, by and between GEC and Interval International, Inc., an Affiliate of
Purchaser (the “Confidentiality Agreement”), and to the extent permitted by
applicable Law, the parties will provide each other with copies of all correspondence,
filings or communications between them or any of their representatives, on the one hand, and
any Governmental Authority or members of its staff, on the other hand, with respect to this
Agreement and the transactions contemplated hereby.




     (b) The parties hereto shall cooperate with one another in determining whether any
action by or in respect of, or filing with, any Governmental Authority (excluding the
actions and filings described in clause (a) above) is required or reasonably appropriate, or
any action, consent, approval or waiver from any party to any Material Contract is required
or reasonably appropriate, in connection with the consummation of the transactions
contemplated by this Agreement. Subject to the terms and conditions of this Agreement and
the Confidentiality Agreement, in taking such actions or making any such filings, the
parties hereto shall furnish information required in connection therewith and timely seek to
obtain any such actions, consents, approvals or waivers.



     6.3 Publicity. GEC, Seller and Purchaser agree that the initial press release with respect to
the transactions contemplated hereby shall be a joint press release. Thereafter, subject to their
respective legal obligations (including requirements of stock exchanges, national stock markets and
other similar regulatory bodies), GEC and Purchaser shall consult with each other, and use
reasonable efforts to agree upon the text of any press release, before issuing any such press
release or otherwise making public statements with respect to the transactions contemplated hereby
and in making any filings with any federal or state governmental or regulatory agency or with any
national securities exchange or national stock market with respect
thereto.



 









 






     6.4 Access to Records and Properties.




     (a) From the date hereof until the Closing Date or earlier termination of this
Agreement, Seller will, and will cause the Companies and their Subsidiaries to:




          (i) provide Purchaser and its officers, counsel and other representatives with
reasonable access during normal business hours to the operations of the Companies
and their Subsidiaries, their principal personnel and representatives, and such
books and records pertaining to the Companies and their Subsidiaries as Purchaser
may reasonably request, provided that (A) Purchaser agrees that such access will
give due regard to minimizing interference with the operations, activities and
employees of the Companies and their Subsidiaries, (B) such access and disclosure
would not violate the terms of any agreement to which the Companies or any of their
Subsidiaries is bound or any applicable Law and (C) all arrangements for access
shall be made solely through Seller; and




          (ii) furnish to Purchaser or its representatives such additional financial and
operating data and other information relating to the Companies and their
Subsidiaries as may be reasonably requested, to the extent that such access and
disclosure would not (A) violate the terms of any agreement to which the Companies
or any of their Subsidiaries is bound or any applicable Law, or (B) cause
significant competitive harm to the Companies or any of their Subsidiaries or their
Affiliates if the transactions contemplated by this Agreement are not consummated.




     (b) From the date hereof until the Closing Date, Purchaser agrees that all information
so received from Seller, the Companies and their Subsidiaries shall be deemed received
pursuant to the Confidentiality Agreement and that each shall, and shall cause its
Affiliates and each of its and their representatives to, comply with the provisions of the
Confidentiality Agreement with respect to such information, and the provisions of the
Confidentiality Agreement are hereby incorporated herein by reference with the same effect
as if fully set forth in this Agreement.



     6.5 Further Action. From and after the Closing Date, each of the parties hereto shall use its
reasonable efforts to perform such further acts and execute such documents as may be reasonably
required to effect the transactions contemplated hereby. Each of GEC and Purchaser will comply in
all material respects with all applicable Laws in connection with its execution, delivery and
performance of this Agreement and the transactions contemplated hereby. Each of GEC and Purchaser
agrees to use its reasonable efforts to obtain in a timely manner all necessary waivers, consents,
approvals and opinions and to effect all necessary registrations and filings, and to use its
reasonable efforts to take, or cause to be taken, all other actions and to do, or cause to be done,
all other things necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated hereby.



 









 





     6.6 Expenses. Whether or not the transactions contemplated hereby are consummated, all costs
and expenses incurred in connection with this Agreement and the transactions contemplated hereby
shall be paid by the party hereto incurring such expenses, except as
expressly provided herein. Notwithstanding the foregoing, each of Seller and Purchaser shall
pay one half of the fees required to be paid under the HSR Act.



     6.7 Notification of Certain Matters.



     Each party shall:




     (a) give prompt notice to the others of the occurrence or nonoccurrence of any event
whose occurrence or nonoccurrence is reasonably expected to cause any of the conditions
precedent set forth in Article 7 not to be satisfied; and




     (b) promptly furnish the other with copies of notices or other communications received
by any party from any Governmental Authority or other third party with respect to this
Agreement or the transactions contemplated hereby.



     6.8 Employee Benefit Plans.




     (a) Purchaser intends to cause each of the Companies and their Subsidiaries to continue
to employ on an at-will basis all employees of the Companies and their Subsidiaries who are
so employed immediately prior to the Closing Date (including employees absent from work as
of the Closing Date due to short-term or long-term disability, sick leave, workers’
compensation absence or other approved leave who have been active employees within six (6)
months prior to the Closing Date) (“Company Covered Employees”). The Companies,
Seller and GEC shall each use their commercially reasonable efforts to assist Purchaser in
employing such Company Covered Employees as of the Closing. For the avoidance of doubt, no
provision in this Agreement shall be construed to restrict the ability of the Companies,
their Subsidiaries or Purchaser to amend any of the compensation and employee benefit plans
and policies maintained by the Companies and/or their Subsidiaries following the Closing.




     (b) Except as otherwise provided herein, Seller and/or GEC shall be solely liable for
any severance or other termination payments or benefits required to be made or provided to
any current or former employee, officer, director or consultant of a Company or a Subsidiary
of the Companies (including any Company Covered Employee) (i) as a result of any termination
of employment or service that occurs on or prior to the Closing or (ii) otherwise as a
result of the transactions contemplated by this Agreement (excluding any such payments
required to be made as the result of the termination of such Covered Employee’s employment
by Purchaser at or after the Closing).




     (c) Except (i) as set forth in Section 6.8(h), and (ii) for any other Plans
covered by the Transition Services Agreement, effective as of the Closing, the Companies and
their Subsidiaries and each of their present and former employees shall cease participating
in Seller’s or its affiliated entities’ Plans (other than any of such Plans sponsored by a
Company or a Company Subsidiary). For purposes of determining eligibility and vesting (but
not for benefit accrual) under any Purchaser benefit plan in



 









 






which a Company Covered
Employee participates after the Effective Time, such employee shall be credited with his or
her years of service with the Companies or a Subsidiary of the Companies.




     (d) As of the Closing Date, Purchaser shall cause to be maintained for the benefit of
Company Covered Employees a defined contribution plan intended to be qualified under Section
401(a) of the Code and Purchaser shall, upon the Closing or as soon as practicable
thereafter, direct the trustee of GEC’s 401(k) Plan to transfer to the trustee of a defined
contribution plan intended to be qualified under Section 401(a) of the Code the aggregate
individual account balances of the Company Covered Employees (whether or not vested) who are
then employed by Purchaser or the Companies or any of their Subsidiaries.




     (e) In the event that (i) GEC makes payments under its Supplemental Salary Deferral
(SUDCOMP) plan to Company Covered Employees that may be categorized as income reportable on
Form W-2 during 2007 with respect to such Company Covered Employees, or (ii) the Company
Covered Employees exercise options to acquire common stock of GEC that results in income
reportable on Form W-2 during 2007 with respect to such Company Covered Employees, the
parties will cooperate with respect to reporting such amounts as required by applicable Law
on Forms W-2 prepared by GEC or Purchaser, as the case may be. Notwithstanding anything in
this Agreement to the contrary, GEC shall be and remain responsible for the payment of all
Taxes and expenses, and shall be entitled to all Tax benefits, with respect to such
Supplemental Salary Deferral (SUDCOMP) Plan and the exercise of such stock options.




     (f) GEC shall remain solely responsible for satisfying the continuation coverage
requirements for group health plans under the Consolidated Omnibus Reconciliation Act of
1985 and Sections 601 through 608 of ERISA (collectively, “COBRA”) for all former
employees (and their respective beneficiaries and dependents) of the Companies and any
Subsidiary thereof who are receiving COBRA continuation coverage as of the Closing Date and
for all former employees and Company Covered Employees (and their respective beneficiaries
and dependents) who are entitled to elect such coverage on account of a qualifying event
occurring on or before the Closing Date, in each case, to the extent such right to such
continuation coverage arose or arises under a Plan sponsored by Seller and/or GEC (i.e.,
other than any Plan sponsored by any Company or any Subsidiary of any Company). The
Companies (or any Subsidiary of any Company, as applicable) shall be solely responsible for
satisfying the continuation coverage requirements for group health plans under COBRA for all
former employees (and their respective beneficiaries and dependents) of the Companies and
any Subsidiary thereof who are receiving COBRA continuation coverage as of the Closing Date
and for all former employees and Company Covered Employees (and their respective
beneficiaries and dependents) who are entitled to elect such coverage on account of a
qualifying event occurring on or before the Closing Date, in each case, to the extent such
right to such continuation coverage arose or arises under a Plan sponsored by a Company or
any Subsidiary of any Company.




     (g) GEC shall provide Purchaser with correctly completed I-9 forms (the “I-9
Forms”) and attachments with respect to all Company Covered Employees (excluding



 









 






any Company Covered Employees whose employment commenced prior to the time at which I-9 Forms
were required to be entered into under applicable Law).




     (h) Simultaneously with the consummation of the transactions contemplated hereby, GEC
and Seller agree to distribute the vested account balances of the Company
Covered Employees under the GEC Supplemental Salary Deferral (SUDCOMP) Plan to such
individuals in accordance with the provisions of the GEC Supplemental Salary Deferral
(SUDCOMP) Plan.




     (i) Within two (2) business days before the Closing, GEC shall provide to Purchaser a
list of all active employees and employees out on leave of the Companies and their
Subsidiaries which list will include the employee name, date last worked and, where applicable, expected date for return
to work status. Such list shall be dated within one week of the delivery of such list as provided in the foregoing sentence.



     6.9 Intercompany Indebtedness. Immediately prior to the Closing, Seller shall contribute to
the Companies, as a capital contribution in respect of the Shares of the relevant Company, all
indebtedness owed by such Company or any of its Subsidiaries to GEC, Seller or any of their
Affiliates that has not been repaid by such Company or its Subsidiary prior to the Closing, if any.
In addition, immediately prior to the Closing, any indebtedness owed by Seller or its Affiliates
(other than the Companies or any of their Subsidiaries) to the Companies or any of their
Subsidiaries that has not been repaid by the Seller or its Affiliates prior to the Closing, shall
be satisfied.



     6.10 Debt and Guaranties. At the Closing, GEC shall pay or make provision for the release of
guaranties of the Companies and their Subsidiaries related to the contracts, agreements and
obligations of GEC, Seller and any of their respective Affiliates (other than the Companies and
their Subsidiaries). Section 6.10 of the Disclosure Schedule sets forth all such
guaranties.



     6.11 Supplements to Disclosure Schedule. If GEC or Seller becomes aware of, or there occurs
after the date of this Agreement and prior to the Closing, any fact or condition that constitutes a
Seller Material Adverse Effect or a material breach of any representation or warranty made by
Seller in Article 4 (without giving effect, for purposes of this Section 6.11, to
any qualifications as to materiality or “Material Adverse Effect” or any similar
qualification contained in such representations or warranties), or if any fact or condition, either
currently existing or hereafter occurring, otherwise requires any change in the Disclosure Schedule
delivered to Purchaser at the time of execution of this Agreement, Seller will promptly disclose
such fact or condition to Purchaser and deliver to Purchaser a supplement to the Disclosure
Schedule (each, a “Disclosure Schedule Supplement”) specifying any needed change. In
addition, if prior to the Closing, Purchaser becomes aware of any fact or condition that
constitutes a breach of any representation or warranty of Seller, Purchaser will promptly disclose
such fact or condition to Seller. Any Disclosure Schedule Supplement shall not be deemed to amend
the Disclosure Schedule for purposes of determining whether the conditions set forth in Section
7.2 or Article 10 have been satisfied and shall not be deemed to cure any breach of any
representation or warranty or to limit the rights and remedies of Purchaser under this Agreement
for any breach of such representations and warranties.



 









 





     6.12 Guaranties by GEC and Interval.




     (a) Subject to the terms and conditions of this Agreement, GEC will cause Seller to
perform all of its obligations under this Agreement. Subject to the terms and conditions
hereof, GEC waives (i) any and all defenses specifically available to a guarantor (other
than any defenses otherwise available to Seller), and (ii) any notices, including, without
limitation, any notice of any amendment of this Agreement or waiver or other similar action
granted pursuant to this Agreement.




     (b) Subject to the terms and conditions of this Agreement, Interval will cause
Purchaser to perform all of its obligations under this Agreement. Subject to the terms and
conditions hereof, Interval waives (i) any and all defenses specifically available to a
guarantor (other than any defenses otherwise available to Purchaser), and (ii) any notices,
including, without limitation, any notice of any amendment of this Agreement or waiver or
other similar action granted pursuant to this Agreement.



     6.13 Retention and Access to Books and Records. As soon as practicable after the Closing, GEC
or Seller shall provide to Purchaser copies of any books and records primarily related to the
operations of the Companies or their Subsidiaries, and access to other information related to the
operations of the Companies or their Subsidiaries reasonably requested by Purchaser, including,
without limitation, the books and records with respect to any properties managed by a Company or
any Subsidiary of either Company, in the possession of GEC or Seller or their Affiliates to the
extent that the Companies or their Subsidiaries do not already possess copies of such books and
records. After the Closing Date, Purchaser shall cause the Companies and their Subsidiaries to
retain for a period consistent with Purchaser’s record retention policies and practices all books
and records of the Companies and their Subsidiaries. Following the Closing, Purchaser shall
provide GEC or Seller and its representatives, at GEC’s or Seller’s sole cost and expense,
reasonable access thereto, during normal business hours and on prior written notice as reasonably
necessary in connection with any Tax, audit, governmental or similar inquiry, the preparation of
financial statements relating to GEC or Seller, the preparation of any filings required to be made
by GEC or Seller with the Securities and Exchange Commission or to pursue or defend any suit,
claim, action, proceeding or investigation reasonably related to claims arising or accruing prior
to the Closing. Any access to the books and records of the Companies and their Subsidiaries
following the Closing pursuant to this Section 6.13 shall be upon the condition that any
such access not materially interfere with the business operations of the Companies and their
Subsidiaries, provided that such access shall not be unreasonably denied.



     6.14 Non-Competition; Non-Solicit and Confidentiality.




     (a) (i) For a period of five years from and after the Closing Date, GEC shall not, and
shall cause its Affiliates not to, without the prior written consent of Purchaser (which may
be withheld in its sole discretion), directly or indirectly engage in the business of
providing hotel management or vacation condominium, hotel condominium, timeshare or rental
property management services anywhere in the State of Hawaii, whether such engagement is as
an officer, director, proprietor, employee, partner, investor (other than as a holder of
less than 5% of the outstanding capital stock of a



 









 






publicly traded corporation), guarantor,
consultant, advisor, agent, sales representative or other participant. Notwithstanding the
foregoing, nothing in this clause (i) shall (A) restrict the activities of any third party
acquirer of GEC (a “Third Party Acquirer”), provided that in no event shall a Third
Party Acquirer be permitted to provide hotel or condominium resort management services with
respect to the Specified Properties; or (B) prohibit GEC or any of its Affiliates from
providing hotel management services to hotels whose primary business is in hosting
conventions, meetings and/or large business groups, provided that in no event shall GEC or
any of its Affiliates be permitted to provide hotel management services with respect to the
Specified Properties. It is acknowledged and
agreed that RHAC Holdings, LLC and Waipouli Holdings, LLC will not be considered to be
Affiliates of GEC or Seller for purposes of this Section 6.14.




     (ii) For a period of five years from and after the Closing Date, Seller and its
Subsidiaries shall not, and Seller shall cause its Affiliates who are or propose to be
engaged in the business of providing hotel management or vacation condominium, hotel
condominium, timeshare or rental property management services, not to, without the prior written consent of Purchaser (which may be withheld in its
sole discretion), directly or indirectly engage in the business of providing hotel or
condominium resort management services with respect to the Specified Properties, whether
such engagement is as an officer, director, proprietor, employee, partner, investor (other
than as a holder of less than 5% of the outstanding capital stock of a publicly traded
corporation), guarantor, consultant, advisor, agent, sales representative or other
participant.




     (b) For a period of five years from and after the Closing Date, (i) GEC shall not, and
shall cause its Affiliates not to, and (ii) Seller and its Subsidiaries shall not, and
Seller shall cause its Affiliates who are or propose to be engaged in the business of providing
hotel management or vacation condominium, hotel condominium, timeshare or rental property
management services not to, without the prior written
consent of Purchaser, which may be withheld in its sole discretion:




          (i) directly or indirectly solicit or recruit any employee of either Company or
any of their Subsidiaries, or encourage or aid any employees of the Companies or any
of their Subsidiaries as of the Closing Date to terminate their employment with
either Company or any of their Subsidiaries, in each case, for the purpose of being
employed by GEC or Seller or by any business, individual, partnership, firm,
corporation or other entity on whose behalf GEC or Seller is acting as an agent,
representative or employee, or convey any confidential information or trade secrets
about other employees of either Company or any of their Subsidiaries relating to
their education, experience, skills, abilities, compensation and benefits, and
inter-personal relationships with suppliers to and customers of either Company and
their Subsidiaries to any other Person except within the scope of GEC’s or Seller’s
duties to either Company; provided, however, that a general solicitation of the
public for employment shall not constitute a solicitation, encouragement or aid
hereunder so long as the general



 









 






solicitation is not designed to target, or does not
have the effect of targeting, any employee of either Company or any of their
Subsidiaries; or



          (ii) solicit, induce or persuade any supplier of either Company or any of their
Subsidiaries to terminate or otherwise limit its business relationship with either
Company or any of their Subsidiaries.




     (c) For a period of five years from and after the Closing Date, Interval and Purchaser
shall not, and shall cause their Subsidiaries not to, without the prior written consent of
Seller (which may be withheld in its sole discretion), directly or indirectly engage in the
business of providing management services with respect to the properties
listed on Schedule 6.14(c), whether such engagement is as an officer, director,
proprietor, employee, partner, investor (other than as a holder of less than 5% of the
outstanding capital stock of a publicly traded corporation), guarantor, consultant, advisor,
agent, sales representative or other participant.




     (d) For a period of five years from and after the Closing Date, Interval and Purchaser
shall not, and shall cause their Subsidiaries, not to, without the prior written consent of
Seller, which may be withheld in its sole discretion:




          (i) directly or indirectly solicit or recruit any employee of Seller or any of
its Subsidiaries, or encourage or aid any employees of the Seller or any of its
Subsidiaries as of the Closing Date to terminate their employment with Seller or
any of its Subsidiaries, in each case, for the purpose of being employed by
Purchaser or any Company or by any business, individual, partnership, firm,
corporation or other entity on whose behalf Purchaser or any Company is acting as an
agent, representative or employee, or convey any confidential information or trade
secrets about other employees of Seller or any of its Subsidiaries relating to their
education, experience, skills, abilities, compensation and benefits, and
inter-personal relationships with suppliers to and customers of Seller and its
Subsidiaries to any other Person; provided, however, that a general solicitation of
the public for employment shall not constitute a solicitation, encouragement or aid
hereunder so long as the general solicitation is not designed to target, or does not
have the effect of targeting, any employee of Seller or any of its Subsidiaries; or




          (ii) solicit, induce or persuade any supplier of Seller any of its Subsidiaries
to terminate or otherwise limit its business relationship with Seller or any of its
Subsidiaries.




     (e) The parties hereto agree that (i) due to the unique nature of the services and
capabilities of GEC, Seller, Interval and Purchaser, damages would be an inadequate remedy
in the event of breach or threatened breach of the provisions this Section 6.14,
(ii) any breach under Section 6.14(a), Section 6.14(b) or Section
6.14(g) may allow GEC and Seller to unfairly compete with Interval, Purchaser, the
Companies and their Subsidiaries, resulting in irreparable harm to Interval, Purchaser, the
Companies and their Subsidiaries, and any breach under Section 6.14(c) or
Section 6.14(d) may allow Interval and Purchaser to unfairly compete with Seller,
GEC and their Subsidiaries, resulting in




 










 




irreparable harm to Seller, GEC and their Subsidiaries, and (iii) in the event of any breach of
Section 6.14(a), Section 6.14(b) or Section 6.14(g), Interval, Purchaser,
the Companies and their Subsidiaries and Affiliates shall be entitled to, and in the event of any
breach of Section 6.14(c) or Section 6.14(d), GEC, Seller and their Subsidiaries
and Affiliates, shall be entitled to, appropriate equitable relief, in addition to whatever
remedies they might have at law, and may, either with or without pursuing any potential damage
remedies, immediately obtain and enforce
an injunction, including, without limitation, a temporary restraining order or preliminary
injunction, prohibiting GEC, Seller and their Affiliates (in the case of any breach of Section
6.14(a), Section 6.14(b) or Section 6.14(g)), and Interval, Purchaser and their
Affiliates (in the case of any breach of Section 6.14(c) or Section 6.14(d)) from
violating the provisions of this Section 6.14 in any available forum.




          (f)      (i) Without limitation, the parties agree and intend that the covenants contained
in this Section 6.14 shall be deemed to be a series of separate covenants and
agreements, one for each and every political subdivision. It is the desire and intent of
the parties hereto that the provisions of this Section 6.14 be enforced to the
fullest extent permissible under the laws and public policies of each jurisdiction in which
enforcement is sought. Accordingly, if any provision in this Section 6.14 or deemed
to be included herein shall be adjudicated to be invalid or unenforceable, such provision,
without any action on the part of the parties hereto, shall be deemed amended to delete or
to modify (including, without limitation, a reduction in duration, geographical area or
prohibited business activities) the portion adjudicated to be invalid or unenforceable, such
deletion or modification to apply only with respect to the operation of such provision in
the particular jurisdiction in which such adjudication is made, and such deletion or
modification to be made only to the extent necessary to cause the provision as amended to be
valid and enforceable.




                    (ii) GEC and Seller agree and acknowledge that the covenants of each contained in this
Section 6.14 are reasonably necessary for the protection of Purchaser’s interests
under this Agreement, including the full benefit of any reputation or goodwill associated
with the business of the Companies and their Subsidiaries as the business may exist on and
after the date hereof, and are not unduly restrictive upon either of GEC or Seller.
Interval and Purchaser agree and acknowledge that the covenants of Interval and Purchaser
contained in this Section 6.14 are reasonably necessary for the protection of
Seller’s interests under this Agreement, including the full benefit of any reputation or
goodwill associated with the business of the Seller and its Subsidiaries as the business may
exist on and after the date hereof, and are not unduly restrictive upon Interval and
Purchaser.



          (g) GEC and Seller acknowledge that, through their direct or indirect ownership of the
Companies and the Subsidiaries of the Companies, GEC and Seller have acquired Confidential
Information (as defined below). GEC and Seller shall not, except as may be required to
perform GEC’s and Seller’s duties under this Agreement or as required by applicable law,
without limitation in time, communicate, divulge, disseminate, disclose to others or
otherwise use, whether directly or indirectly, any Confidential Information regarding the
Companies or any of their Subsidiaries or Affiliates. “Confidential Information”



 









 





 shall mean material information about either Company or any of their Subsidiaries, and their
respective businesses, employees, consultants, contractors, clients and customers, that is
not disclosed by either Company or any of their Subsidiaries for financial reporting
purposes or otherwise publicly available and that was learned by GEC or Seller through its
relationship with the Companies or any of their Subsidiaries or Affiliates, including
(without limitation) any proprietary knowledge, trade secrets, data, formulae, information
and client and customer lists and all
papers, resumes, and records (including computer records) of the documents containing
such Confidential Information. The obligations of GEC and Seller under this Section
6.14 shall not apply to information which: (1) is or becomes generally available to the
public without breach of this Section 6.14; (2) GEC, in good faith, deems necessary
or advisable to be included in filings with the Securities and Exchange Commission or
related public disclosures; or (3) GEC or its Subsidiaries received from a third party
without an obligation of confidentiality. In addition, the parties acknowledge and agree
that GEC, Seller and their representatives have provided Confidential Information to
prospective purchasers of the Companies and the Subsidiaries of the Companies and their
businesses in connection with the strategic alternative review process with respect thereto
and the provisions of this Section 6.14 shall not apply to any such information
provided by GEC, Seller or their representatives prior to the date hereof in connection with
the aforementioned strategic alternative review process; provided such information has been
made available pursuant to confidentiality agreements with terms materially no less
stringent than the terms of the Confidentiality Agreement. GEC and Seller acknowledge that
such Confidential Information is specialized, unique in nature and of great value to the
Companies and their Subsidiaries or Affiliates.



          6.15 RHAC Holdings, LLC; Waipouli Holdings LLC.




          It is acknowledged and agreed by the parties
that, prior to the Closing, the ownership interest held by RQIH in RHAC Holdings, LLC and Waipouli
Holdings LLC will be distributed and/or transferred by RQIH to GEC or an Affiliate of GEC prior to
Closing and that no Company or any Subsidiary of any Company will hold an ownership interest in
RHAC Holdings, LLC or Waipouli Holdings LLC at the Closing, or have any liability or obligation
arising out of or related to such ownership interest.




ARTICLE 7

CLOSING CONDITIONS




          7.1 Conditions to Obligations of Seller and Purchaser to Consummate the Transaction.




          The respective obligation of each of Seller and Purchaser to consummate the transactions contemplated
hereby shall be subject to the satisfaction of each of the following conditions:





     (a) Legality. No order, decree or injunction shall have been entered or issued
by any Governmental Authority that is in effect and has the effect of making the



 









 






transactions contemplated hereby illegal or otherwise prohibiting consummation of the
transactions contemplated hereby.




     (b) HSR Act and Other Regulatory Approvals. Any governmental or regulatory
notices or approvals required under any Laws (including the expiration or termination of the
waiting period (or extension thereof) under the HSR Act) to carry out the transactions
contemplated by this Agreement shall have been obtained and the parties
shall have complied with all Laws applicable to the transactions contemplated by this
Agreement.



          7.2 Additional Conditions to Obligations of Purchaser.




          The obligation of Purchaser to
consummate the transactions contemplated hereby shall also be subject to the satisfaction or waiver
of each of the following conditions:





     (a) Representations and Warranties. The representations and warranties of
Seller contained in this Agreement that are qualified by Seller Material Adverse Effect
shall be true and correct on and as of the Closing Date (except to the extent such
representations and warranties shall have been expressly made as of an earlier date, in
which case such representations and warranties shall have been true and correct as of such
earlier date) with the same force and effect as if made on and as of the Closing Date and
the representations and warranties of Seller contained in this Agreement that are not
qualified as to Seller Material Adverse Effect shall be true and correct on and as of the
Closing Date (except to the extent such representations and warranties shall have been
expressly made as of an earlier date, in which case such representations and warranties
shall have been true and correct as of such earlier date) with the same force and effect as
if made on and as of the Closing Date, except to the extent that any failures of such
representations and warranties to be so true and correct, individually or in the aggregate,
would not reasonably be expected to result in a Seller Material Adverse Effect.




     (b) Agreements and Covenants. Seller shall have performed or complied in all
material respects with all agreements and covenants required by this Agreement to be
performed or complied with by it on or before the Closing.




     (c) Other Closing Deliverables. Purchaser shall have received the Closing
deliverables set forth in Section 3.2(a).




     (d) Consents. The consents required pursuant to the Material Contracts set
forth in Section 7.2(d) of the Disclosure Schedule shall have been received.




     (e) Release of Guaranty. Seller shall have delivered to Purchaser releases of
or from lenders under the agreements set forth in Section 6.10 of the Disclosure
Schedule.




     (f) Transition Services Agreement. GEC and Gaylord Hotels, Inc. (an Affiliate
of GEC) shall have executed and delivered to Purchaser a Transition Services Agreement in
the form attached hereto as Exhibit A effective as of the Closing Date with respect
to the provision by Gaylord Hotels, Inc. of certain services specified therein to the



 









 






Companies and their Subsidiaries after the Closing (the “Transition Services
Agreement”).




     (g) Opinion of Counsel. Seller shall have delivered to Purchaser the written
opinion of counsel to Seller, dated as of the Closing Date, substantially in the form
attached hereto as Exhibit B.




     (h) Officer’s Certificate. Seller shall have delivered to Purchaser a
certificate of an officer of Seller that the conditions set forth in Sections 7.2(a)
and 7.2(b) have been satisfied.




     (i) License Agreement. Seller and ResortQuest Hawaii, LLC shall have executed
and delivered to Purchaser the Trademark and Domain Names License Agreement in the form
attached hereto as Exhibit C (the “License Agreement”) with respect to the
use of the “ResortQuest” tradename in Hawaii.




     (j) Resignation of Directors and Officers. All directors or officers of the
Companies and/or the Subsidiaries of a Company shall have resigned as of the Closing Date.




     (k) No MAE. There shall not have occurred after the date hereof an event,
change, circumstance or effect that has had or is reasonably likely to have a Seller
Material Adverse Effect.




     (l) Section 338 Election and FIRPTA Certificates. Purchaser shall have
received from Seller (i) an affidavit of non-foreign status that complies with Section 1445
of the Code and any certificate required to establish that no withholding is required under
applicable state law (including a Form N-289, Certification for Exemption from the
Withholding Tax on Disposition of Hawaii Real Property), (ii) unless the Purchaser has
elected to cause the LLC Conversion, an executed IRS Form 8023 (and all applicable
corresponding state and local forms) with respect to each of the Companies and their
Subsidiaries, and (iii) if the Purchaser has elected to cause the LLC Conversion, evidence
reasonably satisfactory to the Purchaser that the Conversion has occurred.




     (m) RHAC Holdings, LLC; Waipouli Holdings, LLC. The ownership interest held by
RQIH in RHAC Holdings, LLC and Waipouli Holdings LLC shall have been distributed and/or
transferred by RQIH to GEC or an Affiliate of GEC prior to Closing such that no Company or
any Subsidiary of any Company holds an ownership interest in RHAC Holdings, LLC or Waipouli
Holdings LLC as of the Closing.



          7.3 Additional Conditions to Obligations of Seller.




          The obligation of Seller to consummate
the transactions contemplated hereby shall also be subject to the satisfaction or waiver of each of
the following conditions:





     (a) Representations and Warranties. The representations and warranties of
Purchaser contained in this Agreement that are qualified by Purchaser Material Adverse



 









 






Effect shall be true and correct on and as of the Closing Date (except to the extent such
representations and warranties shall have been expressly made as of an earlier date, in
which case such representations and warranties shall have been true and correct as of such
earlier date) with the same force and effect as if made on and as of the Closing Date, and
the representations and warranties of Purchaser contained in this Agreement that are not
qualified as to Purchaser Material Adverse Effect shall be true and correct on and as of the
Closing Date (except to the extent such representations and warranties shall have been
expressly made as of an earlier date, in which case such representations and
warranties shall have been true and correct as of such earlier date) with the same
force and effect as if made on and as of the Closing Date, except to the extent that any
failures of such representations and warranties to be so true and correct, individually or
in the aggregate, would not reasonably be expected to result in a Purchaser Material Adverse
Effect.




     (b) Agreements and Covenants. Purchaser shall have performed or complied in
all material respects with all agreements and covenants required by this Agreement to be
performed or complied with by it on or before the Closing.




     (c) Other Closing Deliverables. Seller shall have received the Closing
deliverables set forth in Section 3.2(b).




     (d) Officer’s Certificate. Purchaser shall have delivered to Seller a
certificate of an officer of Purchaser that the conditions set forth in Sections
7.3(a) and 7.3(b) have been satisfied




     (e) Transition Services Agreements. Purchaser shall have executed and
delivered the Transition Services Agreement.



ARTICLE 8

CERTAIN TAX MATTERS




          8.1 Tax Indemnity Obligations.





     (a) GEC and Seller shall be liable for, and shall save, defend, indemnify and hold
harmless Purchaser and its Subsidiaries (including the Companies and their Subsidiaries)
from and against any and all Losses suffered or paid as a result of, in connection with or
arising out of: (i) Taxes of the Companies and their Subsidiaries that are due with respect
to periods ending on or prior to the Closing Date, including all interest related thereto,
all Taxes arising from the transactions contemplated by this Agreement (including
distributions of assets pursuant to Section 7.2(m) and all Taxes attributable to
RHAC Holdings, LLC and Waipouli Holdings, LLC), and all withholding Taxes; (ii) Taxes of the
Companies and their Subsidiaries that are due with respect to periods (“Straddle
Periods”) that include but do not end on the Closing Date to the extent attributable to
the portion of the Straddle Period ending at the close of business on the Closing Date;
(iii) any and all Taxes imposed on either of the Companies or any of their Subsidiaries by
reason of either of the Companies or any of their Subsidiaries (or any predecessor thereof)
having been a member of an



 









 






Affiliated Group on or prior to the Closing Date (including,
without limitation, by reason of the liability of either Company or any of their
Subsidiaries (or any predecessor thereof) pursuant to Treas. Reg. § 1.1502-6(a) (or any
predecessor or successor thereof or any analogous or similar provision under state, local or
foreign Law)); and (iv) any inaccuracy in or breach of any Tax representation or warranty
contained in this Agreement or in any certificate delivered pursuant hereto and any breach
of any Tax covenant or agreement contained in this Agreement (without regard to disclosure
in the Disclosure Schedule). Notwithstanding any other provision of this Agreement to the
contrary, GEC and Seller shall not be
required to indemnify Purchaser or the Companies and their Subsidiaries for any Tax to
the extent such Tax is specifically accrued as a liability for Taxes in arriving at the
working capital adjustments pursuant to Section 2.2 of this Agreement.




     (b) Unless prohibited by applicable Law, the parties hereto shall cause the taxable
period of the Companies and their Subsidiaries to close as of the close of business on the
Closing Date. For purposes of this Agreement, whenever it is necessary to determine the
liability for Taxes of the Companies and their Subsidiaries for a Straddle Period, the
determination of the Taxes of the Companies and their Subsidiaries for the portion of the
Straddle Period ending on and including, and the portion of the Straddle Period beginning
after, the Closing Date shall be determined by assuming that the Straddle Period consisted
of two taxable years or periods, one which ended at the close of the Closing Date and the
other which began at the beginning of the day following the Closing Date, and items of
income, gain, deduction, loss or credit, and state and local apportionment factors of the
Companies and their Subsidiaries for the Straddle Period, shall be allocated between such
two taxable years or periods on a “closing of the books basis” by assuming that the books of
the Companies and their Subsidiaries were closed at the close of the Closing Date. However,
(i) exemptions, allowances or deductions that are calculated on an annual basis, such as the
deduction for depreciation, and (ii) periodic taxes such as real and personal property taxes
shall be apportioned ratably between such periods on a daily basis.



          8.2 Responsibility for Filing Tax Returns.





     (a) Income Tax Returns. GEC will be responsible for and will cause to be
prepared and duly filed (i) all Tax Returns of the Companies and their Subsidiaries that are
due before the Closing Date (taking account of extensions of time to file such Tax Returns)
and (ii) all Tax Returns of the Companies and their Subsidiaries that are income Tax Returns
and are prepared on a consolidated, unitary, or combined basis and that include GEC or
Seller for all taxable periods ending on or before the Closing Date. GEC shall include the
income of the Companies and their Subsidiaries on GEC’s consolidated federal income Tax
Returns (and any foreign or state consolidated, unitary or combined Tax Returns) for all
periods ending on or before the Closing Date and pay any income Taxes attributable to such
income. The Companies and their Subsidiaries shall furnish Tax information to GEC for
inclusion in GEC’s federal consolidated income Tax Return (or other Tax Return described in
the preceding sentence) for the period that includes the Closing Date in accordance with the
Companies’ and their Subsidiaries’ past custom and practice.



 









 






     (b) Other Tax Returns. Purchaser shall prepare or cause to be prepared and
file or cause to be filed all Tax Returns for the Companies and their Subsidiaries that are
filed after the Closing Date (other than Tax Returns with respect to periods described in
Section 8.1(a)) and, subject to the right to payment from GEC under the next
sentence, Purchaser shall pay all Taxes shown as due on those Tax Returns. Not later than
two (2) days prior to the filing of any such Tax Returns, GEC shall pay to Purchaser the
amount of Taxes owed by GEC pursuant to the provisions of Section 8.1(a).




     (c) Review Rights. No later than thirty (30) days prior to the due date for
filing thereof, Purchaser shall provide GEC with drafts of all Tax Returns prepared by it
pursuant to Section 8.2(b), but only to the extent such Tax Returns would reflect a
Tax liability for which GEC is responsible under this Agreement. The reviewing party shall
have the right to review and provide comments on Tax Returns during the fifteen (15)-day
period following the receipt of such Tax Returns. GEC and Purchaser shall consult with each
other and attempt in good faith to resolve any issues arising as a result of any Tax Returns
described in this Section 8.2(c) and, if they are unable to do so, the disputed
items shall be resolved (within a reasonable time, taking into account the deadline for
filing such Tax Return) by an internationally recognized independent accounting firm chosen
by both Purchaser and GEC. Upon resolution of all such items, the relevant Tax Return shall
be timely filed on that basis. The costs, fees and expenses of such accounting firm shall
be borne equally by Purchaser and GEC. If any dispute with respect to a Tax Return is not
resolved prior to the due date of such Tax Return, such Tax Return shall be filed in the
manner which the party responsible for preparing such Tax Return deems correct, without
prejudice to the other party’s rights and obligations under this Article 8.



8.3 Cooperation on Tax Matters.





     (a) Purchaser and GEC shall cooperate fully, as and to the extent reasonably requested
by the other party, in connection with the filing of Tax Returns pursuant to this
Article 8 and any audit, litigation or other proceeding with respect to Taxes. Such
cooperation shall include the retention and (upon the other party’s request) the provision
of records and information that are reasonably relevant to any such audit, litigation or
other proceeding and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. GEC and
Purchaser agree (i) to retain all books and records with respect to Tax matters pertinent to
the Companies or a Subsidiary of a Company relating to any taxable period beginning before
the Closing Date until the expiration of the statute of limitations (and, to the extent
notified by Purchaser or GEC, any extensions thereof) of the respective taxable periods, and
to abide by all record retention agreements entered into with any Taxing Authority, and (ii)
to give the other party reasonable written notice prior to transferring, destroying or
discarding any such books and records and, if Purchaser so requests, GEC shall allow
Purchaser to take possession of such books and records.




     (b) Purchaser and GEC further agree, upon request, to use their best efforts to obtain
any certificate or other document from any Governmental Authority or any other Person as may
be necessary to mitigate, reduce or eliminate any Tax that could be



 









 






imposed (including, but
not limited to, with respect to the transactions contemplated hereby).



          8.4 Refunds and Tax Benefits. Any income Tax refunds that are received by Purchaser, either
Company or any Subsidiary, and any amounts credited against income Tax liability of Purchaser, a
Company or any Subsidiary for which GEC is not liable and that relate to income Tax periods or
portions thereof ending on or before the Closing Date, other than any such refunds or credits of
Tax that are (a) attributable to a loss, credit or other tax attribute arising in
periods beginning after the Closing Date (including the portion of a Straddle Period beginning
after the Closing Date) or (b) reflected as an asset on the Closing Date Balance Sheet, shall be
net of any Taxes incurred in respect of the receipt or accrual of such refund or credit and net of
any other expenses attributable thereto be for the account of GEC paid over to GEC within fifteen
(15) days after receipt or entitlement thereto.




          8.5 Section 338(h)(10) Election and Purchase Price Allocation.





     (a) GEC and Seller, on the one hand, and Purchaser, on the other hand, shall join
together in making an election under Section 338(h)(10) of the Code (and all corresponding
elections under state, local or foreign law) (collectively, the “Section 338(h)(10)
Elections”) with respect to the shares of stock of the Companies that are purchased by
Purchaser pursuant to this Agreement and, at the request of Purchaser, shares of stock of
any Subsidiaries of the Companies. GEC and Seller shall cooperate with Purchaser by taking
all steps necessary in order to effectuate the Section 338(h)(10) Elections in accordance
with applicable laws (including, without limitation, the preparation of IRS Form 8023 and
all similar state and local forms and submitting any ruling request, prepared by and at the
sole expense of Purchaser on behalf of GEC, the Seller or the Companies, as the case may be,
the applicable taxing authorities with respect to such election). At the request of the
Purchaser, GEC and Seller shall deliver to the Purchaser on the Closing Date (or such later
time as requested by Purchaser) an executed IRS Form 8023 (and all applicable corresponding
state or local forms) with respect to the Companies and their Subsidiaries. Notwithstanding
the foregoing, at the request of the Purchaser, GEC and the Seller shall convert each of the
Companies (and, at the discretion of the Purchaser, each of the Subsidiaries that is not a
limited liability company) into a limited liability company before the Closing Date in lieu
of the parties making the Section 338(h)(10) Election set forth above, provided that
Purchaser provides a written notice of such request to GEC and Seller no later than ten (10)
days prior to the Closing Date (the “LLC Conversion”).




     (b) Within one hundred and twenty (120) days following the Closing Date, Purchaser
shall prepare and deliver to GEC a draft schedule allocating the Purchase Price among the
stock of the Companies and allocating the “aggregate deemed sales price” within the meaning
of the applicable Treasury Regulations under Section 338(h)(10) of the Code with respect to
each of the Companies and their Subsidiaries, among the assets of the Companies and their
Subsidiaries (collectively, the “Allocation”). Within thirty (30) days of delivery
of the Allocation, GEC shall notify Purchaser of any proposed changes. If the parties
cannot agree on the



 









 






Allocation, the dispute shall be resolved by an independent nationally
recognized accounting firm mutually determined by Purchaser and GEC. The Allocation shall
be used in preparing IRS Form 8883 (and all similar forms required under state or local
Law), which form shall be completed, executed, and delivered by the parties as soon as
reasonably practicable after the finalization of the Allocation, but in no event later than
sixty (60) days before the due date for the filing of such form. Any payments subsequent to
the Closing Date (such as indemnity payments under the terms of this Agreement) that are
treated as an adjustment to purchase price of the assets of the Companies and their
Subsidiaries for tax purposes shall be reflected as an adjustment to the price allocated to
a specific asset, if any, giving rise to the
adjustment and if any such adjustment does not relate to a specific asset, such
adjustment shall be allocated among the Company assets in accordance with the Allocation
method provided in this Section 8.5(b). In the event that Purchaser has made the
election to proceed with a LLC Conversion, the provisions described in this paragraph shall
continue to apply, except that the reference to “Allocation” shall be an allocation of the
purchase price for tax purposes that is done in accordance with Section 1060 of the Code and
Treasury Regulations thereunder and the applicable form used to reflect the Allocation shall
be IRS Form 8594 (and all similar forms required under state or local Law).




     (c) Purchaser, GEC and Seller agree to file and agree to cause each of the Companies
and their Subsidiaries to file all federal, state, local and foreign Returns in accordance
with the Allocation (as originally proposed or as revised in accordance with this Agreement,
as the case may be) and, except as required pursuant to a final determination (as defined in
Section 1313(a) of the Code or corresponding provisions of state or local Law), not to take,
or cause to be taken, any action that would be inconsistent with such Allocation in any
Return, audit, litigation or otherwise.



          8.6 Transfer Taxes. All transfer, documentary, sales, use, stamp, registration and other
similar Taxes and fees (including any penalties and interest) incurred in connection with this
Agreement shall be borne fifty percent (50%) by Purchaser and fifty percent (50%) by GEC, except
that any transfer Taxes arising from the distribution of RHAC Holdings, LLC and Waipouli Holdings,
LLC shall be borne by GEC.




          8.7 Termination of Tax Sharing Agreements. Any Tax allocation, sharing or indemnity agreement
or arrangement (other than this Agreement), whether or not written, that may have been entered into
by Seller (or any Affiliate of Seller), on the one hand, and either Company or any of their
Subsidiaries, on the other hand, shall be terminated as to the Companies and their Subsidiaries as
of the Closing Date, and no payments (or any other obligations) that are owed by or to either
Company or their Subsidiaries pursuant thereto shall be required to be made (or performed)
thereunder.




          8.8 Tax Proceedings.





     (a) In the event (i) Purchaser (or its Affiliates) or (ii) GEC (or its Affiliates)
receives notice of any pending or threatened Tax audits or assessments by any Tax authority
or other disputes concerning Taxes with respect to which the other party may incur liability
under this Article 8 (or otherwise), the party in receipt of such notice shall



 









 






promptly notify the other party of such matter in writing. The failure by Purchaser to
provide such notice on a timely basis, however, shall not release GEC from any of its
obligations under this Article 8, except to the extent that GEC is prejudiced by
such failure.




     (b) GEC shall have the right to defend, object to or prosecute, at its sole cost and
expense, those Tax claims relating to periods ending on or before the Closing Date. GEC may
in its discretion settle or compromise any such Tax claim; provided, however, that if the
results of such Tax claim could affect the Tax liability of Purchaser, the Companies or
their respective Subsidiaries for any Tax period including or ending after
the Closing Date, then GEC shall not settle or compromise such Tax claim without the
prior written consent of Purchaser, which consent shall not be unreasonably withheld. With
respect to Tax claims relating to periods ending on or before the Closing Date that are
controlled by GEC and the settlement of which requires Purchaser’s consent pursuant to this
paragraph, Purchaser or its authorized representatives shall be entitled, at the expense of
Purchaser, to attend and participate in all proceedings relating to such Tax claim.
Purchaser shall have the right to defend, object to or prosecute all other Tax claims.



          8.9 Treatment of Indemnity Payment. Except as otherwise required by applicable Law, the
parties agree that any indemnity payments under the terms of this Agreement and any payment under
Sections 2.2 and 2.3 shall be treated as an adjustment to the Purchase Price for
income tax purposes.




          8.10 Withholding. Purchaser shall be entitled to deduct and withhold from the Purchase Price
otherwise payable pursuant to this Agreement such amounts as it is required to deduct and withhold
with respect to the making of such payment under the Code, or any provision of United States
federal, state or local, or any foreign, tax Law. To the extent that amounts are so withheld or
paid over to or deposited with the relevant Governmental Authority by Purchaser, such amounts shall
be treated for all purposes of this Agreement as having been paid to the applicable holders of
Shares in respect of which Purchaser made such deduction and withholding.




          8.11 Conflict with Article 10. In the event of any conflict between Article 10 and
this Article 8 with respect to indemnification for Taxes, this Article 8 shall
control. For the avoidance of doubt, the provisions of Sections 8.1(a) and 8.2 are
not subject to the limitations set forth in Section 10.5 hereof.




ARTICLE 9

TERMINATION




          9.1 Termination.




          This Agreement may be terminated at any time before the Closing Date as
follows:





     (a) by mutual written consent of each of Seller and Purchaser;



 









 






     (b) by either Seller or Purchaser, if the Closing shall not have occurred on or before
October 1, 2007 (the “Termination Date”); provided, however, that in the event the
FTC or DOJ issues a “second request” in connection with any review of the transactions
contemplated by this Agreement under the HSR Act, such date shall be extended to January 1,
2008; provided further, however, that the right to terminate this Agreement under this
Section 9.1(b) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the failure of the
Closing to occur on or before the Termination Date;




     (c) by either Seller or Purchaser, if a Governmental Authority shall have issued an
order, decree or injunction having the effect of making the transactions
contemplated hereby illegal or permanently prohibiting the consummation of the
transactions contemplated hereby, and such order, decree or injunction shall have become
final and nonappealable; and




     (d) by either Seller or Purchaser, if there shall have been a material breach by the
other of any of its representations, warranties, covenants or agreements contained in this
Agreement, which breach would result in the failure to satisfy one or more of the conditions
set forth in Section 7.2 (in the case of a breach by Seller) or Section 7.3
(in the case of a breach by Purchaser), and such breach shall be incapable of being cured
or, if capable of being cured, shall not have been cured within thirty (30) days after
written notice thereof shall have been received by the party alleged to be in breach.



          9.2 Effect of Termination and Abandonment. In the event of termination of this Agreement
pursuant to this Article 9, this Agreement (other than as set forth in Sections
6.4(b) and 6.6) shall become void and of no effect with no liability on the part of any
party hereto (or of any of its representatives); provided, however, that no such termination shall
relieve any party hereto from any liability for damages (or fees and out-of-pocket expenses)
resulting from any willful and intentional breach of this Agreement.




ARTICLE 10

INDEMNIFICATION




          10.1 Survival of Representations and Warranties. All of the representations and warranties of
Seller shall survive the Closing and continue in full force and effect for a period of eighteen
months thereafter, except (a) Sections 4.2 (“Authority”) and 4.4 (“Capitalization”)
shall survive in perpetuity and (b) Section 4.14 (“Taxes”) and any claims based on actual
fraud or intentional misrepresentation shall survive the Closing until ninety (90) days following
the expiration of any applicable statute of limitations (including any extensions thereof). All of
the representations and warranties of Purchaser shall survive the Closing and continue in full
force and effect for a period of eighteen months thereafter, except (x) Section 5.2
(“Authority”) shall survive in perpetuity and (y) any claims found by a court of competent
jurisdiction to have resulted from actual fraud or intentional misrepresentation shall survive the
Closing until ninety (90) days following the expiration of any applicable statute of limitations
(including any extensions thereof). Each covenant and other agreement in this Agreement shall
survive the Closing and continue in full force and effect until such covenant or other agreement is
to be




 









 




performed in full in accordance with its terms. The right of Purchaser to indemnification
pursuant to Section 8.1(a) shall survive the Closing and continue in full force until the
date ninety (90) days following the expiration of any applicable statute of limitations (including
any extensions thereof).




          10.2 Indemnification Provisions for Benefit of Purchaser. Provided Purchaser issues a Claim
Notice (as hereinafter defined) within the applicable survival period, then, subject to the terms
hereof, GEC and Seller, jointly and severally, agree to indemnify and hold harmless Purchaser and
its Affiliates and each of their respective officers, directors, members, partners, managers and
employees (collectively, “Purchaser Indemnified Parties”) from and against any costs or
expenses (including reasonable attorneys’ fees and expenses), judgments, fines, claims, damages and
assessments (collectively, “Losses”) through and after the date of the claim for
indemnification that are imposed on or incurred by Purchaser Indemnified Parties that result
from, arise out of, relate to (a) any breach of any representations, warranties, covenants or
agreements of GEC or Seller contained herein, (b) any expenses or liabilities with respect to any
of GEC’s, Seller’s, the Companies’ or any of their Affiliates’ expenses incurred in connection with
or in relation to the transactions contemplated by this Agreement or any of the Ancillary
Agreements, including without limitation severance or other termination payment obligations that
become payable as a result of the transactions contemplated hereby (excluding any such payments
required to be made as the result of the termination of such Covered Employee’s employment by
Purchaser at or after Closing), (c) the ownership interest held by any Company or any Subsidiary of
any Company prior to the Closing Date in REP Holdings Ltd., RHAC Holdings, LLC or Waipouli
Holdings, LLC, or (d) the matter described in Item (a)(2)L. of Section 4.13 of the Disclosure
Schedule pursuant to the terms set forth therein.




          10.3 Indemnification Provisions for Benefit of Seller. In the event of any breach of any
representations, warranties, covenants or agreements of Purchaser contained herein, and provided
Seller issues a Claim Notice within the applicable survival period, then, subject to the terms
hereof, Purchaser agrees to indemnify Seller, GEC and their Affiliates and each of their respective
officers, directors, members, partners, managers and employees (collectively, “Seller
Indemnified Parties”) from and against any Losses through and after the date of the claim for
indemnification that are imposed on or incurred by Seller Indemnified Parties that result from,
arise out of, relate to, or are caused by the breach, subject to the terms of this Article
10. In addition, Purchaser agrees to indemnify the Seller Indemnified Parties from and against
any Losses that are imposed on or incurred by the Seller Indemnified Parties to the extent arising
from or out of the operations of the Companies and their Subsidiaries following the Closing
(subject to the representations, warranties, covenants or other agreements of GEC or Seller set
forth herein).




          10.4 Procedure for Matters Involving Third Parties.





     (a) If any third party shall notify either of the parties to this Agreement (the
“Indemnified Party”) with respect to any matter (a “Third-Party Claim”) that
may give rise to a claim for indemnification against any other party to this Agreement (the
“Indemnifying Party”) under this











 






Article 10, then the Indemnified Party
shall promptly issue a Claim Notice to the Indemnifying Party with respect thereto.




     (b) An Indemnifying Party will have the right to defend the Indemnified Party against
the Third-Party Claim with counsel of its choice reasonably satisfactory to the Indemnified
Party so long as the Indemnifying Party notifies the Indemnified Party in writing within
thirty (30) days following the receipt of the Claim Notice that the Indemnifying Party
desires to assume the defense of the Third-Party Claim and the Indemnifying Party thereafter
conducts the defense of the Third-Party Claim actively and diligently.




     (c) So long as the Indemnifying Party is conducting the defense of the Third-Party
Claim in accordance with Section 10.4(b), the Indemnified Party may retain separate
co-counsel at its sole cost and expense and participate in the defense of the Third-Party
Claim. The Indemnifying Party will not consent to the entry of any judgment
or enter into any settlement with respect to the Third-Party Claim without the prior
written consent of the Indemnified Party, which consent will not be unreasonably withheld,
except the Indemnifying Party may consent to the entry of judgment or settlement without the
consent of the Indemnified Party if the judgment or settlement is solely for money damages.




     (d) In the event any of the conditions in Section 10.4(b) is or becomes
unsatisfied, the Indemnified Party may defend against the Third-Party Claim and the
Indemnifying Party will remain responsible for any Losses the Indemnified Party may suffer
resulting from the Third-Party Claim.




     (e) A party suffering Losses that gives or could give rise to a claim for
indemnification under this Article 10 shall promptly notify the other party thereof
in writing (a “Claim Notice”) in accordance with Section 11.1. The Claim
Notice shall contain a brief description of the nature of the Losses suffered and, if
practicable, an aggregate dollar value estimate of the Losses suffered. No delay in the
issuance of a Claim Notice shall relieve either party from any obligation under this
Article 10, unless and solely to the extent the Indemnifying Party is thereby
prejudiced.



10.5 Limitations on Seller’s and GEC’s Indemnification Liability.





     (a) Ceiling: Seller’s and GEC’s aggregate liability for indemnification claims
under this Article 10 arising from breaches of representations and warranties in
Article 4 hereof, shall not exceed $27,281,250 (the “Cap”).




     (b) Deductible: Seller and GEC shall have no liability for indemnification
claims under Article 10 arising from breaches of representations, warranties,
covenants and/or agreements hereunder by Seller and/or GEC, unless and until the aggregate
Losses claimed under Article 10 exceed $1,000,000 (the “Deductible”), and
then only for the amount by which such Losses exceed the Deductible.



 









 






     (c) Exceptions to the Cap and Deductible. The limitations in subsections (a)
and (b) of this Section 10.5 shall not apply to (i) breaches of Sections 4.2
(“Authority”), 4.4 (“Capitalization”), or 4.14 (“Taxes”), (ii) Losses
arising out of or related to the matters set forth in clause (b), (c) or
(d) of Section 10.2, (iii) any claims found by a court of competent
jurisdiction to have resulted from actual fraud or intentional misrepresentation, (iv) any
failure of GEC to pay any post-closing purchase price adjustment required to be made by GEC
pursuant to Section 2.2(b), (v) breaches of Section 6.14 hereof, (vi) the
right of the Purchaser to indemnification pursuant to Section 8.1(a), (vii) any
claims under the Transition Services Agreement, and (viii) the obligation of GEC to pay fees
or expenses as set forth in Section 8.6 and the last sentence of Section
6.6.



10.6 Limitations on Purchaser’s Indemnification Liability.





     (a) Ceiling: Purchaser’s aggregate liability for indemnification claims under
this Article 10 arising from breaches of representations and warranties in
Article 5 shall not exceed the Cap.




     (b) Deductible: Purchaser shall have no liability for indemnification claims
under Article 10 arising from breaches of representations, warranties, covenants
and/or agreements hereunder by Purchaser, unless and until the aggregate Losses claimed
under Article 10 exceed the Deductible, and then only for the amount by which such
Losses exceed the Deductible.




     (c) Exceptions to the Cap and Deductible. The limitations in subsections (a)
and (b) above of this Section 10.6 shall not apply to (i) breaches of Section
5.2 (first and second sentences only), (ii) any failure of Purchaser to close and pay
the Purchase Price as required hereunder (including any post-closing purchase price
adjustment required to be made by Purchaser pursuant to Section 2.2(b)), (iii)
breaches of Section 6.14 hereof, (iv) any claims under the Transition Services
Agreement, (v) any claims of Seller or GEC pursuant to the last sentence of Section
10.3, and (vi) the obligation of Purchaser to pay fees or expenses as set forth in
Section 8.6 and the last sentence of Section 6.6.



10.7 Determination of Losses.




          The parties shall take into account any net Tax benefits
actually realized by the Indemnified Party as of the time that the indemnity payment is made as a
result of the incurrence of Losses giving rise to indemnity. In computing the amount of any such
Tax benefit, the parties shall take account of any Tax costs to the Indemnified Party as a result
of the receipt of the indemnity payment and the Indemnified Party shall be deemed to recognize all
other items of income, gain, loss, deduction or credit before recognizing any item arising from the
receipt of any indemnity payment hereunder or the incurrence or payment of any indemnified Losses.
In addition, the amount of Losses incurred by any Indemnified Party hereunder will be determined
net of any insurance proceeds actually received by the Indemnified Party under any policies of
insurance covering the Loss giving rise to the applicable claim. The Indemnified Parties shall use
commercially reasonable efforts to make an insurance claim under any relevant policies of insurance
covering the loss but shall not be obligated to institute legal proceedings to enforce




 









 







coverage of
any such claim. Furthermore, any amounts received pursuant to making an insurance claim shall be
offset by any Loss related to making such claim, including the payment of any deductible and any
increases in premium payments that can be shown to be directly attributable to having made such
claim, and the Loss shall be increased by the amount, if any, by which the Losses related to making
such claim exceed the insurance proceeding actually received.




          10.8 Exclusive Remedy.




          In the event the Closing occurs, Purchaser and Seller acknowledge and
agree that the foregoing indemnification provisions in this Article 10 shall be the
exclusive remedy of Purchaser (and the other Purchaser Indemnified Parties) and Seller (and the
other Seller Indemnified Parties) with respect to the transactions contemplated by this Agreement
(other than for specific performance of this Agreement, which shall be available as a remedy as set
forth herein). Except as provided in the last sentence of this Section 10.8, each party to
this Agreement hereby waives all statutory, common Law and other claims with respect to this
Agreement, other than claims for indemnification with respect to this Agreement pursuant to (and in
accordance with the terms of) this Article 10 and other than claims for specific
performance or injunctive relief. Notwithstanding anything herein to the contrary, in no
event shall Seller or Purchaser be liable for any special or punitive damages or consequential
damages, except to the extent such damages are payable with respect to a Third-Party Claim, and
Purchaser shall not be entitled to recover or seek any remedy under this Agreement (a) with respect
to any claim or liability to any employee employed by a Company or any of their Subsidiaries
arising as a result of the termination of such employees’ employment after the Closing Date (except
to the extent arising out of a breach of any representation or warranty of Seller hereunder
relating to severance or other payments or obligations in connection with such termination) or (b)
to the extent that the liability for such damages is included in the calculation of the Closing
Date RQ Working Capital. Notwithstanding the foregoing, no party hereto shall be deemed to have
waived any rights, claims, causes of action or remedies if and to the extent such rights, claims,
causes of actions or remedies are found by a court of competent jurisdiction to have resulted from
actual fraud or intentional misrepresentation.




          10.9 Indemnification Obligations of Seller. Notwithstanding anything contained herein to the
contrary, at and after such time that GEC or an Affiliate thereof has sold Seller to a third party,
whether by stock purchase, merger, sale of substantially all of its assets or similar business
combination transaction, Seller shall not have any indemnification obligation hereunder to the
Purchaser Indemnified Parties (except in the event of any breach by Seller or its Affiliates or
Subsidiaries of Section 6.13 or Section 6.14, in which case Seller will have
indemnification obligations to the Purchaser Indemnified Parties in accordance with the terms set
forth herein with respect to such breaches).




          10.10 Notwithstanding anything contained herein to the contrary, at and after such time that GEC or an Affiliate thereof has sold Seller to a third party, whether by stock purchase, merger, sale of substantially all of its assets or similar business combination transaction, Seller shall not have any indemnification obligation hereunder to the Purchaser Indemnified Parties (except in the event of any breach by Seller or its Affiliates or Subsidiaries of Section 6.13 or







 









 







Section 6.14, in which case Seller will have indemnification obligations to the Purchaser Indemnified Parties in accordance with the terms set forth herein).




ARTICLE 11

MISCELLANEOUS




          11.1 Notices.




          All notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made as of the date of receipt and shall be
delivered personally or mailed by registered or certified mail (postage prepaid, return receipt
requested), sent by overnight courier or sent by telecopy, to the applicable party at the following
addresses or telecopy numbers (or at such other address or telecopy number for a party as shall be
specified by like notice):




	 	 	 	 	 	 	 
	 

	 	(a)
	 	if to GEC or Seller:
	 	ResortQuest International, Inc.

c/o Gaylord Entertainment Company

One Gaylord Drive

Nashville, Tennessee 37214

Attention: Carter R. Todd, Esq.

          (615) 316-6186

Telecopy No.: (615) 316-6544
	 
	 	 	 	 	 	 
	 

	 	 	 	with a copy to:
	 	Bass, Berry & Sims PLC

315 Deaderick Street, Suite 2700

Nashville, Tennessee 37238-3001

Attention: F. Mitchell Walker, Jr.

Telecopy No.: (615) 742-2775
	 
	 	 	 	 	 	 
	 

	 	(b)
	 	if to Interval
or Purchaser:
	 	Interval Acquisition Corp.

Vacation Holdings Hawaii, Inc.

6262 Sunset Drive

Miami, Florida 33143

Attention: General Counsel

Telecopy No.: (305) 667-2072
	 
	 	 	 	 	 	 
	 

	 	 	 	with a copy to:
	 	IAC/InterActiveCorp

555 West 18th Street

New York, New York 10011

Attention: General Counsel

Telecopy No.: (212) 314-7497
	 
	 	 	 	 	 	 
	 

	 	 	 	and a copy to:
	 	Gibson, Dunn & Crutcher LLP

333 S. Grand Avenue

Los Angeles, California 90071

Attention: Karen E. Bertero, Esq.






 









 






	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Telecopy No.: (213) 229-7520






          11.2 Certain Definitions; Interpretation.





     (a) For purposes of this Agreement, the following terms shall have the following
meanings:




          (i) “Action” means any written claim, action or suit by or before any
Governmental Authority.




          (ii) “Affiliate” of a Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or is
under common control with, the first-mentioned Person.




          (iii) “Affiliated Group” means any affiliated group within the meaning
of Section 1504(a) of the Code or any similar group defined under a similar
provision of state, local or foreign law.




          (iv) “Ancillary Agreements” means, collectively, (A) the Transition
Services Agreement, (B) the Employment Agreement and (C) the License Agreement.




          (v) “Applicable Rate” means the corporate base rate of interest
published from time to time in the Wall Street Journal.




          (vi) “Code” means the Internal Revenue Code of 1986, as amended.




          (vii) “Control” (including the terms “controlled by” and “under common
control with”) means the possession, direct or indirect, of the power to do direct
or cause the direction of the management and policies of a Person, whether through
the ownership of stock, as trustee or executor, by contract or credit arrangement or
otherwise.




          (viii) “ERISA” means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.




          (ix) “Governmental Authority” means any United States federal, state or
local or foreign governmental, regulatory or administrative agency or any court.




          (x) “Governmental Order” means any order, writ, judgment, injunction,
decree,



 









 






stipulation, determination or award entered by or with any Governmental
Authority.




          (xi) “Known” or “Knowledge” of any Person shall mean the
knowledge of the senior officers (including, but not limited to, Persons holding a
position comparable to a chief executive officer, president, chief financial
officer, chief operating officer, general counsel, and director of human resources)
and directors of such Person (and, in the case of Seller, Knowledge of Seller shall
include the knowledge of the senior officers of either Company, the chief financial
officer of GEC and the president and chief operating officer of Seller), which they
would have after a reasonable investigation of the surrounding circumstances,
whether or not in fact they made such reasonable investigation.




          (xii) “Law” means any Governmental Order or any law, statute,
ordinance, rule or regulation of any Governmental Authority, or any binding
agreement with any Government Authority.




          (xiii) “Permit” means any permit, franchise, authorization, or other
license or approval issued or granted by any Governmental Authority.




          (xiv) “Person” means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization, entity or group.




          (xv) “Purchaser Material Adverse Effect” means any material adverse
change in or material adverse effect on the ability of Purchaser to perform its
obligations under this Agreement and any Ancillary Agreements to which it is a
party, including the ability of Purchaser to consummate the purchase of the Shares.




          (xvi) “Seller Material Adverse Effect” means any event, change,
circumstance, effect or state of facts that is materially adverse to (A) the
business, results of operations or financial condition of the Companies and their
Subsidiaries, taken as a whole, or (B) the ability of GEC, Seller or the Companies
to perform their respective obligations under this Agreement or to consummate the
transactions contemplated hereby; provided, however, that “Seller Material
Adverse Effect” shall not include the effect of any event, change, circumstance,
effect or state of facts (1) resulting from or relating to changes in economic
conditions or financial or securities markets in general or the industries and
markets in which the Companies and their Subsidiaries operate, including changes
resulting from travel restrictions, economic downturn or other factors generally
affecting leisure travel or the leisure travel business, weather or natural



 









 






conditions, political conditions, commodity prices or changes in laws, rules and
regulations, other than any events, circumstances, changes or effects that affect
the Companies and their Subsidiaries, taken as a whole, to a materially
disproportionate extent relative to other entities operating in the industries and
markets in which the Companies and their Subsidiaries operate; (2) resulting from
any outbreak or escalation of hostilities or act of terrorism involving the United
States or any declaration of war by the U.S. Congress, other than any events,
circumstances, changes or effects that affect the Companies and their Subsidiaries,
taken as a whole, to a materially disproportionate extent relative to other entities
operating in the industries and markets in which the Companies and their
Subsidiaries operate; or (3) resulting from the breach by Purchaser of this
Agreement.




          (xvii) “Subsidiary” of a Person means any corporation or other legal
entity of which such Person (either alone or through or together with any other
Subsidiary or Subsidiaries) is the general partner or managing entity or of which at
least a majority of the stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or others
performing similar functions of such corporation or other legal entity is directly
or indirectly owned or controlled by such Person (either alone or through or
together with any other Subsidiary or Subsidiaries); provided, however, that for
purposes of clarification, RHAC Holdings, LLC and Waipouli Holdings, LLC will not be
considered Subsidiaries of (i) the Companies, (ii) any Subsidiary of the Companies,
or (iii) GEC or any Subsidiary of GEC for purposes of this Agreement.




          (xviii) “Taxes” shall mean any and all taxes, fees, levies or other
assessments, including, without limitation, federal, state, local or foreign income,
transient accommodation, gross receipts, excise, real or personal property, sales,
withholding, social security, occupation, use, service, service use, value added,
license, net worth, payroll franchise or similar taxes, imposed by any Taxing
Authority, together with any interest, penalties or additions to Tax and additional
amounts imposed with respect thereto.




          (xix) “Taxing Authority” shall mean any Governmental Authority
responsible for the imposition or collection of any Taxes.




          (xx) “Tax Return” shall mean any report, return, document, declaration
or other information or filing required to be supplied to any Taxing Authority or
jurisdiction (foreign or domestic) with respect to Taxes.




          (xxi) “Working Capital” as of a given date shall mean the amount
calculated by subtracting the current liabilities of the Companies and their
Subsidiaries, excluding (A) liabilities for income Taxes, (B) the current portion of



 









 






capital lease obligations, (C) interest payable, (D) intercompany payables owing to
Seller or its Affiliates or their Subsidiaries and (E) any Seller or GEC insurance
liability allocation (including for self-insured claims or retention), as of that
date from the current assets of the Companies and their Subsidiaries (other than (1)
current deferred income tax assets, (2) any other income Tax assets and (3)
intercompany receivables owed by Seller or its Affiliates or their Subsidiaries) as
of that date; provided that, for the avoidance of doubt, calculations of inventory
and accounts receivable shall be net of the applicable reserve (which reserve will
be calculated in accordance with the past practice of the Companies and their
Subsidiaries).




          (b) When a reference is made in this Agreement to Articles, Sections, or the Disclosure
Schedule, such reference is to an Article or a Section of, or Disclosure Schedule to, this
Agreement, unless otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be understood to be followed by the words “without
limitation.”



          11.3 Severability.




          If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon a determination that any term or other provision is invalid,
illegal or incapable of being enforced, Seller and Purchaser shall negotiate in good faith to
modify this Agreement so as to effect their original intent as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to the maximum extent
possible.




          11.4 Entire Agreement; No Third-Party Beneficiaries.




          This Agreement, including all exhibits
attached hereto, the Disclosure Schedule and any Disclosure Schedule Supplement (which shall be
construed with and as an integral part of this Agreement to the same extent as if the same had been
set forth verbatim herein), the Ancillary Agreements and the Confidentiality Agreement constitute
the entire agreement and supersede any and all other prior agreements and undertakings, both
written and oral, among the parties
hereto, or any of them, with respect to the subject matter hereof and do not, and are not
intended to, confer upon any Person other than the parties hereto, any rights whatsoever.




          11.5 Amendment; Waiver.




          This Agreement may be amended only in a writing signed by all parties
hereto. Any waiver of rights hereunder must be set forth in writing. A waiver of any breach or
failure to enforce any of the terms or conditions of this Agreement shall not in any way affect,
limit or waive any party’s rights at any time to enforce strict compliance thereafter with every
term or condition of this Agreement.

 









 









          11.6 Binding Effect; Assignment.




          This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective legal representatives and successors. Notwithstanding
the foregoing, this Agreement shall not be assigned by any party hereto by operation of law or
otherwise without the express written consent of the other parties.




          11.7 Disclosure Schedule.




          Any matter disclosed pursuant to the Disclosure Schedule or any
Disclosure Schedule Supplement shall be deemed to be disclosed for all purposes under this
Agreement to the extent reasonably apparent from the language of the disclosure (without reference
to any facts or provisions in any document other than the Disclosure Schedule, whether or not
incorporated by reference), but such disclosure shall not be deemed to be an admission or
representation as to the materiality of the item so disclosed.




          11.8 Governing Law; Jurisdiction.




          This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the conflicts of laws
provisions thereof that would apply the law of another jurisdiction. Each of the parties hereby
irrevocably and unconditionally consents to submit to the jurisdiction of the courts of the State
of New York and the courts of the United States of America located in the State of New York for any
litigation arising out of or relating to this Agreement or the transactions contemplated hereby,
and further agrees that service of any process, summons, notice or document by U.S. registered mail
to its respective address set forth in Section 11.1 shall be effective service of process
for any litigation brought against it in any such court. Each of the parties hereby irrevocably
and unconditionally waives any objection to the laying of venue of any litigation arising out of
this Agreement or the transactions contemplated hereby or any of the other transactions
contemplated hereby in the courts of the State of New York or the courts of the United States of
America located in the State of New York and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such litigation brought in any such
court has been brought in an inconvenient forum. Each of the parties hereto hereby irrevocably and
unconditionally waives any right it may have to trial by jury in connection with any litigation
arising out of or relating to this Agreement or the transactions contemplated hereby.




          11.9 Construction.




          The headings of Articles and Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. The language used in this Agreement is the
language chosen by the parties to express their mutual intent, and no rule of strict construction
shall be applied against any party.




          11.10 Counterparts.




          This Agreement may be executed simultaneously in any number of
counterparts (including by facsimile or electronic .pdf submission), and by the different parties
in separate

 









 








counterparts, each of which when executed shall be deemed to be an original, but all of
which shall constitute one and the same agreement.




          11.11 Enforcement.




          The parties hereto agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the parties hereto shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement, this being in addition to any other remedy
to which they are entitled at Law or in equity.




[Signature Page Follows.]




 









 








          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of
the date first written above by their respective officers thereunto duly authorized.




	 	 	 	 	 	 	 
	 	 	Vacation Holdings Hawaii, Inc.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Craig M. Nash	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Craig M. Nash 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	Chairman	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Interval Acquisition Corp.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Craig M. Nash	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Craig M. Nash 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	President and Chief Executive
Officer	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ResortQuest International, Inc.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David C. Kloeppel	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	David C. Kloeppel	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	EVP	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Gaylord Entertainment Company
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David C. Kloeppel	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	David C. Kloeppel	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	EVP