AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of the
10th day of January 2000, between Fountainhead Development Corp.,
Inc., a Georgia corporation ("Fountainhead"), and Ridgewood
Hotels, Inc., a Delaware corporation ("Ridgewood").
W I T N E S S E T H:
WHEREAS, pursuant to a Management Agreement, dated as of
January __, 2000 between the parties hereto (the "Management
Agreement"), Ridgewood has agreed to serve as manager of certain
hotel and resort properties owned by Fountainhead and set forth
on Exhibit A hereto (the "Managed Properties"); and
WHEREAS, in consideration of payment by Fountainhead to
Ridgewood of $10,000 (representing the par value of the Shares
(as defined below)) and Fountainhead's agreement to allow
Ridgewood to act as the manager of the Managed Properties in
accordance with the terms and conditions of the Management
Agreement, Ridgewood desires to issue to Fountainhead 1,000,000
shares of the common stock, $.01 par value per share, of
Ridgewood;
NOW, THEREFORE, for and in consideration of the mutual
agreements and promises contained herein (the mutuality, adequacy
and sufficiency of which are hereby acknowledged) and intending
to be legally bound hereby, the parties agree as follows:
1. Sale of Stock. Notwithstanding any provision in the
Management Agreement to the contrary, immediately upon execution
of the Management Agreement and upon payment by Fountainhead to
Ridgewood of $10,000 (representing the par value of the Shares),
Ridgewood shall issue to Fountainhead a certificate or
certificates representing 1,000,000 shares of its common stock,
$.01 par value per share (the "Shares"). Ridgewood represents
and warrants that the Shares shall be validly issued, fully paid
and non-assessable and free of all liens, claims and restrictions
other than restrictions imposed by applicable federal and state
securities laws.
2. Board of Directors. In connection with the execution
of the Management Agreement, the Board of Directors of Ridgewood
shall take all necessary action to increase the size of the Board
by four directors and shall take all necessary action to approve
the appointment of four new directors approved by Fountainhead,
to take office ten days after the filing with the Securities and
Exchange Commission and the delivery to the shareholders of
Ridgewood of an information statement pursuant to Section 14f-1
of the Securities Exchange Act of 1934, as amended. Prior to or
upon the execution of the Management Agreement, the Board of
Directors of Ridgewood shall also take all necessary action to
approve the appointment of Xxxxxx Panoz as Chief Executive
Officer of Ridgewood, Xxxx Xxxxx as President and Chief Operating
Officer of Ridgewood and Xxxxxxx Xxxxxx as Secretary of
Ridgewood, and the current members of the Board of Directors of
Ridgewood shall agree in writing not to take any Board action
until the new directors take office. Upon execution of the
Agreement, Ridgewood shall deliver to Fountainhead a certificate
of the Secretary of Ridgewood.
3. Purchase for Investment. In connection with the
issuance of the Shares by Ridgewood, Fountainhead represents and
warrants that Fountainhead is acquiring the Shares for its own
account, to hold for investment, and with no intention of
dividing its participation with others or reselling or otherwise
participating, directly or indirectly, in a distribution of the
Shares, and that Fountainhead shall not make any sale, transfer
or other disposition of the Shares in violation of any applicable
state securities laws (the "State Acts") or the Securities Act of
1933 as amended (the "1933 Act").
4. No Registration. Fountainhead acknowledges that it has
been advised that the Shares are not being registered under any
applicable State Acts on the grounds that this transaction is
exempt from registration thereunder, or under the 1933 Act on the
grounds that this transaction is exempt from registration under
Section 4(2) of the 1933 Act as not involving any public
offering, and that reliance by Ridgewood on such exemptions is
predicated in part on its representations set forth in this
Agreement. In addition, Fountainhead acknowledges that the
certificate or certificates received by it shall bear a legend in
substantially the following form, in addition to any other legend
required by law or otherwise:
"The securities represented hereby have not been
registered under the Securities Act of 1933 (the "Act")
or any state securities acts and may not be sold,
transferred or otherwise disposed of unless a
registration statement under the Act and any applicable
state securities acts with respect to such securities
is effective or unless the Company is in receipt of an
opinion of counsel satisfactory to it to the effect
that such securities may be sold without registration
under the Acts and such state acts."
5. Securities Laws. Ridgewood may refuse to permit
Fountainhead to sell, transfer or dispose of the Shares unless
there is in effect a registration statement under any applicable
State Acts and the 1933 Act covering such transfer or
Fountainhead furnishes an opinion of counsel, reasonably
satisfactory to counsel for Ridgewood, to the effect that such
registration is not required and also agrees that stop transfer
instructions will be noted on the appropriate records of
Ridgewood or given to Ridgewood's transfer agent.
6. Limitations. Representatives of Fountainhead have
carefully read this Agreement and discussed its requirements and
other applicable limitations upon Fountainhead's resale of the
Shares with counsel and, to the extent necessary, counsel for
Ridgewood, and has had an opportunity to ask questions and
receive answers about Ridgewood and to obtain additional
information for verification purposes.
7. No Obligation to Register. Fountainhead understands
that Ridgewood is under no obligation to register the Shares or
take any other action necessary in order to make compliance with
an exemption from registration available, except as provided in
the Management Agreement.
8. No Public Solicitation. Fountainhead acknowledges and
agrees that it has received no public solicitation or
advertisement concerning an offer to sell the Shares.
9. High Degree of Risk. Fountainhead acknowledges and
understands that the purchase of the Shares involves a high
degree of risk and acknowledges that it is able to bear the
economic risk of its investment in the Shares.
10. Accredited Investor. Fountainhead acknowledges that it
is an "accredited investor" as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act of 1933, as
amended.
11. Access to Information. Fountainhead acknowledges that
it has either been supplied with or has had access to information
to which a reasonable investor would attach significance in
making investment decisions and has had the opportunity to ask
questions and receive answers from knowledgeable individuals
concerning Ridgewood, its business and the Shares so that as a
reasonable investor, it has been able to make an informed
decision to purchase the Shares. In determining to proceed with
this investment, Fountainhead has relied solely on the results of
its independent investigation with respect to the Shares,
Ridgewood and upon the representations and statements of
Ridgewood set forth herein. Such representations and statements
by Ridgewood constitute the sole and exclusive representations,
warranties, covenants and statements of Ridgewood and its
officers, directors, shareholders and other affiliates to it in
connection with this investment.
12. Validity and Enforceability. Ridgewood has all
necessary corporate power and authority, and has taken all action
required, to execute, deliver and perform this Agreement and the
Management Agreement and sell and deliver the Shares. This
Agreement, the Management Agreement and all other documents and
instruments executed by Ridgewood pursuant hereto, when
delivered, are and will be duly authorized, valid and binding
obligations of Ridgewood, enforceable against it in accordance
with their respective terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of
debtors and equitable principles. The sale of the Shares by
Ridgewood in accordance herewith is not subject to preferential
rights or similar statutory or contract rights that have not
heretofore been waived and does not give rise to any rights or
obligations to third parties arising pursuant to any agreement or
instruments to which Ridgewood is a party or which are otherwise
binding on Ridgewood.
13. Litigation. Except as set forth on Schedule 13, there
is no action, suit, proceeding or investigation pending or, to
Ridgewood's knowledge, threatened against Ridgewood that might
call into question the validity of, or hinder the enforceability
or performance of, this Agreement or the Management Agreement or
the validity of the Shares, or any action taken or to be taken
pursuant hereto. Ridgewood is not in default with respect to any
order, writ, injunction, decree, ruling or decision of any court,
commission, board or other government agency by which Ridgewood
is bound that might affect the Shares.
14. No Violations. Neither the execution, delivery and
performance by Ridgewood of this Agreement, the Management
Agreement and any documents or instruments delivered, executed
and performed in connection herewith, the consummation of the
transactions contemplated hereby (including the sale and delivery
of the Shares), nor the compliance with the provisions hereof
will violate any provision of law, or any order of any court or
other agency of government or indenture, agreement or other
instrument to which Ridgewood is bound, or result in the creation
or imposition of any lien, charge or security interest upon any
of the Shares.
15. Material Adverse Change. Except as set forth on
Schedule 15, since September 30, 1999, Ridgewood has conducted
its business only in the ordinary course of business, and there
has not been any material adverse change in the business,
financial condition, operations, affairs, properties, assets or
results of operations of Ridgewood or any of its subsidiaries.
16. SEC Filings. All of the documents (the "SEC
Documents") filed by Ridgewood with the Securities and Exchange
Commission (the "Commission") in accordance with the requirements
of the Securities Act of 1933, as amended (the "Securities Act"),
and the Securities Exchange Act of 1934, as amended
(collectively, the "Securities Acts"), and all information
supplied by Ridgewood to Purchaser in connection with any and all
securities filings required by the consummation of the
transactions contemplated hereby, conformed in all material
respects to the requirements of the Securities Acts and the rules
and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
17. Derivative Action. The status of the derivative action
against Ridgewood styled as Xxxxxxxxxxxx v. Early et al. is as
set forth on Schedule 17 hereto.
18. Survival of Representations and Warranties. The
representations and warranties contained in this Agreement shall
continue in full force and effect following the execution of this
Agreement and the Management Agreement and issuance and delivery
of the Shares.
19. Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon Fountainhead and Ridgewood,
their successors and assigns. This Agreement may not be assigned
by Ridgewood without the prior written consent of Fountainhead.
Nothing in this Agreement, express or implied, is intended or
shall be construed to confer upon any person other than the
parties hereto any right, remedy or claim under or by reason of
this Agreement.
20. Entire Agreement. This Agreement, together with the
Management Agreement, sets forth the entire agreement between the
parties as to the subject matter of this Agreement and supersedes
all prior agreements, commitments, representations, writings and
discussions between them, whether written or oral, with respect
to the subject matter hereof. Except as otherwise expressly
provided in this Agreement, this Agreement may not be amended or
terminated except in writing and signed by the proper and duly
authorized representative of the party to be bound thereby.
21. Waivers. No party shall be deemed to have waived any
right, power or privilege under this Agreement or any provision
hereof unless such waiver shall have been duly executed in
writing and acknowledged by the party to be charged with such
waiver. The failure of any party to enforce at any time any of
the provisions of this Agreement shall in no way be construed as
a waiver of such provisions nor in any way affect the validity of
this Agreement or any part thereof, or the right of any party to
thereafter enforce each and every such provision.
22. Severability. If any provision of this Agreement or
its application to any person or circumstance is adjudged invalid
or unenforceable by any court of competent jurisdiction, then the
remainder of this Agreement or the application of such provision
to other persons or circumstances shall not be affected thereby;
provided, however, that if any provision or application hereof is
invalid or unenforceable, then a suitable and equitable provision
shall be substituted therefor in order to carry out, so far as
may be valid and enforceable, the intent and purpose of this
Agreement including the invalid or unenforceable provision.
23. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Georgia,
except the rules relating to conflicts of laws.
24. Counterparts. This Agreement may be executed in any
number of counterparts, and each such counterpart shall be deemed
an original instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date set forth above.
RIDGEWOOD HOTELS, INC.
By: /s/ X. X. Xxxxxx
Name: N. Xxxxxxx Xxxxxx
Title: President
FOUNTAINHEAD DEVELOPMENT
CORP., INC.
By: /s/ Xxxxxx X. Panoz
Xxxxxx Panoz
Chairman
EXHIBIT A
Managed Properties
Chateau Elan
(The Lodge Spa and Conference Facilities)
