EXHIBIT A
---------
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 10, 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.
2
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
3
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
4
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.
5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
RIDGEWOOD HOTELS, INC.
By: /s/ N. Xxxxxxx Xxxxxx
---------------------------------
Name: N. Xxxxxxx Xxxxxx
----------------------------
Title: President
---------------------------
FOUNTAINHEAD DEVELOPMENT
CORP., INC.
By: /s/ Xxxxxx Panoz
---------------------------------
Name: Xxxxxx Panoz
-------------------------------
Title: Chairman
------------------------------
EXHIBIT A
Managed Properties
------------------
Chateau Elan
(The Lodge Spa and Conference Facilities)
7
DISCLOSURE SCHEDULES
OF
RIDGEWOOD HOTELS, INC.
PROVIDED PURSUANT TO AND AS A PART OF
AN AGREEMENT
BY AND BETWEEN
FOUNTAINHEAD DEVELOPMENT CORP., INC.
and
RIDGEWOOD HOTELS, INC.
DATED AS OF JANUARY 10, 2000
(the "Agreement")
Unless the context otherwise requires, all capitalized terms in the following
Disclosure Schedules shall have the meanings defined in the Agreement.
SCHEDULE 13
LITIGATION
See Schedule 17.
SCHEDULE 15
MATERIAL ADVERSE CHANGE
None.
SCHEDULE 17
DERIVATIVE ACTION
The case entitled Xxxxxxx X. Xxxxxxxxxxxx v. Xxxxxxx X. Early, Xxxxxx X.
------------------------------------------------------
Xxxxxxxxx, Xxxx X. Xxxxxx, N. Xxxxxxx Xxxxxx, and Triton Group, Ltd.,
---------------------------------------------------------------------
defendants, and Ridgewood Properties, Inc., nominal defendant, C.A. No. 14267,
--------------------------------------------------------------
Delaware Chancery Court, Newcastle County, remains pending. On March 19, 1998,
the Court dismissed all class claims, leaving only the derivative claims
remaining for trial. The case was tried to Vice Chancellor Xxxxxx during the
period February 1-3, 1999. All post-trial briefing and oral argument has been
concluded, and the case has been submitted for decision by the Court.
