Exhibit F
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COMMON STOCK PURCHASE AGREEMENT
by
and among
FOUNTAINHEAD DEVELOPMENT CORP., INC.
and
N. XXXXXXX XXXXXX
dated
January 11, 2000
TABLE OF CONTENTS
1. PURCHASE AND SALE OF PURCHASED SHARES............................. 1
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1.1 Agreement to Purchase and Sell............................. 1
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1.2 Closing.................................................... 1
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1.3 Payment of Purchase Price.................................. 1
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1.4 Covenants of the Parties Prior to Closing.................. 1
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1.5 Option to Purchase Shares.................................. 2
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2. CONDITIONS OF PURCHASE............................................ 2
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2.1 Representations, Warranties and Agreements................. 2
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2.2 Authorization; Consents.................................... 2
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2.3 All Proceedings Satisfactory............................... 2
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2.4 Purchase of Additional Shares.............................. 3
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2.5 No Distributions, Recapitalizations, Etc................... 3
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2.6 Legal Opinion.............................................. 3
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2.7 Adverse Change............................................. 3
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3. CONDITIONS OF SALE................................................ 3
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3.1 Authorization.............................................. 3
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3.2 Governing Documents........................................ 3
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3.3 Representations and Warranties............................. 3
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3.4 All Proceedings Satisfactory............................... 3
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3.5 Financial Statements....................................... 4
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3.6 Legal Opinion.............................................. 4
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4. REPRESENTATIONS AND WARRANTIES OF SELLER.......................... 4
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4.1 Validity and Enforceability................................ 4
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4.2 Validity and Enforceability................................ 4
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4.3 Governmental and Other Consents............................ 4
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4.4 Litigation................................................. 5
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4.5 No Violations.............................................. 5
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4.6 No Brokers or Finders...................................... 5
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4.7 Material Adverse Change.................................... 5
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4.8 SEC Filings................................................ 5
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4.9 Derivative Action.......................................... 6
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4.10 Understanding of Nature of Securities...................... 6
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4.11 Investment Intent.......................................... 6
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4.12 Economic Risk.............................................. 6
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4.13 No Claims Against Seller................................... 7
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4.14 Disclosure................................................. 7
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5. REPRESENTATIONS AND WARRANTIES OF PURCHASER....................... 7
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5.1 Validity and Enforceability................................ 7
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5.2 Understanding of Nature of Securities...................... 7
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5.3 Investment Intent.......................................... 8
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5.4 Economic Risk.............................................. 8
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5.5 No Violations.............................................. 8
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5.6 Governmental and Other Consents............................ 8
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5.7 Litigation................................................. 8
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5.8 No Brokers or Finders...................................... 9
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6. CERTAIN ANNOUNCEMENTS............................................. 9
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7. CERTAIN COVENANTS OF THE PARTIES.................................. 9
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7.1 Investigation.............................................. 9
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7.2 Expenses................................................... 9
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7.3 Noncompetition; Nondisclosure.............................. 9
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7.4 Updated Financial Statements............................... 11
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8. TERMINATION; SURVIVAL............................................. 11
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8.1 Termination................................................ 11
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8.2 Effect of Termination...................................... 11
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8.3 Survival................................................... 12
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9. CONFIDENTIALITY................................................... 12
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10. INDEMNIFICATION................................................... 12
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10.1 Indemnification by Seller.................................. 12
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10.2 Indemnification by Purchaser............................... 13
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10.3 Claims and Procedures...................................... 13
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(a) Notice............................................... 13
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(b) Cooperation.......................................... 13
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10.4 Claims Procedure........................................... 13
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(a) Claims............................................... 14
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(b) Disputes............................................. 14
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(c) Payment.............................................. 14
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11. MISCELLANEOUS..................................................... 14
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11.1 Good Faith Efforts; Further Assurances; Cooperation........ 14
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11.2 Notices.................................................... 14
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11.3 Assignment................................................. 14
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11.4 Severability............................................... 15
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11.5 Controlling Law; Integration; Amendment; Waiver............ 15
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11.6 Copies..................................................... 15
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ii
DEFINED TERMS
Act......................................................................... 6
Agreement................................................................... 1
Closing..................................................................... 1
Closing Date................................................................ 1
Commission.................................................................. 6
Derivative Action........................................................... 6
Indemnified Party........................................................... 14
Indemnifying Party.......................................................... 14
Liens....................................................................... 4
Noncompete Period........................................................... 10
Notice of Contest........................................................... 14
Purchase Price.............................................................. 1
Purchased Shares............................................................ 1
Purchaser................................................................... 1
Purchaser Indemnitees....................................................... 13
Restricted Business......................................................... 10
Ridgewood................................................................... 1
SEC Documents............................................................... 6
Securities Act.............................................................. 6
Securities Acts............................................................. 6
Seller...................................................................... 1
State Acts.................................................................. 6
Territory................................................................... 10
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COMMON STOCK PURCHASE AGREEMENT
January 11, 2000
THIS IS A COMMON STOCK PURCHASE AGREEMENT, dated as of January 11, 2000
(together with any Exhibits and Schedules attached hereto, the "Agreement"),
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entered into by and between Fountainhead Development Corp., Inc., a Georgia
corporation, with its current principal place of business at 0000 Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxx 00000 ("Purchaser"), and N. Xxxxxxx Xxxxxx
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("Seller"), by which Purchaser and Seller, in consideration of the agreements
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set forth below and other good and valuable consideration, the mutuality,
receipt and sufficiency of which are hereby acknowledged, hereby agree as
follows:
1. PURCHASE AND SALE OF PURCHASED SHARES.
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1.1 Agreement to Purchase and Sell. Upon and subject to the terms
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set forth in this Agreement, Purchaser shall purchase from Seller, and Seller
shall sell to Purchaser, 650,000 shares of the $.01 par value common stock of
Ridgewood Hotels, Inc., a Delaware corporation ("Ridgewood") (such shares
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hereafter referred to as the "Purchased Shares"). The purchase price for the
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Purchased Shares shall be $2.00 times the number of Purchased Shares, or
$1,300,000 in the aggregate (the "Purchase Price").
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1.2 Closing. The consummation of the purchase and sale of the
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Purchased Shares (the "Closing") shall occur on January 11, 2000 at the offices
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of Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP, in Atlanta, Georgia, at 12:00 p.m., or on
such other date and at such time as may be mutually agreed upon by the parties
(the "Closing Date"). At the Closing, Seller shall deliver to Purchaser a
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certificate or certificates representing the Purchased Shares, duly endorsed for
transfer or accompanied by a fully executed stock transfer power, and Purchaser
shall deliver to Seller the Purchase Price in the manner set forth in Section
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1.3 below.
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1.3 Payment of Purchase Price. Purchaser shall deliver to Seller at
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Closing (i) $780,000 in immediately available federal funds, (ii) a promissory
note substantially in the form of Exhibit A hereto, issued by Purchaser in favor
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of Seller in the amount of $260,000, payable one year following the Closing Date
and (iii) a promissory note substantially in the form of Exhibit A hereto,
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issued by Purchaser in favor of Seller in the amount of $260,000, payable two
years following the Closing Date (referred to collectively as the "Notes"). The
Notes shall bear interest at a rate of six percent per annum. All interest
shall be paid quarterly, commencing March 31, 2000 and continuing for the term
of each Note.
1.4 Covenants of the Parties Prior to Closing. Each of the parties
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shall use all reasonable efforts to do all things necessary to fulfill the
conditions set forth in Articles 2 and 3 herein, and take all actions necessary
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to comply with the applicable
federal and state securities laws in connection with the purchase and sale of
the Purchased Shares and the issuance of the Notes.
1.5 Option to Purchase Shares. Purchaser shall have the option to
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purchase from Seller an additional 65,000 shares of Ridgewood common stock owned
by Seller, which option shall be exercised by written notice from Purchaser to
Seller no later than fifteen months after the Closing Date hereof. Any purchase
by Purchaser pursuant to the option granted herein shall be on the terms and
conditions set forth in this Agreement and at the price set forth in Section 1.1
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hereof, payable in the form of a promissory note substantially in the form of
Exhibit A hereto and payable three years following the Closing Date. In the
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event Seller desires to sell or otherwise transfer any of the shares of
Ridgewood common stock covered by Purchaser's option herein, Purchaser shall
have a right of first refusal to purchase up to 65,000 of such shares, at the
price set forth in Section 1.1 herein, exercisable within twenty business days
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of receipt of written notice of Seller's offer to sell or proposal to transfer.
In the event Purchaser elects not to exercise its rights of first refusal
hereunder and the sale or transfer initially proposed by Seller is not
consummated on the terms specified in the notice to Purchaser, Purchaser's
rights of first refusal hereunder shall be reinstated without change. Seller
shall not otherwise encumber or create any Lien (as defined below) on the shares
subject to Purchaser's option herein and in no event shall Seller be permitted
to engage in a sale or other transfer in which he retains any interest, legal
or equitable, in the shares being sold or transferred during the fifteen month
period covered by Purchaser's right of first refusal in this Section 1.5.
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2. CONDITIONS OF PURCHASE.
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Purchaser's obligation to purchase the Purchased Shares hereunder and
consummate the other transactions contemplated hereby shall be subject to
compliance by Seller with its agreements herein contained and to the fulfillment
on or before the Closing of the following conditions:
2.1 Representations, Warranties and Agreements. Each of the
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representations, warranties and agreements of Seller contained in this Agreement
shall be true and correct on the date hereof and as of the Closing Date, if made
on and as of the Closing Date, and at the Closing, Purchaser shall receive a
certificate to such effect executed by Seller.
2.2 Authorization; Consents. Seller shall have obtained any and all
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consents, permits and waivers, and made all filings, necessary or appropriate
for consummation of the transactions contemplated by this Agreement.
2.3 All Proceedings Satisfactory. All proceedings taken prior to or
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at the Closing in connection with the transactions contemplated by this
Agreement, and all documents and evidences incident thereto, shall be reasonably
satisfactory in form and substance to Purchaser, and Purchaser shall receive
such copies thereof and other materials as it may reasonably request in
connection therewith.
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2.4 Purchase of Additional Shares. The closing of the purchase by
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Purchaser of all shares of Ridgewood stock owned by ADT Security Services, Inc.
shall have been consummated or shall be consummated simultaneously with the
Closing.
2.5 No Distributions, Recapitalizations, Etc. Except as set forth on
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Schedule 2.5, from December 31, 1998 through the Closing Date, Ridgewood shall
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not have declared or paid any dividend or declared, authorized or made any stock
split, recapitalization, reorganization or other similar distribution on or with
respect to, or redeemed or purchased, any shares of its capital stock.
2.6 Legal Opinion. Purchaser shall have received from counsel for
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Ridgewood a legal opinion in substantially the form of Exhibit B hereto.
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2.7 Adverse Change. Between the date hereof and the Closing, there
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shall have been no adverse change in the business or the results of operations,
liabilities, prospects or condition, financial or otherwise, of Ridgewood.
3. CONDITIONS OF SALE.
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Seller's obligations to sell and deliver the Purchased Shares hereunder and
consummate the other transactions contemplated hereby shall be subject to the
compliance by Purchaser with its agreements herein contained and to the
fulfillment on or before the Closing of the following conditions:
3.1 Authorization. The Board of Directors of Purchaser shall have
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duly adopted resolutions, or given written consent, authorizing Purchaser to
consummate the transactions contemplated hereby in accordance with the terms
hereof and with applicable law, and Seller shall have received a duly executed
certificate of the Secretary of Purchaser, dated the Closing Date, setting forth
a copy of such resolutions.
3.2 Governing Documents. Purchaser shall have delivered to Seller
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true and correct copies of its Articles of Incorporation, Bylaws and other
governing documents, all as amended through the Closing Date and each certified
by the Secretary of Purchaser.
3.3 Representations and Warranties. Each of the representations and
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warranties of Purchaser set forth in Article 5 shall be true and correct on the
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date hereof and as of the Closing Date, if made on and as of the Closing Date,
and at the Closing, Seller shall receive a certificate to such effect executed
by a duly authorized representative of Purchaser.
3.4 All Proceedings Satisfactory. All corporate and other
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proceedings taken prior to or at the Closing in connection with the transactions
contemplated by this Agreement, and all documents and evidences incident
thereto, shall be reasonably
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satisfactory in form and substance to Seller, and Seller shall receive such
copies thereof as he may reasonably request in connection therewith.
3.5 Financial Statements. Prior to or upon the Closing, and subject
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to execution and delivery of a confidentiality agreement by Seller, Purchaser
shall have delivered to Seller copies of its most recent audited financial
statements.
3.6 Legal Opinion. Seller shall have received from counsel for
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Purchaser a legal opinion in substantially the form of Exhibit C hereto.
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4. REPRESENTATIONS AND WARRANTIES OF SELLER.
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As a material inducement to Purchaser to enter into this Agreement and to
purchase the Purchased Shares as contemplated hereby, Seller represents and
warrants to Purchaser, as of the date hereof, as follows:
4.1 Ownership of Shares. Seller owns of record and beneficially all
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of the Purchased Shares. Seller owns all right, title and interest in and to
the Purchased Shares, free and clear of any and all liens, charges, security
interests or other encumbrances (collectively, "Liens"), other than restrictions
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on transfers arising out of applicable federal and state securities laws. Prior
to the Closing, Seller owns 780,000 shares of Ridgewood common stock and options
to acquire 150,000 shares of Ridgewood common stock, and no warrants or other
rights relating to, convertible into or exchangeable for shares of Ridgewood
stock. At the Closing, Purchaser will acquire all right, title and interest in
and to the Purchased Shares, free and clear of any and all Liens, other than
restrictions on transfers arising out of applicable federal and state securities
laws. There are no shareholder agreements in effect with respect to the
Purchased Shares, and Seller owns no security of Ridgewood other than as
described in this Section 4.1.
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4.2 Validity and Enforceability. Seller has all necessary power and
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authority, and has taken all action required, to execute, deliver and perform
this Agreement and sell and deliver the Purchased Shares. This Agreement and
all other documents and instruments executed by Seller pursuant hereto, when
delivered, are and will be duly authorized, valid and binding obligations of
Seller, enforceable against him 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 Purchased
Shares by Seller 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 instrument to which Seller or Ridgewood is a party
or which are otherwise binding on Seller or Ridgewood.
4.3 Governmental and Other Consents. No authorization, consent,
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approval, license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign,
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or any third party, is or will be necessary for, or in connection with, the
offer, sale or delivery by Seller of the Purchased Shares, or for the
performance by Seller of his obligations under this Agreement.
4.4 Litigation. Except as set forth on Schedule 4.4, there is no
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action, suit, proceeding or investigation pending or, to Seller's knowledge,
threatened against Seller or Ridgewood that might call into question the
validity of, or hinder the enforceability or performance of, this Agreement or
the Purchased Shares, or any action taken or to be taken pursuant hereto.
Neither Seller nor Ridgewood is in default with respect to any order, writ,
injunction, decree, ruling or decision of any court, commission, board or other
government agency by which Seller or Ridgewood is bound that might affect the
Purchased Shares.
4.5 No Violations. Neither the execution, delivery and performance
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by Seller of this 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 Purchased 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 Seller is bound, or result in the creation or
imposition of any Lien upon any of the Purchased Shares.
4.6 No Brokers or Finders. No person has or will have, as a result of
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the transactions contemplated by this Agreement, any right, interest or valid
claim against or upon Seller for any commission, fee or other compensation as a
finder or broker because of any act or omission by Seller or any agent of
Seller.
4.7 Material Adverse Change. Except as set forth on Schedule 4.7,
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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.
4.8 SEC Filings. All of the documents (the "SEC Documents") filed by
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Ridgewood with the Securities and Exchange Commission (the "Commission") in
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accordance with the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the Securities Exchange Act of 1934, as amended
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(collectively, the "Securities Acts"), and all information supplied by Seller or
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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.
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4.9 Derivative Action The status of the derivative action against
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Ridgewood styled as Xxxxxxxxxxxx v. Early et al. (the "Derivative Action") is as
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set forth on Schedule 4.9 hereto.
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4.10 Understanding of Nature of Securities. Seller understands that:
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(a) The Notes have not been registered under the Securities Act, or
any state securities laws (the "State Acts") and are being issued and sold in
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reliance upon certain of the exemptions contained in the Securities Act and the
State Acts, and the representations and warranties of Seller contained herein
are essential to the claim of exemption under the Securities Act and the State
Acts;
(b) Each Note is a "restricted security" as that term is defined in
Rule 144 promulgated under the Securities Act;
(c) The Notes cannot be sold or transferred without registration
under the Securities Act and any applicable State Acts or exemptions therefrom;
(d) The Notes and any documents issued in replacement therefor shall
bear a legend in substantially the following form, in addition to any other
legend required by law or otherwise:
"The security represented hereby has not been registered under the
Securities Act of 1933 (the "Act") or any state securities acts and may
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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 security is effective or unless the maker is in receipt
of an opinion of counsel satisfactory to it to the effect that such
security may be sold without registration under the Acts and such state
acts."
(e) Accredited Investor. Seller is an "accredited investor" as that
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term is defined in Regulation D under the Securities Act; and
(f) Acquisition Intent. Seller's acquisition of the Notes is not a
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transaction (or any element of a series of transactions) that is a part of a
plan or scheme to evade the registration provisions of the Securities Act.
4.11 Investment Intent. Seller is acquiring the Notes for Seller's
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own account and not on behalf of any other person. Seller is acquiring the
Notes for investment and not with a view to or for sale in connection with any
distribution or with the intent to divide Seller's participation with others or
resell or otherwise participate in a distribution of the Notes, directly or
indirectly.
4.12 Economic Risk Seller acknowledges that he has the ability to
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bear the economic risks of his investment pursuant to this Agreement.
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4.13 No Claims Against Ridgewood. Except as set forth on Schedule
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4.13, Seller has no claim against Ridgewood, except for accrued compensation for
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the most recent salary payment period and benefits and expenses or similar
obligations incurred in the ordinary course of business (including reimbursement
of medical expenses pursuant to any benefit plan of Ridgewood).
4.14 Disclosure. Neither this Agreement nor any certificate, schedule
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or exhibit provided in connection herewith by Seller to Purchaser contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances under which they are or were made.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
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As a material inducement to Seller to enter into this Agreement and to sell
the Purchased Shares as contemplated hereby, Purchaser represents and warrants
to Seller, as of the date hereof, as follows:
5.1 Validity and Enforceability. Purchaser has all necessary
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corporate power and authority, and has taken all action required, to execute,
deliver and perform this Agreement and purchase the Purchased Shares. This
Agreement and all other documents and instruments executed by Purchaser pursuant
hereto, when delivered, are and will be duly authorized, valid and binding
obligations of Purchaser, 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.
5.2 Understanding of Nature of Securities. Purchaser understands
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that:
(a) The Purchased Shares have not been registered under the
Securities Act, or any State Acts and are being issued and sold in reliance upon
certain of the exemptions contained in the Securities Act and the State Acts,
and the representations and warranties of Seller contained herein are essential
to the claim of exemption by Purchaser under the Securities Act and the State
Acts;
(b) The Purchased Shares are "restricted securities" as that term is
defined in Rule 144 promulgated under the Securities Act;
(c) The Purchased Shares cannot be sold or transferred without
registration under the Securities Act and any applicable State Acts or
exemptions therefrom;
(d) The Purchased Shares and any certificates issued in replacement
therefor shall bear a legend in substantially the following form, in addition to
any other legend required by law or otherwise:
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"The securities represented by this certificate have not been registered
under the Securities Act of 1933 (the "Act") or any state securities acts
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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 Purchaser 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."
(e) Accredited Investor. Purchaser is an "accredited investor" as
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that term is defined in Regulation D under the Securities Act; and
(f) Acquisition Intent. Purchaser's acquisition of the Purchased
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Shares is not a transaction (or any element of a series of transactions) that is
a part of a plan or scheme to evade the registration provisions of the
Securities Act.
5.3 Investment Intent. Purchaser is acquiring the Purchased Shares
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for Purchaser's own account and not on behalf of any other person. Purchaser is
acquiring the Purchased Shares for investment and not with a view to or for sale
in connection with any distribution of the Purchased Shares or with the intent
to divide Purchaser's participation with others or resell or otherwise
participate in a distribution of the Purchased Shares, directly or indirectly.
5.4 Economic Risk. Purchaser acknowledges that it has the ability to
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bear the economic risks of its investment pursuant to this Agreement.
5.5 No Violations. Neither the execution, delivery and performance by
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Purchaser of this Agreement and any documents or instruments delivered, executed
and performed in connection herewith, the consummation of the transactions
contemplated hereby (including the purchase of the Purchased 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 Purchaser is subject or bound.
5.6 Governmental and Other Consents. No authorization, consent,
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approval, license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, or any third party, is or will be necessary for, or in
connection with, the purchase by Purchaser of the Purchased Shares, or for the
performance by Purchaser of its obligations under this Agreement.
5.7 Litigation. Except as set forth on Schedule 5.7, there is no
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action, suit, proceeding or investigation pending or, to Purchaser's knowledge,
threatened against Purchaser that might call into question the validity of, or
hinder the enforceability or performance of, this Agreement or the Purchased
Shares, or any action taken or to be taken pursuant hereto. Purchaser is not in
default with respect to any order, writ,
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injunction, decree, ruling or decision of any court, commission, board or other
government agency by which it is bound that might affect the Purchased Shares.
5.8 No Brokers or Finders. No person has or will have, as a result of
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the transactions contemplated by this Agreement, any right, interest or valid
claim against or upon Purchaser for any commission, fee or other compensation as
a finder or broker because of any act or omission by Purchaser or any agent of
Purchaser.
6. CERTAIN ANNOUNCEMENTS.
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Any public announcement with respect to this Agreement and the transactions
contemplated hereby will be issued at such time and in such manner as is
mutually agreed upon by the parties hereto; provided, however, that in the event
a party hereto determines, based upon advice of counsel, that a public
announcement is required by law, the parties shall in good faith make every
effort to agree on any public announcements or statements so required.
7. CERTAIN COVENANTS OF THE PARTIES.
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7.1 Investigation. Purchaser may, prior to the Closing, make or
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cause to be made, such investigation of the business and properties of Ridgewood
and its financial and legal condition as Purchaser deems necessary or advisable
to familiarize itself therewith, provided, that such investigations shall not
unreasonably interfere with normal operations of Ridgewood. No investigation by
Purchaser heretofore or hereafter made shall affect the representations and
warranties of Seller, and each such representation and warranty shall survive
any investigation.
7.2 Expenses. Except as otherwise provided in this Agreement,
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whether or not the transactions contemplated hereby are consummated, all costs
and expenses (including any attorney's and accountant's fees) incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expenses; provided that all fees and expenses
incurred by Seller or his advisors in connection with this Agreement and the
transactions contemplated hereby are the expenses of Seller, and not of
Ridgewood.
7.3 Noncompetition.
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(a) Seller acknowledges that Ridgewood and Purchaser sell services
throughout the States of Georgia, Texas, Kentucky and Florida (the "Territory")
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and that Purchaser would not purchase the Purchased Shares without the assurance
that Seller will not engage in the activities prohibited by this Section 7.3 for
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the periods set forth herein. To induce Purchaser to consummate the purchase of
the Purchased Shares, Seller shall restrict his actions throughout the Territory
and otherwise as provided in this Section 7.3. Seller acknowledges that such
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restrictions are reasonable in light of the business of Ridgewood and Purchaser
and the benefits of the transactions contemplated by this Agreement to the
Seller; provided, however, that such restrictions shall not apply to any
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activities undertaken by Seller after Closing solely in his capacity as an
employee or consultant of Ridgewood.
(b) Except for any relationship or involvement with Purchaser or
Ridgewood, from and after Closing, Seller will not manage, operate, join,
control or participate in the ownership, management or control of any business
under the name or style of Purchaser or Ridgewood, or any name or style
incorporating any such name or style or any name or style confusingly similar to
such name or style.
(c) During the period commencing on the date of the Closing and
terminating on the third anniversary thereof (the "Noncompete Period"), except
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on behalf of Ridgewood as a director, consultant or otherwise, Seller will not
directly engage in the business of acquiring, developing, operating or managing
hotel properties (the "Restricted Business") within the Territory, or act as
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consultant, advisor, independent contractor, officer, manager, director,
executive level employee or principal of any corporation (other than Purchaser,
Ridgewood or any affiliate thereof), partnership, association or agency, or
directly or indirectly own more than five percent of the outstanding capital
stock of any corporation (other than Purchaser, Ridgewood or any affiliate
thereof), which is engaged in the Restricted Business in the Territory during
the Noncompete Period.
(d) During the Noncompete Period, Seller will not induce a "Customer"
(as defined below) (i) to patronize any business entity engaged in the
Restricted Business in the Territory (other than Purchaser, Ridgewood or any
affiliate thereof); or (ii) to withdraw, curtail or cancel such Customer's
business with Purchaser, Ridgewood or any affiliate thereof. As used in this
Section 7.3, "Customer" means any actual customer of Purchaser, Ridgewood or the
-----------
subsidiaries thereof, or any potential customer of Purchaser, Ridgewood or the
subsidiaries thereof served or solicited by Ridgewood or any subsidiaries
thereof within the 12-month period prior the date of Closing.
(e) During the Noncompete Period, Seller will not request or induce
any employee to terminate his employment with Purchaser, Ridgewood or any
affiliate thereof and accept employment with another business entity engaged in
the Restricted Business in the Territory or hire during the Noncompete Period
any employee, within twelve months after termination of such person's employment
with Purchaser, Ridgewood or any affiliate thereof.
(f) Seller acknowledges that any violation of the provisions of this
Section 7.3 may cause irreparable harm to Purchaser or Ridgewood and that
-----------
damages are not an adequate remedy. Purchaser or Ridgewood therefore shall be
entitled to an injunction by an appropriate court in the appropriate
jurisdiction, enjoining, prohibiting and restraining Seller from the continuance
of any such violation, in addition to any monetary damages that might occur by
reason of the violation of this Section 7.3. The remedies provided in this
-----------
Section 7.3 are cumulative and shall not exclude any other remedies to which any
-----------
party to this Agreement may be entitled under this Agreement or
10
applicable law, and the exercise of a remedy shall not be deemed an election
excluding any other remedy (any such claim by any other party to this Agreement
being hereby waived).
(g) Should any portion, provision or clause of this Section 7.3 be
-----------
deemed too broad to permit enforcement to its full extent, then it shall be
enforced to the maximum extent permitted by law, and such scope may be
judicially modified accordingly in any proceeding brought to enforce such
restriction.
(h) The covenants and agreements set forth in this Section 7.3 shall
-----------
be deemed, and shall be construed as, separate and independent covenants and
agreements, and, should any portion of such covenants or agreements be held
invalid, void or unenforceable by any court of competent jurisdiction, such
invalidity, voidness, or unenforceability shall in no way render invalid, void
or unenforceable any other portion thereof or any separate covenant not declared
invalid, void or unenforceable. This Section 7.3 shall in that case be
-----------
construed as if the void, invalid or unenforceable portions were omitted.
7.4 Updated Financial Statements. Subject to the continuing
----------------------------
effectiveness of a confidentiality agreement between Purchaser and Seller,
Purchaser shall deliver to Seller copies of all audited financial statements
prepared by it during the term of the Notes.
8. TERMINATION; SURVIVAL.
---------------------
8.1 Termination. This Agreement may be terminated at any time prior
-----------
to Closing by: (i) mutual consent of Purchaser and Seller; (ii) Purchaser, if
any of the conditions specified in Article 2 hereof are no longer capable of
---------
being satisfied or shall not have been fulfilled before January 12, 2000 and
shall not have been waived by Purchaser, or if there has been a breach by Seller
of any of the representations and warranties of Seller in Article 4 or any of
---------
the covenants or agreements set forth herein, which breach is not curable or, if
curable, is not cured within five days of written notice to Seller from
Purchaser; (iii) Seller, if any of the conditions specified in Article 3 hereof
---------
are no longer capable of being satisfied or shall not have been fulfilled before
January 12, 2000 and shall not have been waived by Seller, or if there has been
a breach of any of the representations and warranties of Purchaser in Article 5,
---------
or any of the covenants or agreements set forth herein, which breach is not
curable or, if curable, is not cured within five days of written notice to
Purchaser by Seller. In the event of termination of this Agreement by either
Purchaser or Seller pursuant to clause (ii) or (iii) of the immediately
preceding sentence, Purchaser, on the one hand, and Seller, on the other hand,
shall be liable to the other for any breach hereof by such party, which breach
led to such termination.
8.2 Effect of Termination. Except for the provisions of Sections
--------------------- --------
7.1, 7.2, 8.1 and 8.2, which shall survive any termination of this Agreement, in
---------------------
the event of the termination and abandonment of this Agreement pursuant to
Article 8, this
---------
11
Agreement shall forthwith become void and have no further effect, without any
liability on the part of any party hereto or its respective officers, directors
or shareholders; provided, however, that, unless this Agreement is terminated
pursuant to Section 8.1, nothing in this Section 8.2 shall prejudice any claim
----------- -----------
any party may have under this Agreement that arises prior to the effectiveness
of such termination.
8.3 Survival. The representations, warranties and agreements made in
--------
this Agreement shall survive the Closing. Each party, acknowledging that the
other is entitled to rely on its or his representations, warranties and
agreements in this Agreement in order to preserve the benefit of the bargain
otherwise represented by this Agreement, agrees that neither the survival of
such representations, warranties and agreements nor their enforceability nor any
remedies for breaches of them shall be affected by any knowledge of a party,
regardless of when or how such party acquired such knowledge.
9. CONFIDENTIALITY.
---------------
Each of the parties hereto shall keep confidential and not disclose to any
other party the discussions, agreements and information with respect to or
concerning the transactions described herein, except to its employees, agents
and advisors on a need-to-know basis. In the event that the transactions
described are not consummated for any reason, then each party shall be bound to
secrecy with respect to all information concerning the other party or the
transactions that has been made known to it as part of these negotiations for a
two year period. None of the parties to this Agreement shall be bound to
secrecy with respect to any information that (i) becomes generally available to
and known by the public (other than as a result of a disclosure directly or
indirectly by any party hereto), (ii) is or becomes available to any party on a
non-confidential basis from a source other than another party, or its advisors,
provided that such source is not and was not bound by a confidentiality
agreement with, or other obligation of secrecy to, a party, or (iii) is or has
already been independently acquired or developed by another party without
violating any confidentiality agreement with, or obligation of secrecy to, a
party. Furthermore, a party shall not be in breach of these provisions if it
discloses information pursuant to a valid order issued by a court or government
agency, provided that the disclosing party notifies the other parties of the
disclosure in advance and provides an opportunity for such party to oppose the
disclosure.
10. INDEMNIFICATION
---------------
10.1 Indemnification by Seller. Seller shall indemnify, defend, save
-------------------------
and hold harmless Purchaser and its officers, directors, employees, agents and
affiliates (collectively, "Purchaser Indemnitees") from and against all demands,
---------------------
claims, allegations, actions or causes of action, assessments, losses, damages,
deficiencies, liabilities, costs and expenses (including reasonable legal fees,
interest, penalties, and all reasonable amounts paid in investigation, defense
or settlement of any of the foregoing) asserted against, imposed upon, required
to be paid or incurred by any Purchaser Indemnitees, directly or indirectly, in
connection with, arising out of, or which would not have occurred but for, (i) a
breach of any representation or warranty made by Seller in
12
this Agreement or in any certificate or document furnished pursuant hereto by
Seller, or (ii) a breach or nonfulfillment of any covenant or agreement made by
Seller in or pursuant to this Agreement.
10.2 Indemnification by Purchaser. Purchaser shall indemnify, defend,
----------------------------
save and hold harmless Seller from and against any and all demands, claims,
allegations, actions or causes of action, assessments, losses, damages,
deficiencies, liabilities, costs and expenses (including reasonable legal fees,
interest, penalties, and all reasonable amounts paid in investigation, defense
or settlement of any of the foregoing) asserted against, imposed upon, required
to be paid or incurred by Seller, directly or indirectly, in connection with,
arising out of, or which would not have occurred but for, (i) a breach of any
representation or warranty made by Purchaser in this Agreement or in any
certificate or document furnished pursuant hereto by Purchaser, or (ii) a breach
or nonfulfillment of any covenant or agreement made by Purchaser in or pursuant
to this Agreement.
10.3 Claims and Procedures.
---------------------
(a) Notice. If any action, suit, proceeding, claim or demand is
------
asserted against an Indemnified Party (the "Indemnified Party") in respect of
-----------------
which the Indemnified Party proposes to demand indemnification, the Indemnified
Party shall notify the indemnifying party (the "Indemnifying Party") thereof
------------------
promptly and within a reasonable time after assertion thereof; provided,
however, that the Indemnified Party's failure or delay in giving such notice
shall not relieve the Indemnifying Party of its obligations under this Article
-------
10 except to the extent that the Indemnified Party unreasonably delayed and the
--
Indemnifying Party shall have been prejudiced thereby.
(b) Cooperation. The parties shall cooperate fully with each other in
-----------
connection with the mitigation, defense, negotiation or settlement of any legal
proceeding, claim or demand subject hereto, and subject to the provisions
hereof, all parties shall retain the right to participate in the defense of any
such legal proceeding, claim or demand. The Indemnifying Party has the right to
conduct and control, through counsel of its choosing, the defense, compromise or
settlement of any action, suit, proceeding, claim or demand that it agrees in
writing is subject to indemnification hereunder within ten days after receipt of
the notice described in Section 10.3(a); provided, however, that if the
---------------
Indemnifying Party shall have exercised its right to assume such control, the
Indemnified Party may, in its sole discretion, employ counsel to represent it
(in addition to counsel employed by the Indemnifying Party) in any such matter.
If the Indemnifying Party exercises its right to assume such control, (i) the
Indemnifying Party shall not consent to any settlement that does not include as
an unconditional term thereof the giving of a complete release from liability
with respect to such action or suit to the Indemnified Party; and (ii) the
Indemnifying Party shall promptly reimburse the Indemnified Party for the full
amount of its damages, including fees and expenses of counsel.
10.4 Claims Procedure.
----------------
13
(a) Undisputed Claims. To the extent an Indemnified Party delivers a
-----------------
notice to the Indemnifying Party in accordance with Section 10.3(a) and within
---------------
fifteen business days of the date that such notice was delivered, the
Indemnifying Party has not notified the Indemnified Party in writing of a
dispute with such claim, such Indemnified Party shall be entitled to payment in
full of such claim.
(b) Disputes. If a claim is to be contested, the Indemnifying Party
--------
shall notify the Indemnified Party in writing within fifteen business days from
the date of receipt of a notice of a claim ("Notice of Contest"). If such
-----------------
dispute is not resolved within 30 days after Notice of Contest is delivered,
then such dispute shall be resolved by an arbitrator, who shall be appointed
within sixty days after the delivery of the Notice of Contest. The arbitrator
shall abide by the rules of the American Arbitration Association and his
decision shall be made within forty-five days from the date of appointment and
shall be final and binding on all parties.
(c) Payment. To the extent applicable, any indemnification payments
-------
owed by Seller to Purchaser shall be made by a decrease in the principal amount
owing under the Note. All indemnification payments under this Article 10 not
----------
covered by a decrease in the principal amount of the Note shall be made promptly
in cash.
11. MISCELLANEOUS.
-------------
11.1 Good Faith Efforts; Further Assurances; Cooperation. The parties
---------------------------------------------------
shall in good faith undertake to perform their obligations in this Agreement, to
satisfy all conditions and to cause the transactions contemplated in this
Agreement to be carried out promptly in accordance with the terms of this
Agreement. Upon the execution of this Agreement and thereafter, each party
shall do such things as may be reasonably requested by another party in order
more effectively to consummate or document the transactions contemplated by this
Agreement. The parties shall cooperate with each other and their respective
counsel, accountants or representatives in connection with any actions required
to be taken as part of their respective rights and obligations under this
Agreement.
11.2 Notices. Each notice, communication and delivery under this
-------
Agreement (i) shall be made in writing, signed by the party making the same,
(ii) shall specify the section of this Agreement pursuant to which it is given,
(iii) shall be given either in person, by a nationally recognized next business
day delivery service or by telecopier (with confirmation of receipt), and (iv)
if not given in person, shall be given to a party at the address set forth below
such party's signature (or at such other address as a party may furnish to the
other parties to this Agreement pursuant to this Section 11.2). If notice is
------------
given pursuant to this Section 11.2 of a permitted successor or assign of a
------------
party, then notice shall also thereafter be given in the manner set forth above
to such successor or assign of such party.
11.3 Assignment. Neither party shall assign or transfer its rights or
----------
obligations under this Agreement, whether by merger, operation of law or
otherwise, except with the prior written consent of the other party, which shall
not be unreasonably withheld.
14
Purchaser may assign its rights and obligations under this Agreement to a
purchaser of all or a substantial part of its business to which this Agreement
relates, whether such purchase is by purchase of assets, purchase of stock,
merger or otherwise. This Agreement is binding upon the parties and their
successors and assigns and inures to the benefit of the parties and their
permitted successors and assigns and, when appropriate to effect the binding
nature of this Agreement for the benefit of the other parties, of any other
successor or assign.
11.4 Severability. Any determination by any court of competent
------------
jurisdiction of the invalidity, illegality or unenforceability of any provision
of this Agreement that is not essential for accomplishing its purposes shall not
affect the validity, legality or enforceability of any other provision of this
Agreement, which shall remain in full force and effect and which shall be
construed as to be valid under applicable law.
11.5 Controlling Law; Integration; Amendment; Waiver. This Agreement
-----------------------------------------------
is governed by, and shall be construed and enforced in accordance with, the laws
of the State of Georgia (except the laws of that state that would render such
choice of laws ineffective). This Agreement supersedes all prior negotiations,
agreements and understandings among the parties as to its subject matter,
constitutes the entire agreement among the parties as to its subject matter and
may not be altered or amended except in a writing signed by the parties. The
failure of any party at any time or times to require performance of any
provision of this Agreement shall in no manner affect the right to enforce the
same, and no waiver by any party of any provision or of a breach of any
provision of this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed or construed either as a further or continuing waiver
of any such provision or breach or as a waiver of any other provision or of a
breach of any other provision of this Agreement.
11.6 Copies. This Agreement may be executed in two or more copies,
------
each of which shall be deemed an original, and it shall not be necessary in
making proof of this Agreement or its terms to produce or account for more than
one of such copies.
[Signatures begin on next page.]
15
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
FOUNTAINHEAD
DEVELOPMENT CORP., INC.
By: /s/ Xxxxxx Panoz
-------------------------------------
Xxxxxx Panoz
Chairman
Address: 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000
SELLER:
/s/ N. Xxxxxxx Xxxxxx
----------------------------------------
N. Xxxxxxx Xxxxxx
Address: 0000 Xxxxxxxxx Xx., X.X.
Xxxxxxx, XX 00000
EXHIBIT A
THE SECURITY REPRESENTED HEREBY HAS 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 SECURITY IS EFFECTIVE OR UNLESS THE MAKER IS IN RECEIPT OF
AN OPINION OF COUNSEL SATISFACTORY TO IT TO THE EFFECT THAT SUCH SECURITY
MAY BE SOLD WITHOUT REGISTRATION UNDER THE ACTS AND SUCH STATE ACTS.
PROMISSORY NOTE
$260,000 January 11, 2000
FOR VALUE RECEIVED, the undersigned, Fountainhead Development Corp., Inc.,
a Georgia corporation (the "Borrower"), hereby unconditionally promises to pay
to the order of N. Xxxxxxx Xxxxxx, an individual resident of the State of
Georgia (the "Lender"), at 0000 Xxxxxxxxx Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000, or
at such other place as the holder of this Note may from time to time designate
in writing, in lawful money of the United States of America and in immediately
available funds, the principal sum of TWO HUNDRED SIXTY THOUSAND DOLLARS
($260,000).
The principal amount hereof shall be due and payable by Borrower in full no
later than January 11, 2001.
Interest on the outstanding unpaid principal amount hereof shall accrue at
a rate per annum equal to six percent (6%) and shall be payable on a quarterly
basis, commencing March 31, 2000 and due on the last day of every calendar
quarter thereafter for the term of this Note. Interest shall be computed on the
basis of a 360-day year for the actual number of days elapsed in the period
during which it accrues.
The Borrower shall have the right to prepay without penalty the outstanding
principal amount hereof in whole at any time or in part from time to time after
the date hereof. On the date of any such prepayment, the Borrower shall pay
outstanding accrued interest on the amount so prepaid to the date of prepayment.
Any such prepayment in part shall be applied to the installments due hereunder
in inverse order of maturity. The Borrower shall have the right to set
off against any amounts due under this Note any amounts due from the Lender to
the Borrower, whether under the Purchase Agreement of even date herewith between
the Borrower and Lender or otherwise.
In no contingency or event whatsoever shall interest charged hereunder,
however such interest may be characterized or computed, exceed the highest rate
permissible under any law that a court of competent jurisdiction shall, in a
final determination, deem applicable hereto. In the event that such a court
determines that the Lender has received interest hereunder in excess of the
highest rate applicable hereto, such excess interest shall, to the extent
permitted by law, (a) be applied as a credit against the outstanding principal
balance hereof or accrued and unpaid interest hereon, or (b) refunded to the
Borrower.
Each of the following events shall constitute an Event of Default
hereunder:
(a) if the Borrower fails to pay any principal of or interest on this
Note when the same shall become due and payable and such failure continues
for a period of ten (10) days after the Lender delivers written notice
thereof to the Borrower;
(b) if the Borrower fails to perform any of its duties or obligations
as specified in any agreement now or hereafter existing between the
Borrower and the Lender and such failure continues for a period of thirty
(30) days after the Lender delivers written notice thereof to the Borrower;
(c) if the Borrower shall generally not pay its debts as such debts
become due, or admit in writing its inability to pay its debts generally,
or make a general assignment for the benefit of creditors;
(d) if any proceeding is instituted by or against the Borrower seeking
to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debt under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking the entry of an
order for relief or for any substantial part of its property (and, in the
case of any such proceeding instituted against the Borrower, should the
same remain undismissed or unstayed for a period of sixty (60) days), or
should the Borrower take corporate action to authorize any of the actions
set forth in this clause (d); or
(e) if the Borrower is liquidated or dissolved.
Upon the occurrence of any Event of Default under clauses (d) or (e) of the
preceding paragraph, then all outstanding principal hereof and interest hereon
shall, without notice, demand or any other action on the part of the Lender,
become immediately due and payable. Upon the occurrence of any other Event of
Default, then at the Lender's option, by written notice to the Borrower, all
outstanding principal hereof and interest hereon shall become immediately due
and payable. During any period that the Borrower shall have failed to make
payment of any principal or interest due hereunder or during the existence of
any Event of Default hereunder, then in the
2
Lender's sole discretion, the interest rate hereon may be increased to a rate
per annum equal to seven percent (7%) until such payment is made or Event of
Default is cured by the Borrower or waived in writing by the Lender.
The Borrower hereby waives demand, presentment, protest, notice of demand,
dishonor, presentment, protest or nonpayment and all other notices in connection
with this Note.
If this Note is collected by or through an attorney-at-law, all costs of
collection, including reasonable attorneys' fees actually incurred, shall be
payable by the undersigned.
THIS NOTE HAS BEEN DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE AT
ATLANTA, GEORGIA AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO
THE CONFLICTS OF LAW PROVISIONS) AND DECISIONS OF THE STATE OF GEORGIA.
Whenever possible, each provision of this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Note shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Note. Whenever in this Note reference is made to the Lender or the
Borrower, such reference shall be deemed to include, as applicable, a reference
to their respective successors and assigns, provided that the Lender shall not
assign this Note in whole or in part without the prior written consent of the
Borrower, which consent shall not be unreasonably withheld. The provisions of
this Note shall be binding upon and shall inure to the benefit of such
successors and assigns.
3
WITNESS the hand and seal of the undersigned, as of the date first above
written.
FOUNTAINHEAD DEVELOPMENT
CORP., INC.
By:__________________________________
Xxxxxx Panoz
Chairman
4
THE SECURITY REPRESENTED HEREBY HAS 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 SECURITY IS EFFECTIVE OR UNLESS
THE MAKER IS IN RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY TO IT
TO THE EFFECT THAT SUCH SECURITY MAY BE SOLD WITHOUT REGISTRATION
UNDER THE ACTS AND SUCH STATE ACTS.
PROMISSORY NOTE
$260,000 January 11, 2000
FOR VALUE RECEIVED, the undersigned, Fountainhead Development Corp., Inc.,
a Georgia corporation (the "Borrower"), hereby unconditionally promises to pay
to the order of N. Xxxxxxx Xxxxxx, an individual resident of the State of
Georgia (the "Lender"), at 0000 Xxxxxxxxx Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000, or
at such other place as the holder of this Note may from time to time designate
in writing, in lawful money of the United States of America and in immediately
available funds, the principal sum of TWO HUNDRED SIXTY THOUSAND DOLLARS
($260,000).
The principal amount hereof shall be due and payable by Borrower in full no
later than January 11, 2002.
Interest on the outstanding unpaid principal amount hereof shall accrue at
a rate per annum equal to six percent (6%) and shall be payable on a quarterly
basis, commencing March 31, 2000 and due on the last day of every calendar
quarter thereafter for the term of this Note. Interest shall be computed on the
basis of a 360-day year for the actual number of days elapsed in the period
during which it accrues.
The Borrower shall have the right to prepay without penalty the outstanding
principal amount hereof in whole at any time or in part from time to time after
the date hereof. On the date of any such prepayment, the Borrower shall pay
outstanding accrued interest on the amount so prepaid to the date of prepayment.
Any such prepayment in part shall be applied to the installments due hereunder
in inverse order of maturity. The Borrower shall have the right to set off
against any amounts due under this Note any amounts due from the Lender to the
Borrower,
5
whether under the Purchase Agreement of even date herewith between the Borrower
and Lender or otherwise.
In no contingency or event whatsoever shall interest charged hereunder,
however such interest may be characterized or computed, exceed the highest rate
permissible under any law that a court of competent jurisdiction shall, in a
final determination, deem applicable hereto. In the event that such a court
determines that the Lender has received interest hereunder in excess of the
highest rate applicable hereto, such excess interest shall, to the extent
permitted by law, (a) be applied as a credit against the outstanding principal
balance hereof or accrued and unpaid interest hereon, or (b) refunded to the
Borrower.
Each of the following events shall constitute an Event of Default
hereunder:
(a) if the Borrower fails to pay any principal of or interest on this
Note when the same shall become due and payable and such failure continues
for a period of ten (10) days after the Lender delivers written notice
thereof to the Borrower;
(b) if the Borrower fails to perform any of its duties or obligations
as specified in any agreement now or hereafter existing between the
Borrower and the Lender and such failure continues for a period of thirty
(30) days after the Lender delivers written notice thereof to the Borrower;
(c) if the Borrower shall generally not pay its debts as such debts
become due, or admit in writing its inability to pay its debts generally,
or make a general assignment for the benefit of creditors;
(d) if any proceeding is instituted by or against the Borrower
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debt under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking the entry of an
order for relief or for any substantial part of its property (and, in the
case of any such proceeding instituted against the Borrower, should the
same remain undismissed or unstayed for a period of sixty (60) days), or
should the Borrower take corporate action to authorize any of the actions
set forth in this clause (d); or
(e) if the Borrower is liquidated or dissolved.
Upon the occurrence of any Event of Default under clauses (d) or (e) of the
preceding paragraph, then all outstanding principal hereof and interest hereon
shall, without notice, demand or any other action on the part of the Lender,
become immediately due and payable. Upon the occurrence of any other Event of
Default, then at the Lender's option, by written notice to the Borrower, all
outstanding principal hereof and interest hereon shall become immediately due
and payable. During any period that the Borrower shall have failed to make
payment of any principal or interest due hereunder or during the existence of
any Event of Default hereunder, then in the Lender's sole discretion, the
interest rate hereon may be increased to a rate per annum equal to
6
seven percent (7%) until such payment is made or Event of Default is cured by
the Borrower or waived in writing by the Lender.
The Borrower hereby waives demand, presentment, protest, notice of demand,
dishonor, presentment, protest or nonpayment and all other notices in connection
with this Note.
If this Note is collected by or through an attorney-at-law, all costs of
collection, including reasonable attorneys' fees actually incurred, shall be
payable by the undersigned.
THIS NOTE HAS BEEN DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE AT
ATLANTA, GEORGIA AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO
THE CONFLICTS OF LAW PROVISIONS) AND DECISIONS OF THE STATE OF GEORGIA.
Whenever possible, each provision of this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Note shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Note. Whenever in this Note reference is made to the Lender or the
Borrower, such reference shall be deemed to include, as applicable, a reference
to their respective successors and assigns, provided that the Lender shall not
assign this Note in whole or in part without the prior written consent of the
Borrower, which consent shall not be unreasonably withheld. The provisions of
this Note shall be binding upon and shall inure to the benefit of such
successors and assigns.
7
WITNESS the hand and seal of the undersigned, as of the date first above
written.
FOUNTAINHEAD DEVELOPMENT
CORP., INC.
By:/s/ Xxxxxx Panoz
---------------------------------
Xxxxxx Panoz
Chairman
8
DISCLOSURE SCHEDULES
OF
N. XXXXXXX XXXXXX
PROVIDED PURSUANT TO AND AS A PART OF
COMMON STOCK PURCHASE AGREEMENT
BY AND BETWEEN
FOUNTAINHEAD DEVELOPMENT GROUP, INC.
and
N. XXXXXXX XXXXXX
DATED AS OF JANUARY 11, 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 2.5
NO DISTRIBUTIONS, RECAPITALIZATIONS, ETC.
A dividend was paid on Ridgewood's outstanding preferred stock in February, 1999
SCHEDULE 4.4
LITIGATION
See Schedule 4.9.
SCHEDULE 4.7
MATERIAL ADVERSE CHANGE
None.
SCHEDULE 4.9
DERIVATIVE ACTION
The case entitled Xxxxxxx X. Xxxxxxxxxxxx v. Xxxxxxx X. Early, Xxxxxx X.
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Xxxxxxxxx, Xxxx X. Xxxxxx, N. Xxxxxxx Xxxxxx, and Triton Group, Ltd.,
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defendants, and Ridgewood Properties, Inc., nominal defendant, C.A. No. 14267,
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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.
SCHEDULE 4.13
NO CLAIMS AGAINST RIDGEWOOD
Consulting Agreement entered into as of the 5/th/ day of January, 2000, by and
between Ridgewood Hotels, Inc., a Delaware corporation and N. Xxxxxxx Xxxxxx.
SCHEDULE 5.7
LITIGATION
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None.
