SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 1, 1997
BODDIE-NOELL PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Maryland 1-9496 56-1574675
(State of incorporation) (Commission File Number) (IRS Employer Identification No.)
</TABLE>
3710 One First Union Center, Charlotte, NC 28202
(Address or principal executive offices, Zip Code)
Registrant's telephone number 704/333-1367
Index to exhibits at page 15 Total number of pages: 20
1
<PAGE>
Item 2. Acquisition or Disposition of Assets
On December 1, 1997, Boddie-Noell Properties, Inc. completed the acquisition of
four apartment communities containing a total of 880 apartment units. These
properties are part of a contract to acquire a portfolio of seven multifamily
properties containing a total of 1,356 apartment units from affiliates of CB
Development Company. The seven apartment communities are located in the North
Carolina cities of Winston-Salem, Greensboro, and Burlington.
Boddie-Noell Properties, Inc. is a self-managed, self-advised REIT which owns
and operates apartment communities in North Carolina and Virginia. Concurrent
with the acquisition of the four properties, we reorganized to an UPREIT
structure, a structure which many REITs currently use. An UPREIT is a real
estate investment trust that controls and holds most of its properties through
an umbrella limited partnership. The umbrella limited partnership in our UPREIT
is Boddie-Noell Properties Limited Partnership, of which we are the sole general
partner and majority limited partner.
Concurrent with, and as part of, the acquisition of the four properties, Paul G.
Chrysson and W. Michael Gilley were appointed to the Company's Board of
Directors. Effective December 1, 1997, Nicholas B. Boddie and Richard A.
Urquhart have resigned from the Board in order to create openings for the new
directors.
We now own nine apartment communities containing 2,208 apartment units and have
the right to acquire three additional apartment communities (containing 476
apartment units) that are currently under construction. We also own 47 Hardee's
restaurant properties which are master leased on a triple-net basis, and we
manage seven other apartment communities (containing 1,713 apartment units) and
two shopping centers that are owned by other parties. Our headquarters are in
Charlotte, North Carolina, and all of our operations are in North Carolina and
Virginia.
Prior to the acquisition of the four apartment communities, CB Development
was an unrelated party. It is now considered an affiliate because Paul Chrysson
exerts control over CB Development and is also one of our directors. CB
Development is a Winston-Salem, North Carolina, developer of high-end single
family and multifamily properties in North and South Carolina. In addition to
the properties to be acquired, CB Development has several apartment communities
under development.
The properties we acquired on December 1, 1997, are:
Abbington Place Greensboro, North Carolina 360 units
Pepperstone Greensboro, North Carolina 108 units
Savannah Place Winston-Salem, North Carolina 172 units
Waterford Place Greensboro, North Carolina 240 units
We acquired the four apartment properties through issuance of operating
partnership units in Boddie-Noell Properties Limited Partnership and cash
payments to retire existing debt. Operating partnership units issued, and to be
issued, are as follows:
- 950,032 operating partnership units issued at closing, December 1, 1997
- 100,000 operating partnership units to be issued December 1, 1998 (not
subject to contingency)
- 100,000 operating partnership units to be issued December 1, 1999 (not
subject to contingency)
Financing was provided, in part, by FNMA through AMRESCO Capital, Crouse &
Associates. The secured financing, which totals $38,070,500, carries a fixed
interest rate of 6.97% for a term of ten years, interest only. The balance of
the funds required for the acquisition came from an unsecured acquisition line
of credit provided by AMRESCO Capital. The unsecured loan totals $8,785,500,
with interest at the 30-day LIBOR rate plus 2.00% for the first six months, due
the earlier of May 1999 or a public offering.
The remaining three communities containing 476 units are under construction,
with estimated completion dates within the next 12 months. We will acquire these
properties as they achieve predetermined occupancy and rental levels. In
addition to the acquisition of the seven communities, we will have the right of
first refusal to acquire any additional properties developed by CB Development
or any of its affiliates.
2
<PAGE>
Under the terms of the acquisition agreement, the Company will, subject to
certain adjustments, issue a total of approximately 1,635,000 operating
partnership units in Boddie-Noell Properties Limited Partnership. After a one
year holding period, each operating partnership unit will be convertible into
one share of the Company's common stock or, at our option, into cash equal to
the fair value of one share of common stock. The balance of the acquisition
price will be provided by the refinancing of approximately $71 million of
existing debt secured by the properties. We estimate the total value of the
transaction at approximately $92 million.
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired.
Pages 5-8 Acquired Properties Combined Statements of Revenue and
Certain Operating Expenses for the Year Ended December 31,
1996, and for the Nine Months Ended September 30, 1996
and 1997
(b) Pro forma financial information.
Page 9 Boddie-Noell Properties, Inc. Unaudited Pro Forma Condensed
Consolidated Balance Sheet as of September 30, 1997
Page 11 Boddie-Noell Properties, Inc. Unaudited Pro Forma Condensed
Consolidated Statement of Operations for the Year Ended
December 31, 1996
Page 12 Boddie-Noell Properties, Inc. Unaudited Pro Forma Condensed
Consolidated Statement of Operations for the Nine Months
Ended September 30, 1997
We present the unaudited pro forma condensed consolidated balance sheet as of
September 30, 1997, as if the acquisition of the four apartment communities
acquired on December 1, 1997, had occurred on September 30, 1997.
We present the unaudited pro forma condensed consolidated statements of
operations for the year ended December 31, 1996, and for the nine months ended
September 30, 1997, as if the acquisition of the three "stabilized" properties
had occurred on January 1 of each period presented. We consider an apartment
property to be stabilized when construction of all buildings has been completed
and the property has attained 90% occupancy for 90 days. Under the terms of the
Master Agreement of Merger and Acquisition and the financing for the purchase,
these conditions must be met before purchase of the property. These statements
of operations do not include operations, depreciation, or financing expense for
Waterford Place Apartments and the second phase of Abbington Place Apartments
because these properties had not reached stabilized status prior to September
30, 1997. These two properties reached stabilized status in October 1997.
You should read these unaudited statements in conjunction with our Annual Report
on Form 10-K for the year ended December 31, 1996, and our Quarterly Report on
Form 10-Q for the quarter ended September 30, 1997. We believe the pro forma
condensed consolidated financial information provides all adjustments necessary
to reflect the terms of the acquisition.
These pro forma statements may not represent what our financial position would
have been if the purchase of the four apartment communities had occurred on
September 30, 1997, or how we would have performed if the purchase of the four
apartment communities had really occurred at the beginning of the periods
3
<PAGE>
presented. In addition, they do not purport to project our financial position or
results of operations at any future date or for any future period.
(c) Exhibits
No.
2.1* Master Agreement of Merger and Acquisition by and among Boddie-Noell
Properties, Inc., Boddie-Noell Properties Limited Partnership, Paul G.
Chrysson, James G. Chrysson, W. Michael Gilley, Matthew G. Gallins,
James D. Yopp, and the partnerships and limited liability companies
listed therein, dated September 22, 1997 (filed as Exhibit 2.1 to
Registration Statement No. 333-39803 on Form S-2 and incorporated
herein by reference)
2.2* Exchange Option Agreement by and among Boddie-Noell Properties Limited
Partnership, Boddie-Noell Properties, Inc., and the owners of the
Chrysson affiliates listed therein, dated as of September 22, 1997
(filed as Exhibit 2.2 to Registration Statement No. 333-39803 on Form
S-2 and incorporated herein by reference)
2.3 Amendment to Master Agreement of Merger and Acquisition dated
September 22, 1997 by and among Boddie-Noell Properties, Inc., Boddie-
Noell Properties Limited Partnership, Paul G. Chrysson, James G.
Chrysson, W. Michael Gilley, Matthew G. Gallins, James D. Yopp, and
the partnerships and limited liability companies listed therein, dated
November 3, 1997
*Incorporated herein by reference
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Boddie-Noell Properties, Inc.
(Registrant)
December 11, 1997 /s/ Pamela B. Novak
--------------------------
Pamela B. Novak
Vice President, Controller and
Chief Accounting Officer
4
<PAGE>
Report of Independent Auditors
To the Shareholders of
Boddie-Noell Properties, Inc.
We have audited the accompanying Combined Statement of Revenue and Certain
Operating Expenses of Acquired Properties as described in Note 1 for the year
ended December 31, 1996. This financial statement is the responsibility of
Acquired Properties' management. Our responsibility is to express an opinion on
this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the basis of accounting used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying Combined Statement of Revenue and Certain Operating Expenses
was prepared using the basis of accounting described in Note 1 for the purpose
of complying with the rules and regulations of the Securities and Exchange
Commission for inclusion in the Form 8-K of Boddie-Noell Properties, Inc. and is
not intended to be a complete presentation of Acquired Properties' revenue and
expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenue and certain operating expenses described in
Note 1 of Acquired Properties for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
/s/ERNST & YOUNG LLP
Raleigh, North Carolina
September 12, 1997
5
<PAGE>
Acquired Properties
Combined Statements of Revenue and Certain Operating Expenses
<TABLE>
<CAPTION>
December 31 September 30
1996 1996 1997
---------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Rental income $ 4,641,260 $ 3,338,845 $ 4,855,475
Other income 8,143 4,583 14,708
---------------------------------------------------------------
4,649,403 3,343,428 4,870,183
Certain operating expenses:
Property operations expense 965,963 609,373 945,755
Insurance 33,124 20,964 26,323
Property taxes 370,878 264,000 419,371
---------------------------------------------------------------
Total certain operating expenses 1,369,965 894,337 1,391,449
---------------------------------------------------------------
Revenue in excess of certain operating expenses $ 3,279,438 $ 2,449,091 $ 3,478,734
===============================================================
</TABLE>
See accompanying notes.
6
<PAGE>
Acquired Properties
Notes to Combined Statements of Revenue and Certain Operating Expenses
December 31, 1996
1. Basis of Presentation
Presented herein are the Combined Statements of Revenue and Certain Operating
Expenses related to the operations of five apartment properties located in the
greater Greensboro, North Carolina metropolitan market (the "Acquired
Properties".)
Acquired Properties is not a legal entity but rather a combination of the
operations of certain apartment properties expected to be acquired by
Boddie-Noell Properties, Inc. The accompanying Combined Statements of Revenue
and Certain Operating Expenses includes the accounts of the following apartment
properties, each of which is wholly owned by various parties not affiliated with
Boddie-Noell Properties, Inc. Abbington II and Waterford were in the start up
phase of operations during 1996; therefore, these properties had insignificant
operating activity.
<TABLE>
<CAPTION>
Number of Date Placed in
Property Properties Service Owner
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Savannah Place 1 March 1990 Savannah Place Associates, LLC
Pepperstone 1 April 1990 Pepperstone Association, LLC
Abbington I 1 November 1994 Abbington Place Associates, LLC
Abbington II 1 February 1997 Abbington Place Associates, LLC
Waterford 1 July 1996 Waterford Place Associates, LLC
</TABLE>
In accordance with Rule 3-14 of Regulation S-X, the accompanying financial
statement is not representative of the actual operations for the year presented
as certain operating expenses that may not be comparable to the expenses
expected to be incurred by Boddie-Noell Properties, Inc. in the proposed future
operations of the aforementioned properties have been excluded. Expenses
excluded consist of interest, depreciation and general and administrative
expenses not directly related to future operations.
7
<PAGE>
Acquired Properties
Notes to Combined Statements of Revenue and Certain Operating Expenses
(continued)
2. Significant Accounting Policies
Advertising Expense
Acquired Properties expenses advertising costs as incurred. Advertising expense
included in leasing expense was $26,000 for the year ended December 31, 1996.
Use of Estimates
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those amounts.
Interim Financial Data
The unaudited financial statements for the nine months ended September 30, 1996
and 1997 include all adjustments (consisting of normal recurring adjustments)
that are, in the opinion of management, necessary for a fair presentation of the
revenues and certain operating expenses for such interim periods. Operating
results for the nine months ended September 30, 1997 are not necessarily
indicative of the results to be expected for the entire year ending December 31,
1997.
3. Leases
Acquired Properties leases its residential apartments under operating leases
with monthly payments due in advance. The majority of the apartment leases are
for terms of one year or less, with none longer than two years. Rental and other
revenues are recorded as earned.
4. Environmental Matters
All of the Acquired properties have been subjected to Phase I environmental
reviews. Such reviews have not revealed, nor is management aware of, any
environmental liability that management believes would have a material adverse
effect on the accompanying financial statement.
8
<PAGE>
BODDIE-NOELL PROPERTIES, INC.
- -------------------------------------------------------------------------------
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 1997
(In thousands)
<TABLE>
<CAPTION>
Pro Forma
----------------------------------
Chrysson Consolidated
Historical Acquisition Pro Forma
(A) (B)
<S> <C> <C> <C>
Assets
Real estate assets, net $ 96,962 $60,860 $157,822
Cash and cash equivalents 1,407 498 1,905
Rent and other receivables 35 - 35
Prepaid expenses and other assets 595 590 1,185
Investment in and advances to Management Company 243 - 243
Notes receivable 1,413 - 1,413
Intangible related to acquisition of management
operations, net 2,841 - 2,841
Deferred financing costs, net 710 448 1,158
-------------- -------------- ----------------
Total assets $104,206 $62,396 $166,602
============== ============== ================
Liabilities and Shareholders' Equity
Mortgage and other notes payable $ 78,397 $46,856 $125,253
Accounts payable and accrued expenses 557 405 962
Accrued interest on mortgages and other notes payable 466 - 466
Consideration due for acquisitions 572 2,600 3,172
Escrowed security deposits and deferred revenue 264 185 449
-------------- -------------- ----------------
80,256 50,046 130,302
Minority interest in operating partnership - 12,350 12,350
Shareholders' equity:
Common stock 31 - 31
Additional paid-in capital 35,163 - 35,163
Dividend distributions in excess of net income (11,244) - (11,244)
-------------- -------------- ----------------
Total shareholders' equity 23,950 - 23,950
-------------- -------------- ----------------
Total liabilities and shareholders' equity $104,206 $62,396 $166,602
============== ============== ================
See accompanying notes.
</TABLE>
9
<PAGE>
BODDIE-NOELL PROPERTIES, INC.
- -------------------------------------------------------------------------------
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(A) Reflects our historical balance sheet contained in our Quarterly Report on
Form 10-Q for the quarter ended September 30, 1997.
(B) Reflects the acquisition of the Initial Properties specified in the Master
Agreement of Merger and Acquisition related to the Chrysson properties.
The Initial Properties are:
<TABLE>
<CAPTION>
Property Location # Units Completed Stabilized
---------- ----------- --------- ----------- ------------
<S> <C> <C> <C> <C>
Abbington Phase I Greensboro, NC 240 1995 1995
Pepperstone Greensboro, NC 108 1992 1992
Savannah Place Greensboro, NC 172 1991 1991
Abbington Phase II Greensboro, NC 120 June, 1997 October, 1997
Waterford Place Winston-Salem, NC 240 August, 1997 October, 1997
</TABLE>
We expect this acquisition to cost approximately:
<TABLE>
<CAPTION>
Contract price:
<S> <C>
Issue of 950,032 operating partnership units at $13.00 per unit at closing $12,350,000
Issue of 100,000 operating partnership units at $13.00 per unit, due one year after closing 1,300,000
Issue of 100,000 operating partnership units at $13.00 per units, due two years after closing 1,300,000
Cash payments to retire existing debt 44,941,000
-----------------
59,891,000
Other costs 969,000
-----------------
$60,860,000
=================
</TABLE>
We financed this purchase with net proceeds from mortgage financing for 65% of
value, with interest fixed at 6.97%, for a term of ten years, with payments of
interest only. The balance of funds required for the acquisition came from an
unsecured loan for 15% of value, with variable interest at the 30-day LIBOR rate
plus 2.00% for the first six months, for a term of 18 months, with payments of
interest only.
First mortgages on initial properties $38,070,500
Unsecured loan 8,785,500
=================
$46,856,000
=================
We expect loan fees and other costs related to obtaining the mortgages to be
approximately:
Loan fees $300,000
Legal and other costs 148,000
=================
$448,000
=================
We assumed liability for payment of real property taxes and resident security
deposits held in trust at closing.
We received cash at closing for the contributors' portion of prorated real
property taxes, resident security deposits held in trust, and the excess of
mortgage proceeds over cash payments made to retire contributors' debt on the
Initial Properties. Amounts received for the contributor's portion of prorated
real property taxes were placed in escrow with the mortgage lender.
10
<PAGE>
BODDIE-NOELL PROPERTIES, INC.
- -------------------------------------------------------------------------------
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year Ended December 31, 1996
(In thousands, except per share data)
<TABLE>
<CAPTION>
Pro Forma
-------------------------------------------------
Stabilized Other
Chrysson Adjust- Consolidated
Historical Properties ments Pro Forma
(E) (G) (H)
<S> <C> <C> <C> <C>
Revenues
Apartment rental income $ 9,791 $ 4,431 $ - $14,222
Restaurant rental income 4,500 - - 4,500
Equity in income of Management Company 149 - - 149
Interest and other income 68 8 - 76
--------------- -------------- -------------- ----------------
14,508 4,439 - 18,947
Expenses
Depreciation 2,440 - 1,096 (a) 3,536
Amortization - management intangible 316 - - 316
Amortization - finance costs 219 - 42 (b) 261
Apartment operations 2,977 1,177 28 (c) 4,182
Administrative 894 - 81 (d) 975
Interest 5,946 - 1,786 (e) 7,732
--------------- -------------- -------------- ----------------
12,792 1,177 3,033 17,002
--------------- -------------- -------------- ----------------
Income before minority interest 1,716 3,262 (3,033) 1,945
Minority interest in operating partnership - - 308 (f) 308
--------------- -------------- -------------- ----------------
Income before extraordinary item $ 1,716 $ 3,262 $ (3,341) $ 1,637
=============== ============== ============== ================
Per share data:
Income before extraordinary item $ 0.57 $ 0.54
=============== ================
Weighted average shares outstanding 3,027 3,027
=============== ================
See accompanying notes.
</TABLE>
11
<PAGE>
BODDIE-NOELL PROPERTIES, INC.
- -------------------------------------------------------------------------------
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the Nine
Months Ended September 30, 1997 (In thousands, except per share data)
<TABLE>
<CAPTION>
Pro Forma
-------------------------------------------------
Stabilized Other
Chrysson Adjust- Consolidated
Historical Properties ments Pro Forma
(F) (G) (H)
<S> <C> <C> <C> <C>
Revenues
Apartment rental income $ 7,898 $ 3,230 $ - $11,128
Restaurant rental income 3,375 - - 3,375
Equity in income of Management Company 183 - - 183
Interest and other income 153 12 - 165
--------------- -------------- -------------- ----------------
11,609 3,242 - 14,851
Expenses
Depreciation 1,923 - 822 (a) 2,745
Amortization - management intangible 278 - - 278
Amortization - finance costs 161 - 32 (b) 193
Apartment operations 2,537 911 25 (c) 3,473
Administrative 734 - 75 (d) 809
Interest 4,684 - 1,339 (e) 6,023
--------------- -------------- -------------- ----------------
10,317 911 2,293 13,521
--------------- -------------- -------------- ----------------
Income before minority interest 1,292 2,331 (2,293) 1,330
Minority interest in operating partnership - - 206 (f) 206
--------------- -------------- -------------- ----------------
Income before extraordinary item $ 1,292 $ 2,331 $ (2,499) $ 1,124
=============== ============== ============== ================
Per share data:
Income before extraordinary item $ 0.42 $ 0.36
=============== ================
Weighted average shares outstanding 3,107 3,107
=============== ================
See accompanying notes.
</TABLE>
12
<PAGE>
BODDIE-NOELL PROPERTIES, INC.
- -------------------------------------------------------------------------------
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(E) Reflects our historical statement of operations contained in our Annual
Report on Form 10-K for the year ended December 31, 1996.
(F) Reflects our historical statement of operations contained in our Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997.
(G) Reflects the revenues and expenses directly related to apartment operations
of three of the five "Initial Properties" specified in the Master Agreement of
Merger and Acquisition related to the Chrysson properties for the periods
presented. We have included only the operations of properties which were
completed and had attained 90% occupancy for at least 90 days during the periods
presented.
<TABLE>
<CAPTION>
Abbington I Pepperstone Savannah Place Total
---------------- ----------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Year Ended December 31, 1996:
Apartment rental income $2,146,000 $837,000 $1,448,000 $4,431,000
Interest and other income 4,000 2,000 2,000 8,000
---------------- ----------------- ----------------- ----------------
2,150,000 839,000 1,450,000 4,439,000
Apartment operations expense 558,000 243,000 376,000 1,177,000
================ ================= ================= ================
Revenue in excess of certain expenses $1,592,000 $596,000 $1,074,000 $3,262,000
================ ================= ================= ================
Nine Months Ended September 30, 1997:
Apartment rental income $1,519,000 $613,000 $1,098,000 $3,230,000
Interest and other income 6,000 2,000 4,000 12,000
---------------- ----------------- ----------------- ----------------
1,525,000 615,000 1,102,000 3,242,000
Apartment operations expense 423,000 187,000 301,000 911,000
================ ================= ================= ================
Revenue in excess of certain expenses $1,102,000 $428,000 $ 801,000 $2,331,000
================ ================= ================= ================
</TABLE>
We have not included the operations of Abbington II and Waterford Place in the
pro forma statements of operations for the year ended December 31, 1996, and for
the nine months ended September 30, 1997. Construction of Abbington II was
completed in June, 1997, and 90% occupancy was first attained during August,
1997. Construction of Waterford Place was completed in August, 1997, and 90%
occupancy was first attained during August, 1997. Under the terms of the Master
Agreement of Merger and Acquisition, we would not acquire these properties until
construction was completed and the property was in full operation. Our mortgage
lender requires that the properties attain 90% occupancy for at least 90 days
before mortgage financing can be completed.
(H) Reflects adjustments to our historical statements of operations and the pro
forma revenues and expenses directly related to apartment operations of the
three stabilized Chrysson properties as follows:
13
<PAGE>
<TABLE>
<CAPTION>
For the For the
Year Nine Months
Ended Ended
December 31, September 30,
1996 1997
---------------- -----------------
<S> <C> <C>
(a) Estimated depreciation expense for the three stabilized properties
using the straight-line method over the estimated useful lives of the
related assets, which are 40 years for buildings, 20 years for land
improvements, 10 years for fixtures
and equipment, and 5 years for carpet and vinyl. $1,096,000 $ 822,000
(b) Estimated amortization of approximately $240,000 deferred financing costs
related to acquisition of the three stabilized Chrysson properties. 42,000 32,000
(c) Estimated increase in apartment operations expense for property accounting
staff and supplies. 28,000 25,000
(d) Estimated increase in general and administrative expense for management staff
and supplies. 81,000 75,000
(e) Estimated interest on approximately $25,139,000 debt related to acquisition
of the three stabilized Chrysson properties. We calculated interest using rates
of 6.97% for mortgages and 7.68% for the unsecured loan. 1,786,000 1,339,000
(f) Estimated minority interest of approximately 16% in net income of the
operating partnership, assuming approximately 571,000 operating partnership
units issued to minority interests related to acquisition of the three
stabilized
Chrysson properties. 308,000 206,000
</TABLE>
14
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
No. Page
<S> <C> <C>
2.1* Master Agreement of Merger and Acquisition by and among Boddie-Noell
Properties, Inc., Boddie-Noell Properties Limited Partnership, Paul G.
Chrysson, James G. Chrysson, W. Michael Gilley, Matthew G. Gallins, James D.
Yopp, and the partnerships and limited liability companies listed therein,
dated September 22, 1997 (filed as Exhibit 2.1 to Registration Statement No.
333-39803 on Form S-2 and incorporated herein by reference) --
2.2* Exchange Option Agreement by and among Boddie-Noell Properties Limited
Partnership, Boddie-Noell Properties, Inc., and the owners of the Chrysson
affiliates listed therein, dated as of September 22, 1997 (filed as Exhibit
2.2 to Registration Statement No. 333-39803 on Form S-2 and incorporated
herein by reference) --
2.3 Amendment to Master Agreement of Merger and Acquisition dated September 22,
1997 by and among Boddie-Noell Properties, Inc., Boddie-Noell Properties
Limited Partnership, Paul G. Chrysson, James G. Chrysson, W. Michael Gilley,
Matthew G. Gallins, James D. Yopp, and the partnerships and limited liability
companies listed therein, dated November 3, 1997 16
</TABLE>
*Incorporated herein by reference
15
<PAGE>
Exhibit 2.3
AMENDMENT TO MASTER AGREEMENT
This Amendment to the Master Agreement of Merger and Acquisition dated
September 22, 1997 by and among Boddie-Noell Properties, Inc., a Maryland
corporation ("BNP"), Boddie-Noell Properties Limited Partnership, a Delaware
limited partnership ("Boddie-Noell"), the limited liability companies listed on
Schedule 1 attached thereto (collectively, the "Chrysson Partnerships"), and the
following individuals: Paul G. Chrysson, James G. Chrysson, W. Michael Gilley,
Matthew G. Gallins and James D. Yopp (collectively, the "Contributors") is made
as of November 3, 1997 by and among BNP, Boddie-Noell, the Chrysson Partnerships
and the Contributors.
The following definitions shall be added to Article I:
"Change of Control" means the occurrence of any one of the
following events: (i) any "person," as such term is used in
Section 13(d) and 14(d) of the Exchange Act (other than BNP,
any of its subsidiaries, any trustee, fiduciary or other
person or entity holding securities under any employee benefit
plan of BNP or any of its subsidiaries), together with all
"affiliates" and "associates" (as such terms are defined in
Rule 12b-2 under the Exchange Act) of such person, shall
become the "beneficial owner" (as such term is defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of 40%
of BNP's common stock (other than as a result of acquisition
of common stock directly from BNP) or 40% of the Units (other
than as a result of the acquisition of Units directly from
Boddie-Noell); or (ii) persons who, as of the Initial Closing
Date, constitute BNP's board of directors (the "Incumbent
Directors") cease for any reason, including, without
limitation, as a result of a tender offer, proxy contest,
merger or similar transaction, to constitute at least a
majority of the board, provided that any person becoming a
director of BNP subsequent to the Initial Closing Date whose
election or nomination for election was approved by a vote of
at least a majority of the Incumbent Directors shall, for
purposes of this Master Agreement, be considered an Incumbent
Director; or (iii) the stockholders of BNP shall approve (A)
any consolidation or merger of BNP or Boddie-Noell where the
stockholders of BNP, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or
merger, beneficially own (as such term is defined in Rule
13d-3 under the Exchange Act), directly or indirectly, shares
representing in the aggregate 50% of the voting shares of the
corporation issuing cash or securities in the consolidation or
merger (or of its ultimate parent corporation, if any); (B)
any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or
arranged by a party as a single plan)
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of all or substantially all of the assets of BNP or
Boddie-Noell; and (C) any plan or proposal for the liquidation
or dissolution of BNP or Boddie-Noell. Notwithstanding the
foregoing, a "Change of Control" shall not be deemed to have
occurred for purposes of the foregoing clause (i) solely as
the result of an acquisition of securities by BNP which, by
reducing the number of shares of common stock outstanding,
increases the proportionate number of shares of common stock
beneficially owned by any person to 40% or more of the shares
then outstanding; provided, however, that if such person shall
thereafter become the beneficial owner of any additional
shares of BNP common stock (other than pursuant to a stock
split, stock dividend, or similar transaction), then a "Change
of Control" shall be deemed to have occurred.
"Deferred Units" means the 200,000 Units whose issuance is
deferred pursuant to paragraph (a) of Section 3.1 hereof.
Paragraph (a) to Section 3.1 is hereby replaced with the following:
(a) The Initial Properties. As consideration for the
contribution of the Initial Properties, Boddie-Noell shall
deliver to the Contributors, in the aggregate, 1,140,077
limited partnership units ("Units") in Boddie-Noell (subject
to adjustment as provided for herein); provided that 100,000
of such Units shall not be issued until the first anniversary
of the Initial Closing Date and another 100,000 of such Units
shall not be issued until the second anniversary of the
Initial Closing Date (Units whose issuance is so deferred
shall be referred to herein in the aggregate as the "Deferred
Units"). The Deferred Units shall be allocated as follows:
120,000 Units to Abbington I and 80,000 Units allocable to
Waterford, in each case in accordance with the allocation of
shares reflected in Schedule 3.1. Each issuance of Deferred
Units shall be on a pro rata basis. In the event of a Change
of Control, any Deferred Units that have not yet been issued
shall be issued immediately.
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<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Agreement by
their hands and under seal affixed hereto as of the date and year first above
written.
BODDIE-NOELL PROPERTIES, INC.
ATTEST:
/s/ Philip S. Payne By: /s/ D. Scott Wilkerson
Philip S. Payne, President
Assistant Secretary
[CORPORATE SEAL]
BODDIE-NOELL PROPERTIES LIMITED PARTNERSHIP
By: Boddie-Noell Properties, Inc.,
ATTEST: General Partner
/s/ Philip S. Payne By: /s/ D. Scott Wilkerson
Philip S. Payne, Title: President
Assistant Secretary
[CORPORATE SEAL]
PEPPERSTONE ASSOCIATES, LLC
By: /s/ Paul G. Chrysson
Paul G. Chrysson, Managing Member
By: /s/ James G. Chrysson
James G. Chrysson, Managing Member
SAVANNAH PLACE ASSOCIATES, LLC
By: /s/ Paul G. Chrysson
Paul G. Chrysson, Managing Member
By: /s/ James G. Chrysson
James G. Chrysson, Managing Member
18
<PAGE>
PLEASANT RIDGE ASSOCIATES, LLC
By: /s/ Paul G. Chrysson
Paul G. Chrysson, Managing Member
By: /s/ James G. Chrysson
James G. Chrysson, Managing Member
WATERFORD PLACE ASSOCIATES, LLC
By: /s/ Paul G. Chrysson
Paul G. Chrysson, Managing Member
By: /s/ James G. Chrysson
James G. Chrysson, Managing Member
BROOKFORD PLACE ASSOCIATES, LLC
By: /s/ Paul G. Chrysson
Paul G. Chrysson, Managing Member
By: /s/ James G. Chrysson
James G. Chrysson, Managing Member
SUMMERLYN PLACE ASSOCIATES, LLC
By: /s/ Paul G. Chrysson
Paul G. Chrysson, Managing Member
By: /s/ James G. Chrysson
James G. Chrysson, Managing Member
ABBINGTON PLACE ASSOCIATES, LLC
By: /s/ Paul G. Chrysson
Paul G. Chrysson, Managing Member
By: /s/ James G. Chrysson
James G. Chrysson, Managing Member
19
<PAGE>
/s/ Paul G. Chrysson
Paul G. Chrysson
/s/ James G. Chrysson
James G. Chrysson
/s/ W. Michael Gilley
W. Michael Gilley
/s/ Matthew G. Gallins
Matthew G. Gallins
/s/ James D. Yopp
James D. Yopp
