<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 15, 1997
REGISTRATION NO. 333-39803
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 3
TO
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BODDIE-NOELL PROPERTIES, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
MARYLAND 6021 56-1574675
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
3710 ONE FIRST UNION CENTER
CHARLOTTE, NORTH CAROLINA 28202-6032
(704) 333-1367
(Address of principal executive offices)
D. SCOTT WILKERSON, PRESIDENT
BODDIE-NOELL PROPERTIES, INC.
3710 ONE FIRST UNION CENTER
CHARLOTTE, NORTH CAROLINA 28202-6032
(704) 333-1367
(Name and address for agent for service of process)
WITH COPIES TO:
<TABLE>
<S> <C>
BRAD S. MARKOFF, ESQ. JAY BERNSTEIN, ESQ.
ALSTON & BIRD LLP ROGERS & WELLS
3605 GLENWOOD AVENUE 200 PARK AVENUE
RALEIGH, NORTH CAROLINA 27612 NEW YORK, NEW YORK 10166
(919) 420-2200 (212) 878-8000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable following the effective date hereof.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. [ ]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legal facsimile thereof, pursuant to Item 11(a)(1) of
this Form, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
[CAPTION]
<TABLE>
<S> <C> <C> <C>
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE OFFER-
BE REGISTERED REGISTERED PER SHARE(1) ING PRICE
<S> <C> <C> <C>
Common Stock, par value
$0.01 per share....................... 3,220,000 $15.00 per share $48,300,000
<CAPTION>
TITLE OF EACH CLASS AMOUNT OF
OF SECURITIES TO REGISTRATION
BE REGISTERED FEE
<S> <C>
Common Stock, par value
$0.01 per share....................... $14,637
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended.
The fee was computed on the basis of the market price of the Company's
Common Stock as of December 4, 1997.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth estimates of the various expenses to be paid
by Boddie-Noell Properties, Inc. in connection with the registration of the
common stock offered pursuant to this registration statement.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee....................................... $ 14,637
Legal Fees................................................................................ 200,000
Accounting Fees........................................................................... 135,000
American Stock Exchange Listing Fee....................................................... 17,500
Printing Costs............................................................................ 90,000
Miscellaneous............................................................................. 42,863
--------
Total................................................................................ $500,000
--------
--------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's officers and directors are and will be indemnified against
certain liabilities in accordance with the Maryland General Corporation Law
("MGCL"), the Articles of Incorporation and bylaws of the Company and the
Operating Partnership Agreement. The Articles of Incorporation require the
Company to indemnify its directors and officers to the fullest extent permitted
from time to time by the MGCL. The MGCL permits a corporation to indemnify its
directors and officers, among others, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection with
any proceeding to which they may be made a party by reasons of their service in
those or other capacities unless it is established that the act or omission of
the director or officer was material to the matter giving rise to the proceeding
and was committed in bad faith or was the result of active and deliberate
dishonesty, or the director or officer actually received an improper personal
benefit in money, property or services, or in the case of any criminal
proceeding, the director or officer had reasonable cause to believe that the act
or omission was unlawful.
The Operating Partnership agreement also provides for indemnification of
the Company and its officers and directors to the same extent indemnification is
provided to officers and directors of the Company in its Articles of
Incorporation and limits the liability of the Company and its officers and
directors to the Operating Partnership and its partners to the same extent
liability of officers and directors of the Company to the Company and its
stockholders is limited under the Company's Articles of Incorporation.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
II-1
<PAGE>
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ----------------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement
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
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
2.3 ** Agreement and Plan of Merger between BT Venture Corporation and Boddie-Noell Restaurant Properties, Inc.
(filed as Exhibit (2)-2 to Boddie-Noell Properties, Inc. Current Report on Form 8-K dated October 1, 1994,
and incorporated herein by reference)
3.1 ** Articles of Incorporation of Registrant (incorporated by reference to exhibit B of the Company's
Definitive Proxy Statement filed pursuant to Section 14(a) of the Securities Exchange Act of 1934)
3.2 * Bylaws of Registrant
5.1 * Opinion of Alston & Bird LLP regarding the legality of the shares being registered
8.1 Opinion of Alston & Bird LLP regarding tax matters
10.1 ** Amended and Restated Master Lease Agreement dated December 21, 1995, between Boddie-Noell Properties, Inc.
and Boddie-Noell Enterprises, Inc. (filed as Exhibit 10.1 to Boddie-Noell Properties, Inc. Annual Report
on Form 10-K dated December 31, 1995, and incorporated herein by reference)
10.2 ** Loan Agreement dated December 27, 1995, between Boddie-Noell Properties, Inc. and SouthTrust Bank of
Alabama, N.A. (filed as Exhibit 10.2 to Boddie-Noell Properties, Inc. Annual Report on Form 10-K dated
December 31, 1995, and incorporated herein by reference)
10.3 ** Acquisition Agreement by and among Boddie-Noell Restaurant Properties, Inc., BT Venture Corporation and
Related Entities dated June 7, 1994 (filed as an exhibit in Schedule 14A of Proxy Statement dated June 15,
1994, and incorporated herein by reference)
10.4 ** Boddie-Noell Restaurant Properties, Inc. 1994 Stock Option and Incentive Plan effective August 4, 1994
(filed as an exhibit in Schedule 14A of Proxy Statement dated June 15, 1994, and incorporated herein by
reference)
10.5 ** Form and description of Incentive Stock Option Agreements dated October 17, 1994 between the Company and
certain officers (filed as Exhibit 10.8 to Boddie-Noell Properties, Inc. Annual Report on Form 10-K dated
December 31, 1994, and incorporated herein by reference)
10.6 ** Form and description of Nonqualified Stock Option Agreements dated October 17, 1994, between the Company
and certain officers (filed as Exhibit 10.9 to Boddie-Noell Properties, Inc. Annual Report on Form 10-K
dated December 31, 1994, and incorporated herein by reference)
10.7 ** Form and description of Employment Agreements dated July 15, 1997 between the Company and certain officers
(filed as Exhibit 10 to Boddie-Noell Properties, Inc. Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997 and incorporated herein by reference)
10.8 Modification to Loan Agreement, dated August 1, 1997, between Boddie-Noell Properties, Inc. and SouthTrust
Bank of Alabama, N.A.
10.9 * Form of Agreement of Limited Partnership of Boddie-Noell Properties Limited Partnership
10.10** Loan Agreement as of February 27, 1997, by and between The Villages of Chapel Hill Limited Partnership and
Boddie-Noell Properties, Inc. (filed as Exhibit 10 to Boddie-Noell Properties, Inc. Quarterly Report on
Form 10-Q for the quarter ended March 31, 1997 and incorporated herein by reference)
10.11 Form of Registration Rights Agreement
16.1 ** Letter regarding change in certifying accountant (filed as exhibit 16 to Boddie-Noell Properties, Inc.
Current Report on Form 8-K dated October 17, 1996, and incorporated herein by reference)
23.1 * Consent of Alston & Bird LLP (included as part of exhibit 5.1)
23.2 Consent of Ernst & Young LLP
23.3 Consent of Arthur Andersen LLP
24.1 * Power of Attorney of B. Mayo Boddie, D. Scott Wilkerson, Philip S. Payne, Pamela B. Novak,
Donald R. Pesta, Jr., and William H. Stanley
24.2 Power of Attorney of Paul G. Chrysson
24.3 Power of Attorney of W. Michael Gilley
27.1 * Financial Data Schedule (electronic filing)
99.1 * Consent of Philip S. Payne as a person named as about to become a director (previously filed as exhibit 99.3)
99.2 * Consent of D. Scott Wilkerson as a person named as about to become a director (previously filed as exhibit 99.4)
</TABLE>
- ---------------
* Previously filed.
** Incorporated herein by reference.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Charlotte, State of North Carolina, on December 15,
1997.
BODDIE-NOELL PROPERTIES, INC.
/s/ D. SCOTT WILKERSON
---------------------------------------
D. SCOTT WILKERSON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following person in the capacities
and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
- --------------------------------------------- ------------------------------------------------------ -----------------
<S> <C> <C>
/s/B. MAYO BODDIE* Chairman of the Board, Director December 15, 1997
--------------------
B. MAYO BODDIE
/s/D. SCOTT WILKERSON President and Chief Executive Officer December 15, 1997
--------------------
D. SCOTT WILKERSON
/s/PHILIP S. PAYNE Executive Vice President, Treasurer and Chief December 15, 1997
-------------------- Financial Officer
PHILIP S. PAYNE
/s/PAMELA B. NOVAK* Vice President, Controller and Chief Accounting December 15, 1997
-------------------- Officer
PAMELA B. NOVAK
/s/ PAUL G. CHRYSSON* Director December 15, 1997
--------------------
PAUL G. CHRYSSON*
/s/DONALD R. PESTA, JR.* Director December 15, 1997
--------------------
DONALD R. PESTA, JR.
/s/WILLIAM H. STANLEY* Director December 15, 1997
--------------------
WILLIAM H. STANLEY
/s/W. MICHAEL GILLEY* Director December 15, 1997
--------------------
W. MICHAEL GILLEY
*By /s/PHILIP S. PAYNE
--------------------
PHILIP S. PAYNE
ATTORNEY-IN-FACT
</TABLE>
II-4
<PAGE>
Form of Underwriting Agreement
2,800,000 Shares
BODDIE-NOELL PROPERTIES, INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
December ___, 1997
CIBC Oppenheimer Corp.
J.C. Bradford & Co.
Interstate/Johnson Lane Corporation
Davenport & Company LLC
c/o CIBC Oppenheimer Corp.
CIBC Oppenheimer Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Boddie-Noell Properties, Inc., a Maryland corporation (the
"Company"), proposes to sell to you (the "Underwriters") an aggregate of
2,800,000 shares (the "Firm Shares") of the Company's common stock, $0.01 par
value (the "Common Stock"). In addition, the Company proposes to grant to the
Underwriters an option to purchase up to an additional 420,000 shares (the
"Option Shares") of Common Stock for the purpose of covering over-allotments in
connection with the sale of the Firm Shares. The Firm Shares and the Option
Shares are together called the "Shares."
1. Sale and Purchase of the Shares. On the basis of the
representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at $_________ per share (the "Initial
Price"), the number of Firm Shares set forth opposite the name of such
Underwriter on Schedule I to this Agreement.
(b) The Company grants to the Underwriters an option to
purchase, severally and not jointly, all or any part of the Option
Shares at the Initial Price. The number of Option
<PAGE>
Shares to be purchased by each Underwriter shall be the same percentage
(adjusted to eliminate fractions) of the total number of Option Shares
to be purchased by the Underwriters as such Underwriter is purchasing
of the Firm Shares. Such option may be exercised only to cover
over-allotments in the sales of the Firm Shares by the Underwriters and
may be exercised in whole or in part at any time on or before 12:00
noon, New York City time, on the business day before the Firm Shares
Closing Date (as defined below), and from time to time thereafter
within 30 days after the date of this Agreement, in each case upon
written notice (which may be facsimile), or verbal or telephonic notice
confirmed by written notice (which may be facsimile), setting forth the
number of Option Shares to be purchased and the time and date (if other
than the Firm Shares Closing Date) of such purchase which shall be not
more than three business days following the date of exercise of the
option.
2. Delivery and Payment. Delivery by the Company of the Firm
Shares to the Underwriters for their respective accounts, and payment of the
purchase price therefor by wire transfer of same day funds to the Company at the
bank account designated in writing by the Company at least one business day
prior to the Firm Shares Closing Date, shall take place at the offices of Rogers
& Wells at 200 Park Avenue, New York, New York 10166, at 10:00 a.m., New York
City time, on the third business day following the date of this Agreement;
provided, however, that if the Firm Shares sold hereunder are priced after 4:30
p.m., New York City time, on any business day, payment and delivery in respect
of the Firm Shares shall take place on the fourth business day following the
date of this Agreement; and further, if it is determined that settlement within
the foregoing time frame is not feasible, then payment and delivery in respect
of the Firm Shares shall occur at such time on such other date, not later than
ten business days after the date of this Agreement, as shall be agreed upon by
the Company and the Underwriters (such time and date of delivery and payment are
called the "Firm Shares Closing Date").
In the event the option with respect to all or any part of the
Option Shares is exercised, delivery by the Company of the Option Shares to the
Underwriters for their respective accounts, and payment of the purchase price
therefor by wire transfer of same day funds to the Company at the bank account
designated in writing by the Company at least one business day prior to the
Option Shares Closing Date (as defined below), shall take place at the offices
of Rogers & Wells specified above at the time and on the date (which may be the
same date as, but in no event shall be earlier than, the Firm Shares Closing
Date) specified in the notice referred to in Section 1(b) (such time and date of
delivery and payment with respect to each exercise of the option are called an
"Option Shares Closing Date"). The Firm Shares Closing Date and each Option
2
<PAGE>
Shares Closing Date are called, individually, a "Closing Date" and,
collectively, the "Closing Dates."
Unless otherwise indicated, certificates evidencing the Shares
shall be registered in such names and shall be in such denominations as the
Underwriters shall request at least two full business days before the Firm
Shares Closing Date or, in the case of Option Shares, on the day of notice of
exercise of the option as described in Section 1(b) and shall be made available
to the Underwriters for checking and packaging, at such place as is designated
by the Underwriters, at least one full business day before the Firm Shares
Closing Date (or the Option Shares Closing Date in the case of the Option
Shares).
3. Representations and Warranties of the Company. The Company
hereby represents and warrants to each Underwriter as follows:
(a) A registration statement on Form S-2 (File No. 333-
39803), with respect to the Shares, including a preliminary prospectus,
has been carefully prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Securities
Act"), and the rules and regulations (the "Securities Rules") of the
Securities and Exchange Commission (the "Commission") thereunder, filed
with the Commission and declared effective. Such registration statement
may have been amended or supplemented prior to the date of this
Underwriting Agreement; any such amendment of such registration
statement or supplement was so prepared and filed, and any such
amendment filed after the effective time of such registration statement
(the "Effective Time") has been declared effective. Such registration
statement (as amended, if applicable) and the prospectus constituting a
part thereof including, in each case, the information, if any, deemed
to be a part thereof pursuant to Rule 430A under the Securities Rules,
is referred to herein as the "Registration Statement." A prospectus
will be prepared and will be filed pursuant to Rule 424(b) of the
Securities Rules on or before the second business day after the date
hereof (or such earlier time as may be required by the Securities
Rules). The term "Prospectus" shall refer to such final prospectus in
the form first filed with the Commission pursuant to Rule 424(b) of the
Securities Rules. Any reference herein to the Registration Statement,
the Prospectus, any preliminary prospectus or any amendment or
supplement thereto shall be deemed to refer to and include the
documents incorporated by reference therein, and any reference herein
to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, the Prospectus or any preliminary prospectus
shall be deemed to refer to and include the filing after the execution
hereof of any document with the Commission deemed to be incorporated by
3
<PAGE>
reference therein. For purposes of this Underwriting Agreement, all
references to the Registration Statement, the Prospectus, any
preliminary prospectus or any amendment or supplement thereto shall be
deemed to include any copy filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval System (EDGAR), and
such copy shall be identical to any Prospectus delivered to you for use
in connection with the offering of the Securities by the Company. No
stop order suspending the effectiveness of the Registration Statement
has been issued, and no proceeding for that purpose has been instituted
or threatened by the Commission. Copies of the Registration Statement
and Prospectus, any such amendments or supplements and all documents
incorporated by reference therein that were filed with the Commission
on or prior to the date of this Underwriting Agreement have been
delivered or made available to you and your counsel.
(b) Each part of the Registration Statement, when such part
became or becomes effective and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission
and at the Firm Shares Closing Date and, if later, at an Option Shares
Closing Date, conformed or will conform in all material respects with
the requirements of the Securities Act and the Securities Rules; each
part of the Registration Statement, when such part became or becomes
effective, or when such part was filed with the Commission, did not or
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with the
Commission and at the Firm Shares Closing Date and, if later, at an
Option Shares Closing Date, did not or will not include an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; except that the foregoing shall
not apply to statements in, or omissions from, any such document in
reliance upon, and in conformity with, written information concerning
the Underwriters that was furnished to the Company by the Underwriters
specifically for use in the preparation thereof.
(c) The documents incorporated by reference in the
Registration Statement, the Prospectus, and any amendment or supplement
thereto, when they became or become effective under the Securities Act
or were or are filed with the Commission under the Securities Act or
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as the case may be, conformed or will conform in all material respects
with the requirements of the Securities Act, the Securities Rules, the
4
<PAGE>
Exchange Act and/or the rules and regulations of the Commission
thereunder (the "Exchange Rules"), as applicable.
(d) The financial statements of the Company together with the
related schedules and notes thereto, set forth or included or
incorporated by reference in the Registration Statement and Prospectus
fairly present the financial condition of the Company as of the dates
indicated and the results of operations, changes in financial position,
stockholders' equity and cash flows for the periods therein specified,
in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as
otherwise stated therein). The summary and selected financial and
statistical data included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
information shown therein and, to the extent based upon or derived from
the financial statements, have been compiled on a basis consistent with
the financial statements presented therein. In addition, the pro forma
financial statements of the Company and the related notes thereto,
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly
compiled on the basis described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein. Furthermore, all financial statements required by
Rule 3-14 of Regulation S-X ("Rule 3- 14"), if any, have been included
or incorporated by reference in the Registration Statement and the
Prospectus and any such financial statements are in conformity with the
requirements of Rule 3-14. No other financial statements are required
to be set forth or incorporated by reference in the Registration
Statement or the Prospectus under the Securities Act or the Securities
Rules.
(e) Ernst & Young LLP, whose reports are incorporated by
reference in the Registration Statement, are and, during the periods
covered by their reports, were independent public accountants as
required by the Securities Act and the Securities Rules.
(f) Arthur Andersen LLP, whose reports are included in the
Registration Statement, during the periods covered by their reports,
were independent public accountants as required by the Securities Act
and the Securities Rules.
(g) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the
5
<PAGE>
laws of the State of Maryland. The Company is duly qualified and in
good standing as a foreign corporation in each jurisdiction in which
the character or location of its assets or properties (owned, leased or
licensed) or the nature of its business makes such qualification
necessary (including every jurisdiction in which it owns or leases
property), except for such jurisdictions where the failure to so
qualify would not have a material adverse effect on the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company. Except as disclosed or
incorporated by reference in the Registration Statement and the
Prospectus, the Company does not own, lease or license any asset or
property or conduct any business outside the United States of America.
The Company has all requisite corporate power and authority, and all
necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory
bodies or any other person or entity, to own, lease, license and
operate its assets and properties and conduct its business as now being
conducted and as described or incorporated by reference in the
Registration Statement and the Prospectus; except for such
authorizations, approvals, consents, orders, licenses, certificates and
permits the absence of which would not have a material adverse effect
upon the assets or properties, business, results of operations,
prospects or condition (financial or otherwise) of the Company; and no
such authorization, approval, consent, order, license, certificate or
permit contains a materially burdensome restriction other than as
disclosed or incorporated by reference in the Registration Statement
and the Prospectus.
(h) Boddie-Noell Properties Limited Partnership (the
"Operating Partnership") has been duly formed and is validly existing
as a limited partnership in good standing under the laws of the State
of Delaware. The Company is the sole general partner of the Operating
Partnership. The Operating Partnership is duly qualified and in good
standing as a foreign partnership in each jurisdiction in which the
character or location of its assets or properties (owned, leased or
licensed) or the nature of its business makes such qualification
necessary (including every jurisdiction where it owns or leases
property), except for such jurisdictions where the failure to so
qualify would not have a material adverse effect on assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Operating Partnership. Except as
disclosed or incorporated by reference in the Registration Statement
and the Prospectus, the Operating Partnership does not own, lease or
license any asset or property or conduct any business outside the
United States of America. The Operating Partnership has all the
requisite power and authority, and all
6
<PAGE>
necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory
bodies or any other person or entity, to own, lease, license and
operate its assets and properties and conduct its business as now being
conducted and as described or incorporated by reference in the
Registration Statement and the Prospectus; except for such
authorizations, approvals, consents, orders, licenses, certificates and
permits the absence of which would not have a material adverse effect
upon the assets or properties, business, results of operations,
prospects or condition (financial or otherwise) of the Operating
Partnership; and no such authorization, approval, consent, order,
license, certificate or permits contains a materially burdensome
restriction other than as disclosed or incorporated by reference in the
Registration Statement and the Prospectus. The agreement of limited
partnership of the Operating Partnership (the "Operating Partnership
Agreement") is in full force and effect in the form in which it was
included as an exhibit to the Registration Statement.
(i) The Company owns or possesses adequate and enforceable
rights to use all trademarks, trademark applications, trade names,
service marks, copyrights, copyright applications, licenses, know-how
and other similar rights (collectively, the "Intangibles") necessary
for the conduct of its business as now being conducted and as described
or incorporated by reference in the Registration Statement and the
Prospectus. The Company has not infringed, is not infringing, and has
not received any notice on infringement of, any Intangible of any other
person, that will have a material adverse effect upon the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company and the Company does not know
of any basis therefor.
(j) The Company has good title to each of the items of
personal property which are reflected in the financial statements
referred to in Section 4(d) or are referred to in the Registration
Statement and the Prospectus or any document incorporated by reference
therein as being owned by the Company and valid and enforceable
leasehold interests in each of the items of real and personal property
which are referred to in the Registration Statement and the Prospectus
or any document incorporated by reference therein as being leased by
the Company, in each case free and clear of all liens, encumbrances,
claims, security interests and defects, other than those described in
the Registration Statement and the Prospectus and those which do not
and will not have a material adverse effect upon the assets or
properties, business,
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results of operations, prospects or condition (financial or
otherwise) of the Company.
(k) The Operating Partnership has good and marketable title to
all properties, including properties acquired pursuant the acquisition
agreement between the Company and Paul and James Chrysson and certain
of their affiliates, dated September 22, 1997 (the "Properties") and
assets (including, without limitation, mortgaged assets), as described
in the Registration Statement and the Prospectus or any document
incorporated by reference therein, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described in
the Registration Statement and the Prospectus or any document
incorporated by reference therein, or are not material in relation to
the business of the Company and the Operating Partnership; no lessee
under any of the leases pursuant to which the Operating Partnership
leases properties has an option or right of first refusal to purchase
the premises demised under such lease, except with respect to the
Master Lease Agreement dated December ___, 1995 between the Company and
Boddie-Noell Enterprises, Inc. ("Enterprises") whereby Enterprises has
a right of first refusal to purchase the restaurant properties subject
to such agreement on the same terms and conditions as may be offered by
a third party purchaser; the use and occupancy of each of the
Properties complies in all material respects with all applicable codes
and zoning laws and regulations; the Company has no knowledge of any
pending or threatened condemnation or zoning change that will in any
material manner affect the size of, use of, improvements on,
construction on, or access to any of the Properties, which would have a
material adverse effect upon the proposed use of such Property; and the
Company has no knowledge of any pending or threatened proceeding or
action that will in any material respect affect the size of, use of,
improvement of, construction on, or access to any of the Properties.
(l) Title insurance in favor of the mortgagee and the Company
and/or the Operating Partnership is maintained with respect to each of
the Properties in an amount at least equal to the greater of (i) the
cost of acquisition of such property or (ii) the cost of construction
of the improvements located on such property (measured at the time of
such construction).
(m) The mortgages and deeds of trust encumbering the
Properties and assets described or incorporated by reference in the
Registration Statement and the Prospectus are not convertible into
shares of Common Stock or other equity interest in the Company and/or
the Operating Partnership nor does the Company or the Operating
Partnership hold a participating interest therein.
8
<PAGE>
(n) There is no litigation or governmental or other proceeding
or investigation before any court or before or by any public body or
board pending or, to the Company's best knowledge, threatened (and the
Company knows of no basis therefor) against, or involving the assets,
properties or businesses of the Company which would materially
adversely affect the value or the operation of any such assets or
properties or the business, results of operations, prospects or
condition (financial or otherwise) of the Company.
(o) Except as disclosed in the Registration Statement or the
Prospectus or any document incorporated by reference therein, (i) there
is not present on any of the Properties any hazardous substances,
hazardous materials, toxic substances, asbestos or waste materials
(collectively, "Hazardous Materials"), (ii) there has not occurred or
is not presently occurring from any of such Properties any unlawful
spills, releases, discharges or disposal of Hazardous Materials, and
(iii) all such Properties are in compliance with all applicable local,
state and federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the generation,
recycling, reuse, sale, storage, handling, transport and disposal of
any Hazardous Materials, which failure would have a material adverse
effect on the earnings, business, results of operations, prospects or
condition (financial or otherwise) of the Company. Except as disclosed
in the Prospectus, the Company has caused Phase I Environmental Surveys
to be completed with respect to each of the Properties and has
delivered copies of all such Environmental Surveys to the Underwriters.
(p) Property and casualty insurance in favor of the Company
and/or the Operating Partnership is maintained with respect to each of
the Properties, in an amount and on such terms as are reasonable and
customary for businesses of this type.
(q) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
described therein, (i) there has not been any material adverse change
in the assets or properties, business, results of operations, prospects
or condition (financial or otherwise) of the Company, whether or not
arising from transactions in the ordinary course of business; (ii) the
Company has not sustained any material loss or interference with its
assets, businesses or properties (whether owned or leased) from fire,
explosion, earthquake, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or any court or legislative or
other governmental action, order or decree; and (iii) since the date of
the latest balance sheet, included or incorporated by
9
<PAGE>
reference in the Registration Statement and the Prospectus, except as
reflected therein, the Company has not undertaken any liability or
obligation, direct or contingent, except such liabilities or
obligations undertaken in the ordinary course of business.
(r) There is no document or contract of a character required
to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement which is not
described or filed as required. The Operating Partnership Agreement and
each mortgage, line of credit agreement, loan agreement, guarantee,
employee leasing agreement, property management agreement, franchise
agreement, cost reimbursement agreement, employment contract, stock
option agreement, warrant agreement, registration rights agreement,
leasing agreement, construction contract, purchase agreement and all
other agreements of the Company described in the Registration Statement
or the Prospectus or incorporated by reference therein or listed as
exhibits to the Registration Statement are in full force and effect and
are valid and enforceable by and against the Company, in accordance
with their terms, assuming the due authorization, execution and
delivery thereof by each of the other parties thereto. Neither the
Company nor any other party, to the best of the Company's knowledge, is
in default in the observance or performance of any term or obligation
to be performed by it under any such agreement, and no event has
occurred which with notice or lapse of time or both would constitute
such a default, which default or event would have a material adverse
effect on the assets or properties, business, results of operations,
prospects or condition (financial or otherwise) of the Company. No
default exists, and no event has occurred which with notice or lapse of
time or both would constitute a default, in the due performance and
observance of any term, covenant or condition, by the Company, of any
other agreement or instrument to which the Company is a party or by
which it or its properties or businesses may be bound or affected,
which default or event would have a material adverse effect on the
assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company.
(s) The Company is not in violation of any term or provision
of its charter or by-laws, the Operating Partnership Agreement, or of
any franchise, license, permit, judgment, decree, order, statute, rule
or regulation, where the consequences of such violation would have a
material adverse effect on the assets or properties, business, results
of operations, prospects or condition (financial or otherwise) of the
Company.
10
<PAGE>
(t) Neither the execution, delivery and performance of this
Agreement by the Company, nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares) will give rise to a
right to terminate or accelerate the due date of any payment due under,
or conflict with or result in the breach of any term or provision of,
or constitute a default (or an event which with notice or lapse of time
or both would constitute a default) under, or require any consent or
waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company
pursuant to the terms of, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is a party or by
which it is bound, or any other properties or businesses are bound, or
any franchise, license, permit, judgment, decree, order, statute, rule
or regulation applicable to the Company or violate any provision of the
charter or by-laws of the Company, except for such consents or waivers
which have already been obtained and are in full force and effect.
(u) All the issued and outstanding Units of the Operating
Partnership (the "Units") have been duly authorized and validly issued
and are fully paid and non-assessable and none of them was issued in
violation of any preemptive or other similar right. Except as disclosed
in the Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of,
and there is no commitment, plan or arrangement to issue, any Units or
any security convertible into or exercisable or exchangeable for, such
Units. The Units conform in all material respects to all statements
relating thereto contained in the Registration Statement and the
Prospectus.
(v) The Company has authorized, issued and outstanding capital
stock as set forth under the caption "Capitalization" in the
Prospectus. All of the outstanding shares of Common Stock have been
duly authorized and validly issued and are fully paid and nonassessable
and none of them was issued in violation of any preemptive or other
similar right. The Shares, when issued and sold pursuant to this
Agreement, will be duly authorized and validly issued, fully paid and
nonassessable and none of them will be issued in violation of any
preemptive or other similar right. Except as disclosed in the
Registration Statement and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and there
is no commitment, plan or arrangement to issue, any share of stock of
the Company or any security convertible into or exercisable or
exchangeable for, such capital stock. The Common Stock and the Shares
conform in all
11
<PAGE>
material respects to all statements relating thereto contained
in the Registration Statement and the Prospectus.
(w) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
described or referred to therein, the Company has not (i) issued any
securities or incurred any liability or obligation, direct or
contingent, except such liabilities or obligations incurred in the
ordinary course of business including, without limitation, debt
financing to acquire properties (ii) entered into any transaction not
in the ordinary course of business or (iii) declared or paid any
dividend or made any distribution on any shares of its capital stock or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase
or otherwise acquire any shares of its capital stock.
(x) No holder of any security of the Company has the right
which has not been waived to have any security owned by such holder
included in the Registration Statement or any right to demand
registration of any security owned by such holder during the period
ending 45 days after the date of this Agreement. The Company and each
of its executive officers and directors have delivered to the
Underwriters their enforceable written agreement (the "Lock-up
Agreements") that for a period of at least 180 days after the date of
this Agreement, each such party will not, except for sales by the
Company of Common Stock pursuant to the exercise of outstanding
employee and director stock options, warrants and SAR's previously
granted, Common Stock pursuant to the Company's dividend reinvestment
and stock purchase plan, and Units exchangeable into shares of Common
Stock in connection with the acquisition of a property, without the
prior written consent of CIBC Oppenheimer Corp., offer for sale, sell,
distribute, pledge, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, or encumber, or exercise any
registration rights with respect to, any shares of Common Stock (or any
securities convertible into, exercisable for or exchangeable for any
shares of Common Stock or any rights to purchase or acquire shares of
Common Stock) owned by them.
(y) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares
by the Company. This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes and will
constitute the legal, valid and binding obligations of the Company
enforceable against the Company in accordance with its terms. Each
approval, consent, order, authorization, designation, declaration or
filing by or with any regulatory,
12
<PAGE>
administrative or other governmental body necessary in connection with
the execution and delivery by the Company of this Agreement and the
issuance and sale of the Shares by the Company (except such as may be
required under the Securities Act or such additional steps as may be
required by the National Association of Securities Dealers, Inc. (the
"NASD") or the American Stock Exchange ("AMEX"), if any) has been
obtained or made and is in full force and effect. The Shares have been
approved for listing on the AMEX, subject only to official notice of
issuance.
(z) The Company is not involved in any labor dispute nor, to
the knowledge of the Company, is any such dispute threatened, which
dispute would have a material adverse effect on the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company.
(aa) The Company is conducting its business in compliance with
all applicable laws, rules and regulations of the jurisdictions in
which it is conducting business, including, without limitation, the
Americans with Disabilities Act of 1990 and all applicable local, state
and federal employment, truth-in-advertising, franchising and
immigration laws and regulations, except where the failure to be so in
compliance would not have a material adverse effect on the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company.
(bb) No transaction has occurred between or among the Company
and any of its officers or directors or any affiliate or affiliates of
any such officer or director that is required to be described in and is
not described in the Registration Statement and the Prospectus.
(cc) The Company has not taken, and will not take, directly or
indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation
of the price of the Common Stock to facilitate the sale or resale of
any of the Shares.
(dd) The Company has filed all federal, state, local and
foreign tax returns which are required to be filed through the date
hereof (and will file all such tax returns when and as required to be
filed after the date hereof, or have received extensions thereof, and
have paid all taxes shown on such returns to be due on or prior to the
date hereof (and will pay all taxes shown on such returns to be due
after the date
13
<PAGE>
hereof) and all assessments received by it to the extent that the same
are material and have become due.
(ee) The Company has met the qualification requirements for a
"real estate investment trust" during its taxable years ending on or
after December 31, 1987 and its proposed method of operations will
enable it to continue to meet the requirements for qualification and
taxation as a "real estate investment trust" under the Internal Revenue
Code of 1986, as amended (the "Code"), assuming no change in the
applicable underlying law. The Company does not know of any event which
would cause or is likely to cause the Company to fail to qualify as a
"real estate investment trust" at any time.
(ff) The Company is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
4. Conditions of the Underwriters' Obligations. The
obligations of the Underwriters under this Agreement are several and not joint.
The respective obligations of the Underwriters to purchase the Shares are
subject to each of the following terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a) of this Agreement.
(b) No order preventing or suspending the use of the
Prospectus shall have been or shall be in effect and no order
suspending the effectiveness of the Registration Statement shall be in
effect and no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional
information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the satisfaction of you and your counsel.
(c) The representations and warranties of the Company
contained in this Agreement shall be true and correct when made and on
and as of each Closing Date as if made on such date and the Company
shall have performed all covenants and agreements and satisfied all the
conditions contained in this Agreement required to be performed or
satisfied by it at or before such Closing Date.
(d) The Underwriters shall have received on each Closing Date
a certificate, addressed to the Underwriters and dated such Closing
Date, of the chief executive officer or the chief financial officer of
the Company, to the effect that such person has carefully examined the
Registration Statement, the Prospectus and this Agreement and that the
representations and warranties of the Company in this Agreement are
true and
14
<PAGE>
correct on and as of such Closing Date with the same effect as if made
on such Closing Date and the Company has performed all covenants and
agreements and satisfied all conditions contained in this Agreement
required to be performed or satisfied by it at or prior to such Closing
Date.
(e) The Underwriters shall have received at the time this
Agreement is executed and on each Closing Date, a letter or letters
signed by Ernst & Young LLP, addressed to the Underwriters and dated,
respectively, the date of this Agreement and each such Closing Date, in
form and substance satisfactory to the Underwriters, as to their status
as independent accountants within the meaning of the Securities Act and
the Securities Rules and matters relating to the financial statements
and other financial and statistical information included or
incorporated by reference in the Registration Statement and the
Prospectus.
(f) The Underwriters shall have received at the time this
Agreement is executed and on each Closing Date, a letter or letters
signed by Arthur Andersen LLP, addressed to the Underwriters and dated,
respectively, the date of this Agreement and each such Closing Date, in
form and substance satisfactory to the Underwriters, as to their status
as independent accountants within the meaning of the Securities Act and
the Securities Rules and matters relating to the financial statements
and other financial and statistical information included or
incorporated by reference in the Registration Statement and the
Prospectus.
(g) The Underwriters shall have received on each Closing Date
from Alston & Bird LLP, counsel for the Company, an opinion, addressed
to the Underwriters and dated such Closing Date, and stating in effect
that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Maryland; the Company is duly qualified
and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets
or properties (owned, leased or licensed) or by the nature of
its business makes such qualification necessary (including
every jurisdiction in which it owns or leases property),
except for such jurisdictions where the failure to so qualify
would not have a material adverse effect on the assets or
properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company; to the best
of such counsel's knowledge, and except for the Operating
Partnership, the Company has no subsidiary or subsidiaries and
does not control, directly or
15
<PAGE>
indirectly, any corporation, partnership, joint venture,
association or other business organization; and the Company
has all requisite corporate power and authority to own, lease,
license and operate its assets and properties and conduct its
business as now being conducted and as described in the
Registration Statement and the Prospectus or any document
incorporated by reference therein.
(ii) The Operating Partnership has been duly formed
and is validly existing as a limited partnership in good
standing under the laws of the State of Delaware; the
Operating Partnership is duly qualified and in good standing
as a foreign limited partnership in each jurisdiction in which
the character or location of its assets or properties (owned,
leased or licensed) or by the nature of its business makes
such qualification necessary, except for such jurisdictions
where the failure to so qualify would not have a material
adverse effect on the assets or properties, business, results
of operations, prospects or condition (financial or otherwise)
of the Operating Partnership; to the best of such counsel's
knowledge, the Operating Partnership has no subsidiary or
subsidiaries and does not control, directly or indirectly, any
corporation, partnership, joint venture, association or other
business organization; and the Operating Partnership has all
requisite power and authority to own, lease, license and
operate its assets and properties and conduct its business as
now being conducted and as described in the Registration
Statement and the Prospectus or any document incorporated by
reference therein.
(iii) The Company owns Units as set forth under the
caption _____________ in the Prospectus; all the issued and
outstanding Units have been duly authorized and validly
issued; and all of the outstanding Units are fully paid and
non-assessable and none of them was issued in violation of any
preemptive or other similar right. Except as disclosed in the
Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the
issuance of, and, to the knowledge of such counsel, there is
no commitment, plan or arrangement to issue, any share of
capital stock, of the Company or any security convertible into
or exercisable or exchangeable for, Units. The Units conform
in all material respects to all statements relating thereto
contained in the Registration Statement and the Prospectus.
16
<PAGE>
(iv) The Company has authorized, issued and
outstanding capital stock as set forth under the caption
"Description of Capital Stock" in the Prospectus; the
certificates evidencing the Shares are in due and proper legal
form and have been duly authorized for issuance by the
Company; all of the outstanding shares of Common Stock have
been duly authorized and validly issued; and all of the
outstanding shares of Common Stock are fully paid and
nonassessable and none of them was issued in violation of any
preemptive or other similar right. The Shares, when issued and
sold pursuant to this Agreement, will be duly and validly
issued, fully paid and nonassessable and none of them will
have been issued in violation of any preemptive or other
similar right. Except as disclosed in the Registration
Statement and the Prospectus, there is no outstanding option,
warrant or other right calling for the issuance of, and, to
the knowledge of such counsel, there is no commitment, plan or
arrangement to issue, any share of capital stock, of the
Company or any security convertible into or exercisable or
exchangeable for, capital stock of the Company. The Common
Stock and the Shares conform in all material respects to all
statements relating thereto contained in the Registration
Statement and the Prospectus.
(v) The information set forth under the captions
"Articles of Incorporation and Bylaw Provisions,"
"Restrictions on Transfer" and "Common Stock" in the
Prospectus to the extent that it constitutes matters of law,
summaries of legal matters, documents, or legal conclusions,
has been reviewed by such counsel and is correct in all
material respects.
(vi) The descriptions contained or incorporated by
reference in the Registration Statement and the Prospectus of
statutes, legal and governmental proceedings, contracts and
other documents are accurate, and insofar as such statements
constitute a summary of documents referred to therein, matters
of law or legal conclusions, are fair summaries of the
material provisions thereof and accurately present the
information required with respect to such documents and
matters. All statutes, legal or governmental proceedings, and
all agreements and other documents required to be described in
the Registration Statement (or incorporated by reference
therein) have been so described. All agreements and other
documents known to such counsel to be required to be filed as
exhibits to the Registration Statement have been so filed or
incorporated by reference therein.
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<PAGE>
(vii) All necessary corporate action has been duly
and validly taken by the Company to authorize the execution,
delivery and performance of this Agreement and the issuance
and sale of the Shares by the Company. This Agreement has been
duly and validly executed and delivered by the Company.
(viii) Neither the execution, delivery and
performance of this Agreement by the Company nor the
consummation of any of the transactions contemplated hereby
(including, without limitation, the issuance and sale by the
Company of the Shares) will give rise to a right to terminate
or accelerate the due date of any payment due under, or
conflict with or result in the breach of any term or provision
of, or constitute a default (or any event which with notice or
lapse of time, or both, would constitute a default) under, or
require consent or waiver under, or result in the execution or
imposition of any lien, charge or encumbrance upon any
properties or assets of the Company pursuant to the terms of,
any indenture, mortgage, deed of trust, note, franchise,
license, permit or other agreement or instrument known to such
counsel and to which the Company or the Operating Partnership
is a party or by which either of them or any of their
properties or businesses are bound, or violate any judgment,
decree, order, statute, rule or regulation or any provision of
the charter or by-laws of the Company or the partnership
agreement of the Operating Partnership.
(ix) To the best of such counsel's knowledge, no
default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default, in the due
performance and observance by the Company and/or the Operating
Partnership of any term, covenant or condition of any
agreement, instrument or other document to which the Company
or the Operating Partnership is a party or by which their
assets or properties or businesses are bound or affected.
(x) To the best of such counsel's knowledge, the
Company is not in violation of any term or provision of its
charter or by-laws, and the Company is not in violation of any
term or provision of any franchise, license, permit, judgment,
decree, order, statute, rule or regulation. Furthermore, to
the best of such counsel's knowledge, the Operating
Partnership is not in violation of any term or provision of
its partnership agreement, and the Operating Partnership is
not in violation of any term or provision of any franchise,
18
<PAGE>
license, permit, judgment, decree, order, statute, rule
or regulation.
(xi) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
performance by the Company of this Agreement or the
consummation of the transactions contemplated hereby, except
such as have been obtained under the Securities Act.
(xii) To the best of such counsel's knowledge, there
is no litigation or governmental or other proceeding or
investigation before any court or before or by any public body
or board pending or threatened against, or involving the
assets, properties or businesses of, the Company which is
reasonably likely to have a material adverse effect upon the
properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company.
(xiii) The Registration Statement, the Prospectus,
each of the documents incorporated by reference in the
Registration Statement and the Prospectus and each amendment
or supplement thereto (except for the financial statements and
notes and schedules and other financial and statistical
information included therein, as to which such counsel
expresses no opinion) comply as to form in all material
respects with the requirements of the Securities Act and the
Securities Rules and the Exchange Act and the Exchange Rules,
as the case may be.
(xiv) The Registration Statement has become effective
under the Securities Act, and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are threatened or
pending. The Shares have been approved for quotation on the
AMEX.
(xv) The Company has met the qualification
requirements for a "real estate investment trust" during its
taxable years ending on or after December 31, 1987 and its
proposed method of operation will enable it to continue to
meet the requirements for qualification and taxation as a
"real estate investment trust" under the Code, assuming no
change in the applicable underlying law. The discussion in the
Prospectus under the caption "Federal Income Tax
Considerations" is accurate and complete.
19
<PAGE>
(xvi) The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended.
To the extent deemed advisable by such counsel, they may rely
as to matters of fact on certificates of responsible officers of the
Company and public officials, and with respect to matters of Maryland
law, they may rely upon the opinion of
---------------.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company, representatives of the Underwriters and representatives of
the independent certified public accountants of the Company, at which
conferences the contents of the Registration Statement and the
Prospectus and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained or
incorporated by reference in the Registration Statement and the
Prospectus (except as specified in the foregoing opinion), on the basis
of the foregoing no facts have come to the attention of such counsel
which have caused such counsel to believe that the Registration
Statement at the time it became effective and at each Closing Date
contained any 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, or that the Prospectus as of its
date and at each Closing Date contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading (it being understood that such
counsel need not express any belief with respect to the financial
statements and schedules and other financial information included or
incorporated by reference in the Registration Statement or the
Prospectus).
(h) All proceedings taken in connection with the sale of the
Firm Shares and the Option Shares as herein contemplated shall be
reasonably satisfactory in form and substance to the Underwriters and
their counsel and the Underwriters shall have received from Rogers &
Wells a favorable opinion, addressed to the Underwriters and dated such
Closing Date, with respect to the Shares, the Registration Statement
and the Prospectus, and such other related matters, as the Underwriters
may reasonably request, and the Company shall have furnished to Rogers
& Wells such documents as they may reasonably request for the purpose
of enabling them to pass upon such matters.
20
<PAGE>
(i) The Underwriters shall have received on each Closing Date
a certificate, including exhibits thereto, addressed to the
Underwriters and dated such Closing Date, of the Secretary or an
Assistant Secretary of the Company, signed in such capacity, as to the
(i) certificate of incorporation and by-laws of the Company; (ii)
resolutions authorizing the execution and delivery of the Registration
Statement, this Agreement and the performance of the transactions
contemplated by this Agreement, the Registration Statement and the
Prospectus and (iii) incumbency of the person or persons authorized to
execute and deliver the Registration Statement, this Agreement and any
other documents contemplated by the offering of the Shares. In
addition, such certificate shall state that: (x) no stop order
suspending the effectiveness of the Registration Statement has been
issued, and no proceeding for that purpose has been instituted or is
threatened by the Commission; (y) since the effective date of the
Registration Statement, there has occurred no event required to be set
forth in an amendment or supplement to the Registration Statement or
Prospectus that has not been set forth, and there has been no document
required to be filed under the Exchange Act and the Exchange Rules that
upon such filing would be deemed to be incorporated by reference in the
Prospectus, that has not been so filed.
(j) The Underwriters shall have received on each Closing Date
certificates of the Secretaries of State (or comparable officials)
where the Company is incorporated and/or doing business as to the good
standing of the Company, listing all charter documents on file,
qualification of the Company to do business as a foreign corporation,
payment of taxes and filing of annual reports. In addition, the
Underwriters shall have received copies of charter documents of the
Company certified by the Secretary of State of the State of Maryland.
(k) The Underwriters shall have received on each Closing Date
certificates of the Secretaries of State (or comparable officials)
where the Operating Partnership is organized as a limited partnership
and/or doing business as to the good standing of the Operating
Partnership, listing all partnership documents on file, qualification
of the Company to do business as a foreign corporation, payment of
taxes and filing of annual reports. In addition, the Underwriters shall
have received copies of the Operating Partnership Agreement certified
by the Secretary of State of the State of Delaware.
(l) The Company shall have furnished to you such further
certificates and documents as you shall have reasonably requested.
21
<PAGE>
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to the Underwriters. The Company will furnish the
Underwrites with such conformed copies of such opinions, certificates, letters
and other documents as the Underwriters shall reasonably request.
5. Covenants of the Company. The Company covenants and agrees
as follows:
(a) The Company will cause the Prospectus to be filed as
required by Section 3(a) hereof (but only if the Underwriters or their
counsel have not reasonably objected thereto by notice to the Company
after having been furnished a copy a reasonable time prior to filing)
and will notify you promptly of such filing. During the period in which
a prospectus relating to the Shares is required to be delivered under
the Securities Act or such date which is 90 days after the Closing
Date, whichever is later, the Company will notify the Underwriters
promptly of the time when any subsequent amendment to the Registration
Statement has become effective or any subsequent supplement to the
Prospectus has been filed, of any request by the Commission for any
amendment or supplement to the Registration Statement or Prospectus or
for additional information; the Company will prepare and file with the
Commission, promptly upon the request of the Underwriters, any
amendments or supplements to the Registration Statement or Prospectus
that, in their or their counsel's opinion, may be necessary or
advisable in connection with your distribution of the Shares; and the
Company will file no amendment or supplement to the Registration
Statement or Prospectus to which the Underwriters or their counsel
shall reasonably object by notice to the Company after having been
furnished a copy a reasonable time prior to the filing.
(b) The Company will advise the Underwriters, promptly after
it shall receive notice or obtain knowledge thereof, of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification or
registration of the Shares for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceeding for any such
purpose; and it will promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop
order should be issued.
(c) The Company will comply with all requirements imposed upon
it by the Securities Act, the Securities Rules, the Exchange Act and
the Exchange Rules as from time to time in force, so far as necessary
to permit the continuance of sales of, or dealings in, the Shares as
contemplated by the
22
<PAGE>
provisions hereof and the Prospectus. If during such period where a
prospectus relating to the Shares is required to be delivered under the
Securities Act any event occurs as a result of which, in the opinion of
your counsel, the Registration Statement contains an untrue statement
of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such
period it is necessary to amend or supplement the Registration
Statement or Prospectus to comply with the Securities Act, the Company
will promptly notify you and will amend or supplement the Registration
Statement or Prospectus (at the expense of the Company) so as to
correct such statement or omission or effect such compliance.
(d) The Company shall make generally available to its security
holders and to the Underwriters as soon as practicable, but not later
than 45 days after the end of the 12-month period beginning at the end
of the fiscal quarter of the Company during which the Effective Time
occurs (or 90 days if such 12-month period coincides with the Company's
fiscal year), an earning statement (which need not be audited) of the
Company, covering such 12-month period, which shall satisfy the
provisions of Section 11(a) of the Securities Act or Rule 158 of the
Securities Rules.
(e) The Company shall furnish to the Underwriters and their
counsel, without charge, signed copies of the Registration Statement
(including all exhibits thereto and amendments thereof) and all
amendments thereof and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Securities Act or the
Securities Rules, as many copies of the Prospectus and any amendments
thereof and supplements thereto as the Underwriters may reasonably
request.
(f) For a period of five years after the date of this
Agreement, the Company shall supply to the Underwriters, copies of such
financial statements and other periodic and special reports as the
Company may from time to time distribute generally to the holders of
any class of its capital stock and furnish to the Underwriters a copy
of each annual or other report it shall be required to file with the
Commission.
(g) Without the prior written consent of the Underwriters for
a period of 180 days after the date of this
23
<PAGE>
Agreement, the Company shall not, directly or indirectly, issue, offer,
sell or register with the Commission, or otherwise encumber or dispose
of, directly or indirectly, any equity securities of the Company (or
any securities convertible into or exercisable or exchangeable for
equity securities of the Company or any rights to purchase or acquire
equity securities of the Company), except for (i) the issuance of the
Shares pursuant to the Registration Statement; (ii) the issuance of
shares of Common Stock pursuant to (a) the exercise of outstanding
employee and director options or the grant or issuance of options under
the Company's existing stock option plans, (b) the Company's dividend
reinvestment and stock purchase plan or (c) warrants and SAR's
previously granted; and (iii) sales by the Company of Units
exchangeable into shares of Common Stock, in connection with the
acquisition of a property.
(h) On or before the Firm Shares Closing Date, the Company
shall make all filings required under applicable securities laws and by
the AMEX (including any required registration under the Exchange Act).
On or before the date of this Agreement, the Shares shall be listed on
the AMEX.
(i) The Company will continue to elect to qualify as a "real
estate investment trust" and will use its best efforts to continue to
meet the requirement to qualify as a "real estate investment trust."
(j) The Company agrees to pay, or reimburse if paid by the
Underwriters, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
incident to the performance of the obligations of the Company under
this Agreement including those relating to: (i) the preparation,
printing, filing and distribution of the Registration Statement
including all exhibits thereto, the Prospectus, all amendments and
supplements to the Registration Statement and the Prospectus, and the
printing, filing and distribution of this Agreement; (ii) the
preparation and delivery of certificates for the Shares to the
Underwriters; (iii) if applicable, the registration or qualification of
the Shares for offer and sale under the securities laws of the various
jurisdictions, including the reasonable fees and disbursements of
counsel for the Underwriters in connection with any such registration
and qualification; (iv) the furnishing (including cost of shipping and
mailing) to the Underwriters of copies of the Prospectus and all
amendments or supplements to the Prospectus, and of the several
documents required by this Section to be so furnished, as may be
reasonable requested for use in connection with the offering and the
sale of the Shares by the Underwriters or by dealers to whom Shares may
be sold; (v) the
24
<PAGE>
filing fees of the NASD in connection with its review of the terms of
the transactions contemplated hereby; (vi) the furnishing (including
costs of shipping and mailing) to the Underwriters of copies of all
reports and information required by 5(f); (vii) listing of the Shares
on the AMEX; and (viii) all transfer taxes, if any, with respect to the
sale and delivery of the Shares by the Company to the Underwriters.
Subject to the provisions of Section 8, the Underwriters agree to pay,
whether or not the transactions contemplated hereby are consummated or
this Agreement is terminated, all costs and expenses incident to the
performance of the obligations of the Underwriters under this Agreement
not payable by the Company pursuant to the preceding sentence,
including, without limitation, the fees and disbursements of counsel
for the Underwriters.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation,
legal and other expenses incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus or any amendment thereof
or supplement thereto, or arise out of or are based upon any omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that such indemnity shall not inure to
the benefit of any Underwriter (or any person controlling such
Underwriter) on account of any losses, claims, damages or liabilities
arising from the sale of the Shares to any person by such Underwriter
if such untrue statement or omission or alleged untrue statement or
omission was made in the Registration Statement or the Prospectus, or
such amendment or supplement, in reliance upon and in conformity with
information concerning the Underwriters furnished in writing to the
Company by the Underwriters specifically for use therein. This
indemnity agreement will be in addition to any liability which the
Company may otherwise have.
25
<PAGE>
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each person, if any, who
controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, each director of the Company and
each officer of the Company who signs the Registration Statement, to
the same extent as the foregoing indemnity from the Company to each
Underwriter, but only insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in the
Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto, concerning the Underwriters furnished in writing to
the Company by the Underwriters specifically for use therein; provided,
however, that the obligation of each Underwriter to indemnify the
Company (including any controlling person, director or officer thereof)
shall be limited to the underwriting discounts and commissions received
by such Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of
all papers served. No indemnification provided for in Section 6(a) or
6(b) shall be available to any party who shall fail to give notice as
provided in this Section 6(c) if the party to whom notice was not given
was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice but the omission
so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to
any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and
the approval by the indemnified party of such counsel, the indemnifying
party shall not be liable to such indemnified party for any legal or
other expenses, except as provided below and except for the reasonable
costs of investigation subsequently incurred by such indemnified party
in connection with the defense thereof. The indemnified party shall
have the right to employ its counsel in any such action,
26
<PAGE>
but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying
parties, (ii) the indemnified party shall have reasonably concluded
that there may be a conflict of interest between the indemnifying
parties and the indemnified party in the conduct of the defense of such
action (in which case the indemnifying parties shall not have the right
to direct the defense of such action on behalf of the indemnified
party) or (iii) the indemnifying parties shall not have employed
counsel to assume the defense of such action within a reasonable time
after notice of the commencement thereof, in each of which cases the
fees and expenses of counsel shall be at the expense of the
indemnifying parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without
its written consent.
7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 6 is due in accordance with its terms but for any reason is held to be
unavailable from the Company or the Underwriters, the Company and the
Underwriters shall contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters, such as
persons who control the Company within the meaning of the Securities Act,
officers of the Company who signed the Registration Statement and directors of
the Company who may also be liable for contribution) to which the Company and
one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the transactions contemplated hereby
or, if such allocation is not permitted by applicable law or indemnification is
not available as a result of the indemnifying party not having received notice
as provided in Section 6 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company on the one hand and the Underwriter on the other in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as (i) the total proceeds from the offering
of the Shares (net of underwriting discounts but before deducting expenses)
received by the Company, as set forth in the table on the cover page of the
Prospectus, bear to (ii) the underwriting discounts and commissions received by
the Underwriters, as set
27
<PAGE>
forth in the table on the cover page of the Prospectus. The relative fault of
the Company or the Underwriter shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
related to information supplied by the Company or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 7, in no case shall any
Underwriter be liable or responsible for any amount in excess of the
underwriting discount and commission applicable to the Shares purchased by such
Underwriter hereunder; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act shall have the same rights
to contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the immediately
preceding sentence of this Section 7. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section, notify such party
or parties from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have hereunder or otherwise than under this Section. No party
shall be liable for contribution with respect to any action, suit, proceeding or
claim settled without its written consent. The Underwriters' obligations to
contribute pursuant to this Section 7 are several in proportion to their
respective underwriting commitments and not joint.
8. Termination. This Agreement may be terminated with
respect to the Shares to be purchased on a Closing Date by the
Underwriters by notifying the Company at any time:
(a) in the absolute discretion of the Underwriters at or
before any Closing Date: (i) if on or prior to such date, any
28
<PAGE>
domestic or international event or act or occurrence has materially
disrupted, or in the opinion of the Underwriters will in the future
materially disrupt, the securities markets; (ii) if there has occurred
any new outbreak or material escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the
United States is such as to make it, in the judgment of the
Underwriters, inadvisable to proceed with the transactions contemplated
hereby; (iii) if there shall be such a material adverse change in
general financial, political or economic conditions or the effect of
international conditions on the financial markets in the United States
is such as to make it, in the judgment of the Underwriters, inadvisable
or impracticable to market the Shares; (iv) if trading in the Shares
has been suspended by the Commission or trading generally on the New
York Stock Exchange, Inc. or on the AMEX has been suspended or limited,
or minimum or maximum ranges for prices for securities shall have been
fixed, or maximum ranges for prices for securities have been required,
by said exchanges or by order of the Commission, the NASD, or any other
governmental or regulatory authority; or (v) if a banking moratorium
has been declared by any state or federal authority, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 4 shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its
provisions, the Company shall not be under any liability to any Underwriter, and
no Underwriter shall be under any liability to the Company, except that (i) if
this Agreement is terminated by the Underwriters or the Underwriters because of
any failure, refusal or inability on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, the Company will
reimburse the Underwriters for all out-of-pocket expenses (including the fees
and disbursements of their counsel) incurred by them in connection with the
proposed purchase and sale of the Shares or in contemplation of performing their
obligations hereunder and (ii) no Underwriter who shall have failed or refused
to purchase the Shares agreed to be purchased by it under this Agreement,
without some reason sufficient hereunder to justify cancellation or termination
of its obligations under this Agreement, shall be relieved of liability to the
Company or to the other Underwriters for damages occasioned by its failure or
refusal.
9. Substitution of Underwriters. If one or more of the
Underwriters shall fail (other than for a reason sufficient to justify the
cancellation or termination of this Agreement under Section 8) to purchase on
any Closing Date the Shares agreed to be purchased on such Closing Date by such
Underwriter or Underwriters,
29
<PAGE>
the Underwriters may find one or more substitute underwriters to purchase such
Shares or make such other arrangements as the Underwriters may deem advisable or
the remaining Underwriter may agree to purchase all of the Shares, in each case
upon this Agreement. If no such arrangements have been made by the close of
business on the business day following such Closing Date:
(a) if the number of Shares to be purchased by the defaulting
Underwriter on such Closing Date shall not exceed 10% of the Shares
that all the Underwriters are obligated to purchase on such Closing
Date, then the nondefaulting Underwriter shall be obligated to purchase
such Shares on the terms herein set forth in proportion to their
respective obligations hereunder; provided, however, that in no event
shall the maximum number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 9
by more than one-ninth of such number of Shares without the written
consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriter on such Closing Date shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date,
then the Company shall be entitled to an additional business day within
which it may, but is not obligated to, find one or more substitute
underwriters reasonably satisfactory to the Underwriters to purchase
such Shares upon the terms set forth in this Agreement.
In any such case, either the Underwriters or the Company shall
have the right to postpone the applicable Closing Date for a period of not more
than five business days in order that necessary changes and arrangements
(including any necessary amendments or supplements to the Registration Statement
or the Prospectus) may be effected by the Underwriters and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter shall exceed 10% of the Shares that all the Underwriters are
obligated to purchase on such Closing Date, and the nondefaulting Underwriter or
the Company shall make arrangements pursuant to this Section within the period
stated for the purchase of the Shares that the defaulting Underwriter agreed to
purchase, this Agreement shall terminate with respect to the Shares to be
purchased on such Closing Date without liability on the part of the
nondefaulting Underwriter to the Company and without liability on the part of
the Company, except in both cases as provided in Sections 5(j), 6, 7, 8 and 9.
The provisions of this Section shall not in any way affect the liability of any
defaulting Underwriter to the Company or the nondefaulting Underwriter arising
out of such default. A substitute underwriter hereunder shall become an
Underwriter for all purposes of this Agreement.
30
<PAGE>
10. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and
of the Underwriters set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Sections 6 and 7 hereof, and shall survive
delivery of and payment for the Shares. The provisions of Sections 5(j), 6, 7, 8
and 9 shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters and the Company and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons controlling any of
the Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing
and mailed or delivered or by telephone or telegraph if subsequently confirmed
in writing, (a) if to the Underwriters, c/o CIBC Oppenheimer Corp., CIBC
Oppenheimer Tower, World Financial Center, New York, New York 10281, Attention:
Stephen R. Blank, with a copy to Jay Bernstein, Esq., Rogers & Wells, 200 Park
Avenue, New York, New York 10166 and (b) if to the Company, to its agent for
service as such agent's address appears on the cover page of the Registration
Statement, with a copy to Brad S. Markoff, Esq., Alston & Bird LLP, 3605
Glenwood Avenue, Raleigh, North Carolina 27612.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflict of laws.
31
<PAGE>
Please confirm that the foregoing correctly sets forth the
agreement among us.
Very truly yours,
BODDIE-NOELL PROPERTIES, INC.
By:
Name: D. Scott Wilkerson
Title: President and Chief
Executive Officer
BODDIE-NOELL PROPERTIES LIMITED
PARTNERSHIP
By: Boddie-Noell Properties, Inc.,
its sole general partner
By:
Name: D. Scott Wilkerson
Title: President and Chief
Executive Officer
CONFIRMED AND ACCEPTED
as of the date first
above written
CIBC OPPENHEIMER CORP.
By:
Name:
Title:
32
<PAGE>
SCHEDULE I
Number of Firm
Shares to
Name Be Purchased
1. CIBC Oppenheimer Corp.
2. J.C. Bradford & Co.
3. Interstate/Johnson Lane Corporation
4. Davenport & Company LLC
TOTAL 2,800,000
<PAGE>
Boddie-Noell Properties, Inc.
December 15, 1997
Page 1
Alston&Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
404-881-7000
Fax: 404-881-7777
Pinney L. Allen Direct Dial: 404-881-7485
December 15, 1997
Boddie-Noell Properties, Inc.
3710 One First Union Center
Charlotte, North Carolina 28202-6032
Re: Offering of Shares of Common Stock of Boddie-Noell Properties, Inc.
Ladies and Gentlemen:
In connection with a public offering (the "Offering") of shares of
common stock of Boddie-Noell Properties, Inc. ("Company") pursuant to a
registration statement on Form S-2 as in the form filed on November 7, 1997,
file no. 333-39803, (the "Registration Statement"), you have asked us to render
an opinion with respect to the qualification of the Company as a real estate
investment trust ("REIT") under Sections 856 - 860 of the Internal Revenue Code
of 1986, as amended, ("Code").
Specifically for the purpose of this opinion, we have examined the
following documents: (i) the Company's Amended and Restated Articles of
Incorporation currently effective; (ii) the Company's Amended and Restated
Bylaws currently effective; (iii) the Company's federal income tax returns on
Form 1120 REIT as filed for its taxable years ended December of 1994 through
1996 (in which returns we observe that the Company has elected to be treated as
a real estate investment trust); (iv) the Registration Statement; (v) the
Company's Annual Reports to Stockholders for the years 1989 through 1996; (vi)
the Company's Form 10-K and Form 10-K/A reports for the years 1987 through 1996;
(vii) the Company's Form 10-Q reports for each of the quarters ended June 30,
1987 through September 30, 1997; (viii) the Company's Form 8 report dated May
29, 1992; (ix) the Company's Form-8-K reports dated June 8, 1993, August 20,
1993, March 7, 1994, June 7, 1994, October 1, 1994, December 28, 1994 (as
amended by Form 8-K/A dated February 21, 1995), May 13, 1996, October 17, 1996;
(ix) the Company's demand letters and responses to such letters for the taxable
years ended December of 1994 through 1996; (x) the Company's Master Lease
Agreement and Amended and Restated Master Lease Agreement; (xi) form apartment
lease agreements identified by the Company to us as representative of its leases
for its apartment properties other than the properties recently acquired from
Chrysson; (xii) the Company's Board of Directors minutes; (xiii) the Company's
records for stock ownership for the years 1994 through 1997; (xiv) BNP
Management, Inc.'s articles and bylaws, as amended, and (xv) the Partnership
Agreement for Boddie-Noell Limited Partnership in the form attached to the
Master Agreement of
1211 East Morehead Street 3605 Glenwood Avenue 601 Pennsylvania Avenue, N.W.
P. O. Drawer 34009 P. O. Drawer 31107 North Building, Suite 250
Charlotte, NC 28234-4009 Raleigh, NC 27622-1107 Washington, DC 20004-2601
704-331-6000 919-420-2200 202-508-3300
Fax: 704-334-2014 Fax: 919-881-3175 Fax: 202-508-3333
<PAGE>
Boddie-Noell Properties, Inc.
December 15, 1997
Page 2
Merger and Acquisition, dated September 22, 1997. Except as set forth above, we
have reviewed no other original documents but rather with respect to all other
matters have relied on the factual representations as described in the following
paragraphs. Without limiting the generality of the foregoing, we have relied on
representations of the Company and B. Mayo Boddie and Nicholas B. Boddie as to,
among other things, certain facts concerning the merger of BT Venture
Corporation, the ownership of stock or other securities in any corporation, the
characterization of income and assets of the Company recently acquired, the
ownership of stock of the Company for purposes of satisfying various rules
regarding the applicable REIT qualification provisions, the characterization of
parties as independent contractors and the characterization of qualifying rental
income under the REIT provisions of the Code, and the satisfaction of the
various income, asset and distribution requirements for years where original
documentation was not reviewed as outlined above.
We have not been involved in decisions regarding the acquisitions of
properties or the day-to-day operations of the Company's properties or business.
We have, however, discussed the mode of operation of the Company with its
officers and representatives of Ernst & Young LLP, and Arthur Andersen LLP, its
independent accounting advisors during the years covered by this opinion, with a
view to learning information critical to the opinions expressed herein. In
addition, we have received a certificate from an officer of the Company and
certificates from B. Mayo Boddie and Nicholas B. Boddie with respect to certain
matters ("Certificates"). Copies of these certificates are attached and the
representations made in such certificates serve as a basis for our opinions
expressed herein.
In rendering the opinions set forth herein, we are assuming that copies
of documents examined by us are true copies of originals thereof and that the
information concerning the Company set forth in the Company's federal income tax
returns, and in the Registration Statement, as well as the representations made
and the information provided to us by the Company's management and its
independent accountants are true and correct. After reasonable investigation and
inquiry, we have no reason to believe that such assumptions are not warranted.
Based solely on the foregoing examination and information, upon which
you have permitted us to rely, and subject to the limitation below, we are of
the opinion that the Company has been organized and has operated in conformity
with the requirements for qualification and taxation as a REIT under the Code
for its taxable years ended December 31, 1987 through 1996, and that, based upon
their proposed method of operation, the Company is in a position to continue its
qualification as a REIT within the definition of Section 856(a) of the Code for
the taxable year that will end December 31, 1997 and each of the subsequent
taxable years. With respect to 1997 and each subsequent year, we note that the
Company's status as a REIT at any time during any year is dependent, among other
things, upon the Company meeting the requirements of Sections 856 through 860 of
<PAGE>
Boddie-Noell Properties, Inc.
December 15, 1997
Page 3
the Code throughout the year and for the year as a whole. Accordingly, because
the Company's satisfaction of such requirements will depend upon future events,
it is not possible to assure that the Company will satisfy the requirements to
be a REIT during any such year.
In addition, we have participated in the preparation of the material
under the heading "Federal Income Tax Considerations" of the Registration
Statement, and we are of the opinion that the federal income tax treatment
described therein is accurate in all material respects.
This opinion is based on various statutory provisions, regulations
promulgated thereunder and interpretations thereof by the Internal Revenue
Service and the courts having jurisdiction over such matters, all of which are
subject to change either prospectively or retroactively. Also, any variation or
difference in the facts from those set forth in the Registration Statement or
the Certificates may affect the opinions stated herein.
This opinion is furnished only to you, is solely for your use in
connection with the Registration Statement, and is limited to the specific
matters covered hereby and should not be interpreted to imply that the
undersigned has offered its opinion on any other matter. This opinion may be
relied upon only by the party to whom it is addressed and may not be quoted,
circulated, or used for any other purpose without our prior written consent. We,
however, hereby consent to the (i) filing of this opinion as an exhibit to the
Registration Statement, (ii) incorporation by reference of this opinion in any
registration statement related to the Offering filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended, (the "Rule 462 Registration
Statement"), and (iii) use of our name under the caption "Legal Opinions" in the
Registration Statement and incorporated by reference into the Rule 462
Registration Statement, if any.
Very truly yours,
ALSTON & BIRD LLP
By: /s/ Pinney L. Allen
____________________________
Pinney L. Allen
<PAGE>
CERTIFICATE
I, Philip S. Payne, in my capacity as Executive Vice President,
Treasurer, and Chief Financial Officer of Boddie-Noell Properties, Inc. (the
"Company"), do hereby certify, with respect to all matters set forth below, as
follows:
1. That I am the Executive Vice President, Treasurer, and Chief
Financial Officer of the Company in the state of North Carolina;
2. That in such capacity, I have access to relevant information
regarding each of the factual matters set forth below and each of the matters
set forth is true, correct and complete for taxable years of the Company from
1994 to the date of this certificate and that each of the matters is true,
correct and complete for each of the taxable years of the Company prior to 1994
to the best of my knowledge and belief after making appropriate inquiries;
3. That I have reviewed the contents of this certificate with other
personnel of the Company;
4. That for purposes of this Certificate,
(a) "BNP Management" means BNP Management, Inc., a North Carolina
corporation of which the Company owns 100% of the nonvoting stock and 1% of the
voting stock and Philip S. Payne, D. Scott Wilkerson, Douglas E. Anderson, and
W. Craig Worthy, who are officers of the Company or affiliates thereof,
collectively own 99% of the voting stock;
(b) "BT Venture" means BT Venture Corporation, a Subchapter S
corporation that was merged with and into the Company on October 1, 1994;
(c) "Chrysson" means CB Development, Inc., an unrelated corporation
from whom the Company has contracted to acquire a portfolio of seven apartment
properties containing 1,356 apartment units;
(d) "Code" means the Internal Revenue Code of 1986, as amended;
(e) "Foreclosure Property" means real property (including interests
in real property), and any personal property incident to such real property,
acquired by the real estate investment trust as a result of such trust having
bid in such property at foreclosure, or having otherwise reduced such property
to ownership or possession by agreement or process of law, after there was
default (or default was imminent) on a lease of such property or on an
indebtedness that such property secured;
<PAGE>
(f) "Independent Contractor" means any person who does not own,
directly or indirectly, more than 35% of the shares in the REIT, and, if such
person is a corporation, not more than 35% of the total combined voting power of
whose stock (or 35% of the total shares of all classes of whose stock), or, if
such person is not a corporation, not more than 35% of the interest in whose
assets or net profits is owned, directly or indirectly, by one or more persons
owning 35% or more of the shares in the REIT;
(g) "Operating Partnership" means Boddie-Noell Properties Limited
Partnership, a Delaware limited partnership formed on September 18, 1997, of
which the Company is the sole general partner with an approximate 77% ownership
interest, including a 1% general partnership interest and a 76% limited
partnership interest, and various others (including officers and directors of
the Company) are the remaining limited partners with an approximate 23%
aggregate interest;
(h) "Operating Partnership Agreement" means the First Amended and
Restated Agreement of Limited Partnership of Boddie-Noell Properties Limited
Partnership in the form attached as Exhibit 10.9 of the Registration Statement;
(i) "Prohibited Transaction" means a sale or other disposition of
property, other than foreclosure property, that is stock in trade of the
taxpayer or other property of a kind which would properly be included in the
inventory of the taxpayer if on hand at the close of the taxable year, or
property held by the taxpayer primarily for sale to customers in the ordinary
course of trade or business;
(j) "Qualified REIT Subsidiary" means any corporation if 100% of the
stock of such corporation is held by the real estate investment trust at all
times during the period such corporation was in existence;
(k) "Real Estate Assets" means real property (including interests in
real property and interests in mortgages on real property) and shares (or
transferable certificates of beneficial interest) in other real estate
investment trusts that meet the requirements of Code Sections 856 through 860;
(l) "Registration Statement" means the Form S-2 filed on or about
November 7, 1997, in connection with the offer and sale of 3,226,000 shares of
the Company's common stock;
(m) "REIT" means a real estate investment trust;
(n) "REIT Election" means an election to be taxed as a REIT under
Code Section 856(c)(1); and
<PAGE>
(o) "Service" means the Internal Revenue Service;
5. That I have consulted with other employees and officers of the
Company regarding the matters set forth below and such persons have agreed in
all respects with the representations made below;
6. That, except as otherwise noted, all representations made below are
true and complete for each of the taxable years ended December 31, 1987, through
December 31, 1996, and through the date hereof; and that I have no reason to
believe that such representations will not continue to be true for the taxable
year that will end December 31, 1997;
7. That, prior to July 12, 1997, the Company operated in accordance
with Delaware law and, after its reincorporation in Maryland on July 12, 1997,
the Company has operated and will continue to operate in accordance with
Maryland law; and that the Company has operated and will continue to operate in
accordance with its articles of incorporation, and its bylaws and in accordance
with the statements and representations made in the Registration Statement;
8. That the Operating Partnership has operated and will continue to
operate in accordance with Delaware law, the Operating Partnership Agreement in
the form attached as Exhibit 10.9 of the Registration Statement, and the
statements and representations made in the Registration Statement;
9. That I am familiar with the requirements for qualification as a REIT
under applicable provisions of the Code, that all such requirements have been
satisfied for the Company's taxable years ended December 31, 1987, through
December 31, 1996; that I have no reason to believe that such requirements will
not continue to be satisfied in the taxable year that will end December 31,
1997; and that I have exercised ordinary business care and prudence to attempt
to satisfy such requirements and I have advised Alston & Bird LLP of any matter
of which I am aware that could cause reason for concern as to whether those
requirements have been or will be satisfied;
10. That the Company has filed an election, in accordance with
applicable Code requirements, to be taxed as a REIT with each of its tax returns
for the periods ended December 31, 1987, through December 31, 1996, and has not
taken any action to terminate such election; that I have no reason to believe
that the Company will not continue to file such election or that it will take
any action to terminate such election for the period that will end December 31,
1997; and that the Company has received no notification formally or informally
from the Service or any other person that such election may not be valid or has
been revoked or withdrawn in any respect;
11. That the Company is and will continue to be managed by one or more
of its directors who have exclusive authority over the management of the
Company, the
<PAGE>
management of its officers, and the management and disposition of the Company's
property;
12. That the beneficial ownership of the Company is and will continue
to be evidenced by transferable shares; and that there are no restrictions on
the transferability of such shares either in the Articles of Incorporation or in
any agreement to which the Company is a party, other than the restrictions set
forth in the Article of Incorporation that permit the directors to redeem shares
or refuse to transfer shares in any case where such directors, in good faith,
believe that a failure to redeem or that a transfer of shares would result in
the loss of the Company's REIT status;
13. That the Company has been a domestic corporation during its entire
existence;
14. That the Company has not been, is not, and will not be (i) a bank,
a mutual savings bank, a cooperative bank, a domestic building and loan
association or other savings institution, a small business investment company
operating under the Small Business Investment Act of 1958, or a corporation
created under state law for the purpose of promoting, maintaining, and assisting
the economy within a state by making loans, or (ii) an insurance company;
15. That at no time during the last half of any taxable year for which
a REIT election has been made has more than 50% of the value of the Company's
outstanding stock been beneficially owned by five or fewer individuals; and that
the Company will take all measures within its control to ensure that, at no time
during the last half of any taxable year for which a REIT election will be made
will more than 50% of the value of the Company's outstanding stock be
beneficially owned by or for five or fewer individuals;
16. That the record and beneficial ownership of the Company has been
and will be held by 100 or more persons;
17. That at least 95% of the gross income derived by the Company
(including the income derived through its ownership of the Operating
Partnership) consists of: (i) amounts derived from rental of real property,
including rents attributable to personal property as described in representation
(21) below and including charges for services customarily furnished or rendered
in connection with the rental of such real property, whether or not such charges
are separately stated, but excluding rents received from parties in which the
Company owns 10% or more of the vote or value of equity ownership of such party
and excluding amounts received or accrued with respect to any real or personal
property if the Company furnishes noncustomary services to the tenants or
manages or operates such property other than through an independent contractor
from which neither the Company nor the Operating Partnership derives any form of
income; (ii) interest; (iii) gain realized upon the sale of all or a portion of
a Real Estate Asset that is not a Prohibited Transaction; (iv) dividends; (v)
abatements and refunds of tax; (vi)
<PAGE>
income and gain from Foreclosure Property; and (vii) amounts for making loans by
secured properties or to purchase or lease real property; and that I have no
reason to believe that such 95% gross income test will not continue to be met
for the taxable year that will end December 31, 1997;
18. That at least 75% of the gross income derived by the Company
(including the income derived through its ownership of the Operating
Partnership) consists of: (i) amounts derived from rental of real property,
including rents attributable to personal property as described in representation
(21) below and including charges for services customarily furnished or rendered
in connection with the rental of such real property, whether or not such charges
are separately stated, but excluding rents received from parties in which the
Company owns 10% or more of the vote or value of equity ownership of such party
and excluding amounts received or accrued with respect to any real or personal
property if the Company furnishes noncustomary services to the tenants or
manages or operates such property other than through an independent contractor
from which neither the Company nor the Operating Partnership derives any form of
income; (ii) interest on obligations secured by mortgages on real property or on
interests in real property; (iii) gain realized upon the sale of all or a
portion of the real property; (iv) abatements and refunds of property tax; (v)
income and gain derived from Foreclosure Property; (vi) amounts for agreeing to
make loans secured by real property or to purchase or lease real property; and
(vii) gain from the sale or disposition of a Real Estate Asset that is not a
Prohibited Transaction; and that I have no reason to believe that such 75% gross
income test will not continue to be met for the taxable year that will end
December 31, 1997;
19. That less than 30% of the gross income of the Company (including
the income derived through its ownership of the Operating Partnership) is
derived from (i) the sale or other disposition of stock or securities held for
less than one year; (ii) property in a transaction that is a Prohibited
Transaction; and (iii) real property (including interests in real property and
interests in mortgages on real property) held for less than four years other
than property compulsorily or involuntarily converted and property that is
Foreclosure Property; and that I have no reason to believe that such 30% gross
income test will not continue to be met for the taxable year that will end
December 31, 1997;
20. That the Company and the Operating Partnership have not entered
into and will not enter into any lease, agreement, or other arrangement in
connection with the rental of real property under which any amount payable to
the Company or the Operating Partnership depends or will depend in whole or in
part on the income or profits derived from any tenant (or sub-tenant) of such
real property (except that such an amount may be based on a fixed percentage or
percentages of gross receipts or sales);
21. That (i) less than 15% of the rent received or accrued from any
lease of real property has been and will be attributable to personal property;
(ii) any such personal property has been and will be leased under or in
connection with a lease of the real
<PAGE>
property; and (iii) no personal property owned by the Company or the Operating
Partnership at any time has had or will have significant value in excess of its
adjusted basis for federal income tax purposes;
22. That, for purposes of Items 17 and 18 above, "rent" does not
include rent received for any real property directly or indirectly from any
person in which the Company owns (i) in the case of a corporation, 10% or more
of the total combined voting power of all classes of stock entitled to vote or
10% or more of the total number of shares of all classes of stock; or (ii) in
the case of an entity other than a corporation, an interest of 10% or more in
the assets or net profits of such entity; (for purposes of this representation,
ownership is determined by taking into account the attribution rules, which
generally apply a look-through provision to determine constructive stock
ownership);
23. That, in connection with the merger of BT Venture Corporation with
and into the Company, B. Mayo Boddie and Nicholas B. Boddie, the sole
shareholders of BT Venture Corporation, were entitled to additional "earn-out
consideration" up to an amount of $1,700,000 in the event that the Company
satisfied certain performance criteria set forth in the merger agreement; and
that such earn-out consideration was payable in the common stock of the Company
but, at the Company's sole option, was payable in cash in lieu of such stock;
24. That, with respect to Item 22 above, B. Mayo Boddie has not and
will not own more than 9.8% of the Company's stock, taking into consideration
(i) all shares of stock owned directly by him, (ii) all shares of stock
reinvested in BNP's Dividend Reinvestment Plan, (iii) all shares of stock owned
directly by his spouse, children, parents, or grandparents, (iv) his
proportionate share of all shares of stock owned, directly or indirectly, by or
for a partnership in which he has had or will have any partnership interest, (v)
his proportionate share of all shares of stock owned, directly or indirectly, by
or for an estate of which he has been or is a beneficiary, (vi) his
proportionate share of all shares of stock owned, directly or indirectly, by or
for a trust (other than a qualified trust under section 401(a) of the Internal
Revenue Code of 1986, as amended) of which he has been or is a beneficiary,
(vii) all shares of stock owned, directly or indirectly, by or for any portion
of a trust of which he is considered the owner for federal income tax purposes,
and (viii) his proportionate share of all shares of stock owned, directly or
indirectly, by or for a corporation in which he owns or has owned a ten percent
(10%) interest;
25. That, with respect to Item 22 above, Nicholas B. Boddie has not and
will not own more than 9.8% of the Company's stock, taking into consideration
(i) all shares of stock owned directly by him, (ii) all shares of stock
reinvested in BNP's Dividend Reinvestment Plan, (iii) all shares of stock owned
directly by his spouse, children, parents, or grandparents, (iv) his
proportionate share of all shares of stock owned, directly or indirectly, by or
for a partnership in which he has had or will have any partnership interest, (v)
his proportionate share of all shares of stock owned, directly or indirectly, by
or for an estate of which he has been or is a beneficiary, (vi) his
proportionate share of all shares of
<PAGE>
stock owned, directly or indirectly, by or for a trust (other than a qualified
trust under section 401(a) of the Internal Revenue Code of 1986, as amended) of
which he has been or is a beneficiary, (vii) all shares of stock owned, directly
or indirectly, by or for any portion of a trust of which he is considered the
owner for federal income tax purposes, and (viii) his proportionate share of all
shares of stock owned, directly or indirectly, by or for a corporation in which
he owns or has owned a ten percent (10%) interest; and
26. That, for purposes of Item 22 above, no partnership in which either
B. Mayo Boddie or Nicholas B. Boddie is directly or indirectly a partner owns
ten percent (10%) or more of the Company's stock, taking into consideration
stock owned by others attributed to any such partnership including (i) any of
the Company's stock owned, directly or indirectly, by either B. Mayo Boddie or
Nicholas B. Boddie and (ii) any of the Company's stock owned directly or
indirectly by any other partner of a partnership in which either B. Mayo Boddie
or Nicholas B. Boddie owned or own an interest for taxable years ending on or
before December 31, 1997, and in which either B. Mayo Boddie or Nicholas B.
Boddie will own a 25% interest for taxable years ending after December 31, 1997;
27. The Company has continually monitored the constructive share
ownership of the Company by partnerships in which Nicholas B. Boddie and B. Mayo
Boddie are partners, directly or indirectly, and have provided you with
schedules prepared by the Company at certain points in time reflecting the
Analysis of Shares Owned by Affiliated Partners, which provides an accurate
statement of ownership in the Company's stock for purposes of the matters set
forth in paragraphs 24, 25 and 26;
28. That the fair market value of any real property (or, with respect
to any construction loan, the fair market value of the land plus the reasonably
estimated cost of the improvements other than personal property) securing a
note, determined at the time the Company became bound to make the loan, is equal
to or exceeds the amount of the loan;
29. That the Company has reviewed and will continue to review all
leases for each property to ensure that such leases conform with all REIT
requirements; and that in connection with such review, the Company's Chief
Accounting Officer performs the following: (i) audits each lease prior to
signing such lease with respect to new and existing properties, (ii) audits each
property's operations prior to acquiring any such property, and (iii) meets
quarterly with property managers, who complete a form in connection with each
property setting forth the nature and amount of such items as personal property
and services provided to tenants, if any;
30. That neither the Company nor the Operating Partnership has provided
or will provide any services to any tenant other than services that would be
considered customarily furnished or rendered in connection with the rental of
real property, such as the furnishing of water, heat, lights, trash collection,
and maintenance of common areas;
<PAGE>
31. That the Company has not derived and will not derive any income
from any Independent Contractor; that no Independent Contractor who provided or
will provide management and operating functions for the Company or any of its
properties had or will have any ownership interest in the Company in excess of
35%;
32. That at the close of each quarter of any taxable year that the
Company has made or will make a REIT election, at least 75% of the total
combined value of its assets, including its proportionate share of the assets of
the Operating Partnership, has or will consist of Real Estate Assets, cash and
cash items (including receivables), and government securities; and that the
Company performs the following items to determine its compliance with the 75%
asset test: (i) monitors the fair market value of the properties on an ongoing
basis and (ii) completes a spreadsheet detailing all assets of the Company and
the Operating Partnership on an asset by asset basis to determine whether such
assets are qualifying assets under the applicable Treasury Regulations;
33. That at the close of each quarter of any taxable year that the
Company has made or will make a REIT election not more than 25% of the value of
the Company's total assets (including those assets owned indirectly through the
Operating Partnership) has been or will be represented by securities (other than
government securities) for purposes of this calculation limited in respect of
any one issuer to an amount not greater in value than 5% of the value of the
total assets of the Company and to not more than 10% of the outstanding voting
securities of such issuer;
34. That the Company's pro rata share of the value of the securities of
BNP Management has not exceeded 5% of the total value of the Company's assets at
the end of any calendar quarter; that 99% of the voting stock of BNP Management
is owned by Philip S. Payne, D. Scott Wilkerson, Douglas E. Anderson, and W.
Craig Worthy; that the Company has no informal or formal agreement with BNP
Management or the other shareholders of BNP Management regarding the voting of
the BNP Management stock; and that the stock owned by Philip S. Payne, D. Scott
Wilkerson, Douglas E. Anderson, and W. Craig Worthy is not subject to any voting
or purchase agreement that effectively would deny such individuals of the
economic rights of such stock;
35. That at the close of each quarter of any taxable year that the
Company has made or will make a REIT election the Company has not owned and will
not own directly or indirectly securities in any one issuer, including mutual
funds, having an aggregated value in excess of 5% of the value of the total
assets of the Company;
36. That the Company and the Operating Partnership have held and will
at all times hold all real property and all other assets for investment purposes
and not as (i) stock in trade or other property of a kind which would properly
be includible in inventory if on hand at the close of the taxable year, or (ii)
property held primarily for sale to
<PAGE>
customers in the ordinary course of the trade or business of the Company or the
Operating Partnership;
37. That for each taxable year for which a REIT election has been or
will be made the Company has distributed or will distribute an amount equal to
or exceeding the sum of 95% of the Company's real estate investment trust
taxable income for such taxable year, determined without regard for the
deduction for dividends paid and by excluding any net capital gain, and 95% of
the excess of the net income from Foreclosure Property over the tax imposed on
such income, reduced by, any excess noncash income;
38. That for each taxable year for which a REIT election has been or
will be made the Company has and will (i) maintain stock records that disclose
actual ownership of the Company's outstanding stock, and (ii) within 30 days of
each taxable year end, demand a written statement from shareholders of record,
including holders of the Company's stock warrants, for the purpose of disclosing
actual ownership as required by Treas.
Reg. Section 1.857-8;
39. That the Company has received no indication (whether in response to
the required demand letters sent to each shareholder of record owning 1% or more
of the outstanding shares of the Company on the appropriate date, as a result of
any filing of a Schedule 13D or 13G under the Securities Exchange Act of 1934,
as amended, or otherwise) that the actual ownership of shares of the Company was
or is such as to prevent the Company from satisfying the REIT rules prohibiting
the Company from being closely-held or from having fewer than 100 shareholders;
40. That the Company has at all times adopted and will continue to use
a calendar year accounting period;
41. That other than the direct ownership of the stock in BNP
Management, the Company owns no stock or other voting securities in any
corporation;
42. That, at the time of the merger of BT Venture Corporation with and
into the Company, BT Venture Corporation had no Subchapter C earnings and
profits;
43. That the Operating Partnership was formed as a partnership under
the laws of Delaware; and that such partnership has made no election and will
not make any election to be treated as a corporation or any other type of entity
for federal income tax purposes;
44. That I have no reason to believe any of the properties of Chrysson
will cause the Company to fail to satisfy any of the matters set forth in this
certificate or to fail to qualify as a REIT in the taxable year that will end
December 31, 1997; and that the Company has performed the following due
diligence: (i) audited each lease with respect to all Chrysson properties and
(ii) audited each property's operations;
<PAGE>
45. That the Company has filed timely tax returns in each year of its
existence and has not included any information in such returns due to fraud with
an intent to evade taxes;
46. That, beginning with the taxable year ended December 31, 1996, the
Company has engaged Ernst & Young to complete the Company's audited financial
statements and federal income tax returns; and that, in connection with such
work, Ernst & Young advised us that it found no problems with the Company's
qualification as a REIT for any year that it elected to be so taxed and that it
foresaw no problems in continuing to so qualify;
47. That with respect to the Company's interest income:
(a) All of such interest income has been and will be earned on notes
("Notes") that are secured by real property, other than amounts of interest
earned on funds of the Company hald on deposit in banking institutions, the loan
to BNP Management, Inc., and other interest that did not cause the Company to
fail the 75% income test;
(b) None of the Notes has contained or will contain any provisions
that entitles the Company to interest based on the earnings or profits of the
maker of the Note or the value of the property securing the Note; and
(c) The fair market value of the real property (or, with respect to
any construction loan, the fair market value of the land plus the reasonably
estimated cost of the improvements other than presonal property) securing each
of the Notes, determined at the time the Company became bound to make the loan,
is equal to or exceeds the amount of the loan.
48. That to assist you in your review of the Company's records, we have
identified to you certain form apartment leases that are representative of the
Company's actual apartment leases.
49. That no proceedings are pending or, to the knowledge of the
undersigned, threatened against the Operating Partnership, the Company, any of
their subsidiaries (including corporations, limited and general partnerships,
joint ventures and other entities, whether directly or indirectly controlled) or
any of their properties, before or by any Federal state or other commission,
board, court, or administrative agency wherein an unfavorable decision, ruling,
or finding would materially and adversely affect the business, property,
financial condition, or income of the Company, the Operating Partnership, and
their subsidiaries considered as one enterprise or any of their properties.
50. That the Company's ownership interests in the Operating Partnership
and its other directly or indirectly held subsidiaries (the "Subsidiaries") are
held free and clear
<PAGE>
of any security interest, mortgage, pledge, lien, encumbrance, claim or equity,
except for security interests granted in respect to indebtedness of the Company
or the Subsidiaries as described in the Registration Statement.
51. That the description of the Company, its properties, and its method
of operation contained in the Registration Statement is accurate and complete in
all material aspects with respect to this opinion;
52. That the Company will undertake to advise you of any change in the
representations made herein for so long as the Registration Statement referred
to above remains in effect; and
53. That the representations herein as to the real property also will
be true with respect to properties acquired by the Company or the Operating
Partnership after the date hereof.
The foregoing Certification is provided to Alston & Bird LLP in
connection with rendering an opinion regarding the qualification of the Company
as a REIT and may not be relied upon for any other purpose or by any other
party. It is understood that such opinion is limited to the factual matters
revealed pursuant hereto and other materials provided to them and that to the
extent required, I have asked questions of the appropriate individuals to
confirm the foregoing answers, and to the best of my knowledge and belief such
answers are true, correct, and complete and in no way are misleading.
December 15, 1997 /s/ Philip S. Payne
__________________________
Philip S. Payne
Executive Vice President, Treasurer,
and Chief Financial Officer
<PAGE>
CERTIFICATE
I, Nicholas B. Boddie, in my individual capacity and in my capacity as
Vice Chairman of Boddie-Noell Enterprises, Inc. ("Boddie-Noell"), do hereby
certify, after making appropriate inquiries with respect to all matters set
forth below, as follows:
1. That I am the Vice Chairman of Boddie-Noell;
2. That in such capacity, I have access to relevant information
regarding each of the factual matters set forth below;
3. That I have consulted with other employees and officers of
Boddie-Noell regarding the matters set forth below and such persons have agreed
in all respects with the representations made below;
4. That, except as otherwise noted, all representations made below are
true and complete for each of the taxable years ended December 31, 1987, through
December 31, 1996, and through the date hereof; and that I have no reason to
believe that such representations will not continue to be true for the taxable
years that will end December 31, 1997, and thereafter;
5. That BNE Advisory Group, Inc., which was formed in 1987 and operated
as a wholly-owned subsidiary of Boddie-Noell, provided no services with respect
to any of the Hardee's restaurants leased to Boddie-Noell during any of the
taxable years ended December 31, 1987 through 1994; and that BNE Advisory Group,
Inc. neither managed nor operated any of the Hardee's restaurants leased to
Boddie-Noell during any of the taxable years ended December 31, 1987 through
1994;
6. That at all times during the taxable years ended December 31, 1987
through 1996, and through the date hereof I have owned less than ten percent
(10%) of the stock of Boddie-Noell Properties, Inc. ("BNP") taking into
consideration:
(i) all shares of stock owned directly by me,
(ii) all shares of stock reinvested in BNP's Dividend
Reinvestment Plan,
(iii) all shares of stock owned directly by my spouse,
children, parents, or grandparents,
(iv) my proportionate share of all shares of stock owned by or
for a partnership in which I have or have had any partnership interest,
(v) my proportionate share of all shares of stock owned,
directly or indirectly, by or for an estate of which I have been or am a
beneficiary,
<PAGE>
(vi) my proportionate share of all shares of stock owned,
directly or indirectly, by or for a trust (other than a qualified trust under
section 401(a) of the Internal Revenue Code of 1986, as amended) of which I have
been or am a beneficiary,
(vii) all shares of stock owned, directly or indirectly, by or
for any portion of a trust of which I am considered the owner for federal income
tax purposes, and
(viii) my proportionate share of all shares of stock owned,
directly or indirectly, by or for a corporation in which I own or have owned a
ten percent (10%) interest;
7. That no partnership in which I am a general partner directly or
indirectly has owned or does own ten percent (10%) or more of BNP's stock,
taking into consideration stock attributed to any such partnership including (i)
any of BNP's stock owned, directly or indirectly, by me, and (ii) any of BNP's
stock owned, directly or indirectly by any other partner of a partnership in
which I have owned or do own an interest for taxable years ending on or before
December 31, 1997, and in which I will own a 25% interest for taxable years
ending after December 31, 1997; and that I have no reason to believe that any
partnership in which I am a limited partner directly or indirectly has owned or
does own ten percent (10%) or more of BNP's stock, taking into consideration
stock attributed to any such partnership including (i) any of BNP's stock owned,
directly or indirectly, by me, and (ii) any of BNP's stock owned, directly or
indirectly by any other partner of a partnership in which I have owned or do own
an interest for taxable years ending on or before December 31, 1997, and in
which I will own a 25% interest for taxable years ending after December 31,
1997;
8. I have disclosed the partnerships in which I am a general partner to
BNP and the names of those persons who are my partners in said partnerships and
I know that such persons do not own sufficient stock in BNP when taken together
with stock owned by me to cause any partnership to be considered to
constructively own ten percent (10%) or more of the stock of BNP; and that I
have disclosed the partnerships in which I am a limited partner to BNP and I
have no reason to believe that any of the other partners in such partnerships
own stock in BNP when taken together with stock owned by me to cause any
partnership to be considered to constructively own ten percent (10%) or more of
the stock of BNP; and
9. That at all times during the taxable years ended December 31, 1987
through 1994, BNP was organized and operated as a real estate investment trust
under applicable provisions of the Code; and that I am not aware of any reason
that BNP did not so qualify during such period of time.
The foregoing Certification is provided to Alston & Bird LLP in
connection with rendering an opinion regarding the qualification of BNP as a
REIT and may not be relied upon for any other purpose or by any other party. It
is understood that such opinion is limited to the factual matters revealed
pursuant hereto and other materials provided to
-2-
<PAGE>
them and that to the extent required, I have asked questions of the appropriate
individuals to confirm the foregoing answers, and to the best of my knowledge
and belief such answers are true, correct, and complete and in no way are
misleading.
December 15, 1997 /s/ Nicholas B. Boddie
__________________________
Nicholas B. Boddie
Vice Chairman
-3-
<PAGE>
CERTIFICATE
I, B. Mayo Boddie, in my individual capacity and in my capacity as
Chairman of Boddie-Noell Enterprises, Inc. ("Boddie-Noell"), do hereby certify,
after making appropriate inquiries with respect to all matters set forth below,
as follows:
1. That I am the Chairman of Boddie-Noell;
2. That in such capacity, I have access to relevant information
regarding each of the factual matters set forth below;
3. That I have consulted with other employees and officers of
Boddie-Noell regarding the matters set forth below and such persons have agreed
in all respects with the representations made below;
4. That, except as otherwise noted, all representations made below are
true and complete for each of the taxable years ended December 31, 1987, through
December 31, 1996, and through the date hereof; and that I have no reason to
believe that such representations will not continue to be true for the taxable
years that will end December 31, 1997, and thereafter;
5. That BNE Advisory Group, Inc., which was formed in 1987 and operated
as a wholly-owned subsidiary of Boddie-Noell, provided no services with respect
to any of the Hardee's restaurants leased to Boddie-Noell during any of the
taxable years ended December 31, 1987 through 1994; and that BNE Advisory Group,
Inc. neither managed nor operated any of the Hardee's restaurants leased to
Boddie-Noell during any of the taxable years ended December 31, 1987 through
1994;
6. That at all times during the taxable years ended December 31, 1987
through 1996, and through the date hereof I have owned less than ten percent
(10%) of the stock of Boddie-Noell Properties, Inc. ("BNP") taking into
consideration:
(i) all shares of stock owned directly by me,
(ii) all shares of stock reinvested in BNP's Dividend
Reinvestment Plan,
(iii) all shares of stock owned directly by my spouse,
children, parents, or grandparents,
(iv) my proportionate share of all shares of stock owned,
directly or indirectly, by or for a partnership in which I have or have had any
partnership interest,
(v) my proportionate share of all shares of stock owned,
directly or indirectly, by or for an estate of which I have been or am a
beneficiary,
<PAGE>
(vi) my proportionate share of all shares of stock owned,
directly or indirectly, by or for a trust (other than a qualified trust under
section 401(a) of the Internal Revenue Code of 1986, as amended) of which I have
been or am a beneficiary,
(vii) all shares of stock owned, directly or indirectly, by or
for any portion of a trust of which I am considered the owner for federal income
tax purposes, and
(viii) my proportionate share of all shares of stock owned,
directly or indirectly, by or for a corporation in which I own or have owned a
ten percent (10%) interest;
7. That no partnership in which I am a general partner directly or
indirectly has owned or does own ten percent (10%) or more of BNP's stock,
taking into consideration stock attributed to any such partnership including (i)
any of BNP's stock owned, directly or indirectly, by me, and (ii) any of BNP's
stock owned, directly or indirectly, by any other partner of a partnership in
which I have owned or do own an interest for taxable years ending on or before
December 31, 1997, and in which I will own a 25% interest for taxable years
ending after December 31, 1997; and that I have no reason to believe that any
partnership in which I am a limited partner directly or indirectly has owned or
does own ten percent (10%) or more of BNP's stock, taking into consideration
stock attributed to any such partnership including (i) any of BNP's stock owned,
directly or indirectly, by me, and (ii) any of BNP's stock owned, directly or
indirectly by any other partner of a partnership in which I have owned or do own
an interest for taxable years ending on or before December 31, 1997, and in
which I will own a 25% interest for taxable years ending after December 31,
1997;
8. I have disclosed the partnerships in which I am a general partner to
BNP and the names of those persons who are my partners in said partnerships and
I know that such persons do not own sufficient stock in BNP when taken together
with stock owned by me to cause any partnership to be considered to
constructively own ten percent (10%) or more of the stock of BNP; and that I
have disclosed the partnerships in which I am a limited partner to BNP and I
have no reason to believe that any of the other partners in such partnerships
own stock in BNP when taken together with stock owned by me to cause any
partnership to be considered to constructively own ten percent (10%) or more of
the stock of BNP; and
9. That at all times during the taxable years ended December 31, 1987
through 1994, BNP was organized and operated as a real estate investment trust
under applicable provisions of the Code; and that I am not aware of any reason
that BNP did not so qualify during such period of time.
The foregoing Certification is provided to Alston & Bird LLP in
connection with rendering an opinion regarding the qualification of BNP as a
REIT and may not be relied upon for any other purpose or by any other party. It
is understood that such opinion is limited to the factual matters revealed
pursuant hereto and other materials provided to
-2-
<PAGE>
them and that to the extent required, I have asked questions of the appropriate
individuals to confirm the foregoing answers, and to the best of my knowledge
and belief such answers are true, correct, and complete and in no way are
misleading.
December 15, 1997 /s/ B. Mayo Boddie
__________________________
B. Mayo Boddie
Chairman
-3-
<PAGE>
Exhibit 10.8
MODIFICATION AGREEMENT
THIS AGREEMENT, made as of the 1st day of August, 1997, by and between
BODDIE-NOELL PROPERTIES, INC., a Maryland corporation ("Borrower") and
SOUTHTRUST BANK, NATIONAL ASSOCIATION, a national banking association (formerly
known as SouthTrust Bank of Alabama, National Association) ("Lender").
RECITALS:
Borrower and Lender entered into a Loan Agreement dated December 27,
1995 (the "Loan Agreement") pursuant to which Lender made a loan to Borrower in
the principal sum of $25,500,000 (the "Loan"). The Loan is evidenced by
Borrowers' Promissory Note to Lender of even date therewith (the "Note") in the
stated principal sum of the Loan. Borrower has requested that the maturity of
the Note and Loan be extended, and Lender is willing to do so on the terms and
conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the Recitals, the Borrower agrees
with and represents and warrants to Lender, and Lender agrees with Borrower, as
follows:
1. The Recitals herein are true and correct. All capitalized terms
used herein and not otherwise defined shall have the meanings set forth in the
Loan Agreement.
2. The term "Maturity Date" as used in the Note, Loan Agreement and
any other Loan Documents is modified and extended to December 27, 1999. Prior to
the Maturity Date, as so extended, Borrower will continue to pay all accrued and
unpaid interest on the Loan on the 27th day
<PAGE>
of each calendar month. Nothing herein and no prior course of dealing shall
obligate Lender to further extend the Maturity Date.
3. The Note is modified to provide that the outstanding principal
balance, or any part thereof, may be prepaid without premium or penalty,
provided Borrower shall provide Lender thirty (30) days prior written notice of
any partial prepayment.
4. In consideration of the agreements of Lender herein, Borrower agrees
to pay to Lender an extension fee of $42,496.
5. Nothing herein shall constitute a novation. If this Agreement
adversely affects the priority or enforceability of any of the Loan Documents,
this Agreement shall be null and void ab initio.
6. Notwithstanding anything to the contrary herein, in the event that
Lessee fails to achieve a net income (calculated in accordance with generally
accepted accounting principles consistently applied) for the calendar year 1997
and provide evidence thereof satisfactory to Lender on or before 180 days
following the end of such year, then the extension provided in paragraph 2
hereof shall not be effective and in lieu thereof the extension of the Maturity
Date shall be to May 27, 1999, on which date the outstanding principal balance
and all accrued and unpaid interest on the Loan will be immediately due and
payable in full, without demand. This agreement shall constitute an additional
covenant pursuant to the Loan Documents.
7. Except as herein modified, the Loan Documents shall remain in full
force and effect, and the Loan Documents, as so modified, are hereby ratified
and affirmed in all respects. Borrower confirms that it has no offsets or
defenses with respect to its obligations pursuant to the Loan
<PAGE>
Documents, as herein modified. Borrower represents and warrants to Lender that
this Agreement has been duly authorized, executed and delivered pursuant to all
requisite corporate action.
IN WITNESS WHEREOF, the Borrower and Lender have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
BODDIE-NOELL PROPERTIES, INC.,
a Maryland corporation
BY: /s/ D. Scott Wilkerson
Its: President / CEO
STATE OF NC
COUNTY OF MECKLENBURG
I, the undersigned, a Notary Public in and for said County in said
State, hereby certify that D. Scott Wilkerson whose name as President, CEO of
Boddie-Noell Properties, Inc., a Maryland corporation, is signed to the
foregoing instrument, and who is known to me, acknowledged before me on this day
that, being informed of the contents of the instrument, s/he, as such officer
and with fully authority, executed the same voluntarily for and as the act of
the corporation.
Give under my hand and official seal, this 27 day of October ,1997.
/s/ Denise T. Williams
Notary Public
My commission expires: 1-19-99
<PAGE>
SOUTHTRUST BANK, NATIONAL ASSOCIATION,
a national banking association
BY: /s/ John D. Peirce
Its: Group Vice President
STATE OF North Carolina
COUNTY OF Mecklenburg
1, Shari Elizabeth Allender , a Notary Public in and for said County in
said State, hereby certify that John D. Peirce, whose name as Group Vice
President of SouthTrust Bank, National Association, a national banking
association, is signed to the foregoing instrument, and who is known to me,
acknowledged before me on this day that, being informed of the contents of said
instrument, s/he, as such officer and with full authority, executed the same
voluntarily for and as the act of said national banking association.
Given under my hand and seal, this 27 day of October, 1997.
/s/ Shari Elizabeth Allender
Notary Public
My commission expires: April 28, 2001
Exhibit 10.11
FORM OF
REGISTRATION RIGHTS AGREEMENT
Dated as of December 1, 1997
by and among
BODDIE-NOELL PROPERTIES, INC.
AND
THE HOLDERS LISTED ON
SCHEDULE A HEREOF
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of ________________, by and among Boddie-Noell Properties, Inc.
(the "Company") and the persons listed on Schedule A attached hereto, including
their successors, assigns and transferees (each referred to herein as a "Holder"
and collectively as the "Holders").
WHEREAS, each of the Holders will become the owner of Units (as defined
below) in the Boddie-Noell Properties Limited Partnership (the "Operating
Partnership") in connection with the sale of their interests in certain
properties pursuant to the Master Agreement of Merger and Acquisition by and
among the Company, the Operating Partnership and the individuals and limited
liability companies listed therein dated September 22, 1997 (the "Merger
Agreement") and the Exchange Option Agreements by and among the Operating
Partnership, the Company and the owners of the Chrysson Affiliates listed
therein dated September 22, 1997 (the "Exchange Agreements");
WHEREAS, in order to induce the Holders to enter into the Merger
Agreement and the Exchange Agreements, the Company has agreed to provide the
Holders with the registration rights set forth in Section 2 hereof.
NOW, THEREFORE, the parties hereto, in consideration of the foregoing,
the mutual covenants and agreements hereinafter set forth and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"Affiliate" shall have the meaning set forth at Rule 144 of the
Securities Act or any successor regulation.
"Common Stock" shall mean the Common Stock, par value $.01 per share,
of the Company.
"Company" shall have the meaning set forth in the preamble and also
shall include the Company's successors.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Exchange Agreements" shall have the meaning set forth in the preamble.
"Holder" shall have the meaning set forth in the preamble, including
any successors, assigns or transferees of the Units.
<PAGE>
"Merger Agreement" shall have the meaning set forth in the preamble.
"Operating Partnership" shall have the meaning set forth in the
preamble and also shall include the Operating Partnership's successors.
"Partnership Agreement" shall mean the Agreement of Limited Partnership
of the Operating Partnership, as amended.
"Person" shall mean an individual, partnership, corporation, trust,
unincorporated organization or other legal entity or a government or agency or
political subdivision thereof.
"Private Placement" shall mean the issuance and sale of Units to the
Holders pursuant to the transactions described in the Merger Agreement and the
Exchange Agreements, but not including Shares issuable upon redemption of Units.
"Prospectus" shall mean the prospectus included in the Shelf
Registration Statement, including any preliminary prospectus, and all amendments
and supplements thereto, including any supplement relating to the terms of the
offering of any portion of the Registrable Securities covered by the Shelf
Registration Statement, and in each case including all materials incorporated by
reference therein.
"Redemption Right" shall mean the right of a Holder under the
Partnership Agreement to cause its Units to be redeemed for cash or Shares as
more specifically described therein.
"Registrable Securities" shall mean the Shares, excluding (i) Shares
held by Holders who are not Affiliates which were issued in a public offering
pursuant to the Shelf Registration Statement and (ii) Shares that have been
disposed of under the Shelf Registration Statement or any other effective
registration statement, (iii) Shares sold or otherwise transferred pursuant to
Rule 144 under the Securities Act, and (iv) Shares eligible for sale pursuant to
Rule 144(k) of the Securities Act.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance with this Agreement, including, without limitation:
(i) all SEC, stock exchange or National Association of Securities Dealers, Inc.
("NASD") registration and filing fees, (ii) all fees and expenses incurred in
connection with compliance with state securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with qualification of
any of the Registrable Securities under any state securities or blue sky laws
and the preparation of a blue sky memorandum) and compliance with the rules of
the NASD, (iii) all expenses of any Persons in preparing, assisting in
preparing, word processing, printing and distributing the Shelf Registration
Statement, any Prospectus, certificates and other documents relating to the
performance of and compliance with this Agreement, (iv) all fees and expenses
incurred in connection with the listing, if any, of any of the Registrable
Securities on any securities exchange or exchanges pursuant to Section 3(k)
hereof, and (v) the fees and disbursements of counsel for the Company and of the
independent public accountants of the Company, including the expenses of any
special audits or
<PAGE>
"cold comfort" letters required by or incident to such performance and
compliance. Registration Expenses shall specifically exclude underwriting
discounts and commissions, the fees and disbursements of counsel representing a
selling Holder and transfer taxes, if any, relating to the sale or disposition
of Registrable Securities by a selling Holder, all of which shall be borne by
such Holder in all cases.
"Registration Statement" or the "Shelf Registration Statement" shall
mean a registration statement of the Company (and any other entity required to
be a registrant with respect to such registration statement pursuant to the
requirements of the Securities Act) that covers the issuance of Shares and, if
applicable, the sale of Registrable Securities by any Holder pursuant to Rule
415 under the Securities Act, or any similar rule that may be adopted by the
SEC, and all amendments (including post-effective amendments) to such
registration statement, all exhibits thereto and all materials incorporated by
reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Shares" shall mean Common Stock issued or issuable to the Holders upon
redemption of the Units.
"Suspension Event" shall have the meaning set forth in Section 4(a)
hereof.
"Units" shall mean the limited partnership interests of the Operating
Partnership issued to the Holders in the Private Placement.
2. Shelf Registration Under the Securities Act.
(a) Filing of Shelf Registration Statement. If the Company
satisfies the Redemption Right of a Holder under the Partnership
Agreement through the issuance of Shares, the Company shall use its
best efforts to cause such Shares to be freely tradeable by any Holder
upon their receipt. Due to current regulations under the Securities Act
and SEC staff positions, the Company shall have satisfied its
obligations under the preceding sentence if it (i) files the Shelf
Registration Statement covering the issuance of the Shares within 54
weeks of the issuance of the Units and (ii) uses its best efforts to
cause the Shelf Registration Statement to be declared effective
promptly. If permitted by the SEC, such Shelf Registration Statement
shall also register the resale of Shares by Holders who are Affiliates
of the Company at the time of filing. The Company agrees to use its
best efforts to keep the Shelf Registration Statement continually
effective until the date on which the Shares covered by such Shelf
Registration Statement are no longer Registrable Securities.
(b) Expenses. The Company shall pay all Registration Expenses
in connection with the registration pursuant to Section 2(a). Each
Holder shall pay all underwriting discounts and commissions, the fees
and disbursements of counsel
3
<PAGE>
representing such Holder and transfer taxes, if any, relating to the
sale or disposition of such Holder's Registrable Securities pursuant to
the Shelf Registration Statement or Rule 144 under the Securities Act.
(c) Inclusion in Shelf Registration Statement. The Holders
agree to provide as promptly as practicable the information reasonably
requested by the Company in connection with the Registration Statement.
Any Holder who does not provide the information reasonably requested by
the Company in connection with the Shelf Registration Statement, shall
not be entitled to have its Registrable Securities included in the
Shelf Registration Statement.
(d) Unavailability of Rule 415 or Changes in Securities Laws.
Notwithstanding anything herein to the contrary, if the Company is
ineligible or unable under the rules and regulations of the Securities
Act and the positions of the staff of the SEC to register the issuance
of the Shares or the resale of the Registrable Securities as
contemplated by Section 2(a) pursuant to a continuous Shelf
Registration Statement or if the Company is unable to comply with
Section 2(a) hereof due solely to changes in the Securities Act, the
regulations thereunder or SEC staff positions, the Company will have
satisfied its obligations under this Section 2 if it uses its
reasonable efforts to register for public resale each Holder's
Registrable Securities at such time as such Holder provides written
notice to the Company of such Holder's desire to sell such Registrable
Securities.
(e) Resale of Shares. If, at the time of disposition of Shares
by an Affiliate, a Resale Registration Statement covering the resale of
such Shares is effective, (x) such disposition shall be effected
pursuant to such Shelf Registration Statement and accompanied by the
Prospectus or pursuant to Rule 144 under the Securities Act, and (y)
the transferee of such Shares shall not be entitled to the registration
rights set forth in Section 3 hereof.
3. Registration Procedures.
In connection with the obligations of the Company with respect to the
Shelf Registration Statement contemplated by Section 2 hereof, the Company
shall:
(a) prepare and file with the SEC, within the time period set
forth in Section 2 hereof, the Shelf Registration Statement, which
Shelf Registration Statement (i) shall be available for the issuance of
the Shares and sale of the Registrable Securities in accordance with
the intended method or methods of distribution by the selling Holders
thereof, if any, and (ii) shall comply as to form and substance in all
material respects with the requirements of the applicable form and
include all financial statements required by the SEC to be filed
therewith;
(b) (i) prepare and file with the SEC such amendments to such
Registration Statement as may be necessary to keep such Registration
Statement effective for the applicable period; (ii) cause the
Prospectus to be amended or
4
<PAGE>
supplemented as required and to be filed as required by Rule 424 or any
similar rule that may be adopted under the Securities Act; (iii)
respond as promptly as practicable to any comments received from the
SEC with respect to the Shelf Registration Statement or any amendment
thereto; and (iv) if applicable, comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
selling Holders thereof;
(c) furnish to each Holder of Registrable Securities or its
designee, without charge, as many copies of each Prospectus and any
amendment or supplement thereto and such other documents as such Holder
may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities; the Company consents to the
use of the Prospectus and any amendment or supplement thereto by each
such Holder of Registrable Securities in connection with the offering
and sale of the Registrable Securities covered by the Prospectus or
amendment or supplement thereto;
(d) use its best efforts to register or qualify the
Registrable Securities by the time the Shelf Registration Statement is
declared effective by the SEC under all applicable state securities or
blue sky laws of such jurisdictions in the United States and its
territories and possessions as any Holder of Registrable Securities
covered by the Shelf Registration Statement shall request in writing,
keep each such registration or qualification effective during the
period such Registration Statement is required to be kept effective,
and do any and all other acts that may reasonably be necessary to
enable such Holder to dispose of such Registrable Securities owned by
such Holder in each such jurisdiction; provided, however, that in
connection therewith, the Company shall not be required to (i) qualify
as a foreign corporation to do business or to register as a broker or
dealer in any such jurisdiction where it otherwise would not be
required to qualify or register but for this Section 3(d), (ii) subject
itself to taxation in any such jurisdiction, or (iii) file a general
consent to service of process in any such jurisdiction wherein it is
not otherwise required to do so;
(e) notify each Holder of Registrable Securities promptly and,
if requested by such Holder, confirm in writing (i) when the
Registration Statement and any post-effective amendment thereto have
become effective, (ii) when any amendment or supplement to the
Prospectus has been filed with the SEC, (iii) of the issuance by the
SEC or any state securities authority of any stop order suspending the
effectiveness of the Registration Statement or any part thereof or the
initiation of any proceedings for that purpose, (iv) if the Company
receives any notification with respect to the suspension of the
qualification of the Registrable Securities for offer or sale in any
jurisdiction or the initiation of any proceeding for such purpose, and
(v) of the happening of any event during the period the Registration
Statement is effective as a result of which (A) such Registration
Statement contains any untrue statement of a material fact or omits to
state any
5
<PAGE>
material fact required to be stated therein or necessary to make the
statements therein not misleading or (B) the Prospectus, as then
amended or supplemented, contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of the Shelf Registration
Statement, or any part thereof, as promptly as possible;
(g) furnish to each Holder of Registrable Securities, without
charge, at least one conformed copy of the Shelf Registration Statement
and any post-effective amendment thereto and any Prospectus or
amendment or supplement thereto, (without documents incorporated
therein by reference or exhibits thereto, unless requested);
(h) at any time when a Prospectus relating to a Registration
Statement covering Registrable Securities is required to be delivered
under the Securities Act, the Company shall immediately notify the
Holder of the happening of any event as a result of which the
Prospectus included in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading. In such event, the Company shall promptly prepare
and furnish to the Holder a reasonable number of copies of a supplement
to or an amendment of such Prospectus as may be necessary so that, as
thereafter delivered to the purchasers of Registrable Securities, such
Prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they are made, not misleading. The Company will, if
necessary, amend the Registration Statement of which such Prospectus is
a part to reflect such amendment or supplement;
(i) make available for inspection by the Holders of
Registrable Securities and any counsel, accountants or other
representatives retained by such Holders all financial and other
records, pertinent corporate documents and properties of the Company,
and cause the officers, directors and employees of the Company to
supply all such records, documents or information reasonably requested
by such Holders' counsel, accountants or representatives in connection
with the Shelf Registration Statement; provided, however, that such
records, documents or information which the Company determines in good
faith to be confidential and notifies such Holders' counsel,
accountants or representatives in writing that such records, documents
or information are confidential shall not be disclosed by such Holders'
counsel, accountants or representatives unless (i) such disclosure is
necessary to avoid or correct a material misstatement or omission in a
Registration Statement and such disclosure is not made during a
Suspension Event, (ii) such disclosure is ordered pursuant to a
subpoena or other order from a court
6
<PAGE>
of competent jurisdiction, or (iii) such records, documents or
information become generally available to the public other than through
a breach of this Agreement;
(j) upon five business days' notice, the Company shall file
any supplement or post-effective amendment of the Registration
Statement with respect to such Holder's interests in or plan of
distribution of Registrable Securities that is reasonably necessary to
permit the sale of the Holder's Registrable Securities pursuant to the
Resale Shelf Registration Statement;
(k) use its best efforts to cause all Registrable Securities
to be listed on any securities exchange on which similar securities
issued by the Company are then listed or, if no such securities are
then listed, on an exchange selected by the Company, if such listing is
then permitted under the rules of such exchange; or if such listing is
not practicable, to secure designation of such securities as a NASDAQ
"national market system security" within the meaning of Rule 11Aa2-1
under the Exchange Act; or, failing that, to secure NASDAQ
authorization for such securities; and, without limiting the foregoing,
to arrange for at least two market makers to register as such with
respect to such securities with the NASD; and to provide a transfer
agent and registrar for such Registrable Securities not later than the
effective date of such registration statement;
(l) make available to its security holders, as soon as
reasonably practicable, an earnings statement covering at least 12
months, which statement shall satisfy the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder.
The Company may require each Holder of Registrable Securities to
furnish to the Company in writing such information regarding the proposed
distribution by such Holder of such Registrable Securities as the Company may
from time to time reasonably request in writing.
In connection with and as a condition to the Company's obligations with
respect to the Shelf Registration Statement pursuant to Section 2 hereof and
this Section 3, each Holder covenants and agrees that (i) it will not offer or
sell any Registrable Securities under the Shelf Registration Statement until it
has received copies of the Prospectus as then amended or supplemented as
contemplated by Section 3(g) and notice from the Company that the Registration
Statement and any post-effective amendments thereto have become effective as
contemplated by Section 3(e); (ii) upon receipt of any notice from the Company
contemplated by Section 4(a) or Section 3(e) (in respect of the occurrence of an
event contemplated by clause (v) of Section 3(e)), such Holder shall not offer
or sell any Registrable Securities pursuant to the Shelf Registration Statement
until such Holder receives copies of the supplemented or amended Prospectus
contemplated by Section 3(h) hereof and receives notice that any post-effective
amendment has become effective, and, if so directed by the Company, such Holder
will deliver to the Company (at the expense of the Company) all copies in its
possession, other than permanent file copies then in such Holder's possession,
of the Prospectus as amended or supplemented at the time of receipt of such
notice; (iii) such Holder and any of its officers, directors or affiliates, if
any, will comply with the provisions of Regulation M under the Exchange Act as
applicable to them in connection with
7
<PAGE>
sales of Registrable Securities pursuant to the Shelf Registration Statement;
and (iv) such Holder and any of its officers, directors or affiliates, if any,
will enter into such written agreements as the Company shall reasonably request
to ensure compliance with clause (iii) above.
4. Suspension of Registration Rights; Black-out Period.
(a) Notwithstanding anything to the contrary set forth in this
Agreement, the Company's obligation under this Agreement to use its
best efforts to cause the Registration Statement and any filings with
any state securities commission to become effective or to amend or
supplement the Registration Statement shall be suspended in the event
and during such period that unforseen circumstances (including without
limitation (i) an underwritten primary offering by the Company if the
Company is advised by the underwriters that sale of Registrable
Securities under the Registration Statement would have a material
adverse effect on the primary offering or (ii) pending negotiations
relating to, or consummation of, a transaction or the occurrence of an
event that would require additional disclosure of material information
by the Company in the Registration Statement or such filing, as to
which the Company has a bona fide business purpose for preserving
confidentiality or which renders the Company unable to comply with SEC
requirements) (such unforeseen circumstances being hereinafter referred
to as a "Suspension Event") would make it impractical or unadvisable to
cause the Registration Statement or such filings to become effective or
to amend or supplement the Registration Statement, but such suspension
shall continue only for so long as such event or its effect is
continuing but in no event will that suspension exceed 60 days. The
Company shall notify the Holders of the existence and, in the case of
circumstances referred to in clause (i) of this Section 4(a), nature of
any Suspension Event. The Company may deliver only two such notices
within any 12-month period.
(b) Following the effectiveness of the Registration Statement
and the filings with any state securities commission, the Holders agree
that they will not effect any sales of the Registrable Securities
pursuant to the Registration Statement or any such filings at any time
after they have received notice from the Company to suspend sales as a
result of the occurrence or existence of any Suspension Event or so
that the Company may correct or update the Registration Statement or
such filing. The Holder may recommence effecting sales of the Shares
pursuant to the Registration Statement or such filings after the
earlier of 60 days or receipt of further notice to such effect from the
Company, which notice shall be given by the Company not later than five
days after the conclusion of any such Suspension Event. The Company may
deliver only two such notices within any 12-month period.
5. Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Holder and its officers and directors
and each
8
<PAGE>
Person, if any, who controls any Holder within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to which such
Holder, officer, director or controlling Person may become
subject under the Securities Act or otherwise (A) that arises
out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Shelf
Registration Statement (including all documents incorporated
therein by reference) or any amendment thereto, or the
omission or alleged omission therein of a material fact
required to be stated therein or necessary to make the
statements therein not misleading or (B) that arises out of or
is based upon any untrue statement or alleged untrue statement
of a material fact contained in any Prospectus (including all
documents incorporated therein by reference) or any amendment
or supplement thereto, or the omission or alleged omission
therein of a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation, or
investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or alleged untrue
statement or any omission or alleged omission, if such
settlement is effected with the written consent of the
Company; and
(iii) subject to the limitations set forth in Section
5(c), against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of counsel),
reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, in each
case whether or not a party, or any claim whatsoever based
upon any such untrue statement or alleged untrue statement or
omission or alleged omission, to the extent that any such
expense is not paid under Subparagraph (i) or (ii) above;
provided, however, that the indemnity provided pursuant to this Section
5(a) shall not apply to any Holder with respect to any loss, liability,
claim, damage or expense that arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information
furnished to the Company by such Holder expressly for use in the Shelf
Registration Statement or any amendment thereto or the
9
<PAGE>
Prospectus or any amendment or supplement thereto.
(b) Indemnification by Holders. Each Holder agrees to
indemnify and hold harmless the Company and the other selling Holders,
and each of their respective directors and officers (including each
director and officer of the Company who signed the Registration
Statement), and each Person, if any, who controls the Company or any
other selling Holder within the meaning of Section 15 of the Securities
Act, to the same extent as the indemnity contained in Section 5(a)
hereof, but only insofar as such loss, liability, claim, damage or
expense arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in the Shelf
Registration Statement or any amendment thereto or the Prospectus or
any amendment or supplement thereto in reliance upon and in conformity
with written information furnished to the Company by such selling
Holder expressly for use therein.
(c) Conduct of Indemnification Proceedings. Each indemnified
party shall give reasonably prompt notice to each indemnifying party of
any action or proceeding commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an
indemnifying party (i) shall not relieve it from any liability that it
may have under the indemnity agreement provided in Section 5(a) or (b)
above, unless and to the extent it did not otherwise learn of such
action and the lack of notice by the indemnified party materially
prejudices the indemnifying party or results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) shall
not, in any event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification obligation
provided under Section 5(a) or (b) above. After receipt of such notice,
the indemnifying party shall be entitled to participate in and, to the
extent it wishes, jointly with any other indemnifying party so
notified, assume the defense of such action or proceeding at such
indemnifying party's own expense with counsel chosen by such
indemnifying party and approved by the indemnified party, which
approval shall not be unreasonably withheld; provided, however, that if
the defendants in any such action or proceeding include both the
indemnified party and the indemnifying party and the indemnifying party
and the indemnified party reasonably determine, upon advice of counsel,
that a conflict of interest exists or that there may be legal defenses
available to the indemnified parties that are different from or in
addition to those available to the indemnifying party, then the
indemnifying party shall not be entitled to assume the defense of such
action or proceeding and the indemnified party shall be entitled to one
separate counsel, the reasonable fees and expenses of which counsel
shall be paid by the indemnifying party. If the indemnifying party does
not assume the defense of any such action or proceeding, after having
received the notice referred to in the first sentence of this Section
5(c), the indemnifying party will pay the reasonable fees and expenses
of counsel (which shall be limited to a single law firm) for the
indemnified party. In such event, however, no indemnifying party will
be liable for any settlement effected without the written consent of
such indemnifying party. If the indemnifying party assumes the defense
of any such action or proceeding in
10
<PAGE>
accordance with this Section 5(c), such indemnifying party shall not be
liable for any fees and expenses of counsel for the indemnified party
incurred thereafter in connection with such action or proceeding,
except as set forth in the proviso in the second sentence of this
Section 5(c).
(d) Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided
for in this Section 5 is for any reason held to be unenforceable,
although applicable in accordance with its terms, the Company and the
selling Holders shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such
indemnity agreement incurred by the Company and the selling Holders, in
such proportion as is appropriate to reflect the relative fault of and
benefits to the Company on the one hand and the selling Holders on the
other (in such proportions that the selling Holders are severally, not
jointly, responsible for the balance), in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits to the indemnifying party and
indemnified parties shall be determined by reference to, among other
things, the total proceeds received by the indemnifying party and
indemnified parties in connection with the offering to which such
losses, claims, damages, liabilities or expenses relate. The relative
fault of the indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether the action in
question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact,
has been made by, or relates to information supplied by, such
indemnifying party or the indemnified parties, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such action.
The parties hereto agree that it would not be just or
equitable if contribution pursuant to this Section 5(d) were determined
by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section 5(d), no selling Holder shall be required to contribute any
amount in excess of the amount by which the total price (less selling
commissions) at which the Registrable Securities of such selling Holder
were offered to the public exceeds the amount of any damages which such
selling Holder otherwise would have been required to pay by reason of
such untrue statement or omission.
Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who
was not guilty of such fraudulent misrepresentation. For purposes of
this Section 5(d), each Person, if any, who controls a Holder within
the meaning of Section 15 of the Securities Act and directors and
officers of a Holder shall have the same rights to contribution as such
Holder, and each director of the Company, each officer of the Company
who
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<PAGE>
signed the Registration Statement and each Person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act
shall have the same rights to contribution as the Company.
6. Rule 144 Sales.
(a) Compliance. The Company covenants that, so long as it is
subject to the reporting requirements of the Exchange Act, it will file
the reports required to be filed by it under the Exchange Act so as to
enable any Holder to sell Registrable Securities pursuant to Rule 144
under the Securities Act.
(b) Cooperation with Holders. In connection with any sale,
transfer or other disposition by the Holder of any Registrable
Securities pursuant to Rule 144 under the Securities Act, the Company
shall cooperate with such Holder to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be
sold and not bearing any Securities Act legend, and enable certificates
for such Registrable Securities to be for such number of shares and
registered in such names as the selling Holders may reasonably request
at least two business days prior to any sale of Registrable Securities.
7. Miscellaneous.
(a) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended,
modified, supplemented or waived, nor may consent to departures
therefrom be given, without the written consent of the Company and the
Holders of a majority of the outstanding Registrable Securities
hereunder (the Holders of Units being treated as the Holders of
Registrable Securities issuable upon redemption of such Units);
provided, however, that no amendment, modification, supplement or
waiver of, or consent to the departure from, the provisions of Sections
2, 5 or 6 hereof shall be effective as against any Holder of
Registrable Securities unless consented to in writing by such Holder of
Registrable Securities. Notice of any such amendment, modification,
supplement, waiver or consent adopted in accordance with this Section
7(a) shall be provided by the Company to each Holder of Registrable
Securities at least 30 days prior to the effective date of such
amendment, modification, supplement, waiver or consent.
(b) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier or any courier
guaranteeing overnight delivery, (i) if to a Holder, at the most
current address given by such Holder to the Company by means of a
notice given in accordance with the provisions of this Section 7(b),
which address initially is as specified in the Partnership Agreement,
or (ii) if to the Company, at 3710 One First Union Center, Charlotte,
North Carolina 28202, Attention: Philip S. Payne.
All such notices and communications shall be deemed to have
been duly
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<PAGE>
given: at the time delivered by hand if personally delivered; five
business days after being deposited in the mail, postage prepaid, if
mailed; when answered back if telexed; when receipt is acknowledged if
telecopied; or at the time delivered if delivered by an air courier
guaranteeing overnight delivery.
(c) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees
of each of the parties, including, without limitation and without the
need for an express assignment, subsequent Holders; provided, however,
that such assignees have entered into the lock-up agreement
contemplated by the respective Exchange Agreements (the "Lock-up
Agreement"). If any successor, assignee or transferee of any Holder
shall acquire Registrable Securities, in any manner, whether by
operation of law or otherwise and enter into the Lock-up Agreement,
such Registrable Securities shall be held subject to all of the terms
of this Agreement, and by taking and holding such Registrable
Securities and entering into such Lock-up Agreement, such Person shall
be entitled to receive the benefits hereof and shall conclusively be
deemed to have agreed to be bound by all of the terms and provisions
hereof.
(d) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same
agreement.
(e) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina
without giving effect to the conflicts of law provisions thereof.
(g) Specific Performance. The parties hereto acknowledge that
there would be no adequate remedy at law if any party fails to perform
any of its obligations hereunder, and accordingly agree that each
party, in addition to any other remedy to which it may be entitled at
law or in equity, shall be entitled to compel specific performance of
the obligations of any other party under this Agreement in accordance
with the terms and conditions of this Agreement in any court of the
United States or any State thereof having jurisdiction.
(h) Entire Agreement. This Agreement and the lock-up
provisions of the Exchange Agreements are intended by the parties as a
final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. This
Agreement and the lock-up provisions of the Exchange Agreements
supersede all prior agreements and understandings between the parties
with respect to such subject matter.
13
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
BODDIE-NOELL PROPERTIES, INC.
Attest: ______________________ By: _______________________________
HOLDER
____________________________________
Paul G. Chrysson
____________________________________
James G. Chrysson
____________________________________
W. Michael Gilley
____________________________________
James D. Yopp
____________________________________
Matthew G. Gallins
M.G. Gallins Family, LLC
By:
____________________________________
M.G. Gallins, Managing Member
14
<PAGE>
NAME OF EACH HOLDER
INDIVIDUAL HOLDERS
Paul G. Chrysson
James G. Chrysson
W. Michael Gilley
James D. Yopp
Matthew G. Gallins
HOLDERS THAT ARE LIMITED LIABILITY COMPANIES
M.G. Gallins Family, LLC
15
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
amendment no. 3 to the registration statement on Form S-2 (No. 333-39803) and
related prospectus of Boddie-Noell Properties, Inc. for the registration of
2,800,000 shares of its common stock and to the inclusion and incorporation by
reference therein of our report dated January 9, 1997, with respect to the
financial statements and schedule of Boddie-Noell Properties, Inc. included in
its Annual Report (Form 10-K) for the year ended December 31, 1996, filed with
the Securities and Exchange Commission and the inclusion of our report dated
September 12, 1997, with respect to the Combined Statement of Revenue and
Certain Operating Expenses of Acquired Properties for the year ended December
31, 1996.
/s/ Ernst & Young LLP
Raleigh, North Carolina
December 15, 1997
<PAGE>
Consent of Independent Auditors
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 31,
1996, included in Boddie-Noell Properties, Inc.'s Form 10-K for the year
ended December 31, 1996, and to all references to our firm included in this
registration statement. As independent public accountants, we hereby consent
to the use of our reports and to all references to our firm included in or
made a part of this registration statement.
/s/ Arthur Andersen LLP
-----------------------
Arthur Andersen LLP
Charlotte, North Carolina,
December 12, 1997.
<PAGE>
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that I, Paul G. Chrysson, a director of
Boddie-Noell Properties, Inc. (the "Company") hereby severally constitute
D. Scott Wilkerson and Philip S. Payne and each of them singly, my true and
lawful attorney with full power to them, and each of them singly, to sign for
me and in my name in my capacity as a director of the Company, the Registration
Statement (File No. 333-39803) with which this power of attorney is filed,
any and all amendments to said Registration Statement, any and all Registration
Statements filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the "Act"), that relate to this Registration Statement, and generally
to do all such things in my name and my capacity as a director to enable the
Company to comply with the provisions of the Act and all requirements of the
Securities and Exchange Commission, hereby ratifying and confirming my
signature as it may be signed by my said attorneys, or any of them, to said
Registration Statement or Registration Statement filed pursuant to Rule 462(b)
and any and all amendments thereto.
/s/ Paul G. Chrysson
----------------------------
Paul G. Chrysson, Director
<PAGE>
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that I, W. Michael Gilley, a director of
Boddie-Noell Properties, Inc. (the "Company") hereby severally constitute
D. Scott Wilkerson and Philip S. Payne and each of them singly, my true and
lawful attorney with full power to them, and each of them singly, to sign for
me and in my name in my capacity as a director of the Company, the Registration
Statement (File No. 333-39803) with which this power of attorney is filed,
any and all amendments to said Registration Statements, any and all Registration
Statements filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the "Act"), that relate to this Registration Statement, and generally
to do all such things in my name and my capacity as a director to enable the
Company to comply with the provisions of the Act and all requirements of the
Securities and Exchange Commission, hereby ratifying and confirming my
signature as it may be signed by my said attorneys, or any of them, to said
Registration Statement or Registration Statement filed pursuant to Rule 462(b)
and any and all amendments thereto.
/s/ W. Michael Gilley
----------------------------
W. Michael Gilley, Director
