As Filed with the Securities and Exchange Commission on October 10, 1997
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
BUCKHEAD AMERICA CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 58-2023732
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
4243 DUNWOODY CLUB DRIVE
SUITE 200
ATLANTA, GEORGIA 30350
(770) 393-2662
(Address, including zip code, and telephone number,
including area code, of
registrant's principal executive offices)
---------------
DOUGLAS C. COLLINS, CEO COPIES OF COMMUNICATIONS TO:
BUCKHEAD AMERICA CORPORATION B. JOSEPH ALLEY, JR., ESQ.
4243 DUNWOODY CLUB DRIVE ARNALL GOLDEN & GREGORY, LLP
SUITE 200 2800 ONE ATLANTIC CENTER
ATLANTA, GEORGIA 30350 1201 WEST PEACHTREE STREET
(770) 393-2662 ATLANTA, GEORGIA 30309
(Name, address, including zip code (404) 873-8500
and telephone number, including area
code, of agent for service)
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE
SECURITIES TO THE PUBLIC: From time to time after this
Registration Statement becomes effective.
---------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
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 of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Aggregate Offering Amount of
Securities to be Registered Registered Per Share(1) Price(1) Registration Fee(1)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 106,320 Shares $8.06 $860,128.80 $260.65
=============================================================================================================================
</TABLE>
(1) Calculated pursuant to Rule 457(c) and based on the average of the high and
low prices of the Company's Common Stock on October 3, 1997 as reported on The
Nasdaq Stock Market.
------------------
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.
473492.5
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED OCTOBER 10, 1997
PROSPECTUS
BUCKHEAD AMERICA CORPORATION
106,320 SHARES OF COMMON STOCK
$.01 PAR VALUE PER SHARE
This Prospectus relates to an aggregate of 106,320 shares of Common
Stock, $.01 par value per share (the "Common Stock"), of Buckhead America
Corporation, a Delaware corporation ("Buckhead" or the "Company"). All of the
Common Stock offered hereby may be sold from time to time by and for the account
of the Selling Shareholders named in this Prospectus (the "Selling
Shareholders"), or for the account of pledgees, donees, transferees or other
successors in interest of the Selling Shareholders. See "Selling Shareholders"
herein.
The methods of sale of the Common Stock offered hereby are described
under the heading "Plan of Distribution." The Company will receive none of the
proceeds from such sales. Except as set forth below, the Company will pay all
expenses (other than underwriting and brokerage expenses, fees, discounts, and
commissions, all of which will be paid by the Selling Shareholders) incurred in
connection with the offering described in this Prospectus, estimated at $10,000
(including SEC filing fees). See "Selling Shareholders" herein.
The Selling Shareholders and any broker-dealers that participate in the
distribution of the Common Stock offered hereby may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"1933 Act"), and any commission or profit on the resale of shares received by
such broker-dealers may be deemed to be underwriting commissions and discounts
under the 1933 Act. Upon the Company's being notified by the Selling
Shareholders that any material arrangement has been entered into with a broker
or dealer for the sale of the shares through a secondary distribution, or a
purchase by a broker or dealer, a supplemented Prospectus will be filed, if
required, disclosing among other things the names of such brokers and dealers,
the number of shares involved, the price at which such shares are being sold and
the commissions paid or the discounts or concessions allowed to such
broker-dealers.
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING ON PAGE 4.
Sales of the Common Stock may also be made for the account of the
Selling Shareholders, or for the account of donees, transferees or other
successors in interest of the Selling Shareholders, pursuant to Rule 144 under
the 1933 Act. The Common Stock of the Company is listed on The Nasdaq Stock
Market's National Market System (Symbol: BUCK). On October 3, 1997, the closing
price of the Common Stock was $8.06 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-----------------
THE DATE OF THIS PROSPECTUS IS OCTOBER 10, 1997.
473492.5
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission, 450
Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549; and at
regional offices of the Commission at the Citicorp Center, 500 West Madison,
Suite 1400, Chicago, Illinois 60661 and at 7 World Trade Center, New York, New
York 10048. Copies of such material may be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Such material may also be inspected and copied at
the offices of The Nasdaq Stock Market, 1735 K Street, Washington, D.C.
20006-1500, on which the Company's Common Stock is listed. In addition, the
Commission maintains a site on the World Wide Web portion of the Internet that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The address
of such site is http://www.sec.gov.
As permitted by the rules and regulations of the Commission, this
Prospectus omits certain information contained in the Registration Statement on
Form S-3, as amended (the "Registration Statement"), of which this Prospectus is
a part. For further information with respect to the Company and the Common
Stock, reference is made to the Registration Statement and the exhibits thereto.
Statements made in this Prospectus as to the contents of any contract, agreement
or other document are not necessarily complete; and while the Company believes
the descriptions of the material provisions of such contracts, agreements and
other documents contained in this Prospectus are accurate summaries of such
material provisions, reference is made to such contract, agreement or other
document filed as an exhibit to the Registration Statement for a more complete
description of the matter involved, and each such statement is qualified in its
entirety by such reference.
NOTE: THE DISCUSSIONS IN THIS PROSPECTUS CONTAIN FORWARD LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. STATEMENTS CONTAINED IN THIS
PROSPECTUS THAT ARE NOT HISTORICAL FACTS ARE FORWARD LOOKING STATEMENTS THAT ARE
SUBJECT TO THE SAFE HARBOR CREATED BY THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995. A NUMBER OF IMPORTANT FACTORS COULD CAUSE THE COMPANY'S ACTUAL
RESULTS FOR 1997 AND BEYOND TO DIFFER MATERIALLY FROM PAST RESULTS AND FROM
THOSE EXPRESSED OR IMPLIED IN ANY FORWARD LOOKING STATEMENTS MADE BY, OR ON
BEHALF OF, THE COMPANY. THESE FACTORS INCLUDE, WITHOUT LIMITATION, THOSE LISTED
UNDER THE HEADING "RISK FACTORS."
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company hereby incorporates by reference in this Prospectus the
following documents previously filed with the Commission pursuant to the
Exchange Act: (i) Annual Report of the Company on Form 10-KSB, as amended, for
the year ended December 31, 1996, (ii) Quarterly Reports of the Company on Form
10-QSB and Form 10-QSB/A for the quarters ended March 31, 1997 and June 30,
1997, (iii) Current Reports of the Company on Form 8-K and Form 8-K/A filed
April 25, 1997, May 22, 1997, May 29, 1997, June 9, 1997, July 22, 1997 and
October 8, 1997, (iv) Definitive Proxy Statement filed with the Securities and
Exchange Commission on June 9, 1997 and (v) the description of the Company's
Common Stock contained in the Company's registration statement filed under
Section 12 of the Exchange Act effected by filing of Form 10-SB, including any
amendment or report filed for the purpose of updating such description.
Each document filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Common Stock pursuant hereto shall be
deemed to be incorporated by reference in this Prospectus and to be a part of
this Prospectus from the date of filing of such document. Any statement
contained in this Prospectus or in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to be modified or
superseded for purposes of the Registration Statement and this Prospectus to the
extent that a statement contained in this Prospectus or in any subsequently
filed document that also is or is deemed to be incorporated by reference in this
Prospectus modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of any such person, a
copy of any or all of the documents that are incorporated by reference
473492.5
2
<PAGE>
in this Prospectus, other than exhibits to such documents (unless such exhibits
are specifically incorporated by reference into such documents). Requests should
be directed to Buckhead America Corporation, Attn: Chief Financial Officer, 4243
Dunwoody Club Drive, Suite 200, Atlanta, Georgia 30350, telephone (770)
393-2662.
THE COMPANY
Buckhead was incorporated in Delaware on December 17, 1992 in
connection with the bankruptcy reorganization of Buckhead America Corporation
("Old Buckhead"), a Georgia corporation formerly known as Days Inns of America,
Inc. ("Days Inns"), and certain of its affiliates. The Company, the
successor-in-interest to certain assets and liabilities of Days Inns, commenced
operations on December 29, 1992.
The Company operates in the hospitality industry, and its principal
holdings include hotels, loans and other investments secured by hotels,
franchising rights and other related assets. Its principal product is the
Country Hearth Inn mid-priced hotel chain which the Company acquired in May
1994. The primary activity of the Company involves the expansion of the Country
Hearth chain. Expansion of the chain has been effected through direct
acquisition and conversion of existing hotels and through franchise sales. As of
September 30, 1997, thirty Country Hearth Inns were open and operating in 11
states, 14 of which were Company owned.
A substantial portion of the Company's assets were transferred to it by
Old Buckhead. In addition to a significant amount of cash, the principal assets
transferred to the Company were notes receivable primarily secured by limited
service hotel properties, other unsecured receivables, and limited service hotel
properties acquired through foreclosure. As a result of the assets transferred
to it, the initial operations of the Company included mortgage servicing and
hotel management.
The Company's principal business strategy is to provide high quality,
responsive hotel management and franchise services designed to improve hotel
profitability, and to provide its hotel guests with a high level of
satisfaction. In executing this business strategy the Company seeks to implement
policies and programs designed to increase revenues while minimizing operating
expenses. The Company seeks to grow hotel revenues by continuing to strengthen
the Country Hearth brand and implementing national, regional and local sales and
marketing programs. The Company's growth strategy is focused on (i) improving
the revenue and operating performance of its existing hotels; and (ii)
increasing the number of rooms under its management or brand in its hotel
portfolio.
There is significant competition in every phase of the hospitality
industry including development, construction, management, franchising, and in
loan servicing. The Company competes in a very limited way with other hotel
management companies because the Company generally manages only hotels which it
owns. There are many hotel management companies in the United States, and many
of them are significantly larger than the Company. The Company's operations also
involve collecting and servicing hotel mortgage receivables. The terms of these
mortgages are fixed. The Company does not compete as it relates to those
mortgages. However, the mortgages are on hospitality related properties and the
collectibility of the mortgages could be affected by competition in the
hospitality industry. There are numerous hotel chains that operate on a national
and regional basis. There is significant competition in the areas of price,
location, quality and service. This competition could affect the collectibility
of these mortgages. See "Risk Factors -- Hotel Industry Risks -- Competition."
As a franchisor, the Company competes with a large number of hotel
franchise companies, most of whom are much larger than the Company and own
brands which are more nationally recognized than the Company's. See "Risk
Factors -- Risks Related to Franchisor Operations."
As of September 30, 1997, the Company has 35 full-time corporate
employees and approximately 300 full-time and approximately 100 part-time hotel
employees. No Company personnel are presently employed under collective
bargaining agreements.
473492.5
3
<PAGE>
RECENT DEVELOPMENTS
On May 8, 1997, the Company acquired all the outstanding capital stock
of The Lodge Keeper Group, Inc., an Ohio corporation ("LodgeKeeper"), pursuant
to the terms of a Stock Purchase Agreement dated March 7, 1997 by and among the
Company, LodgeKeeper and the stockholders of LodgeKeeper. LodgeKeeper managed 24
hotels in Ohio, Indiana and Michigan. Pursuant to the Stock Purchase Agreement,
the Company issued 106,320 shares of its Common Stock and paid approximately
$825,000 in cash to the former LodgeKeeper stockholders.
On September 23, 1997, pursuant to an Agreement of Merger dated March
11, 1997 ("Merger Agreement"), Hatfield Inns, LLC, a Delaware limited liability
company ("Hatfield"), an operator of eight Hatfield Inns (one currently under
construction) located in Kentucky and Missouri, was merged into the Company's
subsidiary, BLM-RH, Inc., a Delaware corporation. Pursuant to the Merger
Agreement, the Company issued $3 million (30,000 shares) of Series A preferred
stock and assumed approximately $7.12 million in debt.
RISK FACTORS
In addition to the other information in this Prospectus, the following
risk factors should be considered carefully in evaluating an investment in the
Common Stock offered hereby.
This Prospectus contains statements which constitute forward looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Those statements appear in a number of places in this Prospectus and
include statements regarding the intent, belief or current expectations of the
Company, its Directors or its officers with respect to (i) the declaration or
payment of dividends, (ii) the finalization of the terms of, or the consummation
of, acquisitions, (iii) the management or operation of hotels to be acquired,
(iv) the Company's financing plans, (v) the policies of the Company regarding
investments, dispositions, financings, conflicts of interest or other matters,
or (vii) trends affecting the Company's or any hotel's financial condition or
results of operations. Prospective investors are cautioned that any such forward
looking statements are not guarantees of future performance and involve risks
and uncertainties, and that actual results may differ materially from those in
the forward looking statements as a result of various factors. The accompanying
information contained in this Prospectus, including without limitation the
information set forth below and the information under the heading "The Company,"
identify important factors that could cause such differences.
REAL ESTATE INVESTMENT RISKS
General Risks of Investing in Real Estate
The Company's interests in undeveloped real properties and hotels (the
"Hotels") are real estate assets and are subject to the varying risks associated
with assets of such nature. Because real estate assets are relatively illiquid,
the Company's ability to respond promptly to changes in economic or other
conditions by altering its portfolio may be limited. In addition, income from
these properties or debt service on certain unpledged mortgage notes owned by
the Company (the "Unpledged Mortgage Notes") may be adversely affected by the
general economic climate, local conditions such as oversupply of hotels or a
reduction in demand for hotels in the area, the attractiveness of the properties
to customers, competition from other available hotels, the ability of the owner
to provide adequate maintenance and insurance, and increased operating costs
(including real estate taxes).
The Company's investments in the Hotels are subject to varying degrees
of risk generally incident to the ownership of real property. The underlying
value of the Company's real estate investments and the Company's income and
ability to make distributions to its stockholders are both dependent upon the
ability of the Company to operate the Hotels in a manner sufficient to maintain
or increase room revenues and to generate sufficient income in excess of
operating expenses. Income from the Hotels may be adversely affected by adverse
changes in national economic conditions and neighborhood characteristics,
competition from other hotel properties, changes in interest rates and in the
availability, cost and terms of mortgage funds, the impact of present or future
environmental legislation and compliance with environmental laws, the ongoing
need for capital improvements, particularly in older structures, changes in real
property tax rates and other operating expenses, changes in governmental rules
and fiscal policies, civil unrest, acts of God, including earthquakes, floods,
and other natural disasters (which may result in
473492.5
4
<PAGE>
uninsured losses), acts of war, adverse changes in zoning laws, and other
factors which are beyond the control of the Company.
Illiquidity of Real Estate
Real estate investments are relatively illiquid. The ability of the
Company to vary its portfolio in response to changes in economic and other
conditions is limited. Further, although the Hotels have been appraised, no
assurances can be given that such appraised values reflect market value. Also,
no assurances can be given that the market value of any of the Hotels will not
decrease in the future. There can be no assurance that the Company will be able
to dispose of an investment when it finds disposition advantageous or necessary
or that the sale price of any disposition will recoup or exceed the amount of
the Company's investment.
Environmental Matters
The Company's operating costs may be affected by the obligation to pay
for the cost of complying with existing environmental laws, ordinances and
regulations, as well as the cost of future legislation. Under various federal,
state and local environmental laws, ordinances and regulations, a current or
previous owner or operator of real property may be liable for the costs of
removal or remediation of hazardous or toxic substances on, under or in such
property. Such laws often impose liability whether or not the owner or operator
knew of, or was responsible for, the presence of such hazardous or toxic
substances. In addition, the presence of contamination from hazardous or toxic
substances, or the failure to remediate such contaminated property properly, may
adversely affect the owner's ability to borrow using such real property as
collateral. Persons who arrange for the disposal or treatment of hazardous or
toxic substances also may be liable for the costs of removal or remediation of
such substances at the disposal or treatment facility, whether or not such
facility is or ever was owned or operated by such person. Certain environmental
laws and common-law principles could be used to impose liability for releases of
hazardous materials, including asbestos-containing materials ("ACMs"), into the
environment, and third parties may seek recovery from owners or operators of
real properties for personal injury associated with exposure to released ACMs or
other hazardous materials. Environmental laws also may impose restrictions on
the manner in which property may be used or transferred or in which businesses
may be operated, and these restrictions may require expenditures. In connection
with the ownership of the Hotels, the Company may be potentially liable for any
such costs. The cost of defending against claims of liability or remediating
contaminated property and the cost of complying with environmental laws could
materially adversely affect the Company's results of operations and financial
condition. Phase I environmental site assessments ("ESAs") have been obtained on
all of the Hotels to identify potential environmental contamination and
regulatory compliance concerns that are made apparent from historical reviews of
the Hotels, reviews of certain public records, preliminary investigations of the
sites and surrounding properties, and screening for the presence of hazardous
substances, toxic substances, and storage tanks. Other than identifying the
underground storage tanks at the Days Inn hotel in Daytona, Florida (the
"Daytona Hotel"), which have been replaced in a manner which the Company
believes is in compliance with applicable laws, the ESAs have not revealed any
significant environmental contamination or compliance concerns that the Company
believes would have a material adverse effect on the Company's business, assets,
results of operations or liquidity, nor is the Company aware of any such
liability or concerns. Nevertheless, it is possible that these ESAs do not
reveal all environmental liabilities or compliance concerns or that there are
material environmental liabilities or compliance concerns of which the Company
is unaware. Although the Company believes that the underground storage tanks at
the Daytona Hotel have been properly handled in accordance with applicable
environmental laws, there can be no assurance that there are not violations of
which the Company is unaware.
Uninsured and Underinsured Losses
The Company's mortgage obligations require that comprehensive insurance
be maintained on each of the Hotels, including liability, fire and extended
coverage. Management believes such specified coverage is of the type and amount
customarily obtained for or by an owner of real property assets. Mortgages for
subsequently acquired hotels may contain similar provisions. However, there are
certain types of losses, generally of a catastrophic nature, such as earthquakes
and floods, that may be uninsurable or not economically insurable. The Company's
officers use their discretion in determining amounts, coverage limits and
deductibility provisions of insurance, with a view to maintaining appropriate
insurance coverage on the Company's investments at a reasonable cost and on
suitable terms. This may result in insurance coverage that, in the event of a
substantial loss, would not be sufficient to pay the full current market value
or current replacement cost of the Company's lost investment. Inflation, changes
in building codes and ordinances, environmental considerations, and other
factors also might make it infeasible to use
473492.5
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insurance proceeds to replace the property after such property has been damaged
or destroyed. Under such circumstances, the insurance proceeds received by the
Company might not be adequate to restore its economic position with respect to
such property.
Compliance with Americans with Disabilities Act and Other Changes in
Governmental Rules and Regulations
The lodging industry is subject to numerous federal, state and local
government regulations, including those relating to the preparation and sale of
food and beverages (such as health and liquor license laws) and building and
zoning requirements. Also, the Company is subject to laws governing its
relationship with employees, including minimum wage requirements, overtime,
working conditions and work permits requirements. The failure to obtain or
retain liquor licenses or an increase in the minimum wage rate, employee benefit
costs or other costs associated with employees, could adversely affect the
Company. Both at the federal and state level, there are proposals under
consideration to increase the minimum wage and introduce a system of mandated
health insurance.
Under the Americans with Disabilities Act of 1990 (the "ADA"), all
public accommodations are required to meet certain federal requirements related
to access and use by disabled persons. While the Company believes that the
Hotels are substantially in compliance with these requirements, a determination
that the Company is not in compliance with the ADA could result in imposition of
fines or an award of damages to private litigants. In addition, changes in
governmental rules and regulations or enforcement policies affecting the use and
operation of the Hotels, including changes to building codes and fire and life
safety codes, may occur. If the Company were required to make substantial
modifications at the Hotels to comply with the ADA or other changes in
governmental rules and regulations, the Company's ability to make expected
distributions to its stockholders could be adversely affected.
Fluctuations in Property Taxes
Each Hotel is subject to real and personal property taxes. The real and
personal property taxes on hotel properties in which the Company invests may
increase or decrease as tax rates change and as the properties are assessed or
reassessed by taxing authorities. If property taxes increase, the Company's
ability to make expected distributions to its stockholders could be adversely
affected.
HOTEL INDUSTRY RISKS
Operating Risks
The Hotels owned by the Company or pledged to it as security for
Unpledged Mortgage Notes are generally located in areas that contain numerous
lodging facilities. Competition among such facilities is generally intense.
Additional construction of lodging facilities in the market areas where the
hotel properties are located, without an accompanying increase in demand for
such facilities, would likely result in an excess supply of available rooms and
a decrease in occupancy and/or room rates. In addition, the hotel properties may
be subject to risks of geographic concentration, because many of them are
located in the southeastern and Midwestern United States. This concentration
could subject such properties to prevailing economic conditions in these
geographic regions in which the properties are located. Business failures and
layoffs by companies experiencing losses have led to increased unemployment and
consumer uncertainty. As a result, fewer people from the northeast may be
inclined to travel either within the region or to the southeast, traditionally
one of the nation's preferred vacation areas. These factors could result in
lower operating revenues for southeastern hotel properties.
The Hotels are subject to all operating risks common to the hotel
industry. These risks include, among other things, competition from other
hotels; over-building in the hotel industry, which adversely affects occupancy
and revenues; increases in operating costs due to inflation and other factors,
which increases have not been, and may not be, offset by increased room rates;
dependence on business and commercial travelers and tourism; increases in energy
costs and other expenses affecting travel; and adverse effects of general and
local economic conditions. These factors could adversely affect the Company's
results of operations and therefore the Company's ability to make expected
distributions to stockholders.
473492.5
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Competition
Competition for Guests; Operations. The hotel industry is highly
competitive. The Hotels compete with other hotel properties in the geographic
markets. Many of the Company's competitors have substantially greater marketing
and financial resources than the Company.
Competition for Acquisitions. The Company competes for investment
opportunities with entities which have substantially greater financial resources
than the Company. These entities generally may be able to accept more risk than
the Company can manage prudently. Competition generally may reduce the number of
suitable investment opportunities offered to the Company and may increase the
bargaining power of property owners seeking to sell. Further, the Company
believes that competition from entities organized for purposes substantially
similar to the Company's objectives has increased and will increase
significantly in the future.
Operational Risks of Rapid Growth
Since the Chapter 11 Proceedings, the Company has acquired 34
additional hotels. See "The Company" and "Recent Developments." The size and
geographic dispersion of the Company's hotel properties have increased
substantially, resulting in the Company's need for additional management, sales
and accounting personnel. However, there can be no assurance that the Company
will be able to retain the services of existing employees of the Hotels or hire
additional accounting and marketing personnel. To the extent the Company is
unable to retain or hire experienced personnel to operate the Hotels, the
operations of the Hotels could be adversely affected. The Company's growth
strategy also contemplates acquisitions of additional hotels that meet the
Company's investment criteria, further increasing the size and geographic
dispersion of its hotel properties. Failure of the company to hire sufficient
personnel for such expanded operations could have a material adverse effect on
the Company's operating results. Deteriorating operations could negatively
impact revenues at the Hotels and, therefore, the cash available for
distribution to stockholders. Further, deteriorating operations could negatively
impact the Company's operating results.
Investment Concentration in Certain Segments of Single Industry
The Company's investment strategy is to acquire interests in mid-priced
hotel properties. Therefore, a downturn in the hotel industry, in general, and
the mid-priced segment, in particular, will have a material adverse effect on
the Company's lease revenues and amounts available for distribution to its
stockholders.
Seasonality of Hotel Industry
The hotel industry is seasonal in nature. Generally, hotel revenues are
greater in the second and third quarters than in the first and fourth quarters.
This seasonality can be expected to cause quarterly fluctuations in the
Company's revenues. Quarterly earnings may be adversely affected by factors
beyond the Company's control, including poor weather conditions and economic
factors. The Company may be required to enter into short-term borrowing in the
first and fourth quarters in order to offset such fluctuations in revenues and
to fund the Company's anticipated obligations, including distributions to its
stockholders.
Emphasis on Country Hearth Inn Hotels
Of the 34 Hotels, 14 are operated as Country Hearth Inn hotels. In
addition, the Company franchises 16 Country Hearth Inn hotels. Significant
adverse changes in the operations of any Hotel could have a material adverse
effect on revenues and the Company's ability to make expected distributions to
its stockholders. In addition, because all of the hotels for which the Company
is the franchisor are operated as Country Hearth Inn hotels and because the
Company intends to place an emphasis on Country Hearth Inn hotels in its growth
strategy, the Company is subject to risks inherent in concentrating investments
in a single franchise brand, such as a reduction in business following adverse
publicity related to the brand, which could have an adverse effect on the
Company's revenues and amounts available for distribution to stockholders.
Over-building. Over-construction of lodging facilities previously has
resulted in an excess supply of available rooms. A period of over-building
occurred in the 1980s, and the resulting over-supply of rooms adversely affected
occupancy levels and room rates in the lodging industry. Although much of the
over-supply of rooms has
473492.5
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<PAGE>
been absorbed largely as a result of the growth in demand during the past
several years, there can be no assurance that an over-supply of rooms will not
exist again in the future.
Inflation. Inflationary pressures can increase operating expenses,
including labor and energy costs, for the Company and its hotels above expected
levels and beyond the Company's ability to pass such costs on to customers
through increased room charges. Inflation can have secondary effects on
occupancy rates by increasing the expense or decreasing the popularity of
travel. Although the inflation rate has been low recently, it could increase
significantly during the useful lives of the Company's hotels.
Capital Expenditures
The Company's hotel properties have an ongoing need for renovations and
other capital improvements, including periodic replacement of furniture,
fixtures and equipment. The cost of such capital improvements could have an
adverse effect on the Company's financial condition. In addition, the Company's
hotel properties may require significant renovation in the future. Such
renovations involve certain risks, including the possibility of environmental
problems, construction cost overruns and delays, the possibility that the
Company will not have available cash to fund renovations or that financing for
renovations will not be available on favorable terms, uncertainties as to market
demand or deterioration in market demand after commencement of renovation and
the emergence of unanticipated competition from hotels. During 1996, the Company
spent approximately $1.7 million for capital improvements to the Hotels and
$750,000 to date during 1997. Other than conversions which vary, the Company
generally spends approximately 3% to 5% of gross revenues per year on capital
improvements for each Hotel. The Company intends to fund such improvements out
of future cash from operations, present cash balances or the Company's available
borrowing capacity.
CONSTRAINTS ON ACQUISITIONS; LACK OF CAPITAL
The Company intends to continue to pursue a growth strategy which
includes acquiring hotel properties. There is a risk that the Company will not
have access to sufficient equity capital to pursue its acquisition strategy. As
of September 30, 1997, the Company has approximately $23.5 million of debt
outstanding and, without additional equity financing, the maximum amount the
Company can borrow under its debt limitations is approximately $50 million,
assuming that all additional borrowings are invested in hotel properties. The
Company's ability to continue making acquisitions will depend primarily on its
ability to obtain additional private or public debt or equity financing. There
is no assurance that such financing will be available. The Company does not
presently have a working capital facility nor are there any assurances that it
could obtain a working capital facility to the extent that it determined that
such a facility was necessary.
HOTEL RENOVATION RISKS
The renovation of hotels involves risks associated with construction
and renovation of real property, including the possibility of construction cost
overruns and delays due to various factors (including the inability to obtain
regulatory approvals, inclement weather, labor or material shortages and the
unavailability of construction and permanent financing) and market or site
deterioration after acquisition or renovation. Any unanticipated delays or
expenses in connection with the renovation of hotels could have an adverse
effect on the results of operations and financial condition of the Company.
COMMON STOCK PRICE FLUCTUATIONS AND TRADING VOLUME
A number of factors may adversely influence the price of the Company's
Common Stock in public markets, many of which are beyond the control of the
Company. In particular, an increase in market interest rates will result in
higher yields on other financial instruments and may lead purchasers of shares
of Common Stock to demand a higher annual distribution rate on the price paid
for shares from distributions by the Company, which could adversely affect the
market price of the shares of Common Stock. Although the Company's Common stock
is listed on The Nasdaq Stock Market, the daily trading volume of hospitality
stocks in general and the Company's shares in particular may be lower than the
trading volume of certain other industries. As a result, investors in the
Company who desire to liquidate substantial holdings at a single point in time
may find that they are unable to dispose of such shares in the market without
causing a substantial decline in the market value of such shares.
473492.5
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<PAGE>
DIVIDEND POLICY
On November 10, 1994, the Company declared a special $6.00 per share
cash distribution to stockholders of record on November 21, 1994. Such
distribution, which aggregated $10,359,862, was paid on December 1, 1994.
The Company has no specific restrictions which prohibit the payment of
dividends to its stockholders other than certain financial covenants regarding
the Company's net worth and debt to equity ratio contained in the first mortgage
loan related to the Company's purchase of three hotel properties in Texas from
affiliates of American Liberty Hospitality, Inc. Dividends, if any, would be
limited to unrestricted cash and other assets not otherwise pledged. The Company
does not intend to pay dividends in the foreseeable future. All current and
accrued dividends on the Series A Preferred Stock must be paid prior to the
payment of any dividends on Common Stock, and there can be no assurance that the
Company can generate sufficient funds to pay dividends even absent such
restrictions.
CREDIT RISK; ADEQUACY OF ALLOWANCE FOR LOAN LOSSES
A portion of the Company's assets are invested in notes receivable.
There are certain risks inherent in holding such notes as investments, including
risks with respect to the period of time over which notes may be repaid, risks
resulting from changes in economic and industry conditions, risks inherent in
dealing with individual borrowers and, in the case of a collateralized note,
risks resulting from uncertainties as to the future value of the collateral.
Management maintains an allowance for loan losses based on, among other things,
historical experience, an evaluation of economic conditions, and regular reviews
of delinquencies and loan portfolio quality. Based upon such factors, management
makes various assumptions and judgements about the ultimate collectibility of
the loan portfolio and provides an allowance for potential loan losses based
upon a percentage of the outstanding balances and for specific notes when their
ultimate collectibility is considered questionable. Although management believes
that its allowance for loan losses is adequate, there can be no assurance that
the allowance will prove sufficient to cover future losses. Further, future
adjustments may be necessary if economic conditions differ or adverse
developments arise with respect to the Company's nonperforming or performing
notes. Material additions to the Company's allowance for loan losses would
result in a material decrease in the Company's net income and, possibly, its
capital, and could result in its inability to pay dividends, among other adverse
consequences.
ANTI-TAKEOVER MATTERS
The Company's Certificate of Incorporation and By-laws contain
provisions that may have the effect of delaying, deterring or preventing a
takeover of the Company that the Company's stockholders may consider to be in
their best interest. The Company's Certificate of Incorporation grants the Board
of Directors the authority to issue up to 200,000 shares of preferred stock (of
which 30,000 shares have been issued and designated as Series A Preferred
Stock), having such rights, preferences and privileges as designated by the
Board of Directors without stockholder approval. In addition, Section 203 of the
Delaware General Corporation Law, which is applicable to the Company, contains
provisions that restrict certain business combinations with interested
stockholders, which may have the effect of inhibiting a non-negotiated merger or
other business combination involving the Company.
RISKS OF OPERATING HOTELS UNDER FRANCHISOR AGREEMENTS
Certain of the hotels owned, operated or managed by the Company are subject
to third-party franchise license agreements with franchisors such as Days Inn of
America, Inc., and Travel Lodge (the "Franchisors"). The continuation of the
franchise licenses is subject to the maintenance of specified operating
standards and other terms and conditions. The Franchisors periodically inspect
their licensed hotels to confirm adherence to their maintenance and operating
standards. The Company or the applicable joint venture is responsible for
routine maintenance and repair expenditures with respect to such hotels. The
failure to maintain the standards or adhere to the other terms and conditions of
the franchise license agreements could result in the loss or cancellation of
such franchise licenses. It is possible that a Franchisor could condition the
continuation of a franchise license upon the completion of substantial capital
improvements, which the Company or the applicable joint venture may determine to
be too expensive or otherwise unwarranted in light of general economic
conditions or the operating results or prospects of the affected hotel. The loss
of any franchise license could have a material adverse effect upon the
operations and the underlying value of the hotel covered by such license because
of the loss of associated name recognition,
473492.5
9
<PAGE>
marketing support and centralized reservation systems, provided by the
Franchisor. The loss of a franchise license for a significant number of hotels
could have a material adverse effect on the Company's revenues.
RISKS RELATED TO FRANCHISE OPERATIONS
As a franchisor, the Company's products are its brand names and the
support services it provides to its franchisees. Competition among national
brand franchisors in the hotel industry to grow their franchise systems is
intense. In addition, smaller chains pose some degree of competitive pressure in
selected markets. The Company believes that competition for the sale of
franchises in such industries is based principally upon the perceived value and
quality of the brand and services as well as the nature of those services
offered to franchisees. The Company believes that prospective franchisees value
a franchise based upon their view of the relationship of conversion costs and
future charges to the potential for increased revenue and profitability.
The Company's revenue from franchise operations varies directly with
franchisees' gross revenue, but is not directly dependent upon franchisees'
profitability. However, the Company believes that the perceived value of its
brand names to prospective franchisees is in part a function of the success of
its existing franchisees. The ability of the Company's franchisees to compete in
the hotel industry is important to the Company's prospects because franchise
fees are based on franchisees' gross revenue. The Company's franchisees are
generally in intense competition with franchisees of other systems, independent
operators and owner-operated chains. Competition in the hotel industry is based
upon many factors, each of which may be more or less important in a given market
and location. A franchisee's success may also be affected by general, regional
and local economic conditions. See "Hotel Industry Risks - Competition."
The sale of franchises is regulated by various state laws as well as by
the Federal Trade Commission (the "FTC"). The FTC requires that franchisors make
extensive disclosure to prospective franchisees but does not require
registration. A number of states require registration or disclosure in
connection with franchise offers and sales. In addition, several states have
"franchise relationship laws" or "business opportunity laws" that limit the
ability of franchisors to terminate franchise agreements or to withhold consent
to the renewal or transfer of these agreements. While the Company's franchising
operations are not materially adversely affected by such existing regulations,
the Company cannot predict the effect any future legislation or regulation may
have on its business operations or financial condition.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Common Stock offered by the Selling Shareholders.
473492.5
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<PAGE>
SELLING SHAREHOLDERS
The Buckhead America Corporation Common Stock to which this Prospectus
relates is being offered by former shareholders (the "LodgeKeeper Selling
Shareholders") of LodgeKeeper Group, Inc., an Ohio corporation ("LodgeKeeper").
The Company acquired all of the assets of LodgeKeeper effective as of May 8,
1997. An aggregate of 106,320 shares were issued to the LodgeKeeper Selling
Shareholders in connection with the acquisition. The LodgeKeeper Selling
Shareholders received demand registration rights with respect to all of the
shares of the Company's Common Stock received by them pursuant to the
acquisition, and have exercised their rights with respect to 106,320 shares of
Common Stock.
The following table states the number of shares of Common Stock of the
Company beneficially owned by the Selling Shareholders as of September 30, 1997,
and the number of such shares which may be sold for the account of the Selling
Shareholders.
<TABLE>
<CAPTION>
Name of Beneficial Ownership Number of Beneficial Ownership
Selling Shareholder Prior to the Offering(1) Shares Offered After the Offering(2)
- ------------------- ------------------------ -------------- ---------------------
Shares Percentage Shares Percentage
------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C>
Ronald L. Devine 65,452 3.5 65,452 0 0%
Edward W. Hutchman 8,792 * 8,792 0 0%
James M. Devine 1,221 * 1,221 0 0%
David L. Wright 977 * 977 0 0%
Francis L. Bean, Jr. 489 * 489 0 0%
Harry R. Uber 611 * 611 0 0%
Paul L. Ludwig 13,412 * 13,412 0 0%
Robert C. Ludwig, Jr. (3) 15,366 * 15,366 0 0%
The Robert C. Ludwig 13,412 * 13,412 0 0%
Family Trust U/A Dated
December 26, 1996
- ------------------------
</TABLE>
(1) Percentage is the percentage of outstanding shares of each class of
Common Stock beneficially owned as of September 30, 1997. As of such
date, 1,897,780 shares of Common Stock were outstanding.
(2) Assumes all offered securities will be sold.
(3) The shares beneficially owned include 13,412 shares held of record by
The Robert C. Ludwig Family Trust U/A Dated December 26, 1996.
*Less than one percent.
PLAN OF DISTRIBUTION
The shares covered hereby may be offered and sold from time to time by the
Selling Shareholders. The Selling Shareholders will act independently of the
Company in making decisions with respect to the timing, manner and size of each
sale. Such sales may be made on The Nasdaq Stock Market or otherwise, at prices
related to the then current market price or in negotiated transactions,
including one or more of the following methods: (a) purchases by a broker-dealer
as principal and resale by such broker or dealer for its account pursuant to
this Prospectus; (b) ordinary brokerage transactions and transactions in which
the broker solicits purchasers; and (c) block trades in which the broker-dealer
so engaged will attempt to sell the Shares as agent but may position and resell
a portion of the block as principal to facilitate the transaction. The Company
has been advised by the Selling Shareholders that they have not made any
arrangements relating to the distribution of the Shares covered by this
Prospectus. In effecting sales, broker-dealers engaged by the Selling
Shareholders may arrange for other broker-dealers to participate. Broker-dealers
may receive commissions or discounts from the Selling Shareholder in amounts to
be negotiated.
In offering the Shares covered hereby, the Selling Shareholders and any
broker-dealers and any other participating broker-dealers who execute sales for
the Selling Shareholders may be deemed to be "underwriters" within the meaning
of the Securities Act in connection with such sales, and any profits realized by
the Selling Shareholders and the compensation of such broker-dealer may be
deemed to be underwriting discounts and commissions. In addition, any Shares
covered by this Prospectus which qualify for sale pursuant to Rule 144 may be
sold under Rule
473492.5
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<PAGE>
144 rather than pursuant to this Prospectus. None of the Shares covered by this
Prospectus presently qualify for sale pursuant to Rule 144 and it is not
anticipated that any Shares will so qualify during the effectiveness of the
Registration Statement in which this Prospectus is contained.
The Company has advised the Selling Shareholders that during such time as
they may be engaged in a distribution of Shares covered hereby, they are
required to comply with Regulation M under the Exchange Act as described below
and, in connection therewith, that they may not engage in any stabilization
activity in connection with the Company's Common Stock, are required to furnish
to each purchaser and/or broker-dealer through which Shares covered hereby may
be offered copies of this Prospectus, and may not bid for or purchase any
securities of the Company or attempt to induce any person to purchase any
securities of the Company except as permitted under the Exchange Act. Each
Selling Shareholder has agreed to inform the Company when the distribution of
his or her Shares is completed.
Regulation M under the Exchange Act also prohibits, with certain exceptions,
participants in a distribution from bidding for or purchasing, for an account in
which the participant has a beneficial interest, any of the securities that are
the subject of the distribution. Regulation M also governs bids and purchases
made in order to stabilize the price of a security in connection with a
distribution of the security.
This offering will terminate on the earlier of 90 days from the date hereof
or the date on which all Shares offered hereby have been sold by the Selling
Shareholder.
In order to comply with certain states' securities laws, if applicable, the
Shares offered hereby will be sold in such jurisdictions only through registered
or licensed brokers or dealers. In addition, the Shares may not be sold in
certain states unless they have been registered or qualified for sale in such
states or an exemption from registration or qualification is available and is
complied with.
LEGAL MATTERS
Certain legal matters in connection with the Common Stock covered by this
Prospectus are being passed upon by Arnall Golden & Gregory, LLP.
EXPERTS
The consolidated financial statements of the Company and subsidiaries as of
December 31, 1996 and 1995, and for the years then ended, included in the
Company's Form 10-KSB for the year ended December 31, 1996, have been
incorporated by reference herein and in the registration statement in reliance
upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
473492.5
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Set forth below is an estimate of the fees and expenses to be incurred in
connection with the issuance and distribution of the shares of Common Stock, no
par value per share, offered hereby.
Securities and Exchange Commission Registration Fee... $ 260.65
------------------
Nasdaq Listing Fee.................................... n.a.
------------------
Blue Sky Fees and Expenses............................ n.a.
------------------
Legal Fees and Expenses............................... $ 10,000
------------------
Accounting Fees....................................... $ 10,000
------------------
Printing and Engraving Costs.......................... n.a.
------------------
Transfer Agent's Fee.................................. n.a.
------------------
Miscellaneous Expenses................................ n.a.
------------------
TOTAL................................................. $ 20,260.65
==================
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is a Delaware corporation. The following summary is
qualified in its entirety by reference to the complete text of the Delaware
General Corporation Law (the "DGCL"), the Company's Restated Certificate of
Incorporation and the Company's Bylaws, as amended.
Section 145 of the DGCL empowers a Delaware corporation to indemnify
any person who was or is, or is threatened to be made, a party to any threatened
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of such corporation, or is or was serving at the
request of such corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that such person had
no reasonable cause to believe his conduct was unlawful. A Delaware corporation
may indemnify such persons against expenses (including attorneys' fees) in
actions brought by or in the right of the corporation to procure a judgment in
its favor under the same conditions, except that no indemnification is permitted
in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and to the extent the Court of
Chancery of the State of Delaware or the court in which such action or suit was
brought shall determine upon application that, in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnify for such
expenses as the Court of Chancery or other such court shall deem proper. To the
extent such person has been successful on the merits or otherwise in defense of
any action referred to above, or in defense of any claim, issue or matter
therein, the corporation must indemnify such person against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith. The indemnification and advancement of expenses provided for in, or
granted pursuant to, Section 145 is not exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
any by-law, agreement, vote of stockholders or disinterested directors or
otherwise. Section 145 also provides that a corporation may maintain insurance
against liabilities for which indemnification is not expressly provided by the
statute.
Article VI of the Company's Certificate of Incorporation and Article
VIII, Section 3 of the Company's Bylaws provide for indemnification of directors
and officers from any liability that such person reasonably incurs with respect
to any threatened, pending or completed action, suit or proceeding (whether
civil, criminal, administrative, or investigative) by reason of his position as
director or officer of the Company, if such person acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the Company. With respect to a criminal action or proceeding, however, such
person must also have had reasonable cause to believe that his action was
lawful. If such person is found liable to the Company in an action or proceeding
by or in the right of the Company itself, such person may be indemnified only if
the court specifically approves such
473492.5
II - 1
<PAGE>
indemnification. The Company has obtained an insurance policy insuring the
directors and officers of the Company against certain liabilities, including
liabilities under the 1933 Act.
In addition, Company 's Restated Certificate of Incorporation, as
permitted by Section 102(b) of the DGCL, limits directors' liability to the
Company and its stockholders by eliminating liability in damages for breach of a
fiduciary duty. Article VII of Company's Restated Certificate of Incorporation
provides that neither the Company nor its stockholders may recover damages from
its directors for breach of their fiduciary duties in the performance of their
duties as directors of the Company. As limited by Section 102(b), this provision
cannot, however, have the effect of indemnifying any director of the Company in
the case of liability (i) for a breach of the director's duty of loyalty, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) for unlawful payments of dividends or
unlawful stock repurchases or redemptions as provided in Section 174 of the
DGCL, or (iv) for any transactions for which the director derived an improper
personal benefit.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "1933 Act"), may be permitted to directors,
officers or persons controlling the Company pursuant to the foregoing provision
of the DGCL and the Company's Restated Certificate of Incorporation and Bylaws,
the Company has been informed that indemnification is considered by the
Securities and Exchange Commission to be against public policy and therefore
unenforceable.
473492.5
II - 2
<PAGE>
ITEM 16. EXHIBITS
Exhibit No. Exhibit
2.1 Closing Agreement dated May 15, 1995 between Heritage Inn Associates,
Ltd. and BLM EB, Inc. (Incorporated herein by reference to Exhibit
2(a) of the Company's Current Report on Form 8-K filed May 15, 1995)
2.2 Agreement for Purchase and Sale of Hotel between Buckhead and ALH
Properties No. One, Inc. (Incorporated herein by reference to Exhibit
2(b) of the Company's Current Report on Form 8-K filed December 7,
1995)
2.3 Agreement for Purchase and Sale of Hotel between Buckhead and ALH
Properties No. Two, Inc. (Incorporated herein by reference to Exhibit
2(c) of the Company's Current Report on Form 8-K filed December 7,
1995)
2.4 Stock Purchase Agreement dated as of March 7, 1997 among the
Registrant, The Lodge Keeper Group, Inc. ("LodgeKeeper") and the
Stockholders of LodgeKeeper. (Incorporated herein by reference to
Exhibit 2.1 of the Company's Quarterly Report on Form 10-QSB filed for
the quarter ended March 31, 1997)
2.5 Agreement of Merger, as amended, dated as of March 11, 1997 among the
Registrant, BLM-RH, Inc., Hatfield Inns, LLC, Guy Hatfield, Dorothy
Hatfield, and Hatfield Inns Advisors, LLC (Incorporated herein by
reference to Appendix B of the Registrant's Definitive Proxy Statement
filed with the Securities and Exchange Commission on June 9, 1997.)
2.5.1 Second Amendment to Agreement of Merger, dated as of September 17,
1997 among the Registrant, BLM-RH, Inc., Hatfield Inns, LLC, Guy
Hatfield, Dorothy Hatfield, and Hatfield Inns Advisors, LLC
(Incorporated herein by reference to Exhibit 2.1.1 of the Company's
Current Report on Form 8-K filed October 8, 1997).
4 Mortgage Note Payable dated as of November 7, 1996 made by Heritage
Inn Associates, LP as Maker, to Bloomfield Acceptance Company, LLC
(Incorporated by reference to Exhibit 4(ii) to the Registrant's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1996)
5* Opinion of Arnall Golden & Gregory LLP regarding legality
23.1* Consent of Arnall Golden & Gregory LLP (included as part of Exhibit 5
hereto)
23.2* Consent of KPMG Peat Marwick LLP
23.3* Consent of Ernst & Young LLP
99 Debtors' Third Amended Joint Plan of Reorganization and Disclosure
Statement (Incorporated herein by reference to Exhibit 12.1 filed with
Registrant's Registration Statement on Form 10-SB (No. 0-22132) which
became effective on November 17, 1993)
- ----------
* Filed herewith.
473492.5
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<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(A)(3) Of
the Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the registration statement. Notwithstanding the forgoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in the volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement;
(iii) Include any additional or changed material information
on the plan of distribution.
provided, however, that paragraph (1)(i) and (1)(ii) above do not apply if the
information required in a post-effective amendment is incorporated by reference
from periodic reports filed by the registrant under the Exchange Act.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement 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.
Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions set forth in response to Item 15, 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 1933 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 1933 Act
and will be governed by the final adjudication of such issue.
473492.5
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<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-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, State of Georgia on September 30, 1997.
BUCKHEAD AMERICA CORPORATION
By: /s/ Douglas C. Collins
________________________________
Douglas C. Collins, President and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Douglas C. Collins and Robert B. Lee and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place, and stead,
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
PRINCIPAL EXECUTIVE, FINANCIAL & ACCOUNTING OFFICERS AND DIRECTORS:
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Douglas C. Collins President, Chief Executive Officer September 30, 1997
- ------------------------------ and Director (Principal Executive
Douglas C. Collins Officer)
/s/ Robert B. Lee Senior Vice President, Chief Financial September 30, 1997
- ------------------------------ Officer and Director (Principal
Robert B. Lee Financial and Accounting Officer)
Director September __, 1997
- ------------------------------
Robert M. Miller
/s/ William K. Stern Director September 30, 1997
- ------------------------------
William K. Stern
Director September __, 1997
- -------------------------------
Steven A. Van Dyke
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473492.5
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ARNALL GOLDEN & GREGORY,LLP
2800 One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3450
(404) 873-8500
(404) 873-8501
October 10, 1997
Buckhead America Corporation
4243 Dunwoody Club Drive
Suite 200
Atlanta, Georgia 30350
Re: Form S-3 Registration Statement
Gentlemen:
We have acted as your counsel in connection with the preparation of the
Registration Statement on Form S-3 (the "Registration Statement") filed by
Buckhead America Corporation, a Delaware corporation (the "Company"), with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Act"). This Registration Statement relates to an offer by certain selling
shareholders named therein of up to 106,320 shares of the Company's Common
Stock, $.01 par value (the "Shares").
In acting as counsel to you, we have examined and relied upon such corporate
records, documents, certificates and other instruments and examined such
questions of law as we have considered necessary or appropriate for the purposes
of this opinion. Based upon and subject to the foregoing, we advise you that in
our opinion the Shares are legally issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and the reference to this firm under the caption "Legal Matters"
contained therein and elsewhere in the Registration Statement. This consent is
not to be construed as an admission that we are a party whose consent is
required to be filed with the Registration Statement under the provisions of the
Act.
Sincerely,
ARNALL GOLDEN & GREGORY, LLP
ARNALL GOLDEN & GREGORY, LLP
473492.5
ACCOUNTANTS' CONSENT
We consent to the use of our reports incorporated by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Atlanta, Georgia
October 10, 1997
473492.5
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-3 of Buckhead America Corporation of our report dated August 29, 1996,
with respect to the financial statements of The LodgeKeeper Group, Inc.,
included in the Buckhead America Corporation Form 8-K/A (Amendment No. 1) dated
May 8, 1997, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Ernst & Young LLP
Columbus, Ohio
September 29, 1997
473492.5
