Exhibit 10.2 - Loan Agreement

                                 LOAN AGREEMENT


     THIS LOAN  AGREEMENT  (this  "Agreement")  is made as of the  _27th_ day of
December,  1995,  by and  between  BODDIE-NOELL  PROPERTIES,  INC.,  a  Delaware
corporation   (the   "Borrower")  and  SOUTHTRUST  BANK  OF  ALABAMA,   NATIONAL
ASSOCIATION,  a national  banking  association,  its successors and assigns (the
"Lender").

                                R E C I T A L S:

     Borrower has  requested  that the Lender make a loan to the Borrower in the
principal sum of up to  $25,500,000.  Lender has agreed to make such loan on the
terms and conditions hereinafter set forth.

         NOW, THEREFORE, it is hereby agreed as follows:

                                   ARTICLE I.

                 DEFINITIONS, ACCOUNTING PRINCIPLES, UCC TERMS.

     1.1.  As used  in this  Agreement,  the  following  terms  shall  have  the
following meanings unless the context hereof shall otherwise indicate:

     "Affiliate"  shall mean  Boddie-Noell  Properties,  Inc., any subsidiary of
Boddie-Noell  Properties,  Inc. or any entity of which Boddie-Noell  Properties,
Inc.  is a  subsidiary  (or any of them),  collectively  a "BNP  Entity," or any
entity which a BNP Entity  controls or any entity  which  controls a BNP Entity;
provided,  however,  "Affiliate"  shall in no event include the Lessee under the
Lease Agreement  regardless of the degree of ownership or control.  For purposes
hereof,  the term "controlled" shall mean that the BNP Entity directly or acting
through entities in which they own a substantial equity interest,  has the power
to  acquire,  dispose,  operate and manage the assets of said entity even though
the  exercise of such powers may be subject to the  approval or consent of third
parties.

     "Adjusted  Leverage" shall mean all Indebtedness  (other than  subordinated
shareholder  indebtedness)  divided by total assets,  valued at their historical
cost, without depreciation or amortization.

     "Applicable  Environmental Law" shall mean any applicable federal, state or
local laws,  rules or regulations  pertaining to health or the  environment,  or
petroleum  products,  or  radon  radiation,  or  oil  or  hazardous  substances,
including,   without  limitation,  the  Comprehensive   Environmental  Response,
Compensation  and  Liability Act of 1980,  as amended  ("CERCLA"),  the Resource
Conservation  and  Recovery  Act of 1976,  as amended  ("RCRA")  and the Federal
Emergency  Planning and Community  Right-To-Know  Act of 1986,  as amended.  The
terms "hazardous  substance" and "release" shall have the meanings  specified in
CERCLA, and the terms "solid waste," disposal,"  "dispose," and "disposed" shall
have the  meanings  specified  in RCRA,  except that if such acts are amended to
broaden  the  meanings   thereof,   the  broader   meaning  shall  apply  herein
prospectively  from and after the date of such amendments;  notwithstanding  the
foregoing,  provided,  to the extent that the laws of the States of Virginia and
North Carolina establish a meaning for "hazardous  substance" or "release" which
is broader than that specified in CERCLA,  as CERCLA may be amended from time to
time,  or a meaning  for "solid  waste,"  "disposal,"  and  "disposed"  which is
broader than  specified in RCRA, as RCRA may be amended from time to time,  such
broader meanings under said state law shall apply in all matters relating to the
laws of such State.

     "Applicable Rate" shall mean eight percent (8%) per annum.

     "Assignment"  shall  mean the  Assignment  of Rents and Leases of even date
herewith from Borrower to Lender.

     "Business  Day" shall mean a day,  other than  Saturday or Sunday and legal
holidays, when the Lender is open for business.

     "Closing  Date" shall mean the date on which all or any part of the Loan is
disbursed by the Lender to or for the benefit of the Borrower.

     "Collateral"  shall  mean,  collectively,  the  Properties,   Improvements,
Equipment  and Rents,  and all  Proceeds,  all  whether  now owned or  hereafter
acquired, and including replacements,  additions, accessions, substitutions, and
products,  and all other  property which is or hereafter may become subject to a
Lien in favor of Lender as security for any of the Loan Obligations.

     "Commitment  Letter" shall mean the  commitment  letter issued by Lender to
Borrower  dated  October 19, 1995,  as amended by letter from Lender to Borrower
dated December 6, 1995.

     "Debt Service Coverage" shall mean a ratio in which the first number is the
sum of Borrower's earnings before interest,  taxes,  depreciation,  amortization
and  debt  service,   less  interest  on  other   Indebtedness  of  Borrower  or
Indebtedness included pursuant to Section 5.5 hereof (but in any event excluding
subordinate  shareholder  indebtedness),  calculated  based  upon the  preceding
twelve (12) months, and the second number is $2,361,758, except that if the Loan
is prepaid in part,  then the second number shall be equal to twelve (12) months
estimated level monthly principal and interest  amortization payments for a Loan
amount equal to (a) $25,500,000 less (b) principal  repayments,  amortized at 8%
per annum over an assumed  term of 300  months  less the number of months  which
have passed from the date of this Agreement to the date of such calculation.

     "Default"  shall mean the  occurrence or existence of any event which,  but
for the giving of notice or  expiration  of time or both,  would  constitute  an
Event of Default.

     "Default Rate" shall mean a per annum rate equal to two  percentage  points
(2%) in excess of the Applicable Rate then accruing on the outstanding principal
balance of the Loan. 

     "Equipment"  shall mean, to the extent owned by Borrower,  all fixtures and
equipment  now or  hereafter  located  on,  attached  to or  used or  useful  in
connection with any Property or Improvements, and shall include but shall not be
limited to, any interest in such fixtures or equipment now or hereafter acquired
as a result of any landlord's liens and any reversionary rights as landlord upon
termination of the Lease Agreement.

     "Event of  Default"  shall  mean any  "Event  of  Default"  as  hereinafter
defined.

     "Exhibit"  shall  mean an  Exhibit to this  Agreement,  unless the  context
refers to another document, and each such Exhibit shall be deemed a part of this
Agreement  to the same extent as if it were set forth in its  entirety  wherever
reference is made thereto.

     "Facility" shall mean each restaurant  facility now or hereafter  operating
at a Property.

     "GAAP"  shall  mean,  as in effect  from time to time,  generally  accepted
accounting  principles  consistently  applied  as  promulgated  by the  American
Institute of Certified Public Accountants.

     "Improvements"   shall  mean  the  Facilities  and  all  other   buildings,
structures and improvements of every nature whatsoever now or hereafter situated
on a Property,  including,  but not limited to, all gas and  electric  fixtures,
radiators,  heaters,  engines and  machinery,  boilers,  ranges,  elevators  and
motors, plumbing and heating fixtures, air conditioning equipment, carpeting and
other  floor  coverings,  water  heaters,  awnings  and storm  sashes,  cleaning
apparatus, signs, landscaping, and parking areas, which are or shall be attached
to a Property or said buildings,  structures or improvements, to the extent such
attachments are owned by Borrower.

     "Indebtedness"  shall mean the maximum amount which may be disbursed  under
the  Loan  ($25,500,000)  reduced  by any  prepayments  made  as of the  date of
calculation,  plus  (as to  obligations  other  than the  Loan)  any  other  (i)
obligations of Borrower for borrowed money (including  guaranteed  obligations),
(ii)  obligations  of  Borrower  representing  the  deferred  purchase  price of
property other than accounts  payable arising in connection with the purchase of
inventory  customary in the trade,  (iii)  obligations,  whether or not assumed,
secured by Liens or payable out of the proceeds or production  from property now
or  hereafter  owned or acquired by  Borrower,  and (iv) the amount of any other
obligation  (including  obligations under financing leases) which would be shown
as a liability on a balance sheet of Borrower prepared in accordance with GAAP.

     "Indemnity  Agreement" shall mean that certain Indemnity  Agreement of even
date herewith from the Borrower.

     "Lease Agreement" shall mean that certain Amended and Restated Master Lease
Agreement  dated December 21, 1995 pursuant to which  Borrower  leases to Lessee
the  Properties and Facilities  (and any amendments and  replacements  hereafter
approved in writing by Lender in its sole discretion).

     "Lessee"  shall  mean  Boddie-Noell  Enterprises,  Inc.,  a North  Carolina
corporation (or any replacement lessee pursuant to the Lease Agreement hereafter
approved in writing by Lender in its sole discretion).

     "Lien" shall mean any voluntary or  involuntary  mortgage,  security  deed,
deed of trust, deed to secure debt, lien, pledge, assignment, security interest,
title retention agreement,  financing lease, levy, execution, seizure, judgment,
attachment,  garnishment,  charge,  lien  or  other  encumbrance  of  any  kind,
including  those  contemplated  by or permitted in this  Agreement and the other
Loan Documents.

     "Loan" shall mean the loan in the  principal  sum of up to  $25,500,000  in
aggregate  advances  (without  regard to repayments) to be made by Lender to the
Borrower pursuant to this Agreement.

     "Loan Documents" shall mean,  collectively,  this Agreement,  the Note, the
Assignments,  the Mortgages,  the SANDA, and the Indemnity  Agreement,  together
with any and all other  documents  executed by  Borrower or others,  evidencing,
securing, or otherwise relating to the Loan.

     "Loan  Obligations"  shall mean the aggregate of all principal and interest
owing  from time to time  under  the Note and all  expenses,  charges  and other
amounts  from time to time owing under the Note,  this  Agreement,  or the other
Loan Documents and all covenants,  agreements and other obligations from time to
time owing to, or for the benefit of, Lender pursuant to the Loan Documents.

     "Loan  Term"  shall mean the period  from the date  hereof to the  Maturity
Date.

     "Maturity Date" shall mean December 27, 1998.

     "Mortgages" shall mean those certain Deeds of Trust and Security Agreements
of even date herewith from Borrower in favor of or for the benefit of Lender and
encumbering the Collateral.

     "Note"  shall  mean  the  Promissory  Note of  even  date  herewith  in the
principal amount of the Loan payable by Borrower to the order of Lender.

     "Person" shall mean any person,  firm,  corporation,  partnership,  limited
liability company, trust or other entity.

     "Proceeds" shall mean all proceeds  (whether cash or non-cash,  moveable or
immoveable,  tangible  or  intangible),  including  proceeds  of  insurance  and
condemnation,  from the sale,  exchange,  transfer,  collection,  loss,  damage,
disposition, substitution or replacement of any of the Collateral.

     "Property"  shall mean each of the parcels of real  estate in Virginia  and
North Carolina which are more particularly described in Exhibit A hereto.

     "Rents" shall mean all rent and other payments of whatever nature from time
to time payable  pursuant to any lease of any Property or  Improvements,  or any
part thereof, including, but not limited to, the Lease Agreement.

     "SANDA"  shall  mean  the  Subordination,   Attornment  and  Nondisturbance
Agreement of even date herewith among Borrower, Lender and Lessee.

     "Title Company" shall mean Lawyers Title Insurance Corporation.

     1.2.  Singular  terms  shall  include the plural  forms and vice versa,  as
applicable, of the terms defined.

     1.3. Terms  contained in this Agreement  shall,  unless  otherwise  defined
herein or unless the context  otherwise  indicates,  have the meanings,  if any,
assigned  to them by  Uniform  Commercial  Code in  effect in the state in which
Collateral for the Loan Obligations is located.

     1.4.  All  accounting  terms used in this  Agreement  shall be construed in
accordance with GAAP, except as otherwise defined.

     1.5. All references to other  documents or  instruments  shall be deemed to
refer to such  documents  or  instruments  as they may  hereafter  be  extended,
renewed, modified, or amended and all replacements and substitutions therefor.

                                   ARTICLE II

                                TERMS OF THE LOAN

     2.1. The Loan.  Borrower  has agreed to borrow from Lender,  and Lender has
agreed to make the Loan to Borrower,  subject to Borrower's  compliance with and
observance of the terms, conditions, covenants, and provisions of this Agreement
and the  other  Loan  Documents,  and  the  Borrower  has  made  the  covenants,
representations,  and warranties herein and therein as a material  inducement to
Lender to make the Loan.

     2.2.  Security for the Loan.  The Loan will be evidenced and secured by the
Loan Documents.

     2.3. Interest Rate.

     (a) The outstanding principal balance of the Loan will bear interest at the
Applicable Rate pursuant to the Note.

     (b) All interest on the outstanding  principal balance of the Loan shall be
calculated  on the  basis  of a  360-day  year by  multiplying  the  outstanding
principal  amount by the  applicable  per annum  rate,  multiplying  the product
thereof  by the actual  number of days  elapsed,  and  dividing  the  product so
obtained by 360.

     2.4.  Repayment of Loan. Each payment of the Loan Obligations shall be paid
directly  to the Lender in lawful  money of the United  States of America at the
following address:

         SouthTrust Bank of Alabama,
         National Association
         P.O. Box 2554 (35290)
         420 North 20th Street
         Eleventh Floor - Commercial Real Estate Loan Department
         Birmingham, Alabama  35203

or such other place as the Lender shall  designate  in writing to the  Borrower.
Each such  payment  shall be paid in  immediately  available  funds by 2:00 p.m.
Birmingham,  Alabama,  time on the date such payment is due, except if such date
is not a Business Day such payment  shall then be due on the first  Business Day
after such date, but interest shall continue to accrue until the date payment is
received.  Any payment received after 2:00 p.m. Birmingham,  Alabama, time shall
be deemed to have been received on the  immediately  following  Business Day for
all  purposes,  including,  without  limitation,  the  accrual  of  interest  on
principal.

     2.5. Prepayment.

     (a) The principal balance of the Loan may be prepaid,  in whole or in part,
at any time upon thirty (30) days prior written notice to the Lender  specifying
the date of such prepayment,  and upon payment of a prepayment  premium (if any)
set forth in the Note to be prepaid in order to compensate Lender for its forced
reinvestment  of  Loan  proceeds  at  then-market  yields.  Notwithstanding  the
foregoing, no prepayment premium shall be due if and to the extent that (1) such
prepayment is made from proceeds of  condemnation  or insurance  from a casualty
loss with  respect to any  Collateral  and such  prepayment  is  required by the
provisions of this  Agreement,  or (2) such  prepayment  together with all prior
prepayments  in the  aggregate  is not in the  excess  of the  principal  sum of
$6,375,000 (excluding prepayments from proceeds of condemnation or casualty).

     (b)  If an  Event  of  Default  occurs  and  the  Loan  is  declared  to be
immediately due and payable,  there shall be added to the principal balance then
due an amount equal to the prepayment  premium which would then be applicable to
any voluntary prepayment.

     (c) All prepayments will be applied to installments coming due hereunder in
their inverse order of maturity.  Borrower shall not be entitled to reborrow any
amounts so prepaid.

     (d) No prepayment  premium shall be due for prepayments made from and after
September 27, 1998.

     2.6. Late Charges On Overdue Installments; Default Rate; Collection Costs.

     (a) If any scheduled payment of principal or interest,  or any other agreed
charge,  is not made on or before the fifteenth (15th) day after the same became
due,  Borrower  agrees to pay to Lender a late charge equal to four percent (4%)
of the amount of the payment or charge which is in default.

     (b) Upon the  occurrence  of any Event of Default,  Borrower  agrees to pay
interest  to  Lender  at the  Default  Rate on the  aggregate  outstanding  Loan
Obligations  (including accrued interest),  which Default Rate will continue, if
the maturity of the outstanding  principal  indebtedness  has been  accelerated,
until such outstanding principal indebtedness, with interest, is paid in full or
such acceleration has been rescinded; otherwise such Default Rate shall continue
until  such  Event of  Default  is cured or waived in  writing  by  Holder;  and
thereafter interest shall again accrue at the Applicable Rate.

     (c)  Borrower  will also pay to Lender,  in addition to the amount due, all
reasonable costs of collecting, securing, or attempting to collect or secure the
Note, including, without limitation, court costs and reasonable attorneys' fees,
including,  without  limitation,  reasonable  attorneys' fees for preparation of
litigation and in any appellate and bankruptcy proceedings.

     2.7.  Usury  Provisions.  In no event shall the amount of  interest  due or
payable  hereunder or pursuant to any of the Loan  Documents  exceed the maximum
rate of interest allowed by applicable law, and in the event any such payment is
inadvertently  paid by Borrower or inadvertently  received by Lender,  then such
excess sum shall be credited as a payment of principal. It is the express intent
hereof that  Borrower  not pay and Lender not receive,  directly or  indirectly,
interest  in  excess  of  that  which  may be  legally  paid by  Borrower  under
applicable law.

     2.8.  Miscellaneous.  With  respect  to the  amounts  due  under  the Note,
Borrower waives the following to the fullest extent permitted by law:

     (a) All rights of exemption of property  from levy or sale under  execution
or other process for the collection of debts under the  Constitution  or laws of
the United States or any state thereof; and

     (b)  Demand,   presentment,   protest,   notice  of  dishonor,   notice  of
non-payment,  diligence in collection,  and all other requirements  necessary to
enforce the Note; and

     (c) Any  further  receipt  by  Lender  or  acknowledgment  by Lender of any
Collateral now or hereafter deposited with Lender as security for the Loan.

     2.9. Fee.  Borrower will pay to Lender a fee of $127,500,  which fee is due
and deemed earned as of the date of this Agreement.

     2.10.  Disbursement  Procedure.  Subject  to  compliance  with  all  of the
provisions of this Agreement,  and subject to the terms of this  Agreement,  the
Loan shall be disbursed to the Borrower in one or more advances, upon Borrower's
written  request  and  subject to the terms and  conditions  of this  Agreement.
Borrower will request any advance of the Loan in writing,  which request must be
received by Lender (a) as to the initial advance, on or before the Closing Date,
and (b) as to any subsequent  advance, on or before five (5) Business Days prior
to the date of the  requested  advance.  Lender may make one or more advances to
Borrower upon written or oral disbursement  requests not in specific  compliance
with the requirements of this Section or other provisions of this Agreement, and
such advances will nevertheless be deemed to be advances to Borrower  hereunder,
but  will not  constitute  a waiver  by  Lender  of its  right  to  impose  such
provisions,  limitations  and  conditions as a  prerequisite  to any  subsequent
advance to Borrower.

     2.11.  Direct  Advances.  Regardless  of whether  Borrower has  submitted a
requisition  therefor and whether or not an Event of Default exists,  Lender may
from time to time advance amounts which become due for costs of insurance, title
insurance,  fees and expenses of Lender's  legal  counsel and amounts due Lender
for payments of principal,  interest and fees and other amounts due to Lender in
connection with the Loan. All such advances shall be deemed advances to Borrower
hereunder  and shall be secured by the Loan  Documents  to the same extent as if
they were made directly to Borrower.

     2.12.  Representations and Warranties  Regarding  Submission of Request for
Loan Advance.  Each  submission  by Borrower to Lender of a  requisition  for an
advance of the Loan shall constitute  Borrower's  representation and warranty to
Lender that (a) all  representations  and warranties set forth in this Agreement
and the other Loan  Documents  are true and correct as of the date of Borrower's
request, (b) all conditions for such advance as contained in this Agreement have
been satisfied as of such date, and (c) no Default or Event of Default exists as
of such date;  except in each such case as  expressly  disclosed  by Borrower to
Lender in writing with such request.

     2.13. Advances. Lender's obligation to make the Loan or any advance thereof
shall be effective only upon fulfillment of the following conditions:

     (a) Receipt and approval by Lender of all items  required to be provided to
Lender under the terms of the Commitment Letter.

     (b) Payment by Borrower  of all fees and  expenses  then due as required by
this Agreement and the Commitment Letter.

     (c) Execution, delivery and, when appropriate, recording or filing, of this
Agreement,  the Note,  the  Mortgages and all other  documents  required by this
Agreement, all in form and content satisfactory to Lender.

     (d) Issuance of the title insurance  policy  contemplated by the Commitment
Letter in form and content satisfactory to Lender, which policy shall insure the
Mortgages  as  first-priority  liens as to all  advances  (up to an aggregate of
$25,500,000 in total advances).

     In the event  Lender,  at its option,  elects to make one or more  advances
prior to receipt  and  approval  of all items  required  by this  Article,  such
election shall not obligate Lender to make any subsequent advance.

                                  ARTICLE III.

                   BORROWER'S REPRESENTATIONS AND WARRANTIES.

     To induce Lender to enter into this Agreement,  and to make the Loan to the
Borrower, the Borrower represents and warrants to Lender as follows:

     3.1.  Existence,  Power and  Qualification.  Borrower is a corporation duly
organized and validly existing under the laws of the State of Delaware,  has the
power  to own its  properties  and to  carry  on its  business  as is now  being
conducted, and is duly qualified to do business and is in good standing in every
jurisdiction  in which the character of the  properties  owned by it or in which
the transaction of its business makes its qualification necessary.

     3.2. Power and  Authority.  Borrower has full power and authority to borrow
hereunder  and to incur the  obligations  provided for herein and in each of the
other  Loan  Documents,  all of which  have been  authorized  by all  proper and
necessary action of its shareholders.

     3.3. Due Execution and Enforcement.  Each of the Loan Documents constitutes
a valid and legally  binding  obligation  of the  Borrower and does not violate,
conflict with, or constitute any default under any law,  government  regulation,
decree,  judgment, the Borrower's articles incorporation or by-laws or any other
agreement or instrument binding upon the Borrower.

     3.4. Pending  Matters.  No action or investigation is pending or threatened
before or by any state of federal  court or  administrative  agency  which might
result in any material adverse change in the financial condition,  operations or
prospects of the Borrower. Borrower, to the best of its actual knowledge, is not
in violation  of any  agreement,  the  violation  of which might  reasonably  be
expected to have a  materially  adverse  effect on its  business or assets,  and
Borrower, to the best of its actual knowledge, is not in violation of any order,
judgment,  or  decree  of  any  state  or  federal  court,  or  any  statute  or
governmental regulation to which it is subject.

     3.5. Financial  Statements  Accurate.  All financial statements of Borrower
heretofore  provided  by the  Borrower  are true,  correct  and  complete in all
material  respects as of their respective dates and fairly present the financial
condition of the  Borrower,  and there are no  liabilities,  direct or indirect,
fixed or contingent, as of the respective dates of such statements which are not
reflected  therein or in the notes  thereto.  The  financial  statements  of the
Borrower have been prepared in accordance with GAAP.  There has been no material
adverse  change in the  financial  condition,  operations,  or  prospects of the
Borrower since the dates of such statements.

     3.6. Payment of Taxes. The Borrower has filed all federal, state, and local
tax  returns  which are  required  to be filed and has  paid,  or made  adequate
provision for the payment of, all taxes which have or may become due pursuant to
such returns or to assessments received by Borrower.

     3.7. Title to Collateral. The Borrower has good and marketable title to all
of the Collateral,  subject to no Lien except those Liens specifically permitted
by this Agreement.

     3.8. Priority of Mortgages.  The Mortgages  constitute first liens upon and
security interests in the real and personal property described therein, prior to
all other Liens,  including  those which may hereafter  accrue,  excepting  only
those  Liens  specifically  permitted  by this  Agreement  or  those  "Permitted
Encumbrances" specifically set forth in the Mortgages.

     3.9.  Location of Chief  Executive  Offices.  The  location  of  Borrower's
principal  place of  business  and chief  executive  office  are as set forth on
Exhibit B hereto.

     3.10. Disclosure.  All information furnished or to be furnished by Borrower
to the Lender in connection with the Loan or any of the Loan  Documents,  is, or
will be at the time the same is furnished,  accurate and correct in all material
respects and complete  insofar as  completeness  may be necessary to provide the
Lender a true and accurate knowledge of the subject matter.

     3.11.  Trade Names.  Borrower has not changed its name or been known by any
other name within the last five (5) years,  except for  Boddie-Noell  Restaurant
Properties and BT Venture Corp.

     3.12. ERISA. To the best of Borrower's actual knowledge, the Borrower is in
compliance  with all  applicable  provisions of the Employee  Retirement  Income
Security Act of 1974, as amended ("ERISA").

     3.13.  Proceedings  Pending.  To the best of Borrower's  actual  knowledge,
there  are no  proceedings  pending,  or, to the best of the  Borrower's  actual
knowledge,  threatened,  to acquire any power of  condemnation or eminent domain
with  respect to any  Property or any  Improvements,  or to enjoin or  similarly
prevent or restrict the operation of any Facility in any manner.

     3.14.  Compliance  With Applicable  Laws. To the best of Borrower's  actual
knowledge,  the Improvements and the Properties  comply in all material respects
with covenants and restrictions of record and applicable laws, ordinances, rules
and regulations,  including, without limitation, the Americans with Disabilities
Act and regulations thereunder, and all laws, ordinances,  rules and regulations
relating to zoning, setback requirements and building codes.

     3.15.  Environmental  Matters.  To the best of Borrower's actual knowledge,
without  independent  investigation  except  for  the  environmental  screenings
prepared by Resolve  Environmental  which have been furnished to Lender prior to
the date of this  Agreement,  (a) neither any  Improvements,  any Property,  the
Lessee, nor the Borrower is in violation of or subject to any existing, pending,
or  threatened  investigation  or inquiry by any  governmental  authority or any
response costs or remedial  obligations under any Applicable  Environmental Law,
and this  representation  and  warranty  would  continue  to be true and correct
following disclosure to the applicable governmental  authorities of all relevant
facts, conditions and circumstances, if any, pertaining to the Improvements, the
Properties,  the Lessee,  or the Borrower;  (b) neither  Borrower nor Lessee has
obtained  or  is  required  to  obtain,   any   permits,   licenses  or  similar
authorizations  to  construct,  occupy,  operate  or  use  any  Improvements  or
Equipment at any Property by reason of any Applicable  Environmental Law; (c) no
petroleum  products,  oil, or  hazardous  substances  or solid  wastes have been
disposed of or otherwise  released on or are otherwise  located on any Property;
(d) no  PCB-containing or  PCB-contaminated  transformers or other equipment are
located at a Property; and (e) the use of the Properties and Improvements in the
ordinary course of previous  operations and as the same is hereafter intended to
be operated  will not result in the location on or disposal or other  release of
any petroleum  products,  oil, or hazardous  substances or solid wastes on or to
any Property. Borrower has entered into the Indemnity Agreement with Lender, and
Borrower agrees to perform its obligations thereunder.

     3.17. Solvency.  Borrower represents and warrants that it is solvent within
the meaning of 11 U.S.C.  ss. 548 and GAAP,  and the  borrowing of the Loan will
not render the Borrower  insolvent  within the meaning of 11 U.S.C.  ss. 548 and
GAAP.

     3.18. Roads and Utilities. To the best of Borrower's actual knowledge, each
Facility is served by public utilities, including water and sanitary sewage, all
in capacities  necessary for the intended use of such Facilities,  and dedicated
and  publicly  maintained  roads  necessary  for  the  full  use of  each of the
Facilities  for their  intended  purposes have been completed to the boundary of
each Property;  and each Property and the Improvements  thereat are in existence
pursuant to final,  unconditional  certificates  of  occupancy  and there are no
offsite roads, sewage systems, water systems or other improvements which must be
completed for continued occupancy or use of the Improvements.

     3.19. Lease Agreement.  The Lease Agreement is in full force and effect, is
free from default, offset or defense, has not been modified,  altered or amended
(except as described in the  definition  thereof) and  constitutes  the complete
agreement  of  the  parties  with  respect  to  leasing  of the  Properties  and
Improvements; all Properties and Improvements existing as of the date hereof are
owned by Borrower and are leased to Lessee pursuant to the Lease Agreement,  and
there are no other properties subject to the Lease Agreement; all Properties and
Improvements  are utilized for  operation  of Hardee's  Restaurants  pursuant to
valid and enforceable franchise  agreements;  the Lease Agreement provides for a
fixed  minimum rent of not less than  $4,500,000  per annum,  payable in monthly
increments;  the Lease  Agreement  provides  for  percentage  rents of 9.875% of
aggregate annual net sales to the extent such percentage of aggregate annual net
sales exceeds the fixed annual  minimum rent;  no rentals  thereunder  have been
prepaid  further  in  advance  than  one  (1)  month;  the  Lease  Agreement  is
noncancellable;  all of  Borrower's  obligations  as  Landlord  under  the Lease
Agreement have been fully  performed;  the Lease  Agreement has a term presently
ending  December 31, 2007; all fixed minimum rent and other payments to Borrower
pursuant to the Lease Agreement are fully net to Borrower, and Lessee has agreed
in the Lease Agreement to pay all taxes,  insurance,  and utilities with respect
to the  Properties  and  Improvements;  and the  Lease  Agreement  has not  been
modified or amended  (except as so  described  in the  definition  thereof)  and
together with the subordination,  attornment,  and nondisturbance agreement with
Lender is the full and  complete  agreement  of the parties  with respect to the
Properties and Improvements.

                                   ARTICLE IV.

                     AFFIRMATIVE COVENANTS OF THE BORROWER.

     Borrower  agrees  with and  covenants  unto the Lender  that until the Loan
Obligations have been paid in full, the Borrower shall:

     4.1. Payment of Loan/Performance  of Loan Obligations.  Duly and punctually
pay or cause to be paid the  principal  and  interest of the Note in  accordance
with its terms and duly and  punctually  pay and  perform or cause to be paid or
performed all Loan Obligations hereunder and under the other Loan Documents.

     4.2.  Maintenance  of  Existence.  Maintain  its  existence,  and,  in each
jurisdiction  in which the character of the property owned by it or in which the
transaction  of  their  respective  businesses  makes  qualification  necessary,
maintain qualification and good standing.

     4.3.  Accrual and Payment of Taxes.  During  each fiscal  year,  accrue all
current tax liabilities of all kinds (including, without limitation, federal and
state income taxes, franchise taxes, and payroll taxes, all required withholding
of  income  taxes  of   employees,   all  required  old  age  and   unemployment
contributions, and all required payments to employee benefit plans), and pay the
same prior to becoming delinquent.

     4.4 Insurance.  At all times while Borrower is indebted to Lender, maintain
or cause the Lessee to maintain, for the benefit of Borrower,  Lender and Lessee
the following insurance:

     (a)  Liability  insurance  in an amount  equal to at least  $1,000,000  per
occurrence,  with a $10,000,000  umbrella policy.  All such liability  insurance
shall be written on an occurrence basis;

     (b) "All-risk"  broad form coverage on all Improvements and Equipment in an
amount not less than the replacement cost thereof,  with  endorsements  insuring
against such potential causes of loss as shall be required by Lender, including,
but not limited to, loss or damage from (i) subsidence  and windstorm,  and (ii)
flood, unless evidence satisfactory to Lender is provided that no part of any of
the Facilities is located in an area which is designated as a flood hazard area;

     (c) Workers' compensation insurance as required by the laws of the state in
which the Borrower maintains its places of business.

     Each of the policies described in 4.4(b) shall name Lender as mortgagee and
loss payee under a standard  non-contributory  mortgagee and lender loss payable
clause,  and shall  provide that Lender shall  receive not less than thirty (30)
days  written  notice  prior  to  cancellation.  The  proceeds  of the  policies
described  in 4.4(b)  shall be payable to Lender,  and shall be delivered to and
held by Lender,  and such proceeds (after deducting  Lender's costs and expenses
of obtaining such proceeds) shall be applied by Lender, at Lender's sole option,
either (i) to the full or partial payment or prepayment of the Loan  Obligations
(without premium),  or (ii) to the repair and/or restoration of the Improvements
and Equipment  damaged or taken,  or (iii) to the Borrower  and/or  Lessee,  all
without  effecting  the lien of the  Mortgages for the unpaid amount of the Loan
Obligations.

     Borrower  appoints  Lender  as  Borrower's  attorney-in-fact  to cause  the
issuance of or an endorsement  of any policy to bring  Borrower into  compliance
herewith and, at Lender's sole option,  to make any claim for,  receive  payment
for,  and  execute and endorse any  documents,  checks or other  instruments  in
payment for loss,  theft,  or damage  covered under any such  insurance  policy;
however,  in no event will  Lender be liable for  failure to collect any amounts
payable under any insurance policy.

     4.5.  Financial and Other  Information.  Provide  Lender with the following
financial statements and information on a continuing basis:

     (a) Within  ninety  (90) days  after the end of each of its  fiscal  years,
audited financial statements of the Borrower prepared by a nationally recognized
certified  public  accounting  firm  or  other   independent   certified  public
accounting firm acceptable to the Lender,  prepared in accordance with GAAP, and
which shall include all liabilities whether fixed or contingent.

     (b) Within  forty-five (45) days after the end of each fiscal year quarter,
unaudited  financial  statements  of the  Borrower  for the quarter  then ended,
prepared on a basis  consistent with and containing the same  information as set
forth in the quarterly financial  statements  heretofore provided by Borrower to
Lender,  and  certified  by an  authorized  officer of  Borrower  to be true and
correct.

     The Lender reserves the right to require such other  financial  information
(including tax returns,  detailed cash flow information and contingent liability
information) of Borrower and of any affiliate of the Borrower, all at such times
as Lender  shall deem  reasonably  necessary,  and Borrower  agrees  promptly to
provide such information to Lender.  Upon Lender's  request,  Borrower agrees to
request and provide to Lender such  financial  and other  information  regarding
Lessee which  Borrower  may be entitled to receive  under the terms of the Lease
Agreement. All financial statements must be in the form and detail as the Lender
shall from time to time request.

     4.6.  Books and  Records.  Permit,  and require  Lessee to permit,  Persons
designated by Lender to inspect the  Properties and  Improvements  and books and
records of the  Borrower  and the  Lessee  (to the  extent  the Lease  Agreement
permits  inspection by Borrower of Lessee's  records) and to discuss the affairs
of the  Borrower  with the officers of Borrower  and  employees of Borrower,  as
designated by Lender, all at such times as Lender shall reasonably request.

     4.7. Payment of  Indebtedness.  Duly and punctually pay or cause to be paid
all other  Indebtedness  now owing or  hereafter  incurred  by the  Borrower  in
accordance with the terms of such  Indebtedness,  except such Indebtedness owing
to those  other  than  Lender  which is being  contested  in good faith and with
respect to which any  execution  against  properties  of the  Borrower  has been
effectively  stayed  and for  which  reserves  adequate  for  payment  have been
established.

     4.8.  Records  of  Accounts.   Maintain  all  records,   including  records
pertaining to the Lease Agreement and Rents,  at the chief  executive  office of
Borrower as set forth in this Agreement.

     4.9. Notice of Loss.  Immediately  notify the Lender of any event causing a
loss or depreciation in value of the Borrower's assets in excess of $100,000 and
the amount of such loss or  depreciation,  except Borrower shall not be required
to notify Lender of  depreciation in real and personal  property  resulting from
ordinary use thereof.

     4.10. Tax Service Fee and Escrows. Upon Lender's written request pay Lender
a tax  service  fee not to exceed  $500 per  Property  for  retaining  a firm to
monitor and report  payment of property  taxes with respect to each Property and
the Improvements  located thereat,  and fund to Lender such escrows for taxes in
the manner and to the extent required in the Mortgages;  provided,  however,  so
long as  Borrower  timely  pays prior to  delinquency  all  property  taxes with
respect to the  Collateral  and provides to Lender within sixty (60) days of the
end of each calendar year a certificate setting forth an itemization of all such
taxes and  confirming  that such  taxes  have  been paid and  provides  paid tax
receipts  therefor,  Lender  agrees  that it will not  require  payment of a tax
service fee or establishment of an escrow for taxes.

     4.11. Debt Service  Coverage  Requirements.  Achieve and within  forty-five
(45) days of the end of each fiscal  quarter  provide  evidence to Lender of the
achievement of a Debt Service  Coverage of 2.0 (or greater) to 1.0 as of the end
of each such quarter (based on a twelve-month period ending with such quarter).

     4.12. Net Worth.  Maintain a minimum net worth at all times during calendar
year 1995 of not less than  $25,088,000;  during  calendar year 1996 of not less
than $22,806,000;  during calendar year 1997 of not less than  $20,479,000;  and
during calendar year 1998 of not less than $18,105,000; and with each submission
of financial statements required in this Agreement provide evidence to Lender of
the net worth of Borrower and the satisfaction of this requirement.

     4.13.  Lease  Agreement.  Maintain  the Lease  Agreement  in full force and
effect and timely perform all of Borrower's  obligations  thereunder and enforce
performance of all  obligations of the Lessee  thereunder  (except that Borrower
will take no action to terminate the Lease  Agreement or dispossess  Lessee from
any Property or Improvements  without  Lender's prior written  consent);  notify
Lender   promptly  of  any  default  by  Lessee  or  breach  of  any   covenant,
representation  or warranty of Lessee  under the Lease  Agreement  and take such
action with respect to such  default or breach as Lender may  request,  provided
such requested action is permitted by the Lease Agreement;  not waive any right,
remedy or claim of Borrower as landlord under the Lease Agreement or any breach,
default  or  obligation  of Lessee  under the Lease  Agreement;  not  permit the
termination or amendment of the Lease Agreement unless the prior written consent
of Lender is first  obtained;  and not permit the release of any Property or any
Improvements  from the Lease  Agreement  except as  expressly  permitted in this
Agreement or the addition of any property to the Lease Agreement.  Borrower will
enter  into and  cause  Lessee to enter  into a  subordination,  attornment  and
nondisturbance   agreement   relating  to  the  Lease   Agreement  and  in  form
satisfactory  to Lender,  and will cause  Lessee to provide  Lender from time to
time an estoppel letter in form satisfactory to Lender.

     4.14.  Updated  Appraisals.  For so long as the Loan  remains  outstanding,
Lender may cause the Properties and  Improvements  and the Lease Agreement to be
reappraised by an appraiser  selected by Lender, and in accordance with Lender's
appraisal  guidelines  and  procedures  then in effect,  and Borrower  agrees to
cooperate in all respects with such appraisals and furnish to the appraisers all
requested information  regarding the Properties,  the Improvements and the Lease
Agreement,  and if a Default or Event of Default exists and Lender requests such
a reappraisal, Borrower agrees to pay all costs incurred by Lender in connection
with the first such reappraisal.

     4.15.  Comply with  Covenants and Laws.  Comply and cause each Property and
Improvements to comply with all applicable  covenants and restrictions of record
and all laws, ordinances, rules and regulations,  including, without limitation,
the  Americans  with  Disabilities  Act and  regulations  thereunder,  and laws,
ordinances,  rules and regulations relating to zoning,  health,  building codes,
setback requirements and Applicable Environmental Laws.

     4.16. Taxes and Other Charges. Pay all taxes, assessments,  charges, claims
for labor,  supplies,  rent, and other obligations which, if unpaid,  might give
rise to a Lien against  property of Borrower  (including any of the Collateral),
except Liens to the extent  permitted by this  Agreement,  except that Lessee or
Borrower  may contest the same to the extent and subject to the  conditions  set
forth in the Lease  Agreement  provided  Lender receives notice of such contest,
Lessee or Borrower diligently pursues such contest, and the Lender's interest in
the Collateral is not in Lender's opinion materially  endangered by such contest
and Lender, at its option,  receives and holds any reserves required for payment
to the extent reserves are required by the Lease Agreement.

     4.17.  Use and Occupancy.  Require that each Property and the  Improvements
thereon be used  primarily as a Hardee's  restaurant  and maintain the same,  or
require  Lessee to  maintain  the same,  in good  condition  and timely  make or
require Lessee to make all necessary repairs thereto.

     4.18. Use of Proceeds.  Use the proceeds of the Loan solely and exclusively
for business purposes of Borrower and not for acquisition of margin stock.

     4.19.  Reports  and  Notices.   Notify  Lender  promptly  of  any  material
litigation  instituted  or threatened  against  Borrower or Lessee upon Borrower
becoming  aware of the same,  and any  material  deficiencies  asserted or liens
filed by the Internal Revenue Service against Borrower or Lessee;  notify Lender
promptly of any condemnation or similar proceedings with respect to any Property
or Improvements, any proceeding seeking to enjoin the intended use of any of the
Improvements,   and  of  all  material  changes  in  governmental   requirements
pertaining  to any Property or  Improvements  and any other  matters which could
reasonably  be expected to adversely  affect the Lease  Agreement or  Borrower's
ability to perform its obligations under this Agreement.

     4.20.  Certificate.  Simultaneously  with the  furnishing  of quarterly and
annual  financial  statements  to  Lender  and  at  other  times  upon  Lender's
reasonable  written  request,  furnish  Lender with a certificate in the form of
Exhibit C  attached  hereto,  properly  completed  and  signed by an  authorized
officer of Borrower.

                                   ARTICLE V.

                       NEGATIVE COVENANTS OF THE BORROWER.

     Until the Loan Obligations have been paid in full, Borrower shall not:

     5.1. No Liens;  Exceptions.  Create,  incur,  assume or suffer to exist any
Lien  upon or with  respect  to any of the  Collateral,  whether  now  owned  or
hereafter acquired, other than the following permitted Liens:

     (a) Liens at any time existing in favor of the Lender;

     (b) Inchoate  Liens  arising by operation of law for the purchase of labor,
services,  materials,  equipment  or  supplies,  provided  payment  shall not be
delinquent and which Lien is fully subordinate to the Mortgages;

     (c) Liens for current year's taxes,  assessments or governmental charges or
levies provided payment thereof shall not be delinquent;

     (d) "Permitted  Encumbrances" upon a Property, as defined in the Mortgages;
and

     (e) Liens on Lessee's interest only in the Property and Improvements to the
extent permitted in the Lease Agreement.

     5.2. Merger, Consolidation, Etc. Except as provided in Section 7.12 hereof,
enter into any merger,  consolidation or similar  transaction,  or sell, assign,
lease or  otherwise  dispose of  (whether in one  transaction  or in a series of
transactions),  all or substantially all of its assets (whether now or hereafter
acquired), without the prior written consent of the Lender, which may be granted
or refused by Lender in Lender's sole discretion.

     5.3. Disposition of a Material Portion of Its Assets. Sell, lease, transfer
or  otherwise  dispose of any  material  portion of its assets,  unless any such
disposition  is of property  other than the  Collateral  and is in the  ordinary
course of business  for a full and fair  consideration,  which in no event shall
include a transfer for full or partial satisfaction of a preexisting debt.

     5.4.  Dividends,  Distributions  and  Redemptions.  Except  as  hereinafter
provided or as otherwise  consented to by Lender in writing,  declare or pay any
distributions  to its  shareholders or purchase,  redeem,  retire,  or otherwise
acquire for value,  any capital stock of Borrower now or hereafter  outstanding,
return any capital to its  shareholders  as such,  or make any  distribution  of
assets  to its  shareholders;  provided  Borrower  may  pay  cash  dividends  or
distributions so long as no Default or Event of Default exists or would occur as
a result of such dividend or distribution.

     5.5.  Change in Business;  Management;  Control.  Conduct or enter into any
business  other  than  acting  as  owner  and  landlord  of the  Properties  and
Improvements  pursuant to the Lease Agreement and the  acquisition,  development
and operation of  multi-family  properties or the  investment in other  entities
owning  multi-family  properties  (provided any Indebtedness,  including amounts
guaranteed by Borrower,  and interest on such Indebtedness,  must be included in
the  calculations  set forth in Sections 4.11,  4.12 and 5.10 hereof in a manner
reasonably  satisfactory  to Lender after giving  consideration  to the value of
assets,  interests in assets and  earnings on assets  acquired by virtue of such
acquisition or investment of Borrower),  make any other  material  change in the
nature of its business as it is being  conducted  as of the date hereof,  permit
any change in  management  with  respect to (a) both Nick B.  Boddie and B. Mayo
Boddie,  or (b) D. Scott Wilkerson,  except that the death of D. Scott Wilkerson
or  termination  of his  current  managerial  position  shall not  constitute  a
violation of this  covenant so long as a  replacement  manager  satisfactory  to
Lender is  employed  within  ninety  (90) days and  thereafter  remains  in such
capacity, or permit any change in control of Borrower.

     5.6. Changes in Accounting.  Change its methods of accounting,  unless such
change is permitted by GAAP,  and provided  such change does not have the effect
of curing or preventing  what would  otherwise be an Event of Default or Default
had such change not taken place.

     5.7. ERISA Funding and Termination.  Permit (a) the funding requirements of
ERISA with respect to any employee plan to be less than the minimum  required by
ERISA  at any  time,  or (b) any  employee  plan to be  subject  to  involuntary
termination proceedings at any time.

     5.8.  Transactions  with  Affiliates.  Enter into any transaction  with any
Person  affiliated  with the Borrower  other than in the ordinary  course of its
business and on fair and reasonable terms no less favorable to the Borrower than
those they would obtain in a comparable  arms-length  transaction  with a Person
not an affiliate.

     5.9. Place of Business.  Change its chief executive office or its principal
place of business  without  first giving  Lender at least thirty (30) days prior
written  notice  thereof and  promptly  providing  Lender such  information  and
preparing  and filing such  additional  UCC  financing  statements as Lender may
request in connection therewith.

     5.10. Leverage. Borrower's Adjusted Leverage will at no time exceed 66.67%.

                                   ARTICLE VI.

                         EVENTS OF DEFAULT AND REMEDIES.

     6.1. The occurrence of any one or more of the following shall constitute an
"Event of Default" hereunder:

     (a) The failure by Borrower to pay any installment of principal or interest
under the Note,  as and when the same  comes  due,  which  failure  is not cured
within five (5) Business  Days  following  written  notice by Lender to Borrower
(except that the  requirement of notice and the applicable  cure period shall be
deemed  eliminated  after two such  notices  of  failure  have been given in any
single calendar year); or

     (b) The failure by Borrower to pay any payment due to Lender under the Loan
Documents  other than as provided in (a) above,  as and when the same comes due,
which failure is not cured within twenty (20) days  following  written notice by
Lender to Borrower  (except that the  requirement  of notice and the  applicable
cure period  shall be deemed  eliminated  after two such notices of failure have
been given in any single calendar year); or

     (c) The failure of Borrower  properly  and timely to perform or observe any
covenant or condition set forth in this Agreement (other than those specified in
(a) and (b) of this  Section) or any other Loan  Document,  which failure is not
cured  within  any  applicable  cure  period as set forth  herein or, if no cure
period is specified  therefor,  is not cured within thirty (30) days of Lender's
written  notice to  Borrower  of such  Default  except  that if such  Default is
capable of being  cured but is not cured  within such  period and  Borrower  has
notified  Lender on or before the  expiration of such initial 30-day period that
it is  diligently  pursuing  a cure,  then so long  as  Borrower  is  diligently
pursuing a cure,  Borrower shall have an additional sixty (60) days within which
to effect a cure; or

     (d) The occurrence of any Event of Default  (other than those  specified in
(a), (b) or (c) of this Section) under any other Loan Documents; or

     (e) The  filing  by the  Borrower  or  Lessee of a  voluntary  petition  in
bankruptcy or the adjudication of either of the aforesaid  Persons as a bankrupt
or insolvent,  or the filing by either of the aforesaid  Persons of any petition
or  answer   seeking  or  acquiescing   in  any   reorganization,   arrangement,
composition, readjustment, liquidation, dissolution or similar relief for itself
under any present or future federal,  state or other statute,  law or regulation
relating to bankruptcy,  insolvency or other relief for debtors, or if either of
the aforesaid  Persons should seek or consent to or acquiesce in the appointment
of any trustee,  receiver or liquidator for itself or of all or any  substantial
part its  property or of any or all of the rents,  revenues,  issues,  earnings,
profits or income  thereof,  or the  making of any  general  assignment  for the
benefit of  creditors  or the  admission  in writing by either of the  aforesaid
Persons of its inability to pay its debts generally as they become due; or

     (f) The entry by a court of competent  jurisdiction of an order,  judgment,
or decree approving a petition filed against the Borrower or Lessee,  which such
petition  seeks  any  reorganization,  arrangement,  composition,  readjustment,
liquidation,  dissolution or similar relief under any present or future federal,
state or other statute, law or regulation relating to bankruptcy, insolvency, or
other relief for debtors,  which order, judgment or decree remains unvacated and
unstayed for an aggregate of sixty (60) days (whether or not  consecutive)  from
the date of entry  thereof,  or the  appointment  of any  trustee,  receiver  or
liquidator of either of the aforesaid  Persons or of all or any substantial part
of its  properties or of any or all of the rents,  revenues,  issues,  earnings,
profits or income thereof which  appointment shall remain unvacated and unstayed
for an aggregate of sixty (60) days (whether or not consecutive); or

     (g)  Any  certificate,   statement,   representation,   warranty  or  audit
heretofore or hereafter furnished by or on behalf of the Borrower pursuant to or
in connection with this Agreement,  the Lease Agreement or otherwise (including,
without limitation,  representations  and warranties  contained herein or in any
Loan  Documents)  or as an  inducement  to Lender to extend  any credit to or to
enter into this or any other  agreement  with Borrower in  connection  with this
Loan or other loans now existing or hereafter created, proves to have been false
in any material respect at the time when the facts therein set forth were stated
or  certified,   or  proves  to  have  omitted  any  substantial  contingent  or
unliquidated liability or claim against Borrower, or on the date of execution of
this Agreement there shall have been any materially adverse change in any of the
facts previously disclosed by any such certificate,  statement,  representation,
warranty  or audit,  which  change  shall not have been  disclosed  to Lender in
writing at or prior to the time of such execution; or

     (h) A final  judgment shall be rendered by a court of law or equity against
Borrower  and the same shall  remain  undischarged  for a period of thirty  (30)
days, unless such judgment is either (i) fully covered by collectible  insurance
and such insurer has within such period  acknowledged  such coverage in writing,
or (ii) although not fully covered by  insurance,  enforcement  of such judgment
has been  effectively  stayed,  such judgment is being  contested or appealed by
appropriate  proceedings  and Borrower  has  established  reserves  adequate for
payment in the event  Borrower is  ultimately  unsuccessful  in such  contest or
appeal and evidence thereof is provided to Lender; or

     (i) The  occurrence  of any  materially  adverse  change  in the  financial
condition  or  prospects  of Borrower or Lessee,  or the  existence of any other
condition which, in Lender's reasonable determination, constitutes an impairment
of Borrower's ability to perform its obligations under its Loan Documents or the
Lessee's ability to perform its obligations  under the Lease  Agreement,  except
that a material adverse change in the financial condition or prospects of Lessee
shall not be deemed to constitute an Event of Default if within thirty (30) days
following  written  notice  from  Lender,  Borrower  provides  Lender  with such
additional  collateral  as Lender may  reasonably  request to assure Lender that
such material adverse change will not adversely affect the original valuation of
the  Lender's  Collateral  or  Borrower's  ability to pay and  perform  the Loan
Obligations as and when due; or

     (j) Any  default  by Lessee  under the Lease  Agreement  which is not cured
within any applicable cure period therein.

     Notwithstanding  anything in this Section, all requirements of notice shall
be  deemed  eliminated  if  Lender  is  prevented  from  giving  such  notice by
bankruptcy or other applicable law. The cure period, if any, shall then run from
the occurrence of the event or condition of Default rather than from the date of
notice.

     If a Default occurs solely as a result of a Property or Properties being in
violation of a covenant of this  Agreement  then Borrower may elect to cure such
Default by  satisfying  the  conditions  of Section 7.11 hereof on or before the
last day of the cure period set forth in (c) above,  in which event such Default
shall be deemed cured by  satisfaction  of such  conditions  and release of such
Property.

     6.2.  Remedies.  Upon the  occurrence  of any  Default or Event of Default,
regardless of any  requirement  that notice be given or a period of time elapse,
Lender shall be under no obligation to make further  advances of the Loan.  Upon
the occurrence of any Event of Default,  Lender shall have the absolute right to
refuse to disburse any  additional  Loan funds  hereunder  and at its option and
election and in its sole  discretion to exercise  alternatively  or cumulatively
any or all of the following remedies:

     (a) Cancel  Lender's  obligations  pursuant  to this  Agreement  by written
notice to  Borrower.  Upon the  occurrence  of a Default  or an Event of Default
described in Sections  6.1(e) or (f) hereof,  Lender's  obligations  pursuant to
this Agreement shall be terminated immediately and automatically.

     (b) Take immediate  possession of the Borrower's interest in the Collateral
as well as all other property to which title is held by Borrower as is necessary
to comply with the Borrower's  obligations  under the Lease Agreement;  exercise
all rights in and to the  Collateral;  and do anything  in its sole  judgment to
fulfill the obligations of Borrower under this Agreement or the Lease Agreement.
Without  restricting  the  generality  of the  foregoing  and for  the  purposes
aforesaid,   Borrower  hereby   appoints  and  constitutes   Lender  its  lawful
attorney-in-fact  with full power of  substitution  to preserve  and protect the
Collateral  and take any action that  Borrower  itself would be entitled to take
with respect to the Collateral,  it being  understood and agreed that this power
of attorney shall be a power coupled with an interest and cannot be revoked. All
expenses incurred by Lender under this subsection shall constitute a part of the
Loan Obligations, shall bear interest from the date incurred at the Default Rate
and shall,  together with such interest,  be deemed secured by the Mortgages and
all Collateral.

     (c) Declare the entire unpaid  principal of the Loan Obligations to be, and
the  same  shall  thereupon  become,   immediately  due  and  payable,   without
presentment,  protest or further  demand or notice of any kind, all of which are
hereby expressly waived.

     (d) Proceed to protect and enforce its rights by action at law  (including,
without  limitation,  bringing  suit to reduce any claim to  judgment),  suit in
equity and other appropriate  proceedings  including,  without  limitation,  for
specific performance of any covenant or condition contained in this Agreement.

     (e) Exercise  any and all rights and  remedies  afforded by the laws of the
United States, the state in which any Property or other Collateral is located or
any other  appropriate  jurisdiction  as may be available for the  collection of
debts and  enforcement  of covenants and conditions  such as those  contained in
this Agreement and the Loan Documents.

     (f) Exercise the rights and remedies of setoff and/or banker's lien against
the  interest  of the  Borrower  in  and to  every  account  (including  escrows
established  pursuant to the Mortgages) and other property of the Borrower which
is in the  possession of the Lender or any person who then owns a  participating
interest in the Loan, to the extent of the full amount of the Loan Obligations.

     (g) Exercise its rights and remedies pursuant to any other Loan Documents.

                                  ARTICLE VII.

                                 MISCELLANEOUS.

     7.1.  Waiver.  No remedy conferred upon, or reserved to, the Lender in this
Agreement or any of the other Loan  Documents is intended to be exclusive of any
other remedy or remedies,  and each and every  remedy  shall be  cumulative  and
shall be in addition to every other remedy  given  hereunder or now or hereafter
existing in law or in equity.  Exercise or omission to exercise any right of the
Lender shall not affect any subsequent  right of Lender to exercise the same. No
course of dealing between  Borrower and Lender or any delay on the Lender's part
in  exercising  any  rights  shall  operate  as a waiver of any of the  Lender's
rights. No waiver of any Default or Event of Default under this Agreement or any
of the other Loan  Documents  shall extend to or shall affect any  subsequent or
other then  existing  Default or Event of  Default or shall  impair any  rights,
remedies or powers of Lender.

     7.2.  Costs and Expenses.  Borrower will bear all taxes,  fees and expenses
(including  reasonable  fees and  expenses of counsel for Lender) in  connection
with the Loan,  the  preparation  of this Agreement and the other Loan Documents
(including any amendments  hereafter made), and the recording of any of the Loan
Documents.  If, at any  time,  a Default  or Event of  Default  occurs or Lender
becomes a party to any suit or  proceeding  in order to protect its interests or
priority in any Collateral  for any of the Loan  Obligations or its rights under
this Agreement or any of the Loan Documents, or if Lender is made a party to any
suit or proceeding by virtue of the Loan,  this  Agreement or any Collateral for
any Loan Obligations and as a result of any of the foregoing, the Lender employs
counsel  to  advise  or  provide  other  representation  with  respect  to  this
Agreement,  or to collect  the balance of the Loan  Obligations,  or to take any
action in or with respect to any suit or proceeding  relating to this Agreement,
any of the other Loan Documents, any Collateral for any of the Loan Obligations,
the Borrower,  or the Lessee,  or to protect,  collect,  or liquidate any of the
Collateral for the Loan Obligations, or attempt to enforce any security interest
or lien  granted  to the Lender by any of the Loan  Documents,  then in any such
events,  all of the  reasonable  attorney's  fees  arising  from such  services,
including  fees on appeal and in any bankruptcy  proceedings,  and any expenses,
costs and charges relating thereto shall  constitute  additional  obligations of
Borrower to the Lender  payable on demand of the Lender.  Without  limiting  the
foregoing, Borrower has undertaken the obligation for payment of, and shall pay,
all  recording  and  filing  fees,  revenue  or  documentary  stamps  or  taxes,
intangibles taxes, transfer taxes, recording taxes and other taxes, expenses and
charges payable in connection  with this  Agreement,  any of the Loan Documents,
the  Loan  Obligations,  or the  filing  of any  financing  statements  or other
instruments  required to effectuate the purposes of this  Agreement,  and should
Borrower fail to do so, Borrower agrees to reimburse Lender for the amounts paid
by Lender,  together with penalties or interest, if any, incurred by Lender as a
result of  underpayment or nonpayment.  This Section shall survive  repayment of
the remaining Loan Obligations.

     7.3.  Performance of Lender. At its option,  upon Borrower's  failure to do
so, the Lender may make any  payment,  do any act or give any notice  (including
notices of default to Lessee under the Lease Agreement) on the Borrower's behalf
that the Borrower or others are required to do to remain in compliance with this
Agreement,  any of the other Loan Documents or the Lease Agreement, and Borrower
agrees to  reimburse  the Lender,  on demand,  for any  payment  made or expense
incurred by Lender pursuant to the foregoing authorization,  including,  without
limitation, reasonable attorneys' fees, and until so repaid any sums advanced by
Lender  shall bear  interest at the Default  Rate from the date  advanced  until
repaid,  and such expenses together with interest shall be deemed secured by the
Collateral.

     7.4.  Headings.  The  headings of the  Sections of this  Agreement  are for
convenience of reference only, are not to be considered a part hereof, and shall
not limit or otherwise affect any of the terms hereof.

     7.5. Survival of Covenants. All covenants, agreements,  representations and
warranties made herein and in certificates or reports delivered  pursuant hereto
shall be deemed to have been  material and relied on by Lender,  notwithstanding
any  investigation  made by or on  behalf  of  Lender,  and  shall  survive  the
execution and delivery to Lender of the Note and this Agreement.

     7.6. Notices, etc. Any notice or other communication  required or permitted
to be given by this  Agreement or the other Loan  Documents or by applicable law
shall be in writing and shall be deemed received (a) on the date  delivered,  if
sent by hand delivery (to the person or  department if one is specified  below),
(b) three (3) days  following  the date  deposited  in U.S.  mail,  certified or
registered, with return receipt requested, or (c) one (1) day following the date
deposited with Federal Express or other national overnight carrier,  and in each
case addressed as follows:

         If to Borrower:

         Boddie-Noell Properties, Inc.
         3710 One First Union Center
         301 South College Street
         Charlotte, North Carolina  28202
         Attention:  Mr. D. Scott Wilkerson, President

         with a copy to:

         Kennedy Covington Lobdell & Hickman, L.L.P.
         100 North Tryon Street, Suite 4200
         Charlotte, North Carolina  28202
         Attention:  E. Allen Prichard

         If to Lender:

         SouthTrust Bank of Alabama,
         National Association
         P.O. Box 2554 (35290)
         420 N. 20th Street
         11th Floor - Commercial Real Estate Loan Department
         Birmingham, Alabama 35203

         with a copy to:

         SouthTrust Bank of North Carolina
         6525 Morrison Boulevard
         Suite 318
         Charlotte, North Carolina  28211
         Attention:  Mr. John Peirce

Either party may change its address to another single address by notice given as
herein provided,  except any change of address notice must be actually  received
in order to be effective.

     7.7. Benefits. All of the terms and provisions of this Agreement shall bind
and inure to the benefit of the parties hereto and their  respective  successors
and assigns.  No Person other than  Borrower or Lender shall be entitled to rely
upon this Agreement or be entitled to the benefits of this Agreement.

     7.8.  Participation.  Borrower acknowledges that Lender may, at its option,
sell  participation  interests  in, or assign all of its  interest in, the Loan.
Borrower  agrees with each present and future  participant  or owner of the Loan
that if an Event of Default should occur, each present and future participant or
owner shall have all of the rights and  remedies  of Lender with  respect to any
deposit due from any participant to the Borrower. The execution by a participant
of a participation  agreement with Lender,  and the execution by the Borrower of
this  Agreement,  regardless  of the  order  of  execution,  shall  evidence  an
agreement  between Borrower and said participant in accordance with the terms of
this Section.  Borrower  consents to the Lender's  disclosure and  distribution,
subject to obligations of  confidentiality  in SEC and AMEX rules,  of financial
and other  information  that has been provided by Borrower to Lender pursuant to
this Agreement to participants and prospective participants.

     7.9. Supersedes Prior Agreements; Counterparts. This Agreement and the Loan
Documents  referred to herein  supersede and  incorporate  all  representations,
promises, and statements, oral or written, made by Lender in connection with the
Loan. This Agreement may not be varied,  altered, or amended except by a written
instrument  executed by an authorized officer of the Lender.  This Agreement may
be executed in any number of  counterparts,  each of which,  when  executed  and
delivered, shall be an original, but such counterparts shall together constitute
one and the same instrument.

     7.10. Use of Proceeds for  Restoration.  Notwithstanding  the provisions of
this  Agreement or any  Mortgage,  Lender  agrees that Lender shall make the net
proceeds of  insurance  or  condemnation  (after  payment of Lender's  costs and
expenses)  available to Borrower or Lessee for  Borrower's  or Lessee's  repair,
restoration and replacement of the Improvements  and Equipment  damaged or taken
on the following terms and subject to Borrower's or Lessee's satisfaction of the
following conditions:

     (a) At the time of such loss or damage  and at all times  thereafter  while
Lender is holding  any  portion of such  proceeds,  there shall exist no default
under the Lease  Agreement  (provided  if a default  exists as of the date of or
subsequent to Borrower's or Lessee's written election to Lender informing Lender
that Borrower intends to use proceeds to restore the Improvements,  Equipment or
Lessee's equipment,  Lender shall not apply the net proceeds to Loan Obligations
so long as a cure period exists);

     (b) The  Improvements,  Equipment and Lessee's  equipment for which loss or
damage has  resulted  shall be capable of being  restored or replaced to its use
immediately  preceding  such loss or  damage  and with a value not less than the
value  prior to such loss or damage  and  restoration  or  replacement  shall be
capable of being  completed  prior to the current term of the Lease Agreement or
any renewal term for which Lessee has exercised its option;

     (c)  Within  forty-five  (45)  days  from the date of such  loss or  damage
Borrower or Lessee shall have given Lender a written notice electing to have the
proceeds applied for such purpose;

     (d) Within sixty (60) days following the date of notice under the preceding
subparagraph  (c) and prior to any  proceeds  being  disbursed  to  Borrower  or
Lessee, Borrower or Lessee shall have provided to Lender all of the following to
the extent requested by Lender:

          (1) complete  plans and  specifications  for  restoration,  repair and
     replacement of the Improvements,  Equipment and Lessee's  equipment damaged
     to the condition, utility and value required by (b) above,

          (2) if loss or  damage  exceeds  $50,000,  fixed-price  or  guaranteed
     maximum cost bonded construction contracts for completion of the repair and
     restoration work in accordance with such plans and specifications,

          (3) builder's  risk insurance for the full cost of  construction  with
     Lender named under a standard mortgagee loss-payable clause,

          (4)  such  additional  funds as in  Lender's  reasonable  opinion  are
     necessary to complete the repair, restoration and replacement, and

          (5) copies of all permits and licenses  necessary to complete the work
     in accordance with the plans and specifications;

     (e) Lender may, at Borrower's and Lessee's  expense,  retain an independent
inspector  to  review  and  approve  plans  and   specifications  and  completed
construction and to approve all requests for disbursement, which approvals shall
be conditions precedent to release of proceeds as work progresses;

     (f) No  portion  of such  proceeds  shall be made  available  by Lender for
architectural  reviews  or  for  any  other  purposes  which  are  not  directly
attributable to the cost of repairing,  restoring or replacing the Improvements,
Equipment and Lessee's  equipment for which a loss or damage has occurred unless
the same are covered by such insurance;

     (g) Borrower or Lessee shall  commence such work within one hundred  twenty
(120)  days of such loss or  damage  and shall  diligently  pursue  such work to
completion;

     (h) Each  disbursement  by Lender of such  proceeds and  deposits  shall be
funded  subject to conditions  and in accordance  with  disbursement  procedures
which a commercial construction lender would typically establish in the exercise
of sound banking  practices and shall be made only upon receipt of  disbursement
requests on an AIA G702/703 form (or similar form approved by Lender) signed and
certified by the Borrower or Lessee and its architect and general contractor, if
any, with appropriate invoices and lien waivers as required by Lender;

     (i) Lender  shall have a first lien and  security  interest in all building
materials  and  completed  repair and  restoration  work and in all fixtures and
equipment  (to the extent owned by Borrower)  acquired with such  proceeds,  and
Borrower and Lessee shall  execute and deliver such  mortgages,  deeds of trust,
security agreements,  financing statements and other instruments as Lender shall
request  to  create,  evidence,  or  perfect  such lien and  security  interest;
provided,  however,  Lender  shall  in no  event  have a lien  upon or  security
interest in any fixtures, equipment, inventory or personal property of Lessee or
any restoration or replacement thereof, however acquired by Lessee; and

     (j) In the event and to the extent such  proceeds  are not required or used
for the repair, restoration and replacement of the Improvements or Equipment for
which a loss or damage has occurred, or in the event Borrower or Lessee fails to
timely make such  election or having made such  election  fails to timely comply
with the terms and conditions set forth herein, Lender shall be entitled without
notice to or consent  from  Borrower  to apply  such  proceeds,  or the  balance
thereof,  at  Lender's  option  either  (i) to the full or  partial  payment  or
prepayment  of the Loan  Obligations  in the  manner  aforesaid,  or (ii) to the
repair,  restoration  and/or replacement of all or any part of such Improvements
and Equipment for which a loss or damage has occurred, or Lender may release the
balance of such proceeds to the Borrower,  all without affecting the lien of the
Mortgages for the unpaid balance of the Loan Obligations.

     7.11.  Release of  Properties.  Certain  provisions of the Lease  Agreement
provide  for the  release of  "Uneconomic  Properties,"  and  Borrower  may cure
certain  Defaults  pursuant  to Section  6.1 of this  Agreement  which  affect a
Property or  Properties  only but not all  Properties  by obtaining a release of
such Property or Properties, provided Lender is willing to release a Property or
Properties  from  this  Agreement  and the  Mortgages  if and only if all of the
following conditions are satisfied:

     (a) Borrower pays to Lender a principal  prepayment of $542,553.19 per each
Property to be released, together with any applicable prepayment premium;

     (b) Such Property is released and removed from the Lease  Agreement  with a
reduction  in rent not  greater  than  1/47th of the rent as of the date of this
Agreement;

     (c) Not more than seven (7) such Properties are released during the term of
this Agreement; and

     (d) No Default or Event of Default  exists  except a Default which is cured
as a result of such release.

Provided,  however,  that upon  substitution  of a property  (and  corresponding
release of a Property)  under the terms of the Lease  Agreement,  such  released
Property  shall not be included in the maximum of seven (7) released  Properties
and shall not require a principal  repayment so long as the Lender  approves the
substitute  property or properties,  the rent under the Lease Agreement does not
decrease,  and Borrower satisfies such additional conditions with respect to the
substitute  property  or  properties  as Lender may  impose,  including  but not
limited  to, the  execution,  delivery  and  recording  of an  amendment  to the
applicable  Mortgage and the issuance of an  endorsement  to Lender's  policy of
title insurance, insuring the applicable Mortgage, as amended, is an enforceable
first-priority lien with respect to the substitute property or properties.

     7.12.  UPREIT.  In  connection  with an "UPREIT"  transaction  in which the
Properties  would be  transferred to a transferee in exchange for the transferor
(i.e. the Borrower) receiving an interest in the transferee, provided no Default
or Event of Default  exists or would  result from  proposed  transfer,  Borrower
shall have the right to transfer all (but not less than all) of the  Properties,
at any time or from time to time,  to an entity which is an  "Affiliate"  of the
Borrower;  provided  that not less  than ten  (10)  Business  Days  prior to the
effective date of any such transfer, Borrower shall provided to Lender:

     (a) The name and address of the  prospective  transferee  and evidence that
such  transferee  is an Affiliate  and that such  transaction  is one  described
above;

     (b)  The  partnership   agreement,   articles  of  incorporation  or  other
organizational  documents  of the  prospective  transferee  and  evidence of its
existence and, to the extent  applicable,  its good standing in each  applicable
jurisdiction;

     (c) An  instrument  of  assumption,  in form  satisfactory  to the  Lender,
whereby  the  transferee   assumes  jointly  and  severally  with  Borrower  the
Borrower's  obligations under the Loan Documents in accordance with their terms,
including, but not limited to, all financial covenants; and

     (d)  Appropriately-completed  UCC financing statements or amendments to the
existing  financing  statements  and/or Loan  Documents  as may be  requested by
Lender  to  continue  the  perfection  of  Lender's  security  interest  in  the
Collateral without loss of priority; and

     (e)  Evidence  that  Borrower's  interest  under  the  Lease  Agreement  is
simultaneously  transferred  to such  transferee  and that such  transaction  is
permitted  by the Lease  Agreement  and does not result in a merger of interests
under the Lease Agreement; and

     (f) Evidence that the Borrower,  as transferor,  and the  transferee,  on a
consolidated  basis, will satisfy all financial and other covenants contained in
this Agreement as of the next reporting date.

     Such  transfer  shall not relieve  Borrower from its liability for all Loan
Obligations,  including those Loan Obligations thereafter accruing, but Borrower
shall remain jointly and severally obligated therefor.

     7.13. Controlling Law. THE VALIDITY, INTERPRETATION, ENFORCEMENT AND EFFECT
OF THIS  AGREEMENT  SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH, THE
LAWS OF THE STATE OF NORTH CAROLINA EXCEPT AS OTHERWISE EXPRESSLY PROVIDED.

     7.14. Jurisdiction.  THE LENDER'S PRINCIPAL PLACE OF BUSINESS IS LOCATED IN
JEFFERSON  COUNTY IN THE STATE OF  ALABAMA,  AND THE  BORROWER  AGREES THAT THIS
AGREEMENT SHALL BE HELD BY LENDER AT SUCH PRINCIPAL  PLACE OF BUSINESS,  AND THE
HOLDING OF THIS AGREEMENT BY LENDER THEREAT SHALL CONSTITUTE  SUFFICIENT MINIMUM
CONTACTS  OF  BORROWER  WITH  JEFFERSON  COUNTY AND THE STATE OF ALABAMA FOR THE
PURPOSE OF CONFERRING  JURISDICTION  UPON THE FEDERAL AND STATE COURTS PRESIDING
IN SUCH COUNTY AND STATE.  BORROWER CONSENTS THAT ANY LEGAL ACTION OR PROCEEDING
ARISING  HEREUNDER  MAY BE BROUGHT IN THE CIRCUIT COURT OF THE STATE OF ALABAMA,
JEFFERSON  COUNTY,  ALABAMA OR THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ALABAMA AND ASSENTS AND SUBMITS TO THE PERSONAL  JURISDICTION OF ANY
SUCH COURT IN ANY ACTION OR PROCEEDING INVOLVING THIS AGREEMENT.  NOTHING HEREIN
SHALL LIMIT THE JURISDICTION OF ANY OTHER COURT.

     7.15.  Waiver of Jury Trial.  TO THE FULLEST EXTENT  ENFORCEABLE,  BORROWER
HEREBY  WAIVES  ANY  RIGHT  THAT IT MAY  HAVE TO A TRIAL  BY JURY ON ANY  CLAIM,
COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING OUT OF OR IN
ANY WAY RELATED TO THIS AGREEMENT, THE LOAN DOCUMENTS OR THE LOAN, OR (B) IN ANY
WAY CONNECTED  WITH OR PERTAINING OR RELATED TO OR INCIDENTAL TO ANY DEALINGS OF
LENDER AND/OR  BORROWER WITH RESPECT TO THE LOAN DOCUMENTS OR IN CONNECTION WITH
THIS  AGREEMENT OR THE EXERCISE OF EITHER PARTY'S RIGHTS AND REMEDIES UNDER THIS
AGREEMENT  OR  OTHERWISE,  OR THE  CONDUCT OR THE  RELATIONSHIP  OF THE  PARTIES
HERETO,  IN ALL OF THE FOREGOING CASES WHETHER NOW EXISTING OR HEREAFTER ARISING
AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. BORROWER AGREES THAT LENDER
MAY FILE A COPY OF THIS  AGREEMENT  WITH ANY COURT AS  WRITTEN  EVIDENCE  OF THE
KNOWING, VOLUNTARY, AND BARGAINED AGREEMENT OF BORROWER IRREVOCABLY TO WAIVE ITS
RIGHTS TO TRIAL BY JURY AS AN INDUCEMENT  OF LENDER TO MAKE THE LOAN,  AND THAT,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY DISPUTE OR CONTROVERSY WHATSOEVER
(WHETHER OR NOT MODIFIED  HEREIN)  BETWEEN  BORROWER AND LENDER SHALL INSTEAD BE
TRIED IN A COURT OF COMPETENT  JURISDICTION  BY A JUDGE SITTING  WITHOUT A JURY.
THIS WAIVER SHALL BE GOVERNED BY AND  CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF
THE STATE IN WHICH ANY ACTION, SUIT OR LEGAL PROCEEDING IS THEN PENDING AND THEN
SHALL BE  CONSTRUED  IN  ACCORDANCE  WITH THE LAWS THEN IN EFFECT AT THE TIME OF
SUCH ACTION, SUIT OR LEGAL PROCEEDING.

     IN WITNESS  WHEREOF,  the parties have caused this Agreement to be executed
as of the date first above written.

                                    BORROWER:

                                    BODDIE-NOELL PROPERTIES, INC.,
                                    a Delaware corporation


                                    BY:      __/s/ D. Scott Wilkerson__________
                                    Its      __President_______________________


                                    LENDER:

                                    SOUTHTRUST BANK OF ALABAMA,
                                    NATIONAL ASSOCIATION, a national
                                    banking association


                                    BY:      __/s/ John D. Peirce______________
                                    Its      __VP______________________________