Cassland will develop properties using the 40-unit Country Hearth Inn design prototype that is targeted at smaller markets. Buckhead America already owns and manages eight of these properties and is developing similar properties in Nicholasville, Ky., near Lexington and in Eddyville in western Kentucky. The company also recently announced an agreement for H W Management Inc., Lexington, Ky., to develop 10 such properties in the state of Kentucky during the next five years.

In total, there are 30 Country Hearth Inns opened and operating and 10 additional properties under construction and expected to open by mid-1998. Cassland said it expects to begin construction of its first Country Hearth Inn in Barnesville, Ga., within the next four weeks, and that it is actively considering sites in Cedartown, Hampton and Monroe, Ga. Cassland is controlled by the Kassam family, which also owns about 8 percent of Buckhead America's outstanding shares.

Azim Kassam, president of Cassland, said, "We believe the 40-unit Country Hearth Inns are ideal for smaller rural communities that have an industrial base, but little, if any, hotel capacity. We see numerous development opportunities in rural Georgia and elsewhere in the Southeast."

Douglas C. Collins, president and chief executive of Buckhead America, said, "This agreement advances Country Hearth Inns' strategy to focus on smaller communities that have been under-served by the hospitality industry. We also welcome this vote of confidence from a major shareholder of Buckhead America."

Buckhead America is a diversified hospitality services company whose holdings include the Country Hearth Inn mid-priced hotel chain, hotels, hotel loans, hotel management contracts and other hospitality-related assets. Buckhead America common shares trade on the NASDAQ National Market System under the stock symbol "BUCK."