EXHIBIT 10.3.5
AMENDED, RESTATED AND CONSOLIDATED MEZZANINE NOTE
$84,080,526 MARCH 31, 2003
THIS AMENDED, RESTATED AND CONSOLIDATED PROMISSORY NOTE (this "RESTATED
MEZZANINE NOTE"), is made as of March 31, 2003, by the undersigned, each having
an address c/o Lodgian, Inc., 3445 Peachtree Road, NE, Suite 700, Atlanta,
Georgia 30326 (each, a "MEZZANINE BORROWER" and, collectively, "MEZZANINE
BORROWERS"), in favor of MERRILL LYNCH MORTGAGE LENDING, INC., a Delaware
corporation (together with its successors and assigns, "MEZZANINE LENDER"),
having an address at 4 World Financial Center, New York, New York 10080.
RECITALS
WHEREAS Mezzanine Borrowers are the obligors under that
certain promissory note (the "ORIGINAL MEZZANINE NOTE") described on Exhibit A
annexed hereto and made a part hereof in the outstanding principal amount as of
the date hereof of $78,541,251 (the "EXISTING INDEBTEDNESS");
WHEREAS Mezzanine Borrowers have assumed the obligations of
the original makers of, and are now the obligors under, that certain promissory
note described on Exhibit B annexed hereto and made a part hereof in the
outstanding principal amount as of the date hereof of $5,539,275 (the "ASSUMED
NOTE"), and together with the Original Mezzanine Note, collectively, the
"EXISTING NOTES");
WHEREAS the Original Mezzanine Note is, and from and after the
date hereof, the Assumed Note will be, secured by, among other things, that
certain Pledge and Security Agreement, dated as of November 25, 2002 (as
amended, modified or restated from time to time, the "PLEDGE AGREEMENT"),
executed by certain of the Mezzanine Borrowers named therein, pledging such
Mezzanine Borrowers' legal and beneficial interest in and to certain stock,
limited liability company membership interests and limited and general
partnership interests, as applicable, as more particularly described therein
(collectively, the "PLEDGED INTERESTS") in favor of Mezzanine Lender, and (ii)
that certain Leasehold Deed to Secure Debt, Assignment of Leases and Rents and
Security Agreement, dated as of November 25, 2002 (together with all extensions,
renewals, modifications, substitutions and amendments thereof, the "SECURITY
INSTRUMENT"), made by Island Motel Enterprises, Inc. and Penmoco, Inc. for the
benefit of Lender and covering the property as more particularly described
therein;
WHEREAS Mezzanine Lender is the holder of the Existing Notes,
the Pledge Agreement and the Security Instrument;
WHEREAS on the date hereof, Mezzanine Borrowers and Mezzanine
Lender are consolidating, modifying and amending the Existing Indebtedness
pursuant to a certain Modification of Loan Agreement and Other Loan Documents
(as same may be amended, modified or supplemented, the "MODIFICATION
AGREEMENT");
WHEREAS Mezzanine Borrowers and Mezzanine Lender desire to
combine, consolidate, coordinate, amend and restate in its entirety the Existing
Indebtedness evidenced by the Existing Notes on the terms and conditions
provided in this Restated Mezzanine Note as hereinafter set forth; and
WHEREAS this Restated Mezzanine Note evidences a loan (the
"LOAN") in the principal amount of the Loan Amount (hereinafter defined).
NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto covenant and agree as follows:
(i) The Recitals are hereby incorporated herein by this
reference;
(ii) Mezzanine Borrowers and Mezzanine Lender acknowledge
and agree that the Existing Notes, as modified, constitute a single indebtedness
in the principal amount of EIGHTY-FOUR MILLION EIGHTY THOUSAND FIVE HUNDRED AND
TWENTY SIX AND 00/100 DOLLARS ($84,080,526.00) (the "LOAN AMOUNT") as evidenced
by this Restated Mezzanine Note;
(iii) From and after the date hereof, the terms, covenants
and provisions of the Existing Notes are hereby modified, amended and restated
in their entirety so that henceforth the terms, covenants and provisions of this
Restated Mezzanine Note shall supersede those of the Existing Notes;
(iv) Neither this Restated Mezzanine Note nor anything
contained herein shall be construed as a substitution or novation of the
indebtedness under the Existing Notes all of which shall remain in full force
and effect, as hereby confirmed, modified, amended and restated in their
entirety;
(v) On the date hereof, the principal amount outstanding
under the Existing Notes is the Loan Amount; and
(vi) Mezzanine Borrowers represent, warrant and covenant
to Mezzanine Lender that there are no offsets, counterclaims or defenses with
respect to the obligations under the Existing Notes.
NOW, THEREFORE, FURTHER, FOR VALUE RECEIVED, Mezzanine Borrowers do hereby
covenant and promise to pay to the order of Mezzanine Lender, without any
counterclaim, setoff or deduction whatsoever, on the Maturity Date (as
hereinafter defined), in immediately available funds, at 4 World Financial
Center, New York, New York 10080, or at such other place as Mezzanine Lender may
designate to Mezzanine Borrowers in writing from time to time, in legal tender
of the United States of America, the Loan Amount and all other amounts due or
becoming due hereunder, to the extent not previously paid in accordance
herewith.
PAYMENTS OF PRINCIPAL AND INTEREST. Mezzanine Borrowers shall make
payments of principal and interest on the outstanding principal balance of this
Restated
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Mezzanine Note in accordance with the terms and provisions of Section 2.4 of the
Mezzanine Loan Agreement.
The entire outstanding principal balance of the Mezzanine Loan, all
accrued and unpaid interest thereon (including interest through the end of the
Interest Accrual Period then in effect) and all other amounts due on each
Component hereunder and under the other Mezzanine Loan Documents (collectively,
the "DEBT") if not sooner paid (and unless Mezzanine Borrowers shall extend the
term of the Mezzanine Loan for the First Extension Term, the Second Extension
Term, or the Third Extension Term) shall be due and payable on November 30, 2004
(the "SCHEDULED MATURITY DATE"). Subject to the terms and conditions of Section
2.5(B) of the Mezzanine Loan Agreement, Mezzanine Borrowers may extend the term
of the Mezzanine Loan for the Extension Terms. The Scheduled Maturity Date, as
the same may be extended for the First Extension Term, the Second Extension
Term, or the Third Extension Term (subject to the terms and conditions of
Section 2.5(B) of the Mezzanine Loan Agreement), or such other date on which the
final payment of the Debt becomes due hereunder or under the Mezzanine Loan
Agreement or the other Mezzanine Loan Documents, whether at such stated maturity
date, by acceleration, or otherwise, shall be referred to herein as the
"MATURITY DATE".
Interest on the principal sum of this Restated Mezzanine Note shall be
calculated on the basis of a 360 day year, and shall be charged for the actual
number of days elapsed during any month or other accrual period.
SECURITY; MEZZANINE LOAN DOCUMENTS. This Restated Mezzanine Note is
being executed and delivered pursuant to the Modification Agreement, dated as of
the date hereof which amends, among other documents, that certain Mezzanine Loan
Agreement dated as of November 25, 2002 (as so amended and as may be further
amended, modified or restated from time to time, the "MEZZANINE LOAN
AGREEMENT"), among Mezzanine Borrowers and Mezzanine Lender. Reference is hereby
made to the Mezzanine Loan Agreement for the terms and conditions governing this
Restated Mezzanine Note, including the terms and conditions under which this
Restated Mezzanine Note may be prepaid or its maturity accelerated. This
Restated Mezzanine Note is secured by, among other things the Pledge Agreement
and the Security Instrument. This Restated Mezzanine Note, the Mezzanine Loan
Agreement, the Pledge Agreement, the Security Instrument and all other documents
or instruments given by Mezzanine Borrowers or any one of them or any guarantor
and accepted by Mezzanine Lender for purposes of evidencing, securing,
perfecting, or guaranteeing the indebtedness evidenced by this Restated
Mezzanine Note, as same may be amended from time to time, may be referred to as
the "MEZZANINE LOAN DOCUMENTS."
PREPAYMENT; PREPAYMENT CONSIDERATION. Mezzanine Borrowers shall have no
right to prepay the Mezzanine Loan in whole or in part except as expressly
provided in Section 2.6 of the Mezzanine Loan Agreement.
EVENTS OF DEFAULT; ACCELERATION. Upon the occurrence and during the
continuance of any Event of Default, at the option of Mezzanine Lender and
without notice, the entire principal amount and all interest accrued and
outstanding hereunder and all other amounts outstanding under any of the
Mezzanine Loan Documents shall at once become due and payable, and Mezzanine
Lender may exercise any and all of its rights and remedies under any of the
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Mezzanine Loan Documents or pursuant to applicable law. Mezzanine Lender may so
accelerate such obligations and exercise such remedies at any time after the
occurrence of any Event of Default, regardless of any prior forbearance.
LATE CHARGES; DEFAULT INTEREST. If an Event of Default relating to
non-payment of any principal, interest or other sums due under this Restated
Mezzanine Note or under any of the other Mezzanine Loan Documents shall occur,
then Mezzanine Borrowers shall pay to Mezzanine Lender, in addition to all sums
otherwise due and payable, a late charge in an amount equal to five percent
(5.0%) of such principal, interest or other sums due hereunder or under any
other Mezzanine Loan Document (or, in the case of a partial payment, the unpaid
portion thereof), such late charge to be immediately due and payable without
demand by Mezzanine Lender.
Upon the occurrence and during the continuance of an Event of Default
and in any event from and after the Maturity Date of the Mezzanine Loan, the
outstanding principal balance of this Restated Mezzanine Note and all other
Obligations shall bear interest until paid in full at a rate per annum (the
"DEFAULT RATE") equal to the sum of (i) five percent (5.0%) and (ii) the
Interest Rate otherwise applicable under this Restated Mezzanine Note.
Mezzanine Borrowers agree that such late charge and Default Rate of
interest are reasonable and do not constitute a penalty.
INTEREST LAWS. Notwithstanding any provision to the contrary contained
in this Restated Mezzanine Note, the Mezzanine Loan Agreement or the other
Mezzanine Loan Documents, Mezzanine Borrowers shall not be required to pay, and
Mezzanine Lender shall not be permitted to collect, any amount of interest in
excess of the maximum amount of interest permitted by law ("EXCESS INTEREST").
If any Excess Interest is provided for or determined by a court of competent
jurisdiction to have been provided for in this Restated Mezzanine Note, the
Mezzanine Loan Agreement or in any of the other Mezzanine Loan Documents, then
in such event: (i) the provisions of this subsection shall govern and control;
(ii) Mezzanine Borrowers shall not be obligated to pay any Excess Interest;
(iii) any Excess Interest that Mezzanine Lender may have received hereunder
shall be, at Mezzanine Lender's option, (a) applied as a credit against either
or both of the outstanding principal balance of the Mezzanine Loan or accrued
and unpaid interest thereunder (not to exceed the maximum amount permitted by
law), (b) refunded to the payor thereof, or (c) any combination of the
foregoing; (iv) the interest rate(s) provided for herein shall be automatically
reduced to the maximum lawful rate allowed from time to time under applicable
law (the "MAXIMUM RATE"), and this Restated Mezzanine Note, the Mezzanine Loan
Agreement and the other Mezzanine Loan Documents shall be deemed to have been
and shall be, reformed and modified to reflect such reduction; and (v) Mezzanine
Borrowers shall not have any action against Mezzanine Lender for any damages
arising out of the payment or collection of any Excess Interest. Notwithstanding
the foregoing, if for any period of time interest on any Obligation is
calculated at the Maximum Rate rather than the applicable rate under this
Restated Mezzanine Note, and thereafter such applicable rate becomes less than
the Maximum Rate, the rate of interest payable on such Obligations shall, to the
extent permitted by law, remain at the Maximum Rate until Mezzanine Lender shall
have received or accrued the amount of interest which Mezzanine Lender would
have received or accrued during such period on Obligations had the rate of
interest not been limited to the Maximum Rate during such period.
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If the Default Rate shall be finally determined to be unlawful, then the
Interest Rate shall be applicable during any time when the Default Rate would
have been applicable hereunder, provided however that if the Maximum Rate is
greater or lesser than the Interest Rate, then the foregoing provisions of this
paragraph shall apply.
CERTAIN RIGHTS AND WAIVERS. From time to time, without affecting the
obligation of Mezzanine Borrowers or their successors or assigns to pay the
outstanding principal balance of this Restated Mezzanine Note, interest thereon
and other amounts due hereunder and to observe the covenants contained herein,
in the Mezzanine Loan Agreement, the Pledge Agreement or in any other Mezzanine
Loan Document, without affecting the guaranty of any person or entity for
payment of the outstanding principal balance of this Restated Mezzanine Note,
without giving notice to or obtaining the consent of any Mezzanine Borrower or
its successors or assigns or any guarantors or indemnitor, and without liability
on the part of Mezzanine Lender, Mezzanine Lender may, at its option, extend the
time for payment of the outstanding principal balance of this Restated Mezzanine
Note or any part thereof, reduce the payments thereon, release anyone liable for
payment of all or a portion of said indebtedness, accept a renewal of this
Restated Mezzanine Note, modify the terms and time of payment of said
outstanding principal balance, join in any extension or subordination agreement,
release any security given herefor, take or release other or additional
security, and agree in writing with the undersigned to modify the rate of
interest or period of amortization of this Restated Mezzanine Note or change the
amount of the monthly installments payable hereunder.
Presentment, notice of dishonor, and protest are hereby waived by
Mezzanine Borrowers and all makers, sureties, guarantors and endorsers hereof.
This Restated Mezzanine Note shall be binding upon Mezzanine Borrowers and their
respective successors and assigns.
EACH MEZZANINE BORROWER AND MEZZANINE LENDER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONJUNCTION WITH THIS RESTATED MEZZANINE NOTE, THE PLEDGE AGREEMENT, ANY OTHER
MEZZANINE LOAN DOCUMENT, ANY OTHER AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.
ASSIGNMENT AND TRANSFER OF RESTATED MEZZANINE NOTE. Mezzanine Lender
shall have the right to assign or transfer, in whole or in part (including the
right to grant participation interests in) any or all of its obligations under
this Restated Mezzanine Note, the Mezzanine Loan Agreement, the Pledge Agreement
and any or all of the other Mezzanine Loan Documents, subject to the terms of
the Mezzanine Loan Agreement. Mezzanine Lender shall be released of any
obligations accruing after the date of such assignment or transfer to the extent
that the same are so assigned or transferred, and the rights and obligations of
"MEZZANINE LENDER" hereunder shall become the rights and obligations of the
transferee holder. Mezzanine Lender agrees to provide Mezzanine Borrowers with
notice of any such assignment; provided, however, that no Mezzanine Borrower's
consent shall be required in connection with any such assignment and no failure
or delay by Mezzanine Lender in delivering such notice shall limit the
effectiveness of such assignment.
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LIMITATION ON RECOURSE. The obligations of Mezzanine Borrowers
hereunder are subject to limitations on recourse as provided in Article XII of
the Mezzanine Loan Agreement.
ATTORNEYS' FEES, COSTS OF COLLECTION. Mezzanine Borrowers shall pay to
Mezzanine Lender on demand all reasonable out-of-pocket costs and expenses,
including reasonable attorneys' fees and expenses, incurred by Mezzanine Lender
in collecting the indebtedness arising hereunder or under any other Mezzanine
Loan Documents or secured thereby or otherwise exercising any rights or remedies
of Mezzanine Lender hereunder or thereunder or at law or in equity or enforcing
the obligations of any parties hereto or thereto, or as a consequence of any
breach or default by any Mezzanine Borrower or any guarantor hereunder or
thereunder, or otherwise as a consequence of any right evidenced or secured by
this Restated Mezzanine Note or the Mezzanine Loan Documents. Without
limitation, such costs and expenses to be reimbursed by Mezzanine Borrowers
shall include reasonable attorneys' fees and expenses incurred in any bankruptcy
case or proceeding and in any appeal.
APPLICABLE LAW. This Restated Mezzanine Note shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and performed in the State of New York and any applicable laws of
the United States of America.
TIME OF ESSENCE. Subject to the terms of the Mezzanine Loan Agreement,
time shall be of the essence as to all of the terms, covenants and conditions of
this Restated Mezzanine Note. If the due date of any payment due hereunder or
under any of the other Mezzanine Loan Documents shall fall on a day other than a
Business Day, Mezzanine Borrowers shall be required to make such payment on the
next succeeding Business Day.
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IN WITNESS WHEREOF, the undersigned Mezzanine Borrowers have executed
this Amended, Restated and Consolidated Restated Mezzanine Note as of the date
first written above.
MEZZANINE BORROWERS:
IMPAC HOTEL GROUP MEZZANINE, LLC,
a Delaware limited liability company
By: /s/ Daniel E. Ellis
---------------------------------------
Name: Daniel E. Ellis
Title: Vice President and Secretary
SERVICO OPERATIONS MEZZANINE, LLC,
a Delaware limited liability company
By: /s/ Daniel E. Ellis
---------------------------------------
Name: Daniel E. Ellis
Title: Vice President and Secretary
LODGIAN FINANCING MEZZANINE, LLC,
a Delaware limited liability company
By: /s/ Daniel E. Ellis
---------------------------------------
Name: Daniel E. Ellis
Title: Vice President and Secretary
ISLAND MOTEL ENTERPRISES, INC.,
a Georgia corporation
By: /s/ Daniel E. Ellis
---------------------------------------
Name: Daniel E. Ellis
Title: Vice President and Secretary
PENMOCO, INC.,
a Michigan corporation
By: /s/ Daniel E. Ellis
---------------------------------------
Name: Daniel E. Ellis
Title: Vice President and Secretary
EXHIBIT A
ORIGINAL MEZZANINE NOTE
That certain Restated Mezzanine Note dated as of November 25, 2002, made by
Mezzanine Borrowers to Mezzanine Lender, in the original principal amount of
$78,671,201.
EXHIBIT B
That certain Promissory Note B dated as of March 31, 2003, made by ALBANY HOTEL,
INC., APICO HILLS, INC., APICO INNS OF GREEN TREE, INC., BRUNSWICK MOTEL
ENTERPRISES, INC., DOTHAN HOSPITALITY 3053, INC., DOTHAN HOSPITALITY 3071, INC.,
GADSDEN HOSPITALITY, INC., LODGIAN AMI, INC., MINNEAPOLIS MOTEL ENTERPRISES,
INC., NH MOTEL ENTERPRISES, INC., SERVICO AUSTIN, INC., SERVICO CEDAR RAPIDS,
INC., SERVICO COLUMBIA, INC., SERVICO GRAND ISLAND, INC., SERVICO HOUSTON, INC.,
SERVICO JAMESTOWN, INC., SERVICO LANSING, INC., SERVICO MARKET CENTER, INC.,
SERVICO MARYLAND, INC., SERVICO METAIRIE, INC., SERVICO NEW YORK, INC., SERVICO
NIAGARA FALLS, INC., SERVICO NORTHWOODS, INC., SERVICO PENSACOLA 7200, INC.,
SERVICO PENSACOLA 7330, INC., SERVICO PENSACOLA, INC., SERVICO ROLLING MEADOWS,
INC., SERVICO WINTER HAVEN, INC., SHEFFIELD MOTEL ENTERPRISES, INC., IMPAC
HOTELS I, L.L.C., LODGIAN MEMPHIS PROPERTY OWNER, LLC, AMI OPERATING PARTNERS,
L.P., DEDHAM LODGING ASSOCIATES I, LIMITED PARTNERSHIP, LITTLE ROCK LODGING
ASSOCIATES I, LIMITED PARTNERSHIP, and SERVICO CENTRE ASSOCIATES, LTD., to
MERRILL LYNCH MORTGAGE LENDING, Inc., in the original principal amount of
$5,539,275.