EXHIBIT 10.1.9
COLLATERAL ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT
This COLLATERAL ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT,
dated as of June 25, 2004 (this "ASSIGNMENT"), made by the undersigned, each
having an address at c/o Lodgian, Inc., 3445 Peachtree Road, NE, Suite 700,
Atlanta, Georgia 30326 (collectively, "ASSIGNOR"), in favor of MERRILL LYNCH
MORTGAGE LENDING, INC., a Delaware corporation, having an address at Four World
Financial Center, New York, New York 10080 (together with its successors,
transferees and assigns, "ASSIGNEE"). Capitalized terms used but not defined
herein shall have the meanings assigned such terms in that certain Loan and
Security Agreement, dated as of the date hereof (as amended, modified or
restated, the "LOAN AGREEMENT"), between Assignor and Assignee.
1. For good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Assignor hereby pledges, assigns, transfers and
grants a security interest to Assignee in and to all its right, title and
interest in, to and under (a) the interest rate hedge or protection agreement
and any related confirmation described on EXHIBIT A attached hereto and made a
part hereof (such agreement(s) and confirmation(s), as same may be amended or
modified, and any renewals or replacements thereof, or successor agreements
thereto, collectively, the "RATE PROTECTION AGREEMENT"), with the counterparty
indicated on the signature page hereof (the "COUNTERPARTY"), and (b) all amounts
received or receivable under the Rate Protection Agreement and all "proceeds"
(as defined in the Uniform Commercial Code adopted in the State of New York (the
"UCC")) thereof, to have and to hold the same, unto Assignee, its successors and
assigns. This Assignment constitutes additional security for payment by
Borrowers of that certain loan in the original principal amount of One Hundred
and Ten Million and No/100 Dollars ($110,000,000.00) from Lender to Borrowers
evidenced by or arising pursuant to the Loan Agreement and pursuant to the other
Loan Documents.
2. Counterparty hereby consents to the above collateral assignment
by Assignor of the Rate Protection Agreement and agrees that Counterparty will
make any payments to become payable under or pursuant to the Rate Protection
Agreement to, or at the direction of, Assignee from time to time, until such
time as this Assignment is terminated or otherwise canceled, at which time
Counterparty will be instructed to make payments to, or at the direction of,
Assignor. Assignor hereby irrevocably instructs and authorizes Counterparty to
make any payments payable pursuant to the Rate Protection Agreement to Assignee
by wire transfer to the Lock Box Account at the following address:
Wachovia Bank, National Association
ABA #: 053-000-219
Account #: 5000000053793
Account Name: Merrill Lynch Mortgage Lending, Inc. as
Mortgagee of Lodgian, Inc.
Collateral Assignment of Interest
Rate Protection Agreement [FL]
3. Upon the occurrence and during the continuance of an Event of
Default, Assignee shall be entitled to exercise all remedies provided under the
UCC with respect to the Rate Protection Agreement and the other related
collateral pledged hereunder.
4. Assignor hereby covenants and agrees that Assignor shall not,
without first obtaining Assignee's written consent, which consent shall not be
unreasonably withheld, conditioned or delayed, convey, assign, sell, mortgage,
encumber, pledge, hypothecate, grant a security interest in, grant an option or
options with respect to, or otherwise dispose of (directly or indirectly,
voluntarily or involuntarily, by operation of law or otherwise, and whether or
not for consideration) the Rate Protection Agreement or any interest therein,
provided, however, Assignor shall be permitted to assign or otherwise transfer
the Rate Protection Agreement in connection with a Permitted Assumption pursuant
to Section 11.3 of the Loan Agreement. Assignor and Counterparty hereby covenant
and agree that Assignor and Counterparty shall not, without first obtaining
Assignee's written consent, which consent shall not be unreasonably withheld,
conditioned or delayed, amend, modify, cancel or terminate the Rate Protection
Agreement.
5. This Assignment shall be governed by and construed in accordance
with the laws of the State of New York, without regard to conflicts of law
principles.
6. This Assignment shall terminate upon payment in full of the
Obligations of Borrowers under the Loan Documents.
7. This Assignment shall be binding upon Assignor and its successors
and assigns and shall inure to the benefit of Assignee and its successors and
assigns.
8. Subject to the terms of the Loan Agreement, Assignee shall have
the right to assign this Assignment and the obligations hereunder in connection
with any assignment or transfer of all or any portion of the Loan or any
interest therein. The parties hereto acknowledge that following the execution
and delivery of this Assignment, Assignee may sell, transfer and assign this
Assignment and certain other Loan Documents. All references to "Assignee"
hereunder shall be deemed to include the successors and assigns of Assignee and
the parties hereto acknowledge that actions taken by Assignee hereunder may be
taken by Assignee's agents and by the agents of the successors and assigns of
Assignee.
9. In consideration of the foregoing agreement by Counterparty,
Borrower agrees that (a) Counterparty shall be entitled to conclusively rely
(without any independent investigation) on any notice or instructions from
Lender in respect of the Rate Protection Agreement, and (b) Counterparty shall
be held harmless and shall be fully indemnified by Borrower, from and against
any and all claims, other than those ultimately determined to be founded on
gross negligence or willful misconduct of Counterparty, and from and against any
damages, penalties, judgments, liabilities, losses or expenses (including
reasonable attorney's fees and disbursements) incurred by Counterparty as a
result of the assertion of any claim, by any person or entity, arising out of,
or otherwise related to, any actions taken or omitted to be taken by
Counterparty in reliance upon any such instructions or notice provided by Lender
in accordance herewith and the Loan Agreement.
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10. This Assignment may be executed in any number of counterparts
each of which shall be an original, but all of which shall constitute one
instrument.
11. The obligations of Assignor hereunder are subject to limitations
on recourse as provided in Article XII of the Loan Agreement.
[SIGNATURE PAGES FOLLOW]
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ASSIGNOR:
APICO HILLS, INC.
BRUNSWICK MOTEL ENTERPRISES, INC.
DOTHAN HOSPITALITY 3053, INC.
DOTHAN HOSPITALITY 3071, INC.
GADSDEN HOSPITALITY, INC.
LODGIAN BRIDGEPORT LLC
LODGIAN COLCHESTER LLC
LODGIAN FLORENCE LLC
LODGIAN HAMBURG LLC
LODGIAN HOTELS FLOATING, LLC
LODGIAN JACKSON LLC
LODGIAN MEMPHIS LLC
LODGIAN MEMPHIS PROPERTY OWNER, LLC
LODGIAN MORGANTOWN LLC
SERVICO AUSTIN, INC.
SERVICO CEDAR RAPIDS, INC.
SERVICO GRAND ISLAND, INC.
SERVICO JAMESTOWN, INC.
SERVICO LANSING, INC.
SERVICO MARYLAND, INC.
SERVICO NEW YORK, INC.
SERVICO NIAGARA FALLS, INC.
SERVICO PENSACOLA 7200, INC.
SERVICO PENSACOLA 7330, INC.
SERVICO WINTER HAVEN, INC.
SHEFFIELD MOTEL ENTERPRISES, INC.
By: /s/ Daniel E. Ellis
-----------------------------------------
Name: Daniel E. Ellis
Title: Vice President and Secretary, or
Authorized Signatory for each of the
entities listed above
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ACKNOWLEDGED AND AGREED BY COUNTERPARTY:
MERRILL LYNCH MORTGAGE LENDING, INC.
By: /s/ Robert Spuler
--------------------------------------------
Name: Robert Spuler
Title: Senior Vice President
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EXHIBIT A
(Description of Rate Cap Agreement)
Confirmation dated as of June 24, 2004 and effective as of June 24, 2004, by and
between SWISS RE FINANCIAL PRODUCTS CORPORATION, as Party A, and Assignor, as
Party B, and any replacements thereof confirming the Transaction (as defined
therein), together with Guaranty of SWISS REINSURANCE COMPANY, dated as of March
25, 2004, and made with respect to all Guaranteed Obligations (as defined in
such Guaranty) of Party A, including the Rate Protection Agreement.
Collateral Assignment of Interest
Rate Protection Agreement [FL]