EXHIBIT 10.3.2
MEZZANINE NOTE
$78,671,201.00 NOVEMBER 25, 2002
FOR VALUE RECEIVED, the undersigned, each having an address c/o
Lodgian, Inc., 0000 Xxxxxxxxx Xxxx, XX, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (each,
a "MEZZANINE BORROWER" and collectively, "MEZZANINE BORROWERS"), jointly and
severally, promise to pay to the order of XXXXXXX XXXXX MORTGAGE LENDING, INC.,
a Delaware corporation (together with its successors and assigns, "MEZZANINE
LENDER"), at 4 World Financial Center, New York, New York 10080, or such other
place as Mezzanine Lender may designate in writing, the principal sum of
SEVENTY-EIGHT MILLION SIX HUNDRED SEVENTY-ONE THOUSAND TWO HUNDRED ONE AND
00/100 DOLLARS ($78,671,201.00), with interest on the unpaid principal balance
from the date of this Mezzanine Note, until paid, at the Interest Rate in effect
from time to time hereunder. This Mezzanine Note may be referred to herein as
the "MEZZANINE NOTE," and the loan evidenced hereby may be referred to herein as
the "MEZZANINE LOAN." Capitalized terms used but not otherwise defined herein
shall have the respective meanings given thereto in the Mezzanine Loan Agreement
(hereinafter defined).
PAYMENTS OF PRINCIPAL AND INTEREST. Mezzanine Borrowers shall make
payments of principal and interest on the outstanding principal balance of this
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 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 all
Extension Terms) 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 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 Mezzanine Note is being
executed and delivered pursuant to that certain Mezzanine Loan Agreement, dated
as of the date hereof (as amended, modified or restated from time to time, the
"MEZZANINE LOAN AGREEMENT"), among Mezzanine Borrowers and Mezzanine Lender, to
which reference is hereby made for the terms and conditions governing this
Mezzanine Note, including the terms
Mezzanine Note
and conditions under which this Mezzanine Note may be prepaid or its maturity
accelerated. This Mezzanine Note is secured by, among other things, (i) that
certain Pledge and Security Agreement, dated as of the date hereof (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 the date hereof (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. This
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 Mezzanine Note 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
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 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 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 Mezzanine Note.
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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 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 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 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 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. 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 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 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 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 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
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period of amortization of this 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 Mezzanine Note shall be binding upon Mezzanine Borrowers and their
respective successors and assigns.
EACH MEZZANINE XXXXXXXX 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 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 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
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.
Xxxxxxxxx Xxxxxx agrees to provide Xxxxxxxxx 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
Xxxxxxxxx Lender in delivering such notice shall limit the effectiveness of such
assignment.
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 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 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.
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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
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 Xxxxxxxxx Borrowers have executed
this Mezzanine Note as of the date first written above.
MEZZANINE BORROWERS:
IMPAC HOTEL GROUP MEZZANINE, LLC,
a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Secretary
SERVICO OPERATIONS MEZZANINE, LLC,
a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Secretary
LODGIAN FINANCING MEZZANINE, LLC,
a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Secretary
ISLAND MOTEL ENTERPRISES, INC.,
a Georgia corporation
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Secretary
PENMOCO, INC.,
a Michigan corporation
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Secretary
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