-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qfz2jpcMygAZM42gmZn8A2h0qHD9jv3W1sb6JC0P4D79kQ80NpIXRVF2u0jQgV5B CE4qemnxqWuS8G3ZPlKmYA== 0000914121-02-001300.txt : 20021126 0000914121-02-001300.hdr.sgml : 20021126 20021125184156 ACCESSION NUMBER: 0000914121-02-001300 CONFORMED SUBMISSION TYPE: 8-A12G PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20021126 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LODGIAN INC CENTRAL INDEX KEY: 0001066138 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 522093696 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-A12G SEC ACT: 1934 Act SEC FILE NUMBER: 000-50108 FILM NUMBER: 02839897 BUSINESS ADDRESS: STREET 1: 3445 PEACHTREE ROAD N E SUITE 700 CITY: ATLANTA STATE: CA ZIP: 30326 BUSINESS PHONE: 4043649400 MAIL ADDRESS: STREET 1: 3445 PEACHTREE ROAD N E SUITE 700 CITY: ATLANTA STATE: CA ZIP: 30326 8-A12G 1 lo112502_8-a.txt FORM 8-A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________ FORM 8-A FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 LODGIAN, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 52-2093696 - ------------------------------------ --------------------------------- (State of incorporation (IRS Employer Identification No.) organization) 3445 Peachtree Road, N.E., Suite 700, Atlanta, GA 30326 - ------------------------------------ --------------------------------- (Address of principal executive (Zip Code) offices) If this form relates to the If this form relates to the registration of a class of securities registration of a class of securities pursuant to Section 12(b) of the pursuant to Section 12(g) of the Exchange Act and is effective pursuant Exchange Act and is effective pursuant to General Instruction A.(c), please to General Instruction A.(d), please check the following box. [ ] check the following box. [X] Securities Act registration statement file number to which this form relates: N/A - --- Securities to be registered pursuant to Section 12(b) of the Act: Title of each class Name of exchange of which to be so registered each class is to be registered ------------------- ------------------------------ Securities to be registered pursuant to Section 12(g) of the Act: Common Stock, par value $.01 per share -------------------------------------- (Title of Class) Series A Preferred Stock, par value $.01 per share -------------------------------------------------- (Title of Class) Class A Warrants ---------------- (Title of Class) Class B Warrants ---------------- (Title of Class) ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED. On November 5, 2002, the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court") entered an order (the "Confirmation Order") confirming the First Amended Joint Plan of Reorganization of Lodgian, Inc. and certain of its subsidiaries (the "Plan"). This registration statement registers under Section 12(g) of the Securities Exchange Act of 1934, as amended, (a) the common stock, par value $.01 per share ("Common Stock") of Lodgian, Inc. (the "Company"); (b) the Series A Preferred Stock, par value $.01 per share (the "Series A Preferred Stock") of the Company, (c) Class A Warrants to purchase shares of Common Stock, and (d) Class B Warrants to purchase shares of Common Stock. Pursuant to the Confirmation Order, the Bankruptcy Court approved (a) the Company's amendment (the "Certificate Amendment") to its Restated Certificate of Incorporation (as amended by the Certificate Amendment, the "Amended Certificate"), (b) the Certificate of Designation for Series A Preferred Stock of the Company (the "Certificate of Designation"), (c) the Class A Warrant Agreement between the Company and Wachovia Bank, N.A., as Warrant Agent (the "Warrant Agent") (the "Class A Warrant Agreement") and (d) the Class B Warrant Agreement between the Company and the Warrant Agent (the "Class B Warrant Agreement"). On the effective date of the Plan (the "Effective Date"), the Company's existing common stock, par value $.01 per share, was cancelled. Under the Restated Certificate and the Certificate of Designation, which have been filed with the Secretary of State of the State of Delaware pursuant to the Plan, the Company is authorized to issue (a) 30,000,000 shares of Common Stock, of which approximately 6,633,411 shares will be issued on or about the Effective Date and 366,589 shares will be reserved for issuance to holders of General Unsecured Claims, as such claims are allowed and (b) 10,000,000 shares of preferred stock, par value $.01 per share, of which 7,100,000 shares have been designated Series A Preferred Stock pursuant to the Certificate of Designation and of which 4,690,600 shares will be issued on or about the Effective Date and 309,400 shares will be reserved for issuance to holders of General Unsecured Claims, as such claims are allowed. On or about the Effective Date (a) under the terms and provisions of the Class A Warrant Agreement, the Company will issue Class A Warrants, which, in the aggregate, provide for the right to purchase, for a period of five years from the date of issuance, initially up to 1,510,638 shares of Common Stock at an exercise price of $18.29 and (b) under the terms and provision of the Class B Warrant Agreement, the Company will issue Class B Warrants, which, in the aggregate, provide for the right to purchase, for a period of seven years from the date of issuance, initially up to 1,029,366 shares of Common Stock at an exercise price of $25.44. The number of shares of Common Stock for which the Class A Warrants and the Class B Warrants are exercisable and the respective exercise prices of such warrants are subject to adjustment upon the occurrence of certain events, including, but not limited to, (i) divisions and combinations of the outstanding shares of Common Stock, (ii) certain dividends and distributions on or in respect of the outstanding Common Stock and (iii) certain issuances of Common Stock (or securities convertible into Common Stock) at a price below 90% of the then current market price of the Common Stock. In accordance with Section 1123(a) of the U.S. Bankruptcy Code, the Restated Certificate prohibits the issuance by the Company of any non-voting equity securities, except in certain limited situations. Each holder of Common Stock is entitled to attend the special and annual meetings of the Company's stockholders and to cast one vote for each outstanding share of Common Stock held upon any matter, including the election of one or more directors, properly considered and acted upon by the stockholders. The Restated Certificate does not provide for cumulative voting for the election of directors. Holders of Common Stock are entitled to receive dividends when and if declared by the Company's board of directors from funds legally available therefor and to share, on the basis of their shareholdings, in the Company's assets that are available for distribution to the Company's stockholders in the event of a liquidation. Holders of Common Stock have no preemptive, subscription, redemption or conversion rights. Shares of Common Stock issued pursuant to the Plan will be fully paid and nonassessable shares of capital stock of the Company. It is not presently anticipated that any dividends will be paid on the Common Stock in the foreseeable future, and certain debt instruments of the Company and its subsidiaries, as well as the Certificate of Designation, expressly limit, or may have the effect of limiting, the amount of dividends payable by the Company. The Series A Preferred Stock has an initial liquidation value of $25.00 per share, subject to increase as described below (the "Liquidation Value"). The dividend rate on the Series A Preferred Stock is 12.25% per annum of the then current Liquidation Value. Dividends accrue annually in arrears whether or not they have been earned or declared and whether or not there are profits, surplus or other funds of the Company legally available for the payment of dividends. Dividends will be payable annually on the anniversary of the Effective Date (each, a "Dividend Payment Date") and will be (a) payable-in-kind for the first year following the issuance thereof, (b) payable-in-kind or cash, at the discretion of the Company's board of directors, for the second and third year following the issuance thereof, and (c) payable in cash on each Dividend Payment Date following the third year from the issuance thereof. Any cash dividends payable by the Company on any Dividend Payment Date, which are not so paid will accumulate and remain accumulated and unpaid dividends with respect to such shares until paid. The Liquidation Value will be increased by the amount of any accumulated dividends and, in the event of a liquidation or redemption, by the amount of any dividends accrued from the Dividend Payment Date immediately preceding such liquidation or redemption. Upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, holders of the Series A Preferred Stock shall be entitled to be paid, before any distribution or payment is made upon any securities which are junior in priority to the Series A Preferred Stock, an amount in cash equal to the aggregate Liquidation Value of all such Series A Preferred Stock outstanding on the date of such liquidation, dissolution or winding up. The holders of Series A Preferred Stock have no voting rights other than those voting rights prescribed by law or set forth in the Certificate of Designation. The consent of the holders of a majority of shares of Series A Preferred Stock is required to (a) increase the authorized number of shares of Series A Preferred Stock, (b) amend, alter, change, or repeal (by merger or otherwise) any provision of the Restated Certificate or Bylaws of the Company or any terms or provisions of the Certificate of Designation so as to affect the relative rights, preferences, qualifications, limitations or restrictions of the Series A Preferred Stock, or (c) enter into a share exchange, reorganization, recapitalization or other similar transaction that affects the Series A Preferred Stock, or consolidate, merge with or into, or enter into a business combination with, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets to, another Person, unless (i) the entity formed by such consolidation, merger or business combination (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made (in any such case, the "resulting entity") is a corporation organized and existing under the laws of the United States, any State thereof or the District of Columbia, and (ii) if the Company is not the resulting entity, the shares of Series A Preferred Stock are converted into or exchanged for and become shares of such resulting entity, having in respect of such resulting entity the same (or more favorable) powers, preferences and relative rights, qualifications, limitations and restrictions that shares of the Series A Preferred Stock had immediately prior to such transaction. The Company, at its option, may redeem shares of Series A Preferred Stock for cash, in whole or in part, out of funds legally available therefor, at any time and from time to time during the ten year period beginning with the date of issuance of such shares at the following rates (expressed as a percentage of the then current Liquidation Value of such shares) for each twelve-month period beginning on the Effective Date or the anniversary of the Effective Date, as the case may be, in the calendar year indicated: Year of Redemption Redemption Rate - ------------------ --------------- 2002 105% 2003 104% 2004 103% 2005 102% 2006 101% 2007 and thereafter 100% The Company must redeem the Series A Preferred Stock on the tenth anniversary of the date of the issuance thereof. So long as any shares of Series A Preferred Stock remain outstanding, without the prior written consent of the holders of a majority of such outstanding shares, the Company may not, nor may it permit any subsidiary to, redeem, retire, purchase or otherwise acquire for value directly or indirectly any securities which are junior in priority to the Series A Preferred Stock or securities which are on a parity with the Series A Preferred Stock (other than upon conversion of convertible preferred stock into common stock), nor may any moneys or property be paid into or set apart, or made available for the purchase, redemption or other retirement of any such junior priority or parity securities, nor may the Company directly or indirectly pay or declare any dividend or make any distribution (either in cash or property) with respect to any such junior or parity securities (with certain exceptions as set forth in the Certificate of Designation). There are no preemptive, subscription or conversion rights with respect to the Series A Preferred Stock. The warrant agent, transfer agent and registrar for the Common Stock, Series A Preferred Stock, Class A Warrants and Class B Warrants is Wachovia Bank, N.A., Corporate Trust Group, Corporate Actions Department, 1525 West W.T. Harris Blvd., Bldg. 3C3, Charlotte, NC 28262-1153 (overnight courier) 28288-1153 (first class mail). Any terms used herein, that have not otherwise been defined, shall have the meanings provided therefore in the Plan. ITEM 2. EXHIBITS. EXHIBIT NUMBER DESCRIPTION OF EXHIBIT -------- ---------------------- 2.1 First Amended Joint Plan of Reorganization of Lodgian, Inc., et al., dated November 1, 2002 (Incorporated by reference to the Registrant's Current Report on Form 8-K, filed on November 20, 2002). 3.1 Amendment to Restated Certificate of Incorporation of Lodgian, Inc. 3.2 Restated Certificate of Incorporation of Lodgian, Inc. (Incorporated by reference to the Registrant's Registration Statement on Form S-4, as amended, filed on July 17, 1998 (SEC File no. 333-59315)). 3.3 Amended and Restated Bylaws of Lodgian, Inc. (Incorporated by reference to the Registrant's Current Report on Form 8-K, filed on March 9, 2000). 4.1 Certificate of Designation for Series A Preferred Stock of Lodgian, Inc. 4.2 Class A Warrant Agreement between Lodgian, Inc. and Wachovia Bank, N.A. 4.3 Class B Warrant Agreement between Lodgian, Inc. and Wachovia Bank, N.A. 10.1 Form of Registration Rights Agreement between Lodgian, Inc. and the other signatories thereto. 99.1 Order Confirming the First Amended Joint Plan of Reorganization of Lodgian, Inc., et al., issued on November 5, 2002 by the United States Bankruptcy Court for the Southern District of New York (Incorporated by reference to the Registrant's Current Report on Form 8-K, filed on November 20, 2002). SIGNATURE Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. LODGIAN, INC. By: /s/ Daniel E. Ellis -------------------------- Name: Daniel E. Ellis Title: Vice President and Secretary Date: November 25, 2002 EXHIBIT INDEX Exhibit No. Description 2.1 First Amended Joint Plan of Reorganization of Lodgian, Inc., et al., dated November 1, 2002 (Incorporated by reference to the Registrant's Current Report on Form 8-K, filed on November 20, 2002). 3.1 Amendment to Restated Certificate of Incorporation of Lodgian, Inc. 3.2 Restated Certificate of Incorporation of Lodgian, Inc. (Incorporated by reference to the Registrant's Registration Statement on Form S-4, as amended, filed on July 17, 1998 (SEC File no. 333-59315)). 3.3 Amended and Restated Bylaws of Lodgian, Inc. (Incorporated by reference to the Registrant's Current Report on Form 8-K, filed on March 9, 2000). 4.1 Certificate of Designation for Series A Preferred Stock of Lodgian, Inc. 4.2 Class A Warrant Agreement between Lodgian, Inc. and Wachovia Bank, N.A. 4.3 Class B Warrant Agreement between Lodgian, Inc. and Wachovia Bank, N.A. 10.1 Form of Registration Rights Agreement between Lodgian, Inc. and the other signatories thereto. 99.1 Order Confirming the First Amended Joint Plan of Reorganization of Lodgian, Inc., et al., issued on November 5, 2002 by the United States Bankruptcy Court for the Southern District of New York (Incorporated by reference to the Registrant's Current Report on Form 8-K, filed on November 20, 2002). EX-3.1 3 lo112502_3-1.txt CERTIFICATE OF AMENDMENT EXHIBIT 3.1 CERTIFICATE OF AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION PURSUANT TO REORGANIZATION OF LODGIAN, INC. Pursuant to Section 303 of the General Corporation Law of the State of Delaware, LODGIAN, INC., a corporation duly organized and validly existing under the General Corporation Law of the State of Delaware, does hereby certify as follows: I. The name of the Corporation is LODGIAN, INC. II. Section 4.1 of Article IV of the certificate of incorporation is amended to read as follows: Authorized Capital; Shares. The total number of shares of all classes of stock that the Corporation shall have authority to issue is Forty Million (40,000,000), of which Thirty Million (30,000,000) shares shall be shares of Common Stock, par value $0.01 per share ("COMMON STOCK"), and Ten Million (10,000,000) shares shall be shares of Preferred Stock, par value $0.01 per share ("PREFERRED STOCK"). III. Section 4.4 of Article IV is added to the certificate of incorporation and shall read as follows: Prohibition of Non-Voting Equity Securities. Notwithstanding anything herein to the contrary, the Corporation shall not be authorized to issue non-voting equity securities of any class, series or other designation to the extent prohibited by Section 1123(a)(6) of Title 11 of the United States Code (the "Bankruptcy Code"); provided, however, that the foregoing restriction shall (i) have no further force and effect beyond that required under Section 1123(a)(6) of the Bankruptcy Code, (ii) only have such force and effect for so long as such Section 1123(a)(6) is in effect and applies to the Corporation and (iii) be deemed void or eliminated if required by applicable law. IV. Section 8.1(c)(ii) of Article VIII of the certificate of incorporation is amended in its entirety to read as follows: The Board of Directors shall be elected each year at the annual meeting of stockholders. Each director shall hold office until the annual meeting of stockholders for the year following the year of his or her election until his or her successor is elected and has qualified or until his or her earlier resignation, retirement, disqualification or removal from office. Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Restated Certificate of Incorporation or the resolution or resolutions adopted by the Board of Directors pursuant to Section 4.2 of Article IV hereof applicable thereto. V. Pursuant to Section 303 of the General Corporation Law of the State of Delaware, a plan of reorganization of the Corporation entitled Joint Plan of Reorganization of Lodgian, Inc., et al. Together With the Official Committee of Unsecured Creditors (Other than the CCA Debtors) Under Chapter 11 of the Bankruptcy Code (the "Plan") having been filed pursuant to Chapter 11 of Title 11 of the United States Code in a proceeding under the United States Bankruptcy Code entitled In re: Lodgian, Inc., et al., Case No. 01-16345 (the "Proceeding") and confirmed by an order dated November 5, 2002 by the United States Bankruptcy Court for the Southern District of New York, a court having jurisdiction over the Proceeding (the "Order"), and such Order providing for the making and filing of this certificate of amendment, this certificate of amendment amends the provisions of the certificate of incorporation of the Corporation. [SIGNATURES ON FOLLOWING PAGE] IN WITNESS WHEREOF, the Corporation has caused this certificate of amendment to be executed as of the 21 day of November, 2002. LODGIAN, INC. By: /s/ Daniel E. Ellis ------------------------------ Daniel E. Ellis Vice President and Secretary EX-4.1 4 lo112502_4-1.txt CERTIFICATE OF DESIGNATION EXHIBIT 4.1 CERTIFICATE OF DESIGNATION FOR SERIES A PREFERRED STOCK OF LODGIAN, INC. PURSUANT TO SECTION 303 OF THE DELAWARE GENERAL CORPORATION LAW Lodgian, Inc., a Delaware corporation (the "Corporation"), HEREBY CERTIFIES that pursuant to the provisions of Section 303 of the Delaware General Corporation Law (the "DGCL"), the Corporation, pursuant to the Order dated November 5, 2002 of the United States Bankruptcy Court for the Southern District of New York (the "Order") adopted the following resolution effective as of November 21, 2002 (the "Effective Time"), which resolution remains in full force and effect as of the date hereof: WHEREAS, the Corporation is authorized, pursuant to Section 303 of the DGCL, without further action by its directors or stockholders to put into effect and carry out the Order including making any change in its capital or capital stock; WHEREAS, it is the desire of the Corporation, pursuant to such authority, to authorize and fix the terms of the series of Preferred Stock designated as Series A Preferred Stock; and WHEREAS, capitalized terms used herein and not otherwise defined shall have the meanings set forth in Section 10 hereof; NOW THEREFORE, be it resolved, that the terms and provisions of such series and all other rights or preferences granted to or imposed upon such series or the holders thereof are as herein set forth: SECTION 1. DESIGNATION; RANK. This series of preferred stock shall be designated "Series A Preferred Stock", par value $0.01 per share (the "Series A Preferred Stock"). The initial liquidation preference of each share (a "Share") of Series A Preferred Stock, including shares of Series A Preferred Stock issued as Payment-In-Kind, shall be $25 (the "Initial Liquidation Value"). The Series A Preferred Stock shall rank, with respect to dividend rights and rights on liquidation, dissolution and winding-up, senior to all Junior Securities. SECTION 2. AUTHORIZED NUMBER. The number of authorized Shares constituting the Series A Preferred Stock shall be 7,100,000. The initial number of Shares issued shall be 5,000,000 with an aggregate Initial Liquidation Value of $125,000,000. The additional authorized Shares allow for the payment of the Pay-In-Kind dividends pursuant to Section 3 hereof. SECTION 3. DIVIDENDS. (a) General Obligation. To the extent permitted under applicable law, dividends on each Share shall accrue annually in arrears at a rate of 12.25% per annum of the Liquidation Value thereof (the "Dividend Rate"), from November 21, 2002 (the "Date of Issuance") to the date on which the Liquidation Value of each such Share has been paid in full. Such dividends shall accrue whether or not they have been earned or declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of dividends. (b) Dividend Payment Date. The accrued dividends shall be payable, in accordance with the terms of subsection (c), on November 21 of each year, starting with November 21, 2003 (each a "Dividend Payment Date") to the holders of record of Series A Preferred Stock, as they appear on the stock records of the Corporation at the close of business on such record date as shall be fixed by the Board of Directors not more than 60 or less than 10 days preceding such Dividend Payment Date. (c) Payment Method. The Corporation shall make dividend payments on each Dividend Payment Date in accordance with the following provisions: (i) On the first Dividend Payment Date following the Date of Issuance the Corporation shall Pay-In-Kind all dividends; (ii) On each of the two consecutive Dividend Payment Dates following the first Dividend Payment Date, the Corporation, at the sole discretion of its Board of Directors, shall pay all accrued and unpaid dividends either as Payment-In-Kind or, to the extent permitted under applicable law, out of funds legally available therefor, in cash. The Corporation shall give written notice to the record holders of Series A Preferred Stock of its intention to Pay-In-Kind, pursuant to this clause (ii), at least 5 business days prior to the applicable Dividend Payment Date. (iii) On each Dividend Payment Date following the third Dividend Payment Date, the Corporation shall pay, to the extent permitted under applicable law, out of funds legally available therefor, all accrued and unpaid dividends in cash, and to the extent not paid in cash, such dividends shall accrue and accumulate on each such Dividend Payment Date and shall remain accumulated and unpaid dividends until paid. (d) Distribution of Partial Dividend Payments. With regards to cash dividends, to the extent the Corporation, in accordance with the foregoing provisions of this Section 3, is limited to paying less than the total amount of dividends then accrued and unpaid with respect to the Series A Preferred Stock, such payment will be distributed among the holders of the Series A Preferred Stock pro rata based upon the aggregate accrued but unpaid dividends on the Share(s) held by each such holder, and any amounts of such dividends remaining thereafter shall be accumulated and shall remain accumulated and unpaid dividends with respect to such Share(s) until paid. (e) Dividend Preference. No dividend, distribution, repurchase, redemption, or payment of cash or property (other than solely in shares of common stock or a partial cash dividend on Parity Securities that is paid pro rata on the Series A Preferred Stock) shall be declared, paid, set aside for payment or made on or with respect to any Junior Securities or Parity Securities, either directly or indirectly, unless and until (i) all accrued and unpaid dividends (including all accumulated and unpaid dividends) on each Share that the holder of such Share is entitled to receive pursuant to this Section 3, including pro rata dividends for the period from last Dividend Payment Date to the date of such dividend, distribution, repurchase, redemption or payment, have been paid in full and (ii) the conditions to such dividend, distribution, repurchase, redemption or payment set forth in Section 6 hereof have been satisfied. SECTION 4. LIQUIDATION. Upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, holders of the Series A Preferred Stock shall be entitled to be paid, before any distribution or payment is made upon any of the Junior Securities, an amount in cash equal to the aggregate Liquidation Value of all such Series A Preferred Stock outstanding on the date of such liquidation, dissolution or winding up, and the holders of Series A Preferred Stock shall not be entitled to any further payment. If upon any such liquidation, dissolution or winding up of the Corporation, the Corporation's assets (or proceeds thereof) to be distributed among the holders of the Series A Preferred Stock and any Parity Securities are insufficient to permit payment in full to such holders of the aggregate amount which they are entitled to be paid, then the entire assets to be distributed shall be distributed ratably among such holders based upon, in the case of holders of the Series A Preferred Stock, the aggregate Liquidation Value of the Series A Preferred Stock held by each such holder on the date of such liquidation, dissolution or winding up and, in the case of holders of any Parity Securities, the liquidation preference and accumulated and unpaid dividends which they are entitled to pursuant to such Parity Securities. The Corporation shall mail written notice of such liquidation, dissolution or winding up, not less than 10 days prior to the payment date statement therein, to each record holder of Series A Preferred Stock. Neither the consolidation or merger of the Corporation into or with any other Person or Persons, nor the reduction of the capital stock of the Corporation, shall be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 4. SECTION 5. REDEMPTION. (a) Optional Redemption. Prior to November 21, 2012, the Series A Preferred Stock shall be redeemable at the option of the Corporation for cash, in whole or in part out of funds legally available therefor, at any time and from time to time, at the redemption prices per share (expressed as a percentage of the Liquidation Value thereof as of the date of such redemption) set forth below (the "Redemption Price"), if redeemed during the twelve-month period beginning November 21 of each of the calendar years indicated below: YEAR PERCENTAGE 2002................................................... 105% 2003................................................... 104% 2004................................................... 103% 2005................................................... 102% 2006................................................... 101% 2007 and thereafter.................................... 100% (b) Mandatory Redemption. On November 21, 2012 (the "Scheduled Redemption Date") the Corporation shall redeem all remaining outstanding Shares out of funds legally available therefor, at a price per Share equal to the Liquidation Value thereof as of the date of such redemption. (c) Payment of Redemption Price. For each Share which is to be redeemed, the Corporation shall be obligated on the Redemption Date to pay to the holder thereof (upon surrender by such holder at the Corporation's principal office of the certificate representing such Share) the Redemption Price in immediately available funds. If the Corporation's funds which are legally available for redemption of Shares on any date of such redemption are insufficient to redeem the total number of Shares to be redeemed on such date, those funds which are legally available shall be used to redeem the maximum possible number of Shares ratably among the holders of the Shares to be redeemed based upon the aggregate Liquidation Value of such Shares held by each such holder on the date of such redemption. At each Dividend Payment Date thereafter, all funds of the Corporation that are legally available for the redemption of Shares shall immediately be used to redeem the balance of the Shares which the Corporation did not redeem on the date of such redemption. Without limiting any rights of the holders of Series A Preferred Stock which are set forth in the Certificate of Incorporation of the Corporation or are otherwise available under law, the balance of the Shares which the Corporation has become obligated to redeem on the date of any such redemption but which it has not redeemed shall continue to have all of the powers, designations, preferences and relative participating, optional, and other special rights (including without limitation, rights to accrue dividends) which such Shares had prior to such date, until the Redemption Price has been paid in full with respect to such Shares. (d) Notice of Redemption. Except as otherwise provided herein, the Corporation shall mail written notice of each redemption of Series A Preferred Stock to each record holder not more than 60 nor less than 30 days prior to the date on which such redemption is to be made. In case fewer than the total number of Shares represented by any certificate are redeemed, a new certificate representing the number of unredeemed Shares shall be issued to the holder thereof without cost to such holder within 3 business days after surrender by such holder of the certificate representing the redeemed Shares. (e) Dividends After Redemption Date; Rights of Stockholder. No Share is entitled to any dividends accruing after the Redemption Date of such Share. On such Redemption Date all rights of the holder of such Share as a holder shall cease, and such Share shall not be deemed to be outstanding. (f) Redeemed or Otherwise Acquired Shares. Any Shares which are redeemed or otherwise acquired by the Corporation shall be canceled and shall not be reissued, sold or transferred thereafter. SECTION 6. PRIORITY OF SERIES A PREFERRED STOCK ON DIVIDENDS AND REDEMPTIONS. So long as any Shares remain outstanding, without the prior written consent of the holders of a majority of the outstanding Shares, the Corporation shall not, nor shall it permit any Subsidiary to, redeem, retire, purchase or otherwise acquire for value directly or indirectly any Junior Securities or Parity Securities (other than upon conversion of convertible preferred stock into common stock), nor shall any moneys or property be paid into or set apart, or made available for the purchase, redemption or other retirement of any Junior Securities or Parity Securities, nor shall the Corporation directly or indirectly pay or declare any dividend or make any distribution (either in cash or property) with respect to any Junior Securities or Parity Securities (other than dividends payable in compliance with Section 3(e)). SECTION 7. VOTING RIGHTS. (a) General. The holders of Series A Preferred Stock shall have no voting rights other than those voting rights prescribed by law or set forth in this Certificate of Designation. (b) Corporate Action Requiring Affirmative Vote of Holders of Shares of Series A Preferred Stock. So long as any Shares are outstanding, the Corporation shall not: (i) Without first obtaining the consent, given in person or by proxy, either in writing or at any meeting called for that purpose, of the record holders of at least a majority of the Shares then outstanding, (1) increase the authorized number of Shares; (2) amend, alter, change, or repeal (by merger or otherwise) any provision of the Certificate of Incorporation or Bylaws of the Corporation or any terms or provisions of this Certificate of Designation so as to affect the relative rights, preferences, qualifications, limitations or restrictions of the Series A Preferred Stock; or (3) enter into a share exchange, reorganization, recapitalization or other similar transaction that affects the Series A Preferred Stock, or consolidate, merge with or into, or enter into a business combination with, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets to, another Person, unless (A) the entity formed by such consolidation, merger or business combination (if other than the Corporation) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made (in any such case, the "resulting entity") is a corporation organized and existing under the laws of the United States, any State thereof or the District of Columbia, and (B) if the Corporation is not the resulting entity, the Shares are converted into or exchanged for and become shares of such resulting entity, having in respect of such resulting entity the same (or more favorable) powers, preferences and relative rights, qualifications, limitations and restrictions that Shares of the Series A Preferred Stock had immediately prior to such transaction (it being understood that the resulting entity shall thereafter be deemed to be the "Corporation" for all purposes of this Certificate and the predecessor shall be relieved of all obligations with respect to the Series A Preferred Stock). (ii) For the purpose of this Section 7, except as otherwise specifically provided, the holders of Series A Preferred Stock shall vote as one class, and each holder of Series A Preferred Stock shall be entitled to one vote for each Share held. The consent or votes under this Section 7 shall be in addition to any approval of stockholders of the Corporation that may be required by law or pursuant to any provision of the Corporation's Certificate of Incorporation or Bylaws. SECTION 8. REGISTRATION OF TRANSFER. The Corporation shall keep at its principal office a register for the registration of Series A Preferred Stock. Upon the surrender of any certificate representing Series A Preferred Stock at such place, the Corporation shall, at the request of the record holder of such certificate, execute and deliver (at the Corporation's expense) a new certificate or certificates in exchange therefor representing in the aggregate the number of Shares represented by the surrendered certificate. Each such new certificate shall be registered in such name and shall represent such number of Shares as is requested by the holder of the surrendered certificate and shall be substantially identical in form to the surrendered certificate. SECTION 9. REPLACEMENT. Upon receipt of evidence reasonably satisfactory to the Corporation (an affidavit of the registered holder shall be satisfactory) of the ownership and the loss, theft, extraction or mutilation of any certificate evidencing any Shares, and in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Corporation, or, in the case of any such mutilation upon surrender of such certificate, the Corporation shall (at its expense) execute and deliver in lieu of such certificate a new certificate of like kind representing the number of Shares represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate. SECTION 10. DEFINITIONS. Unless defined elsewhere herein, each capitalized term shall have the meaning assigned to such term below: "Date of Issuance" shall have the meaning set forth in Section 3. "Dividend Rate" shall have the meaning set forth in Section 3. "Dividend Payment Date" shall have the meaning set forth in Section 3. "Initial Liquidation Value" shall have the meaning set forth in Section 1. "Junior Securities" means any of the Corporation's securities (except for the Series A Preferred Stock), whether presently issued and outstanding or hereafter authorized and issued, the terms of which do not expressly provide that such securities rank senior to or on a parity with the Series A Preferred Stock as to dividend distributions and distributions upon the Corporation's liquidation, dissolution and winding-up. "Liquidation Value" as to any Share as of any date of determination, means an amount equal to the sum of (x) the Initial Liquidation Value of such Share, (y) all accumulated and unpaid dividends with respect to such Share as of the date of determination and (z) in the case of liquidation pursuant to Section 4 or redemption pursuant to Section 5, all accrued and unpaid dividends with respect to such Share as of the date of such determination, including pro rata dividends for the period from the last Dividend Payment Date to the date of determination, whether or not declared to the date of such determination. "Order" shall have the meaning set forth in the preamble. "Parity Securities" means any class or series of the Corporation's securities, whether presently issued and outstanding or hereafter authorized and issued, the terms of which expressly provide that such class or series will rank on a parity with the Series A Preferred Stock as to dividend distributions and distributions upon the Corporation's liquidation, dissolution and winding-up. "Pay-In-Kind" or "Payment-In-Kind" with respect to any Dividend Payment Date, means the issuance by the Corporation to each holder of record of one or more outstanding Shares a number of additional Shares (or fractional portion thereof) that have an aggregate Liquidation Value equal to the amount of accrued dividends on such outstanding Share(s) as of such Dividend Payment Date. "Person" means any individual, sole proprietorship, partnership (including a limited partnership), joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, limited liability company, joint stock company, entity or government (whether federal, state, county, city, municipal or otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof) or any other business entity. "Redemption Date" as to any Share means the Scheduled Redemption Date or the applicable date specified herein in the case of any other redemption; provided, that no such date shall be a Redemption Date unless the applicable Redemption Price is actually paid in full in cash, and if not so paid, the Redemption Date shall be the date on which such Redemption Price is fully paid in cash. "Redemption Price" shall have the meaning set forth in Section 5. "Scheduled Redemption Date" shall have the meaning set forth in Section 5. "Series A Preferred Stock" shall have the meaning set forth in Section 1. "Share" shall have the meaning set forth in Section 1. "Stock" means all shares, options, warrants, general or limited partnership interests, participation or other equivalents (regardless of how designated) of or in a Person, whether voting or nonvoting, including, without limitation, common stock, preferred stock, or any other "equity security" (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended), including without limitation, any securities with profit participation features, and any rights, warrants, options or other securities convertible into or exercisable or exchangeable for any such shares, equity or profits interests, participations or other equivalents, or such other securities, directly or indirectly (or any equivalent ownership interests, in the case of a Person which is not a corporation). "Subsidiary" shall mean, with respect to any Person, (i) any corporation of which an aggregate of 50% or more of the outstanding Stock having ordinary voting power to elect a majority of the board of directors, managers or trustees of such corporation (irrespective of whether, at the time, Stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially or controlled, directly or indirectly, by such Person and/or one or more Subsidiaries of such Person, or any combination thereof, or with respect to which any such Person has the right to vote or designate the vote of 50% or more of such Stock whether by proxy, agreement, operation of law or otherwise, (ii) any partnership, limited liability company, association or other business entity, in which such Person and/or one or more Subsidiaries of such Person shall have 50% or more of the partnership or other similar ownership interests thereof (whether in the form of voting or participation in profits or capital contribution), and (iii) all other Persons from time to time included in the consolidated financial statements of such Person. For purposes hereof, a Person or Persons shall be deemed to have 50% or more ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons shall be allocated 50% or more of limited liability company, partnership, association or other business entity gains or losses or shall be or control any managing director or general partner of such limited liability company, partnership, association or other business entity. SECTION 11. AMENDMENT AND WAIVER. No amendment, modification or waiver shall be binding or effective with respect to any of the provisions stating the number, designation, relative rights, preferences, qualifications, limitations or restrictions of the Series A Preferred Stock, without the prior written consent of the holders of at least a majority of Shares then outstanding. SECTION 12. NOTICES. Except as otherwise expressly provided herein, all notices referred to herein shall be in writing and shall be delivered by registered or certified mail, return receipt requested, postage prepaid and shall be deemed to have been given four business days after being deposited in the mail (i) to the Corporation, at its principal executive offices and (ii) to any stockholder, at such holder's address as it appears in the stock records of the Corporation (unless otherwise indicated by any such holder). IN WITNESS WHEREOF, Lodgian, Inc. has caused this Certificate of Designation to be signed by the undersigned this 21st day of November 2002. LODGIAN, INC. By: /s/ Daniel E. Ellis ----------------------------------- Name: Daniel E. Ellis Title: Vice President and Secretary EX-4.2 5 lo112502_4-2.txt CLASS A WARRANT AGREEMENT EXHIBIT 4.2 ================================================================================ LODGIAN, INC. and WACHOVIA BANK, N.A., as Warrant Agent CLASS A WARRANT AGREEMENT Dated as of November 25, 2002 ================================================================================ TABLE OF CONTENTS Section 1. DEFINITIONS................................................................1 2. EXECUTION AND DELIVERY OF WARRANT CERTIFICATES.............................4 3. EXERCISE OF WARRANT........................................................5 3.1. Manner of Exercise..............................................5 3.2. Procedure.......................................................5 3.3. Payment of Taxes................................................6 3.4. Fractional Shares...............................................7 4. TRANSFER, DIVISION AND COMBINATION.........................................7 4.1. Division and Combination........................................7 4.2. Expenses........................................................7 4.3. Maintenance of Books............................................7 4.4. Transfer........................................................7 5. ADJUSTMENTS................................................................8 5.1. Stock Dividends, Subdivisions and Combinations..................8 5.2. Certain Other Distributions.....................................8 5.3. Below Market Issuances of Common Stock..........................9 5.4. Below Market Issuances of Convertible Securities...............10 5.5. Superseding Adjustment.........................................10 5.6. Other Provisions Applicable to Adjustments under this Section........................................................11 5.7. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets.......................................12 5.8. Other Action Affecting Common Stock............................13 5.9. Certain Limitations............................................14 6. NOTICES OF AdJUSTMENT.....................................................14 7. NO IMPAIRMENT.............................................................14 8. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY....................................15 9. STOCK AND WARRANT TRANSFER BOOKS..........................................15 10. SUPPLYING INFORMATION.....................................................15 11. LOSS OR MUTILATION........................................................16 12. OFFICE OF COMPANY.........................................................16 13. APPRAISAL.................................................................16 14. LIMITATION OF LIABILITY...................................................16 15. CONCERNING THE WARRANT AGENT..............................................16 15.1. Correctness of Statement.......................................16 15.2. Breach of Covenants............................................16 15.3. Reliance on Counsel............................................17 15.4. Reliance on Documents..........................................17 15.5. Compensation and Indemnification...............................17 15.6. Legal Proceedings..............................................17 15.7. Other Transactions in Securities of the Company................17 15.8. Liability of Warrant Agent.....................................17 15.9. Adjustments....................................................18 16. MISCELLANEOUS.............................................................18 16.1. Nonwaiver......................................................18 16.2. Notice Generally...............................................18 16.3. Appointment of Warrant Agent...................................19 16.4. Successors and Assigns.........................................19 16.5. Amendment......................................................19 16.6. Severability...................................................19 16.7. Headings.......................................................19 16.8. Governing Law..................................................19 SIGNATURES ...................................................................20 Exhibit A Form of Warrant Certificate....................................21 Exhibit B Subscription Form..............................................24 Exhibit C Assignment Form................................................26 WARRANT AGREEMENT WARRANT AGREEMENT, dated as of November 25, 2002 (the "Warrant Agreement"), between LODGIAN, INC., a Delaware corporation (the "Company"), and Wachovia Bank, N.A., as Warrant Agent (the "Warrant Agent"). WHEREAS, pursuant to the First Amended Joint Plan of Reorganization (the "Plan") of the Company and certain of its subsidiaries, as confirmed by the United States Bankruptcy Court for the Southern District of New York on November 5, 2002, the Company proposes to issue Class A Warrants (as defined herein), representing the right to purchase up to an aggregate of 1,510,638 shares of its Common Stock (as defined herein), subject to adjustment as hereinafter provided; and WHEREAS, the Company desires to appoint the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act in connection with the issuance, transfer, exchange, replacement and exercise of the Class A Warrant Certificates (as defined herein) and other matters as provided herein; NOW THEREFORE, in consideration of the foregoing and for the purpose of defining the terms and conditions of the Class A Warrants and the respective rights and obligations thereunder of the Company and the holders from time to time of the Class A Warrants, the Company and the Warrant Agent hereby agree as follows: 1. DEFINITIONS As used in this Warrant Agreement, the following terms have the respective meanings set forth below: "Additional Shares of Common Stock" means all shares of Common Stock issued by the Company after the Closing Date, other than shares of Class A Warrant Stock. "Appraised Value" means, in respect of the Common Stock on any date herein specified, the fair saleable value of one share of Common Stock as of the last day of the most recent fiscal month ended at least 15 days prior to such specified date, based on (i) the equity value of the Company, as determined by an investment banking firm selected in accordance with the terms of Section 13, divided by (ii) the number of Fully Diluted Outstanding shares of Common Stock. "Business Day" means any day that is not a Saturday or Sunday or a day on which banks are required or permitted to be closed in the State of New York. "Class A Warrant" means each of the Company's warrants issued pursuant to this Warrant Agreement, each of which evidences the right to purchase one share of Common Stock, subject to adjustment as set forth in this Warrant Agreement, and all warrants issued upon transfer, division or combination of, or in substitution for, any thereof. "Class B Warrant" means each of the Company's warrants issued pursuant to that certain Warrant Agreement dated as of even date herewith, each of which evidences the right to purchase one share of Common Stock, subject to adjustment as set forth in such Warrant Agreement, and all warrants issued upon transfer, division or combination of, or in substitution for, any thereof. "Class A Warrant Certificate" means a certificate, substantially in the form of Exhibit A hereto, representing one or more Class A Warrants held by a Holder. All Class A Warrant Certificates shall be identical as to terms and conditions, except as to the number of Class A Warrants represented thereby. "Class A Warrant Price" means an amount equal to (i) the number of shares of Common Stock being purchased upon exercise of Class A Warrants pursuant to Section 3.1, multiplied by (ii) the Current Class A Warrant Price as of the date of such exercise. "Class A Warrant Stock" means the shares of Common Stock purchased by the Holders of the Class A Warrants upon the exercise thereof. "Closing Date" means November 25, 2002. "Commission" means the Securities and Exchange Commission or any other federal agency then administering the Securities Act and other federal securities laws. "Common Stock" means the Common Stock, $0.01 par value, of the Company, and any capital stock into which such Common Stock may hereafter be changed, whether as a result of any change in the capital structure of the Company or otherwise, and shall also include (i) capital stock of the Company of any other class (regardless of how denominated) issued to the holders of shares of Common Stock upon any reclassification thereof which is not preferred as to dividends or assets over any other class of stock of the Company and which is not subject to redemption and (ii) shares of common stock of any successor or acquiring corporation (as defined in Section 5.7) received by or distributed to the holders of Common Stock of the Company in the circumstances contemplated by Section 5.7. "Convertible Securities" means evidences of indebtedness, shares of stock or other securities which are convertible into or exchangeable for Additional Shares of Common Stock, either immediately or upon the occurrence of a specified date or a specified event. "Current Class A Warrant Price" means, at any date herein specified, the price at which one share of Common Stock may be purchased pursuant to this Warrant Agreement on such date. The Current Class A Warrant Price as of the date of this Warrant Agreement is $18.29, subject to adjustment in accordance with the terms hereof. "Current Market Price" means, in respect of any share of Common Stock on any date herein specified, (a) for so long as there shall then be a public market for the Common Stock, the average of the Daily Market Prices for the 20 consecutive Business Days immediately prior to such specified date, and (b) if there is then no public market for the Common Stock, the Appraised Value per share of Common Stock as at such specified date. "Daily Market Price" means, for each Business Day (i) if the Common Stock is then listed or admitted to trading on any stock exchange, the last sale price per share of Common Stock on such day on the principal stock exchange on which the Common Stock is then listed or admitted to trading, (ii) if the Common Stock is then listed or admitted to trading on any stock exchange but no sale takes place on such day on such exchange, the average of the last reported closing bid and asked prices per share of Common Stock on such day as officially quoted on such exchange, (iii) if the Common Stock is not then listed or admitted to trading on any stock exchange, the closing sale price per share of Common Stock on such day in the over-the-counter market, as furnished by the Nasdaq Stock Market or the National Quotation Bureau, Inc., provided, that if no sale takes place on such day in the over-the-counter market, the average closing bid and asked price per share of Common Stock on such day as furnished by the Nasdaq Stock Market or the National Quotation Bureau, Inc., (iv) if neither such corporation at the time is engaged in the business of reporting such prices, the closing sale price per share of Common Stock on such day in the over-the-counter market as furnished by any similar firm then engaged in such business, (v) if there is no such firm, the closing sale price per share of Common Stock on such day in the over-the-counter market as furnished by any member of the NASD selected by the Company or (vi) if there is then no public market for the Common Stock, the Appraised Value per share of Common Stock as at such specified date. "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, as the same shall be in effect from time to time. "Exercise Period" means the period during which the Class A Warrants are exercisable pursuant to Section 3.1. "Expiration Date" means the 5th anniversary of the Closing Date. "Fully Diluted Outstanding" means, when used with reference to Common Stock, at any date as of which the number of shares thereof is to be determined, all shares of Common Stock Outstanding at such date and all shares of Common Stock issuable in respect of the Class A Warrants outstanding on such date, and other options or warrants to purchase, or securities convertible into, shares of Common Stock outstanding on such date which would be deemed outstanding in accordance with GAAP for purposes of determining book value or net income per share. "GAAP" means generally accepted accounting principles in the United States of America as in effect on the applicable date of determination. "Holder" means, at any time, a Person in whose name a Class A Warrant or Class A Warrants is then registered on the books of the Company maintained by the Warrant Agent for such purpose. "NASD" means the National Association of Securities Dealers, Inc., or any successor corporation thereto. "Other Property" shall have the meaning set forth in Section 5.7. "Outstanding" means, when used with reference to Common Stock, at any date as of which the number of shares thereof is to be determined, all issued shares of Common Stock, except shares then owned or held by or for the account of the Company or any subsidiary thereof, and shall include all shares issuable in respect of outstanding scrip or any certificates representing fractional interests in shares of Common Stock. "Permitted Issuances" means (i) the issuance of the Class A Warrants and Class B Warrants, (ii) the issuance of shares of Common Stock upon the exercise of the Class A Warrants and the Class B Warrants, (iii) the issuance of (x) shares of Common Stock and (y) warrants, options or other rights to acquire shares of Common Stock to the Company's management and other eligible participants under the Company's 2002 Stock Incentive Plan, in accordance with its terms as in effect on the effective date of the Plan, (iv) the issuance of shares of Common Stock upon exercise of the warrants, options and other rights referred to in clause (iii)(y), and (v) all other issuances of Common Stock and warrants by the Company expressly authorized by the Plan. "Person" means any individual, corporation, partnership, trust or other entity of any nature whatsoever. "Plan" has the meaning assigned to such term in the recitals in this Warrant Agreement. "Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. 2. EXECUTION AND DELIVERY OF WARRANT CERTIFICATES Class A Warrant Certificates evidencing 1,510,638 Class A Warrants, each Class A Warrant to purchase initially one share of Common Stock, may be executed, on or after the date of this Warrant Agreement, by the Company and delivered to the Warrant Agent for countersignature, and the Warrant Agent shall thereupon countersign and deliver such Class A Warrant Certificates upon the order and at the written direction of the Company signed by its Chief Executive Officer or other duly authorized executive officer. The Warrant Agent is hereby authorized to countersign and deliver Class A Warrant Certificates as required by this Section 2 or by Section 3.2, 4 or 11 hereof. The Class A Warrant Certificates shall be executed on behalf of the Company by its Chairman of the Board, Chief Executive Officer, President, any Vice President or other duly authorized executive officer of the Company either manually or by facsimile signature printed thereon. The Class A Warrant Certificates shall be countersigned by manual signature of the Warrant Agent and shall not be valid for any purpose unless so countersigned. In case any officer or director of the Company whose signature shall have been placed upon any Class A Warrant Certificate shall cease to be such officer or director of the Company before countersignature by the Warrant Agent and the issuance and delivery thereof, such Class A Warrant Certificate may nevertheless be countersigned by the Warrant Agent and issued and delivered with the same force and effect as though such person had not ceased to be such officer or director of the Company. 3. EXERCISE OF WARRANT 3.1. Manner of Exercise. From and after the date hereof and until 5:00 P.M., New York time, on the Expiration Date, a Holder may exercise Class A Warrants, at any time and from time to time, on any Business Day, for all or any part of the number of shares of Class A Warrant Stock purchasable hereunder. 3.2. Procedure. (a) In order to exercise Class A Warrants, a Holder shall deliver to the Company at its principal office located at 3445 Peachtree Road - Suite 700, Atlanta, Georgia 30326, Attn: General Counsel, or, if so requested in writing by the Company, to the Warrant Agent, at the office or agency designated by the Company pursuant to Section 12, (i) a written notice of such Holder's election to exercise such Class A Warrants substantially in the form attached hereto as Exhibit B (the "Subscription Form"), duly executed by such Holder or its designated agent or attorney, which notice shall specify the number of shares of Common Stock to be purchased by such Holder, (ii) payment of the Class A Warrant Price made against delivery of the shares, at the option of such Holder, by certified or official bank check or wire transfer or, at the option of the Holder, as provided in subsection (b), and (iii) the Class A Warrant Certificate in respect of the Class A Warrants being exercised. (b) In lieu of payment of the Class A Warrant Price by certified or official bank check or wire transfer, as provided for in subsection (a)(ii), a Holder may elect to pay all or any portion of the Class A Warrant Price, as indicated by such Holder on the Subscription Form, (i) by agreeing to accept a reduction in the number of shares of Class A Warrant Stock that would have otherwise been issued to such Holder upon exercise of such Class A Warrants, which would result in the Holder receiving from the Company, pursuant to such exercise, a number of shares of Class A Warrant Stock computed using the following formula: X = Y (A-B) ------- A Where: X = the number of shares of Class A Warrant Stock to be issued to the Holder. Y = the number of shares of Class A Warrant Stock purchasable under the Class A Warrants being exercised by such Holder. A = the Daily Market Price of one share of the Common Stock on the trading day preceding such exercise date. B = the Current Class A Warrant Price (as adjusted to the date of such calculation). or (ii) by surrender to the Company of debt securities of the Company having a value equal to the Class A Warrant Price of the Class A Warrant Stock being purchased upon such exercise, which value shall be the principal amount thereof, plus accrued interest and premium (if any) or less any unamortized discount thereon, as reasonably determined by the Company. (c) Upon receipt thereof, the Company shall, as promptly as practicable, and in any event within ten (10) Business Days thereafter, (i) have executed by a duly authorized executive officer of the Company, either manually or by facsimile signature printed thereon, and (ii) cause the Warrant Agent to execute and deliver or cause to be delivered to such Holder a certificate or certificates representing the aggregate number of full shares of Class A Warrant Stock issuable upon such exercise, together with cash in lieu of any fraction of a share, as hereinafter provided. The stock certificate or certificates so delivered shall be, to the extent possible, in such denomination or denominations as the exercising Holder shall request in the notice and shall be registered in the name of such Holder or, such other name as shall be designated in the notice delivered to the Company by such Holder. Class A Warrants shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the exercising Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the notice, together with payment therefor (in whatever form, as provided in this Warrant Agreement) and the Class A Warrant Certificate, is received by the Company as described above and all taxes required to be paid by such Holder, if any, pursuant to Section 3.3 prior to the issuance of such shares, have been paid. If the Class A Warrants represented by a Class A Warrant Certificate shall have been exercised in part, the Warrant Agent shall, at the time of delivery of the certificate or certificates representing Class A Warrant Stock, deliver to the exercising Holder a new Class A Warrant Certificate representing Class A Warrants to purchase a number of shares of Common Stock equal to the unpurchased balance of the shares of Common Stock issuable upon exercise of the Class A Warrants represented by the Class A Warrant Certificate surrendered, which new Class A Warrant Certificate shall in all other respects be identical to the Class A Warrant Certificate so surrendered, or, at the request of the exercising Holder, appropriate notation may be made on the Class A Warrant Certificate so surrendered and the same returned to such Holder. Until a Holder has complied with Section 3.3 with respect to the payment of certain taxes and charges specified in such section, the Company shall not be required to issue or deliver shares in the name of any Person who acquired Class A Warrants or any Class A Warrant Stock. 3.3. Payment of Taxes. All shares of Common Stock issuable upon the exercise of Class A Warrants pursuant to the terms hereof shall be validly issued, fully paid and nonassessable and without any preemptive rights. The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery thereof, unless such tax or charge is imposed by law upon a Holder, in which case such taxes or charges shall be paid by such Holder. The Company shall not be required, however, to pay any tax or other charge imposed in connection with any transfer involved in the issuance of any certificate for shares of Common Stock issuable upon exercise of Class A Warrants in any name other than that of a Holder, and in such case the Company shall not be required to issue or deliver any stock certificate until such tax or other charge has been paid or it has been established to the satisfaction of the Company that no such tax or other charge is due. If such tax or other charge is due, the Warrant Agent shall have no duty or obligation under this Section 3.3 or any other similar provision of this Warrant Agreement unless and until it is satisfied that all such taxes and/or governmental charges have been paid in full. 3.4. Fractional Shares. The Company shall not be required to issue a fractional share of Common Stock upon exercise of any Class A Warrants. As to any fraction of a share which a Holder of one or more Class A Warrants, the rights under which are exercised in the same transaction, would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the Current Market Price per share of Common Stock on the date of exercise. 4. TRANSFER, DIVISION AND COMBINATION 4.1. Division and Combination. A Class A Warrant Certificate may be exchanged for a new Class A Warrant Certificate and Class A Warrants may be divided or combined with other Class A Warrants upon presentation of the Class A Warrant Certificate(s) therefor at the aforesaid office or agency of the Warrant Agent, together with a written notice specifying the names and denominations in which new Class A Warrant Certificates are to be issued, signed by the Holder of such Class A Warrant Certificate or Certificates or its agent or attorney. Subject to compliance with this Section 4.1, as to any transfer which may be involved in such division or combination, the Warrant Agent shall execute and deliver a new Class A Warrant Certificate(s) in exchange for the Class A Warrant Certificate(s) representing the Class A Warrants to be divided or combined in accordance with such notice. 4.2. Expenses. The Company shall prepare, issue and deliver at its own expense (other than transfer taxes) the new Class A Warrant Certificates under this Section 4. The Company shall not be required, however, to pay any tax or other charge imposed in connection with any transfer of any Class A Warrants, including, but not limited to, any transfer involved in the division or combination of any Class A Warrant Certificates under this Section 4, and in such case the Company shall not be required to issue or deliver any Class A Warrant Certificates until such tax or other charge has been paid or it has been established to the satisfaction of the Company that no such tax or other charge is due. If such tax or other charge is due, the Warrant Agent shall have no duty or obligation under this Section 4 or any other similar provision of this Warrant Agreement unless and until it is satisfied that all such taxes and/or governmental charges have been paid in full. 4.3. Maintenance of Books. The Company agrees to maintain, at its aforesaid office or agency, books for the registration and the registration of transfer of the Class A Warrants. 4.4. Transfer. Subject to Section 4.2, the Class A Warrants and all rights hereunder are transferable, in whole or in part, without charge to the Holder hereof upon surrender of the Class A Warrant Certificate with a form of assignment, substantially in the form attached hereto as Exhibit C, at the office or agency of the Warrant Agent as provided for in Section 12. Upon any partial transfer, the Warrant Agent shall promptly issue and deliver to the Holder hereof a new Class A Warrant Certificate of like tenor, in the name of the Holder hereof, which shall be exercisable for such number of shares of Class A Warrant Stock which were not so transferred. 5. ADJUSTMENTS The number of shares of Common Stock for which each Class A Warrant is exercisable, and the price at which such shares may be purchased upon exercise of Class A Warrants, shall be subject to adjustment from time to time as set forth in this Section 5. The Company shall give each Holder notice of any event described below which requires an adjustment pursuant to this Section 5 at the time of such event. 5.1. Stock Dividends, Subdivisions and Combinations. If at any time after the Closing Date the Company shall: (a) pay a dividend, or make any other distribution of, Additional Shares of Common Stock to all holders of its Common Stock, (b) subdivide its outstanding shares of Common Stock into a larger number of shares of Common Stock, or (c) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, then (i) the number of shares of Common Stock for which each Class A Warrant is exercisable immediately after the occurrence of any such event shall be adjusted to equal the number of shares of Common Stock which a record holder of the same number of shares of Common Stock for which one Class A Warrant is exercisable immediately prior to the occurrence of such event would own or be entitled to receive after the happening of such event, and (ii) the Current Class A Warrant Price shall be adjusted to equal (A) the Current Class A Warrant Price multiplied by the number of shares of Common Stock for which one Class A Warrant is exercisable immediately prior to such adjustment divided by (B) the number of shares for which one Class A Warrant is exercisable immediately after such adjustment. 5.2. Certain Other Distributions. If at any time after the Closing Date the Company shall make: (a) any distribution of evidences of its indebtedness or any other assets of any nature whatsoever (other than cash or Convertible Securities covered by Section 5.4) to all holders of its Common Stock, or (b) any distribution of warrants or other rights to subscribe for or purchase any evidences of its indebtedness (other than warrants or rights covered by Section 5.3 hereof) to all holders of its Common Stock, then (i) the number of shares of Common Stock for which each Class A Warrant is exercisable shall be adjusted to equal the product obtained by multiplying the number of shares of Common Stock for which one Class A Warrant is exercisable immediately prior to such distribution by a fraction (A) the numerator of which shall be the Current Market Price per share of Common Stock at the time of such distribution and (B) the denominator of which shall be the Current Market Price per share of Common Stock minus the amount allocable to one share of Common Stock of the fair value (as determined in good faith by the Board of Directors of the Company) of any and all such evidences of indebtedness, shares of stock, other securities or property or warrants or other subscription or purchase rights so distributed, and (ii) the Current Class A Warrant Price shall be reduced to equal (A) the Current Class A Warrant Price immediately prior to such distribution multiplied by the number of shares of Common Stock for which one Class A Warrant is exercisable immediately prior to such distribution divided by (B) the number of shares for which one Class A Warrant is exercisable immediately after such distribution. A reclassification of the Common Stock (other than a change in par value, or from par value to no par value or from no par value to par value) into shares of Common Stock and shares of any other class of stock shall be deemed a distribution by the Company to the holders of its Common Stock of such shares of such other class of stock within the meaning of this Section 5.2 and, if the outstanding shares of Common Stock shall be changed into a larger or smaller number of shares of Common Stock as a part of such reclassification, such change shall be deemed a subdivision or combination, as the case may be, of the outstanding shares of Common Stock within the meaning of Section 5.1. 5.3. Below Market Issuances of Common Stock. If at any time after the Closing Date the Company shall (other than in a Permitted Issuance) issue Additional Shares of Common Stock (or options, warrants or other rights to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Securities, whether or not the rights to exchange, subscribe or convert thereunder are immediately exercisable), at a price per share (or having an effective exercise, exchange or conversion price per share together with the purchase price thereof) of less than 90% of the Current Market Price in effect immediately prior to the time of such issue, then in each such case (i) the number of shares of Common Stock for which each Class A Warrant is exercisable shall be adjusted to equal the product obtained by multiplying the number of shares of Common Stock for which one Class A Warrant is exercisable immediately prior to such issuance by a fraction (A) the numerator of which shall be the number of shares of Common Stock Outstanding immediately prior to such issuance plus the total number of Additional Shares of Common Stock issued or offered for subscription or purchase, as the case may be, and (B) the denominator of which shall be the number of shares of Common Stock Outstanding immediately prior to such issuance plus the number of shares of Common Stock which the aggregate purchase, subscription and/or exercise price to be paid for all Additional Shares of Common Stock would purchase at the then Current Market Price; and (ii) the Current Class A Warrant Price in effect immediately prior to such issuance shall be reduced by multiplying such Current Class A Warrant Price by a fraction (X) the numerator of which shall be the number of shares for which one Class A Warrant is exercisable immediately prior to such issuance; and (Y) the denominator of which shall be the number of shares of Common Stock for which one Class A Warrant is exercisable immediately after such issuance. No further adjustments of the number of shares for which Class A Warrants are exercisable or of the Current Class A Warrant Price shall be made upon the actual issue of such Common Stock or such Convertible Securities upon exercise of any such options, warrants or other rights or upon the actual issuance of such Common Stock upon such conversion or exchange of such Convertible Securities. No adjustment of the number of shares of Common Stock for which Class A Warrants are exercisable or of the Current Class A Warrant Price shall be made under this Section 5.3 for the issuance of any shares of Common Stock upon the conversion or exchange of any Convertible Securities, the issuance of which Convertible Shares is covered by Section 5.4 or is expressly exempt from Section 5.4 by reason of the price per share (or effective price per share) for which Common Stock is issuable upon exchange or conversion thereof. No adjustment of the number of shares of Common Stock for which Class A Warrants are exercisable or of the Current Class A Warrant Price shall be made under this Section 5.3 for any issuance of shares of Common Stock covered by Section 5.1. 5.4. Below Market Issuances of Convertible Securities. If at any time after the Closing Date the Company shall (other than in a Permitted Issuance) make a distribution to all holders of its Common Stock of, or otherwise issue, any Convertible Securities (whether or not the rights to exchange or convert thereunder are immediately exercisable), for which Common Stock is issuable upon such exchange or conversion at a price per share (or effective price per share together with the purchase price thereof) of less than 90% of the Current Market Price in effect immediately prior to the time of such issuance, then (i) the number of shares of Common Stock for which each Class A Warrant is exercisable shall be adjusted to equal the product obtained by multiplying the number of shares of Common Stock for which one Class A Warrant is exercisable immediately prior to such issuance by a fraction (A) the numerator of which shall be the number of shares of Common Stock Outstanding immediately prior to such issuance plus the total number of Additional Shares of Common Stock into which such Convertible Securities would be convertible and (B) the denominator of which shall be the number of shares of Common Stock Outstanding immediately prior to such issuance plus the number of shares of Common Stock which the aggregate consideration to be paid upon the exchange or conversion thereof would purchase at the then Current Market Price, and (ii) the Current Class A Warrant Price in effect immediately prior to such issuance shall be reduced by multiplying such Current Class A Warrant Price by a fraction (X) the numerator of which shall be the number of shares for which one Class A Warrant is exercisable immediately prior to such issuance and (Y) the denominator of which shall be the number of shares of Common Stock for which one Class A Warrant is exercisable immediately after such issuance. No further adjustments of the number of shares of Common Stock for which Class A Warrants are exercisable or of the Current Class A Warrant Price shall be made upon the actual issue of such Common Stock upon conversion or exchange of such Convertible Securities. No adjustment of the number of shares of Common Stock for which Class A Warrants are exercisable or of the Current Class A Warrant Price shall be made under this Section 5.4 upon the issuance of any Convertible Securities which are issued pursuant to the exercise of any warrants or other subscription or purchase rights therefor, the issuance of which warrants or other subscription or purchase rights is covered by Section 5.3 or is expressly exempt from Section 5.3 by reason of the price per share (or effective price per share) for which Common Stock is issuable upon exchange or conversion of the Convertible Securities covered thereby. 5.5. Superseding Adjustment. If, at any time after any adjustment of the number of shares of Common Stock for which Class A Warrants are exercisable and the Current Class A Warrant Price shall have been made pursuant to Section 5.3 or Section 5.4 as the result of any issuance of warrants, rights or Convertible Securities, (a) such warrants or rights, or the right of conversion or exchange in such other Convertible Securities, shall expire, and all or a portion of such warrants or rights, or the right of conversion or exchange with respect to all or a portion of such other Convertible Securities, as the case may be, shall not have been exercised, or (b) the consideration per share for which shares of Common Stock are issuable pursuant to such warrants or rights, or the terms of such other Convertible Securities, shall be increased solely by virtue of provisions therein contained for an automatic increase in such consideration per share upon the occurrence of a specified date or event, then for each outstanding Class A Warrant such previous adjustment shall be rescinded and annulled and the Additional Shares of Common Stock which were deemed to have been issued by virtue of the computation made in connection with the adjustment so rescinded and annulled shall no longer be deemed to have been issued by virtue of such computation. Thereupon, a recomputation shall be made of the effect of such rights or options or other Convertible Securities on the basis of (i) treating the number of Additional Shares of Common Stock or other property, if any, theretofore actually issued or issuable pursuant to the previous exercise of any such warrants or rights or any such right of conversion or exchange, as having been issued on the date or dates of any such exercise and for the consideration actually received and receivable therefor, and (ii) treating any such warrants or rights or any such other Convertible Securities which then remain outstanding as having been granted or issued immediately after the time of such increase of the consideration per share for which shares of Common Stock or other property are issuable under such warrants or rights or other Convertible Securities; whereupon a new adjustment of the number of shares of Common Stock for which Class A Warrants are exercisable and the Current Class A Warrant Price shall be made, which new adjustment shall supersede the previous adjustment so rescinded and annulled. 5.6. Other Provisions Applicable to Adjustments under this Section. The following provisions shall be applicable to the making of adjustments of the number of shares of Common Stock for which Class A Warrants are exercisable and the Current Class A Warrant Price provided for in this Section 5: (a) Computation of Consideration. To the extent that any Additional Shares of Common Stock or any Convertible Securities or any warrants or other rights to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Securities shall be issued for cash consideration, the consideration received by the Company therefor shall be the amount of the cash received by the Company therefor, or, if such Additional Shares of Common Stock or Convertible Securities are offered by the Company for subscription, the subscription price. To the extent that such issuance shall be for a consideration other than cash, then, except as herein otherwise expressly provided, the amount of such consideration shall be deemed to be the fair value of such consideration at the time of such issuance as determined in good faith by the Board of Directors of the Company. In case any Additional Shares of Common Stock or any Convertible Securities or any warrants or other rights to subscribe for or purchase such Additional Shares of Common Stock or Convertible Securities shall be issued in connection with any merger in which the Company issues any securities, the amount of consideration therefor shall be deemed to be the fair value, as determined in good faith by the Board of Directors of the Company, of such portion of the assets and business of the nonsurviving corporation as such Board in good faith shall determine to be attributable to such Additional Shares of Common Stock, Convertible Securities, warrants or other rights, as the case may be. The consideration for any Additional Shares of Common Stock issuable pursuant to any warrants or other rights to subscribe for or purchase the same shall be the consideration received by the Company for issuing such warrants or other rights plus the additional consideration payable to the Company upon exercise of such warrants or other rights. The consideration for any Additional Shares of Common Stock issuable pursuant to the terms of any Convertible Securities shall be the consideration received by the Company for issuing warrants or other rights to subscribe for or purchase such Convertible Securities, plus the consideration paid or payable to the Company in respect of the subscription for or purchase of such Convertible Securities, plus the additional consideration, if any, payable to the Company upon the exercise of the right of conversion or exchange in such Convertible Securities. In case of the issuance at any time of any Additional Shares of Common Stock or Convertible Securities in payment or satisfaction of any dividends upon any class of stock other than Common Stock, the Company shall be deemed to have received for such Additional Shares of Common Stock or Convertible Securities a consideration equal to the amount of such dividend so paid or satisfied. (b) When Adjustments to Be Made. The adjustments required by this Section 5 shall be made whenever and as often as any specified event requiring an adjustment shall occur, except that any adjustment of the number of shares of Common Stock for which Class A Warrants are exercisable that would otherwise be required may be postponed (except in the case of a subdivision or combination of shares of the Common Stock, as provided in Section 5.1) up to, but not beyond the date of exercise if such adjustment either by itself or with other adjustments not previously made adds or subtracts less than 1% of the shares of Common Stock for which Class A Warrants are exercisable immediately prior to the making of such adjustment. Any adjustment representing a change of less than such minimum amount (except as aforesaid) which is postponed shall be carried forward and made as soon as such adjustment, together with other adjustments required by this Section 5 and not previously made, would result in a minimum adjustment or on the date of exercise. For the purpose of any adjustment, any specified event shall be deemed to have occurred at the close of business on the date of its occurrence. (c) Fractional Interests. In computing adjustments under this Section 5, fractional interests in Common Stock shall be taken into account to the nearest 1/100th of a share. 5.7. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets. In case the Company shall, after the Closing Date, reorganize its capital or reclassify its capital stock (other than in a capital reorganization or reclassification resulting solely in the issuance of Additional Shares of Common Stock or Convertible Securities or options, warrants or other rights to subscribe for or purchase Additional Shares of Common Stock or Convertible Securities, the issuance of which is covered by Section 5.1, 5.3 or 5.4 or is expressly exempt from Section 5.3 or 5.4 by reason of the price per share (or effective price per share) for which Common Stock is issuable upon exercise, exchange or conversion thereof), consolidate or merge with or into another Person (where the Company is not the surviving corporation or where as a result of such consolidation or merger there is a change in or distribution with respect to the Common Stock of the Company), or sell, transfer or otherwise dispose of all or substantially all its property, assets or business to another Person and, pursuant to the terms of such reorganization, reclassification, merger, consolidation or disposition of assets, shares of common stock of the successor, acquiring Person or surviving corporation (or of the Company if the Company is the surviving corporation), or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor, acquiring Person or surviving corporation ("Other Property"), are to be received by or distributed to the holders of Common Stock of the Company, then, subject to the terms and conditions of this Warrant Agreement, each Class A Warrant shall thereafter entitle the Holder thereof to receive, upon exercise thereof, the number of shares of common stock of the successor, acquiring Person or surviving corporation (or of the Company, if the Company is the surviving corporation), and Other Property receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which one Class A Warrant is exercisable immediately prior to such event. In case of any such reorganization, reclassification, merger, consolidation or disposition of assets, the successor or acquiring corporation (if other than the Company) shall expressly assume the due and punctual observance and performance of each and every covenant and condition of this Warrant Agreement to be performed and observed by the Company and all the obligations and liabilities hereunder, subject to such modifications as may be deemed appropriate (as determined by resolution of the Board of Directors of the Company) in order to provide for adjustments of shares of the Common Stock for which Class A Warrants are exercisable which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 5. For purposes of this Section 5.7, "common stock of the successor, acquiring Person or surviving corporation" shall include stock of such Person of any class which is not preferred as to dividends or assets over any other class of stock of such Person and which is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or other securities which are convertible into or exchangeable for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock. The foregoing provisions of this Section 5.7 shall similarly apply to any successive reorganizations, reclassifications, mergers, consolidations or disposition of assets. 5.8. Other Action Affecting Common Stock. In case at any time or from time to time the Company shall take any action in respect of its Common Stock, other than any action described in this Section 5, then the number of shares of Common Stock or other stock for which Class A Warrants are exercisable and/or the Class A Warrant Price thereof shall be adjusted in such manner as may be equitable in the circumstances consistent with the fundamental intent of such provisions making an appropriate adjustment in the Current Class A Warrant Price and the number of Class A Warrant Stock obtainable upon exercise of the Class A Warrants so as to protect the rights of the Holder of the Class A Warrants. 5.9. Certain Limitations. Notwithstanding anything herein to the contrary, the Company agrees not to enter into any transaction which, by reason of any adjustment hereunder, would cause the Current Class A Warrant Price to be less than the par value per share of Common Stock. 6. NOTICES OF AdJUSTMENT Whenever the number of shares of Common Stock for which Class A Warrants are exercisable, or whenever the Current Class A Warrant Price shall be adjusted pursuant to Section 5, the Company shall forthwith prepare a certificate to be executed by the chief financial officer of the Company setting forth, in reasonable detail, the event requiring the adjustment and the facts, computations, and method by which such adjustment was calculated (including a description of the basis on which the Board of Directors of the Company determined the fair value of any evidences of indebtedness, shares of stock, other securities or property or warrants or other subscription or purchase rights referred to in Section 5), specifying the number of shares of Common Stock for which Class A Warrants are exercisable and (if such adjustment was made pursuant to Section 5.7) describing the number and kind of any shares of other common stock or Other Property for which Class A Warrants are exercisable, and any change in the Current Class A Warrant Price (or, if such adjustment was made pursuant to Section 5.7, the purchase price or prices at which a share of such other common stock or Other Property may be purchased upon exercise of Class A Warrants), after giving effect to such adjustment. The Company shall promptly cause a signed copy of such certificate to be delivered to the Warrant Agent and to each Holder in accordance with Section 16.2. The Company shall keep at its office or agency designated pursuant to Section 12 copies of all such certificates and cause the same to be available for inspection at said office during normal business hours by any Holder or any prospective purchaser of Class A Warrants designated by a Holder thereof. 7. NO IMPAIRMENT The Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant Agreement, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holders against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any shares of Common Stock receivable upon the exercise of a Class A Warrant above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of a Class A Warrant, and (c) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant Agreement. 8. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY From and after the Closing Date, the Company shall at all times reserve and keep available for issue upon the exercise of Class A Warrants such number of authorized but unissued shares of Common Stock as will be sufficient to permit the exercise in full of all outstanding Class A Warrants. All shares of Common Stock which shall be so issuable, when issued upon exercise of any Class A Warrant and payment therefor in accordance with the terms of this Warrant Agreement, shall be duly and validly issued and fully paid and nonassessable, not subject to preemptive rights, and free from all taxes, liens, charges, security interests, encumbrances and other restrictions created by or through the Company. Before taking any action which would cause an adjustment reducing the Current Class A Warrant Price below the then par value, if any, of the shares of Common Stock issuable upon exercise of the Class A Warrants, the Company shall take any corporate action which may be necessary in order that the Company may validly and legally issue fully paid and nonassessable shares of such Common Stock at such adjusted Current Class A Warrant Price. Before taking any action which would result in an adjustment in the number of shares of Common Stock for which Class A Warrants are exercisable or in the Current Class A Warrant Price, the Company shall use its best efforts to obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof. If any shares of Common Stock required to be reserved for issuance upon exercise of Class A Warrants require registration or qualification with any governmental authority or other governmental approval or filing under any federal or state law before such shares may be so issued, the Company will in good faith (subject to all applicable laws including, without limitation, those rules and regulations promulgated under the Securities Act) and as expeditiously as possible and at its expense endeavor to cause such shares to be duly registered. 9. STOCK AND WARRANT TRANSFER BOOKS The Company will not at any time, except upon dissolution, liquidation or winding up of the Company, close its stock transfer books or Class A Warrant transfer books so as to result in preventing or delaying the exercise or transfer of any Class A Warrant. 10. SUPPLYING INFORMATION The Company shall cooperate with each Holder of a Class A Warrant and each holder of Class A Warrant Stock in supplying such information as may be reasonably necessary for such holder to complete and file any information reporting forms presently or hereafter required by the Commission as a condition to the availability of an exemption from the Securities Act for the sale of any Class A Warrant or Class A Warrant Stock. 11. LOSS OR MUTILATION Upon receipt by the Company from any Holder of evidence satisfactory to the Company of the ownership of and the loss, theft, destruction or mutilation of a Class A Warrant Certificate and indemnity satisfactory to the Company, and in case of mutilation upon surrender and cancellation thereof, the Company will execute and deliver to such Holder in exchange for or in lieu thereof a new Class A Warrant Certificate of like tenor and for the same aggregate number of Class A Warrants. 12. OFFICE OF COMPANY As long as any of the Class A Warrants remain outstanding, the Warrant Agent, on behalf of the Company, shall maintain an office or agency (which shall be the principal executive offices of the Warrant Agent) where the Class A Warrants may be presented for exercise, registration of transfer, division or combination as provided in this Warrant Agreement. 13. APPRAISAL The determination of the Appraised Value per share of Common Stock shall be made by an investment banking firm of nationally recognized standing selected by the Company. The Company shall retain, at its sole cost, such investment banking firm as may be necessary for the determination of Appraised Value required by the terms of this Warrant Agreement. 14. LIMITATION OF LIABILITY No provision hereof, in the absence of affirmative action by a Holder to purchase shares of Common Stock, and no enumeration herein of the rights or privileges of a Holder hereof, shall give rise to any liability of such Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. 15. CONCERNING THE WARRANT AGENT The Warrant Agent undertakes the duties and obligations imposed by this Warrant Agreement upon the following terms and conditions, by all of which the Company and the Holders, by their acceptance of the Class A Warrants, shall be bound: 15.1. Correctness of Statement. The statements contained herein and in the Class A Warrant Certificates shall be taken as statements of the Company, and the Warrant Agent assumes no responsibility for the correctness of any of the same except such as describe the Warrant Agent or action to be taken by it. The Warrant Agent assumes no responsibility with respect to the distribution of the Class A Warrant Certificates except as herein otherwise provided. 15.2. Breach of Covenants. The Warrant Agent shall not be responsible for any failure of the Company to comply with any of the covenants contained in this Warrant Agreement or in the Class A Warrant Certificates to be complied with by the Company. 15.3. Reliance on Counsel. The Warrant Agent may consult at any time with counsel satisfactory to it (who may be counsel for the Company) and the Warrant Agent shall incur no liability or responsibility to the Company or to any Holder in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the opinion or the advice of such counsel. 15.4. Reliance on Documents. The Warrant Agent shall incur no liability or responsibility to the Company or to any Holder for any action taken, suffered or omitted in reliance on any Class A Warrant Certificate, certificate of shares, notice, resolution, waiver, consent, order certificate, or other paper, document or instrument believed by it to be genuine and to have signed, sent or presented by the proper party or parties. 15.5. Compensation and Indemnification. The Company agrees to pay to the Warrant Agent reasonable compensation for all services rendered by the Warrant Agent in the execution of this Warrant Agreement, to reimburse the Warrant Agent for all expenses, taxes and governmental charges and other charges of any kind and nature incurred by the Warrant Agent in the execution of this Warrant Agreement to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and counsel fees, for anything done or omitted by the Warrant Agent in the execution of its duties and powers under this Warrant Agreement, except for such liabilities that arise as a result of the Warrant Agent's negligence, willful misconduct or bad faith. 15.6. Legal Proceedings. The Warrant Agent shall be under no obligation to institute any action, suit or legal proceeding or to take any other action likely to involve expense unless the Company or one or more Holders shall furnish the Warrant Agent with reasonable security and indemnity for any costs and expenses which may be incurred, but this provision shall not affect the power of the Warrant Agent to take such action as it may consider proper, whether with or without any such security indemnity. All rights of action under this Warrant Agreement or under any of the Class A Warrant Certificates may be enforced by the Warrant Agent without possession of any of the Class A Warrant Certificates or the production thereof at any trial or other proceeding relative thereto, and any such action, suit or proceeding instituted by the Warrant Agent shall be brought in its name as Warrant Agent, and any recovery of judgment shall be for the ratable benefit of the Holders, as their respective rights or interests may appear. 15.7. Other Transactions in Securities of the Company. Except as prohibited by law, the Warrant Agent, and any stockholder, director, officer or employee of it, may buy, sell or deal in any of the Class A Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Warrant Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity. 15.8. Liability of Warrant Agent. The Warrant Agent shall act hereunder solely as agent for the Company, and its duties shall be determined solely by the provisions hereof. The Warrant Agent shall not be liable for anything which it may do or refrain from doing in connection with this Warrant Agreement except for its own negligence, willful misconduct or bad faith. 15.9. Adjustments. The Warrant Agent shall not at any time be under any duty or responsibility to any Holder to make or cause to be made any adjustment of the Current Class A Warrant Price or number of shares of Class A Warrant Stock deliverable as provided in this Warrant Agreement, or to determine whether any facts exist which may require any of such adjustments, or with respect to the nature or extent of any such adjustments, when made, or with respect to the method employed in making the same. The Warrant Agent shall not be accountable with respect to the validity or value or the kind or amount of any shares of Class A Warrant Stock or of any securities or property which may at any time be issued or delivered upon the exercise of any Class A Warrant or with respect to whether any such shares of Class A Warrant Stock or other securities will be, when issued, validly issued, fully paid and nonassessable, and makes no representation with respect thereto. 16. MISCELLANEOUS 16.1. Nonwaiver. No course of dealing or any delay or failure to exercise any right hereunder on the part of any Holder shall operate as a waiver of such right or otherwise prejudice Holder's rights, powers or remedies. 16.2. Notice Generally. Any notice, demand, request, consent, approval, declaration, delivery or other communication hereunder to be made pursuant to the provisions of this Warrant Agreement shall be sufficiently given or made if in writing and either (i) delivered in person with receipt acknowledged, (ii) sent by registered or certified mail, return receipt requested, postage prepaid, or (iii) by telecopy and confirmed by telecopy answer back, addressed as follows: (a) If to any Holder or holder of Class A Warrant Stock, at its last known address appearing on the books of the Company maintained by the Warrant Agent for such purpose; (b) If to the Warrant Agent, to Wachovia Bank, N.A., as Warrant Agent, Corporate Trust Group, Corporate Actions Department, 1525 West W.T. Harris Blvd., Bldg. 3C3, Charlotte, NC 28262-1153 (overnight courier) 28288-1153 (first class mail); or (c) If to the Company, at 3445 Peachtree Road, N.E. - Suite 700, Atlanta, Georgia 30326, Attn: General Counsel; or at such other address as may be substituted by notice given as herein provided. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. Every notice, demand, request, consent, approval, declaration, delivery or other communication hereunder shall be deemed to have been duly given or served on the date on which personally delivered, with receipt acknowledged, telecopied and confirmed by telecopy answerback, or three (3) Business Days after the same shall have been deposited in the United States mail. Failure or delay in delivering copies of any notice, demand, request, approval, declaration, delivery or other communication to the person designated above to receive a copy shall in no way adversely affect the effectiveness of such notice, demand, request, approval, declaration, delivery or other communication. 16.3. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the instructions set forth herein, and the Warrant Agent hereby accepts such appointment. 16.4. Successors and Assigns. This Warrant Agreement and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company, the Warrant Agent and the successors and assigns of each Holder. The provisions of this Warrant Agreement are intended to be for the benefit of all Holders from time to time of a Class A Warrant or Class A Warrants and holders of Class A Warrant Stock, and shall be enforceable by any such Holder or holder of Class A Warrant Stock. 16.5. Amendment. The Company and the Warrant Agent may from time to time supplement or amend this Warrant Agreement without the approval of any Holders in order to cure any ambiguity or to correct or supplement any provision contained herein which may be defective or inconsistent with any other provision herein, or to make any other provisions or change in regard to matters or questions arising hereunder which the Company and the Warrant Agent may deem necessary or desirable and which shall not adversely affect the interests of any Holder. 16.6. Severability. Wherever possible, each provision of this Warrant Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Warrant Agreement. 16.7. Headings. The headings used in this Warrant Agreement are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant Agreement. 16.8. Governing Law. This Warrant Agreement shall be governed by the laws of the State of Delaware, without regard to the provisions thereof relating to conflict of laws. IN WITNESS WHEREOF, the Company and the Warrant Agent have caused this Warrant Agreement to be duly executed as of the date first written above. LODGIAN, INC. By: /s/ Daniel E. Ellis ------------------------------------ Name: Daniel E. Ellis Title: Vice President and Secretary WACHOVIA BANK, N.A. By: /s/ Ted Wiener ------------------------------------ Name: Ted Wiener Title: Assistant Vice President EXHIBIT A FORM OF CLASS A WARRANT CERTIFICATE CLASS A WARRANT LODGIAN, INC. No. ______________ [______] Class A Warrants Incorporated Under the Laws of the State of Delaware THIS CERTIFIES THAT, for value received, ______________________, the registered holder hereof or registered assigns (the "Holder"), is the owner of the number of Class A Warrants set forth above, each of which represents the right to purchase from LODGIAN, INC., a Delaware corporation (the "Company"), at any time commencing with the opening of business on November __, 2002, and until the close of business on November __, 2007 (the "Expiration Date"), at the purchase price of $18.29 (subject to adjustment as described below) (the "Current Class A Warrant Price"), one fully paid and nonassessable share of Common Stock, par value $0.01 per share (the "Common Stock"), of the Company. The number of shares of Common Stock purchasable upon exercise of each Class A Warrant and the Current Class A Warrant Price per whole share shall be subject to adjustment from time to time as set forth in the Warrant Agreement referred to below. The Class A Warrants represented hereby may be exercised in whole or in part by presentation of this Class A Warrant Certificate with the Subscription Form included herein duly executed, which signature shall, in certain circumstances (as indicated on the Subscription Form), be guaranteed by a bank or trust company having an office or correspondent in the United States or a broker or dealer which is a member of a registered securities exchange or the National Association of Securities Dealers, Inc., and simultaneous payment of the exercise price thereof (in the form indicated on the Subscription Form) to the Company at 3445 Peachtree Road - Suite 700, Atlanta, Georgia 30326, Attn: General Counsel, or as otherwise provided in the Warrant Agreement (defined below). The Class A Warrants represented hereby are of a duly authorized issue of Class A Warrants evidencing the right to purchase up to an aggregate of 1,510,638 shares of Common Stock and are issued under and in accordance with a Warrant Agreement (the "Warrant Agreement"), dated as of November __, 2002, between the Company and Wachovia Bank, N.A. (the "Warrant Agent") and are subject to the terms and provisions contained in the Warrant Agreement, to all of which the Holder of this Class A Warrant Certificate by acceptance hereof consents. A copy of the Warrant Agreement is available for inspection at the principal office of the Company. Upon any partial exercise of the Class A Warrants represented hereby, there shall be countersigned and issued to the Holder hereof a new Warrant Certificate in respect of the shares of Common Stock as to which the Class A Warrants represented hereby shall not have been exercised. The Class A Warrants represented hereby may be exchanged at the office of the Warrant Agent by surrender of this Class A Warrant Certificate properly endorsed either separately or in combination with one or more other Class A Warrant Certificates for one or more new Class A Warrant Certificates representing Class A Warrants entitling the Holder thereof to purchase the same aggregate number of shares of Common Stock as were purchased on exercise of the Class A Warrant or Class A Warrants exchanged. No fractional shares will be issued upon the exercise of these Class A Warrants. Subject to compliance with applicable securities laws, the Class A Warrants represented hereby are transferable at the office of the Warrant Agent, in the manner and subject to the limitations set forth in the Warrant Agreement. The Holder hereof may be treated by the Company, the Warrant Agent and all other persons dealing with this Warrant Certificate as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented hereby, or to the transfer hereof on the books of the Company, any notice to the contrary notwithstanding, and until such transfer on such books, the Company may treat the Holder hereof as the owner for all purposes. The Class A Warrants represented hereby do not entitle any Holder hereof to any of the rights of a shareholder of the Company. The Class A Warrants represented hereby shall not be valid or obligatory for any purpose until this Warrant Certificate shall have been countersigned by the Warrant Agent. Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers. Dated: [_______________] Countersigned and Registered: WACHOVIA BANK, N.A. as Warrant Agent By: ------------------------- Authorized Signature LODGIAN, INC. By: -------------------------- President or Vice President Attest: ----------------------- Secretary or Assistant Secretary EXHIBIT B SUBSCRIPTION FORM [To be executed only upon exercise of a Warrant or Warrants] The undersigned (the "Registered Holder") hereby irrevocably exercises the right to purchase _________ shares of Common Stock of LODGIAN, INC., an entity organized and existing under the laws of the State of Delaware (the "Company"), evidenced by the attached Warrant Certificate, and herewith makes payment of the exercise price against delivery of the shares with respect to such shares in full in the form of (check the appropriate box) (i) certified or official bank check or wire transfer in the amount of $________; (ii) by surrendering ______ shares of Class A Warrant Stock, which represent the amount of Class A Warrant Stock, as provided in the Warrant Agreement, to be cancelled in connection with such exercise; or (iii) by the surrender to the Company of the attached original debt securities of the Company in the principal amount (plus accrued interest and premium (if any) or less any unamortized discount thereon) of $_________, all in accordance with the conditions and provisions of the Warrant Agreement, and requests that certificates for the shares of Common Stock hereby purchased (and any securities or other property issuable upon such exercise) be issued in the name of and delivered to [_____________] whose address is [________________________________] and, if such shares of Common Stock shall not include all of the shares of Common Stock issuable as provided in the Class A Warrant Certificate, that a new Class A Warrant Certificate of like tenor and date for the balance of the shares of Common Stock issuable thereunder be delivered to the undersigned. ----------------------------------- (Name of Registered Owner) ----------------------------------- (Signature of Registered Owner) ----------------------------------- (Street Address) - ------------------------------- ----------------------------------- (Signature Guarantee) (City)(State) (Zip Code) NOTICE: The signature on this subscription form must correspond with the name as written upon the face of the Class A Warrant Certificate in every particular, without alteration or enlargement or any change whatsoever. Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officer. Dated: [_______________] Countersigned and Registered: WACHOVIA BANK, N.A. as Warrant Agent By: ----------------------- Authorized Signature [Name] [Title] LODGIAN, INC. By: ------------------------------------- President and Chief Executive Officer Attest: --------------------------------- Secretary EXHIBIT C ASSIGNMENT FORM FOR VALUE RECEIVED the undersigned registered owner of the Class A Warrant(s) represented by Class A Warrant Certificate No. [_______] hereby sells, assigns and transfers unto the Assignee named below all of the rights of the undersigned under the Warrant Agreement, with respect to the number of Class A Warrants set forth below: Name and Address of Assignee No. of Class A Warrants - ---------------------------- ----------------------- and does hereby irrevocably constitute and appoint [_____________________] attorney-in-fact to register such transfer on the books of LODGIAN, INC. maintained for the purpose, with full power of substitution in the premises. Dated: Print Name: ----------------------- ------------------------ Signature: ------------------------ Witness: ------------------------ - ------------------------- (Signature Guarantee) NOTICE: The signature on this assignment must correspond with the name as written upon the face of the Warrant in every particular, without alteration or enlargement or any change whatsoever. EX-4.3 6 lo112502_4-3.txt CLASS B WARRANT AGREEMENT EXHIBIT 4.3 ================================================================================ LODGIAN, INC. and WACHOVIA BANK, N.A., as Warrant Agent CLASS B WARRANT AGREEMENT Dated as of November 25, 2002 ================================================================================ TABLE OF CONTENTS Section 1. DEFINITIONS............................................................1 2. EXECUTION AND DELIVERY OF WARRANT CERTIFICATES.........................1 3. EXERCISE OF WARRANT....................................................1 3.1. Manner of Exercise.............................................1 3.2. Procedure......................................................1 3.3. Payment of Taxes...............................................1 3.4. Fractional Shares..............................................1 4. TRANSFER, DIVISION AND COMBINATION.....................................1 4.1. Division and Combination.......................................1 4.2. Expenses.......................................................1 4.3. Maintenance of Books...........................................1 4.4. Transfer.......................................................1 5. ADJUSTMENTS............................................................1 5.1. Stock Dividends, Subdivisions and Combinations.................1 5.2. Certain Other Distributions....................................1 5.3. Below Market Issuances of Common Stock.........................1 5.4. Below Market Issuances of Convertible Securities...............1 5.5. Superseding Adjustment.........................................1 5.6. Other Provisions Applicable to Adjustments under this Section..1 5.7. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets..........................................1 5.8. Other Action Affecting Common Stock............................1 5.9. Certain Limitations............................................1 6. NOTICES OF AdJUSTMENT..................................................1 7. NO IMPAIRMENT..........................................................1 8. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY.................................1 9. STOCK AND WARRANT TRANSFER BOOKS.......................................1 10. SUPPLYING INFORMATION..................................................1 11. LOSS OR MUTILATION.....................................................1 12. OFFICE OF COMPANY......................................................1 13. APPRAISAL..............................................................1 14. LIMITATION OF LIABILITY................................................1 15. CONCERNING THE WARRANT AGENT...........................................1 15.1. Correctness of Statement.......................................1 15.2. Breach of Covenants............................................1 15.3. Reliance on Counsel............................................1 15.4. Reliance on Documents..........................................1 15.5. Compensation and Indemnification...............................1 15.6. Legal Proceedings..............................................1 15.7. Other Transactions in Securities of the Company................1 15.8. Liability of Warrant Agent.....................................1 15.9. Adjustments....................................................1 16. MISCELLANEOUS..........................................................1 16.1. Nonwaiver......................................................1 16.2. Notice Generally...............................................1 16.3. Appointment of Warrant Agent...................................1 16.4. Successors and Assigns.........................................1 16.5. Amendment......................................................1 16.6. Severability...................................................1 16.7. Headings.......................................................1 16.8. Governing Law..................................................1 SIGNATURES .............................................................20 Exhibit A Form of Warrant Certificate...................................1 Exhibit B Subscription Form.............................................1 Exhibit C Assignment Form...............................................1 WARRANT AGREEMENT WARRANT AGREEMENT, dated as of November 25, 2002 (the "Warrant Agreement"), between LODGIAN, INC., a Delaware corporation (the "Company"), and Wachovia Bank, N.A., as Warrant Agent (the "Warrant Agent"). WHEREAS, pursuant to the First Amended Joint Plan of Reorganization (the "Plan") of the Company and certain of its subsidiaries, as confirmed by the United States Bankruptcy Court for the Southern District of New York on November 5, 2002, the Company proposes to issue Class B Warrants (as defined herein), representing the right to purchase up to an aggregate of 1,029,366 shares of its Common Stock (as defined herein), subject to adjustment as hereinafter provided; and WHEREAS, the Company desires to appoint the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act in connection with the issuance, transfer, exchange, replacement and exercise of the Class B Warrant Certificates (as defined herein) and other matters as provided herein; NOW THEREFORE, in consideration of the foregoing and for the purpose of defining the terms and conditions of the Class B Warrants and the respective rights and obligations thereunder of the Company and the holders from time to time of the Class B Warrants, the Company and the Warrant Agent hereby agree as follows: 1. DEFINITIONS As used in this Warrant Agreement, the following terms have the respective meanings set forth below: "Additional Shares of Common Stock" means all shares of Common Stock issued by the Company after the Closing Date, other than shares of Class B Warrant Stock. "Appraised Value" means, in respect of the Common Stock on any date herein specified, the fair saleable value of one share of Common Stock as of the last day of the most recent fiscal month ended at least 15 days prior to such specified date, based on (i) the equity value of the Company, as determined by an investment banking firm selected in accordance with the terms of Section 13, divided by (ii) the number of Fully Diluted Outstanding shares of Common Stock. "Business Day" means any day that is not a Saturday or Sunday or a day on which banks are required or permitted to be closed in the State of New York. "Class A Warrant" means each of the Company's warrants issued pursuant to that certain Warrant Agreement dated as of even date herewith, each of which evidences the right to purchase one share of Common Stock, subject to adjustment as set forth in such Warrant Agreement, and all warrants issued upon transfer, division or combination of, or in substitution for, any thereof. "Class B Warrant" means each of the Company's warrants issued pursuant to this Warrant Agreement, each of which evidences the right to purchase one share of Common Stock, subject to adjustment as set forth in this Warrant Agreement, and all warrants issued upon transfer, division or combination of, or in substitution for, any thereof. "Class B Warrant Certificate" means a certificate, substantially in the form of Exhibit A hereto, representing one or more Class B Warrants held by a Holder. All Class B Warrant Certificates shall be identical as to terms and conditions, except as to the number of Class B Warrants represented thereby. "Class B Warrant Price" means an amount equal to (i) the number of shares of Common Stock being purchased upon exercise of Class B Warrants pursuant to Section 3.1, multiplied by (ii) the Current Class B Warrant Price as of the date of such exercise. "Class B Warrant Stock" means the shares of Common Stock purchased by the Holders of the Class B Warrants upon the exercise thereof. "Closing Date" means November 25, 2002. "Commission" means the Securities and Exchange Commission or any other federal agency then administering the Securities Act and other federal securities laws. "Common Stock" means the Common Stock, $0.01 par value, of the Company, and any capital stock into which such Common Stock may hereafter be changed, whether as a result of any change in the capital structure of the Company or otherwise, and shall also include (i) capital stock of the Company of any other class (regardless of how denominated) issued to the holders of shares of Common Stock upon any reclassification thereof which is not preferred as to dividends or assets over any other class of stock of the Company and which is not subject to redemption and (ii) shares of common stock of any successor or acquiring corporation (as defined in Section 5.7) received by or distributed to the holders of Common Stock of the Company in the circumstances contemplated by Section 5.7. "Convertible Securities" means evidences of indebtedness, shares of stock or other securities which are convertible into or exchangeable for Additional Shares of Common Stock, either immediately or upon the occurrence of a specified date or a specified event. "Current Class B Warrant Price" means, at any date herein specified, the price at which one share of Common Stock may be purchased pursuant to this Warrant Agreement on such date. The Current Class B Warrant Price as of the date of this Warrant Agreement is $25.44, subject to adjustment in accordance with the terms hereof. "Current Market Price" means, in respect of any share of Common Stock on any date herein specified, (a) for so long as there shall then be a public market for the Common Stock, the average of the Daily Market Prices for the 20 consecutive Business Days immediately prior to such specified date, and (b) if there is then no public market for the Common Stock, the Appraised Value per share of Common Stock as at such specified date. "Daily Market Price" means, for each Business Day (i) if the Common Stock is then listed or admitted to trading on any stock exchange, the last sale price per share of Common Stock on such day on the principal stock exchange on which the Common Stock is then listed or admitted to trading, (ii) if the Common Stock is then listed or admitted to trading on any stock exchange but no sale takes place on such day on such exchange, the average of the last reported closing bid and asked prices per share of Common Stock on such day as officially quoted on such exchange, (iii) if the Common Stock is not then listed or admitted to trading on any stock exchange, the closing sale price per share of Common Stock on such day in the over-the-counter market, as furnished by the Nasdaq Stock Market or the National Quotation Bureau, Inc., provided, that if no sale takes place on such day in the over-the-counter market, the average closing bid and asked price per share of Common Stock on such day as furnished by the Nasdaq Stock Market or the National Quotation Bureau, Inc., (iv) if neither such corporation at the time is engaged in the business of reporting such prices, the closing sale price per share of Common Stock on such day in the over-the-counter market as furnished by any similar firm then engaged in such business, (v) if there is no such firm, the closing sale price per share of Common Stock on such day in the over-the-counter market as furnished by any member of the NASD selected by the Company or (vi) if there is then no public market for the Common Stock, the Appraised Value per share of Common Stock as at such specified date. "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, as the same shall be in effect from time to time. "Exercise Period" means the period during which the Class B Warrants are exercisable pursuant to Section 3.1. "Expiration Date" means the 7th anniversary of the Closing Date. "Fully Diluted Outstanding" means, when used with reference to Common Stock, at any date as of which the number of shares thereof is to be determined, all shares of Common Stock Outstanding at such date and all shares of Common Stock issuable in respect of the Class B Warrants outstanding on such date, and other options or warrants to purchase, or securities convertible into, shares of Common Stock outstanding on such date which would be deemed outstanding in accordance with GAAP for purposes of determining book value or net income per share. "GAAP" means generally accepted accounting principles in the United States of America as in effect on the applicable date of determination. "Holder" means, at any time, a Person in whose name a Class B Warrant or Class B Warrants is then registered on the books of the Company maintained by the Warrant Agent for such purpose. "NASD" means the National Association of Securities Dealers, Inc., or any successor corporation thereto. "Other Property" shall have the meaning set forth in Section 5.7. "Outstanding" means, when used with reference to Common Stock, at any date as of which the number of shares thereof is to be determined, all issued shares of Common Stock, except shares then owned or held by or for the account of the Company or any subsidiary thereof, and shall include all shares issuable in respect of outstanding scrip or any certificates representing fractional interests in shares of Common Stock. "Permitted Issuances" means (i) the issuance of the Class B Warrants and Class A Warrants, (ii) the issuance of shares of Common Stock upon the exercise of the Class B Warrants and the Class A Warrants, (iii) the issuance of (x) shares of Common Stock and (y) warrants, options or other rights to acquire shares of Common Stock to the Company's management and other eligible participants under the Company's 2002 Stock Incentive Plan, in accordance with its terms as in effect on the effective date of the Plan, (iv) the issuance of shares of Common Stock upon exercise of the warrants, options and other rights referred to in clause (iii)(y), and (v) all other issuances of Common Stock and warrants by the Company expressly authorized by the Plan. "Person" means any individual, corporation, partnership, trust, or other entity of any nature whatsoever. "Plan" has the meaning assigned to such term in the recitals in this Warrant Agreement. "Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. 2. EXECUTION AND DELIVERY OF WARRANT CERTIFICATES Class B Warrant Certificates evidencing 1,029,366 Class B Warrants, each Class B Warrant to purchase initially one share of Common Stock, may be executed, on or after the date of this Warrant Agreement, by the Company and delivered to the Warrant Agent for countersignature, and the Warrant Agent shall thereupon countersign and deliver such Class B Warrant Certificates upon the order and at the written direction of the Company signed by its Chief Executive Officer or other duly authorized executive officer. The Warrant Agent is hereby authorized to countersign and deliver Class B Warrant Certificates as required by this Section 2 or by Section 3.2, 4 or 11 hereof. The Class B Warrant Certificates shall be executed on behalf of the Company by its Chairman of the Board, Chief Executive Officer, President, any Vice President or other duly authorized executive officer of the Company either manually or by facsimile signature printed thereon. The Class B Warrant Certificates shall be countersigned by manual signature of the Warrant Agent and shall not be valid for any purpose unless so countersigned. In case any officer or director of the Company whose signature shall have been placed upon any Class B Warrant Certificate shall cease to be such officer or director of the Company before countersignature by the Warrant Agent and the issuance and delivery thereof, such Class B Warrant Certificate may nevertheless be countersigned by the Warrant Agent and issued and delivered with the same force and effect as though such person had not ceased to be such officer or director of the Company. 3. EXERCISE OF WARRANT 3.1. Manner of Exercise. From and after the date hereof and until 5:00 P.M., New York time, on the Expiration Date, a Holder may exercise Class B Warrants, at any time and from time to time, on any Business Day, for all or any part of the number of shares of Class B Warrant Stock purchasable hereunder. 3.2. Procedure. (a) In order to exercise Class B Warrants, a Holder shall deliver to the Company at its principal office located at 3445 Peachtree Road - Suite 700, Atlanta, Georgia 30326, Attn: General Counsel, or, if so requested in writing by the Company, to the Warrant Agent, at the office or agency designated by the Company pursuant to Section 12, (i) a written notice of such Holder's election to exercise such Class B Warrants substantially in the form attached hereto as Exhibit B (the "Subscription Form"), duly executed by such Holder or its designated agent or attorney, which notice shall specify the number of shares of Common Stock to be purchased by such Holder, (ii) payment of the Class B Warrant Price made against delivery of the shares, at the option of such Holder, by certified or official bank check or wire transfer or, at the option of the Holder, as provided in subsection (b), and (iii) the Class B Warrant Certificate in respect of the Class B Warrants being exercised. (b) In lieu of payment of the Class B Warrant Price by certified or official bank check or wire transfer, as provided for in subsection (a)(ii), a Holder may elect to pay all or any portion of the Class B Warrant Price, as indicated by such Holder on the Subscription Form, (i) by agreeing to accept a reduction in the number of shares of Class B Warrant Stock that would have otherwise been issued to such Holder upon exercise of such Class B Warrants, which would result in the Holder receiving from the Company, pursuant to such exercise, a number of shares of Class B Warrant Stock computed using the following formula: X = Y (A-B) ------- A Where: X = the number of shares of Class B Warrant Stock to be issued to the Holder. Y = the number of shares of Class B Warrant Stock purchasable under the Class B Warrants being exercised by such Holder. A = the Daily Market Price of one share of the Common Stock on the trading day preceding such exercise date. B = the Current Class B Warrant Price (as adjusted to the date of such calculation). or (ii) by surrender to the Company of debt securities of the Company having a value equal to the Class B Warrant Price of the Class B Warrant Stock being purchased upon such exercise, which value shall be the principal amount thereof, plus accrued interest and premium (if any) or less any unamortized discount thereon, as reasonably determined by the Company. (c) Upon receipt thereof, the Company shall, as promptly as practicable, and in any event within ten (10) Business Days thereafter, (i) have executed by a duly authorized executive officer of the Company, either manually or by facsimile signature printed thereon, and (ii) cause the Warrant Agent to execute and deliver or cause to be delivered to such Holder a certificate or certificates representing the aggregate number of full shares of Class B Warrant Stock issuable upon such exercise, together with cash in lieu of any fraction of a share, as hereinafter provided. The stock certificate or certificates so delivered shall be, to the extent possible, in such denomination or denominations as the exercising Holder shall request in the notice and shall be registered in the name of such Holder or, such other name as shall be designated in the notice delivered to the Company by such Holder. Class B Warrants shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the exercising Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the notice, together with payment therefor (in whatever form, as provided in this Warrant Agreement) and the Class B Warrant Certificate, is received by the Company as described above and all taxes required to be paid by such Holder, if any, pursuant to Section 3.3 prior to the issuance of such shares, have been paid. If the Class B Warrants represented by a Class B Warrant Certificate shall have been exercised in part, the Warrant Agent shall, at the time of delivery of the certificate or certificates representing Class B Warrant Stock, deliver to the exercising Holder a new Class B Warrant Certificate representing Class B Warrants to purchase a number of shares of Common Stock equal to the unpurchased balance of the shares of Common Stock issuable upon exercise of the Class B Warrants represented by the Class B Warrant Certificate surrendered, which new Class B Warrant Certificate shall in all other respects be identical to the Class B Warrant Certificate so surrendered, or, at the request of the exercising Holder, appropriate notation may be made on the Class B Warrant Certificate so surrendered and the same returned to such Holder. Until a Holder has complied with Section 3.3 with respect to the payment of certain taxes and charges specified in such section, the Company shall not be required to issue or deliver shares in the name of any Person who acquired Class B Warrants or any Class B Warrant Stock. 3.3. Payment of Taxes. All shares of Common Stock issuable upon the exercise of Class B Warrants pursuant to the terms hereof shall be validly issued, fully paid and nonassessable and without any preemptive rights. The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery thereof, unless such tax or charge is imposed by law upon a Holder, in which case such taxes or charges shall be paid by such Holder. The Company shall not be required, however, to pay any tax or other charge imposed in connection with any transfer involved in the issuance of any certificate for shares of Common Stock issuable upon exercise of Class B Warrants in any name other than that of a Holder, and in such case the Company shall not be required to issue or deliver any stock certificate until such tax or other charge has been paid or it has been established to the satisfaction of the Company that no such tax or other charge is due. If such tax or other charge is due, the Warrant Agent shall have no duty or obligation under this Section 3.3 or any other similar provision of this Warrant Agreement unless and until it is satisfied that all such taxes and/or governmental charges have been paid in full. 3.4. Fractional Shares. The Company shall not be required to issue a fractional share of Common Stock upon exercise of any Class B Warrants. As to any fraction of a share which a Holder of one or more Class B Warrants, the rights under which are exercised in the same transaction, would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the Current Market Price per share of Common Stock on the date of exercise. 4. TRANSFER, DIVISION AND COMBINATION 4.1. Division and Combination. A Class B Warrant Certificate may be exchanged for a new Class B Warrant Certificate and Class B Warrants may be divided or combined with other Class B Warrants upon presentation of the Class B Warrant Certificate(s) therefor at the aforesaid office or agency of the Warrant Agent, together with a written notice specifying the names and denominations in which new Class B Warrant Certificates are to be issued, signed by the Holder of such Class B Warrant Certificate or Certificates or its agent or attorney. Subject to compliance with this Section 4.1, as to any transfer which may be involved in such division or combination, the Warrant Agent shall execute and deliver a new Class B Warrant Certificate(s) in exchange for the Class B Warrant Certificate(s) representing the Class B Warrants to be divided or combined in accordance with such notice. 4.2. Expenses. The Company shall prepare, issue and deliver at its own expense (other than transfer taxes) the new Class B Warrant Certificates under this Section 4. The Company shall not be required, however, to pay any tax or other charge imposed in connection with any transfer of any Class B Warrants, including, but not limited to, any transfer involved in the division or combination of any Class B Warrant Certificates under this Section 4, and in such case the Company shall not be required to issue or deliver any Class B Warrant Certificates until such tax or other charge has been paid or it has been established to the satisfaction of the Company that no such tax or other charge is due. If such tax or other charge is due, the Warrant Agent shall have no duty or obligation under this Section 4 or any other similar provision of this Warrant Agreement unless and until it is satisfied that all such taxes and/or governmental charges have been paid in full. 4.3. Maintenance of Books. The Company agrees to maintain, at its aforesaid office or agency, books for the registration and the registration of transfer of the Class B Warrants. 4.4. Transfer. Subject to Section 4.2, the Class B Warrants and all rights hereunder are transferable, in whole or in part, without charge to the Holder hereof upon surrender of the Class B Warrant Certificate with a form of assignment, substantially in the form attached hereto as Exhibit C, at the office or agency of the Warrant Agent as provided for in Section 12. Upon any partial transfer, the Warrant Agent shall promptly issue and deliver to the Holder hereof a new Class B Warrant Certificate of like tenor, in the name of the Holder hereof, which shall be exercisable for such number of shares of Class B Warrant Stock which were not so transferred. 5. ADJUSTMENTS The number of shares of Common Stock for which each Class B Warrant is exercisable, and the price at which such shares may be purchased upon exercise of Class B Warrants, shall be subject to adjustment from time to time as set forth in this Section 5. The Company shall give each Holder notice of any event described below which requires an adjustment pursuant to this Section 5 at the time of such event. 5.1. Stock Dividends, Subdivisions and Combinations. If at any time after the Closing Date the Company shall: (a) pay a dividend, or make any other distribution of, Additional Shares of Common Stock to all holders of its Common Stock, (b) subdivide its outstanding shares of Common Stock into a larger number of shares of Common Stock, or (c) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, then (i) the number of shares of Common Stock for which each Class B Warrant is exercisable immediately after the occurrence of any such event shall be adjusted to equal the number of shares of Common Stock which a record holder of the same number of shares of Common Stock for which one Class B Warrant is exercisable immediately prior to the occurrence of such event would own or be entitled to receive after the happening of such event, and (ii) the Current Class B Warrant Price shall be adjusted to equal (A) the Current Class B Warrant Price multiplied by the number of shares of Common Stock for which one Class B Warrant is exercisable immediately prior to such adjustment divided by (B) the number of shares for which one Class B Warrant is exercisable immediately after such adjustment. 5.2. Certain Other Distributions. If at any time after the Closing Date the Company shall make: (a) any distribution of evidences of its indebtedness or any other assets of any nature whatsoever (other than cash or Convertible Securities covered by Section 5.4) to all holders of its Common Stock, or (b) any distribution of warrants or other rights to subscribe for or purchase any evidences of its indebtedness (other than warrants or rights covered by Section 5.3 hereof) to all holders of its Common Stock, then (i) the number of shares of Common Stock for which each Class B Warrant is exercisable shall be adjusted to equal the product obtained by multiplying the number of shares of Common Stock for which one Class B Warrant is exercisable immediately prior to such distribution by a fraction (A) the numerator of which shall be the Current Market Price per share of Common Stock at the time of such distribution and (B) the denominator of which shall be the Current Market Price per share of Common Stock minus the amount allocable to one share of Common Stock of the fair value (as determined in good faith by the Board of Directors of the Company) of any and all such evidences of indebtedness, shares of stock, other securities or property or warrants or other subscription or purchase rights so distributed, and (ii) the Current Class B Warrant Price shall be reduced to equal (A) the Current Class B Warrant Price immediately prior to such distribution multiplied by the number of shares of Common Stock for which one Class B Warrant is exercisable immediately prior to such distribution divided by (B) the number of shares for which one Class B Warrant is exercisable immediately after such distribution. A reclassification of the Common Stock (other than a change in par value, or from par value to no par value or from no par value to par value) into shares of Common Stock and shares of any other class of stock shall be deemed a distribution by the Company to the holders of its Common Stock of such shares of such other class of stock within the meaning of this Section 5.2 and, if the outstanding shares of Common Stock shall be changed into a larger or smaller number of shares of Common Stock as a part of such reclassification, such change shall be deemed a subdivision or combination, as the case may be, of the outstanding shares of Common Stock within the meaning of Section 5.1. 5.3. Below Market Issuances of Common Stock. If at any time after the Closing Date the Company shall (other than in a Permitted Issuance) issue Additional Shares of Common Stock (or options, warrants or other rights to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Securities, whether or not the rights to exchange, subscribe or convert thereunder are immediately exercisable), at a price per share (or having an effective exercise, exchange or conversion price per share together with the purchase price thereof) of less than 90% of the Current Market Price in effect immediately prior to the time of such issue, then in each such case (i) the number of shares of Common Stock for which each Class B Warrant is exercisable shall be adjusted to equal the product obtained by multiplying the number of shares of Common Stock for which one Class B Warrant is exercisable immediately prior to such issuance by a fraction (A) the numerator of which shall be the number of shares of Common Stock Outstanding immediately prior to such issuance plus the total number of Additional Shares of Common Stock issued or offered for subscription or purchase, as the case may be, and (B) the denominator of which shall be the number of shares of Common Stock Outstanding immediately prior to such issuance plus the number of shares of Common Stock which the aggregate purchase, subscription and/or exercise price to be paid for all Additional Shares of Common Stock would purchase at the then Current Market Price; and (ii) the Current Class B Warrant Price in effect immediately prior to such issuance shall be reduced by multiplying such Current Class B Warrant Price by a fraction (X) the numerator of which shall be the number of shares for which one Class B Warrant is exercisable immediately prior to such issuance; and (Y) the denominator of which shall be the number of shares of Common Stock for which one Class B Warrant is exercisable immediately after such issuance. No further adjustments of the number of shares for which Class B Warrants are exercisable or of the Current Class B Warrant Price shall be made upon the actual issue of such Common Stock or such Convertible Securities upon exercise of any such options, warrants or other rights or upon the actual issuance of such Common Stock upon such conversion or exchange of such Convertible Securities. No adjustment of the number of shares of Common Stock for which Class B Warrants are exercisable or of the Current Class B Warrant Price shall be made under this Section 5.3 for the issuance of any shares of Common Stock upon the conversion or exchange of any Convertible Securities, the issuance of which Convertible Shares is covered by Section 5.4 or is expressly exempt from Section 5.4 by reason of the price per share (or effective price per share) for which Common Stock is issuable upon exchange or conversion thereof. No adjustment of the number of shares of Common Stock for which Class B Warrants are exercisable or of the Current Class B Warrant Price shall be made under this Section 5.3 for any issuance of shares of Common Stock covered by Section 5.1. 5.4. Below Market Issuances of Convertible Securities. If at any time after the Closing Date the Company shall (other than in a Permitted Issuance) make a distribution to all holders of its Common Stock of, or otherwise issue, any Convertible Securities (whether or not the rights to exchange or convert thereunder are immediately exercisable), for which Common Stock is issuable upon such exchange or conversion at a price per share (or effective price per share together with the purchase price thereof) of less than 90% of the Current Market Price in effect immediately prior to the time of such issuance, then (i) the number of shares of Common Stock for which each Class B Warrant is exercisable shall be adjusted to equal the product obtained by multiplying the number of shares of Common Stock for which one Class B Warrant is exercisable immediately prior to such issuance by a fraction (A) the numerator of which shall be the number of shares of Common Stock Outstanding immediately prior to such issuance plus the total number of Additional Shares of Common Stock into which such Convertible Securities would be convertible and (B) the denominator of which shall be the number of shares of Common Stock Outstanding immediately prior to such issuance plus the number of shares of Common Stock which the aggregate consideration to be paid upon the exchange or conversion thereof would purchase at the then Current Market Price, and (ii) the Current Class B Warrant Price in effect immediately prior to such issuance shall be reduced by multiplying such Current Class B Warrant Price by a fraction (X) the numerator of which shall be the number of shares for which one Class B Warrant is exercisable immediately prior to such issuance and (Y) the denominator of which shall be the number of shares of Common Stock for which one Class B Warrant is exercisable immediately after such issuance. No further adjustments of the number of shares of Common Stock for which Class B Warrants are exercisable or of the Current Class B Warrant Price shall be made upon the actual issue of such Common Stock upon conversion or exchange of such Convertible Securities. No adjustment of the number of shares of Common Stock for which Class B Warrants are exercisable or of the Current Class B Warrant Price shall be made under this Section 5.4 upon the issuance of any Convertible Securities which are issued pursuant to the exercise of any warrants or other subscription or purchase rights therefor, the issuance of which warrants or other subscription or purchase rights is covered by Section 5.3 or is expressly exempt from Section 5.3 by reason of the price per share (or effective price per share) for which Common Stock is issuable upon exchange or conversion of the Convertible Securities covered thereby. 5.5. Superseding Adjustment. If, at any time after any adjustment of the number of shares of Common Stock for which Class B Warrants are exercisable and the Current Class B Warrant Price shall have been made pursuant to Section 5.3 or Section 5.4 as the result of any issuance of warrants, rights or Convertible Securities, (a) such warrants or rights, or the right of conversion or exchange in such other Convertible Securities, shall expire, and all or a portion of such warrants or rights, or the right of conversion or exchange with respect to all or a portion of such other Convertible Securities, as the case may be, shall not have been exercised, or (b) the consideration per share for which shares of Common Stock are issuable pursuant to such warrants or rights, or the terms of such other Convertible Securities, shall be increased solely by virtue of provisions therein contained for an automatic increase in such consideration per share upon the occurrence of a specified date or event, then for each outstanding Class B Warrant such previous adjustment shall be rescinded and annulled and the Additional Shares of Common Stock which were deemed to have been issued by virtue of the computation made in connection with the adjustment so rescinded and annulled shall no longer be deemed to have been issued by virtue of such computation. Thereupon, a recomputation shall be made of the effect of such rights or options or other Convertible Securities on the basis of (i) treating the number of Additional Shares of Common Stock or other property, if any, theretofore actually issued or issuable pursuant to the previous exercise of any such warrants or rights or any such right of conversion or exchange, as having been issued on the date or dates of any such exercise and for the consideration actually received and receivable therefor, and (ii) treating any such warrants or rights or any such other Convertible Securities which then remain outstanding as having been granted or issued immediately after the time of such increase of the consideration per share for which shares of Common Stock or other property are issuable under such warrants or rights or other Convertible Securities; whereupon a new adjustment of the number of shares of Common Stock for which Class B Warrants are exercisable and the Current Class B Warrant Price shall be made, which new adjustment shall supersede the previous adjustment so rescinded and annulled. 5.6. Other Provisions Applicable to Adjustments under this Section. The following provisions shall be applicable to the making of adjustments of the number of shares of Common Stock for which Class B Warrants are exercisable and the Current Class B Warrant Price provided for in this Section 5: (a) Computation of Consideration. To the extent that any Additional Shares of Common Stock or any Convertible Securities or any warrants or other rights to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Securities shall be issued for cash consideration, the consideration received by the Company therefor shall be the amount of the cash received by the Company therefor, or, if such Additional Shares of Common Stock or Convertible Securities are offered by the Company for subscription, the subscription price. To the extent that such issuance shall be for a consideration other than cash, then, except as herein otherwise expressly provided, the amount of such consideration shall be deemed to be the fair value of such consideration at the time of such issuance as determined in good faith by the Board of Directors of the Company. In case any Additional Shares of Common Stock or any Convertible Securities or any warrants or other rights to subscribe for or purchase such Additional Shares of Common Stock or Convertible Securities shall be issued in connection with any merger in which the Company issues any securities, the amount of consideration therefor shall be deemed to be the fair value, as determined in good faith by the Board of Directors of the Company, of such portion of the assets and business of the nonsurviving corporation as such Board in good faith shall determine to be attributable to such Additional Shares of Common Stock, Convertible Securities, warrants or other rights, as the case may be. The consideration for any Additional Shares of Common Stock issuable pursuant to any warrants or other rights to subscribe for or purchase the same shall be the consideration received by the Company for issuing such warrants or other rights plus the additional consideration payable to the Company upon exercise of such warrants or other rights. The consideration for any Additional Shares of Common Stock issuable pursuant to the terms of any Convertible Securities shall be the consideration received by the Company for issuing warrants or other rights to subscribe for or purchase such Convertible Securities, plus the consideration paid or payable to the Company in respect of the subscription for or purchase of such Convertible Securities, plus the additional consideration, if any, payable to the Company upon the exercise of the right of conversion or exchange in such Convertible Securities. In case of the issuance at any time of any Additional Shares of Common Stock or Convertible Securities in payment or satisfaction of any dividends upon any class of stock other than Common Stock, the Company shall be deemed to have received for such Additional Shares of Common Stock or Convertible Securities a consideration equal to the amount of such dividend so paid or satisfied. (b) When Adjustments to Be Made. The adjustments required by this Section 5 shall be made whenever and as often as any specified event requiring an adjustment shall occur, except that any adjustment of the number of shares of Common Stock for which Class B Warrants are exercisable that would otherwise be required may be postponed (except in the case of a subdivision or combination of shares of the Common Stock, as provided in Section 5.1) up to, but not beyond the date of exercise if such adjustment either by itself or with other adjustments not previously made adds or subtracts less than 1% of the shares of Common Stock for which Class B Warrants are exercisable immediately prior to the making of such adjustment. Any adjustment representing a change of less than such minimum amount (except as aforesaid) which is postponed shall be carried forward and made as soon as such adjustment, together with other adjustments required by this Section 5 and not previously made, would result in a minimum adjustment or on the date of exercise. For the purpose of any adjustment, any specified event shall be deemed to have occurred at the close of business on the date of its occurrence. (c) Fractional Interests. In computing adjustments under this Section 5, fractional interests in Common Stock shall be taken into account to the nearest 1/100th of a share. 5.7. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets. In case the Company shall, after the Closing Date, reorganize its capital or reclassify its capital stock (other than in a capital reorganization or reclassification resulting solely in the issuance of Additional Shares of Common Stock or Convertible Securities or options, warrants or other rights to subscribe for or purchase Additional Shares of Common Stock or Convertible Securities, the issuance of which is covered by Section 5.1, 5.3 or 5.4 or is expressly exempt from Section 5.3 or 5.4 by reason of the price per share (or effective price per share) for which Common Stock is issuable upon exercise, exchange or conversion thereof), consolidate or merge with or into another Person (where the Company is not the surviving corporation or where as a result of such consolidation or merger there is a change in or distribution with respect to the Common Stock of the Company), or sell, transfer or otherwise dispose of all or substantially all its property, assets or business to another Person and, pursuant to the terms of such reorganization, reclassification, merger, consolidation or disposition of assets, shares of common stock of the successor, acquiring Person or surviving corporation (or of the Company if the Company is the surviving corporation), or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor, acquiring Person or surviving corporation ("Other Property"), are to be received by or distributed to the holders of Common Stock of the Company, then, subject to the terms and conditions of this Warrant Agreement, each Class B Warrant shall thereafter entitle the Holder thereof to receive, upon exercise thereof, the number of shares of common stock of the successor, acquiring Person or surviving corporation (or of the Company, if the Company is the surviving corporation), and Other Property receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which one Class B Warrant is exercisable immediately prior to such event. In case of any such reorganization, reclassification, merger, consolidation or disposition of assets, the successor or acquiring corporation (if other than the Company) shall expressly assume the due and punctual observance and performance of each and every covenant and condition of this Warrant Agreement to be performed and observed by the Company and all the obligations and liabilities hereunder, subject to such modifications as may be deemed appropriate (as determined by resolution of the Board of Directors of the Company) in order to provide for adjustments of shares of the Common Stock for which Class B Warrants are exercisable which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 5. For purposes of this Section 5.7, "common stock of the successor, acquiring Person or surviving corporation" shall include stock of such Person of any class which is not preferred as to dividends or assets over any other class of stock of such Person and which is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or other securities which are convertible into or exchangeable for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock. The foregoing provisions of this Section 5.7 shall similarly apply to any successive reorganizations, reclassifications, mergers, consolidations or disposition of assets. 5.8. Other Action Affecting Common Stock. In case at any time or from time to time the Company shall take any action in respect of its Common Stock, other than any action described in this Section 5, then the number of shares of Common Stock or other stock for which Class B Warrants are exercisable and/or the Class B Warrant Price thereof shall be adjusted in such manner as may be equitable in the circumstances consistent with the fundamental intent of such provisions making an appropriate adjustment in the Current Class B Warrant Price and the number of Class B Warrant Stock obtainable upon exercise of the Class B Warrants so as to protect the rights of the Holder of the Class B Warrants. 5.9. Certain Limitations. Notwithstanding anything herein to the contrary, the Company agrees not to enter into any transaction which, by reason of any adjustment hereunder, would cause the Current Class B Warrant Price to be less than the par value per share of Common Stock. 6. NOTICES OF AdJUSTMENT Whenever the number of shares of Common Stock for which Class B Warrants are exercisable, or whenever the Current Class B Warrant Price shall be adjusted pursuant to Section 5, the Company shall forthwith prepare a certificate to be executed by the chief financial officer of the Company setting forth, in reasonable detail, the event requiring the adjustment and the facts, computations, and method by which such adjustment was calculated (including a description of the basis on which the Board of Directors of the Company determined the fair value of any evidences of indebtedness, shares of stock, other securities or property or warrants or other subscription or purchase rights referred to in Section 5), specifying the number of shares of Common Stock for which Class B Warrants are exercisable and (if such adjustment was made pursuant to Section 5.7) describing the number and kind of any shares of other common stock or Other Property for which Class B Warrants are exercisable, and any change in the Current Class B Warrant Price (or, if such adjustment was made pursuant to Section 5.7, the purchase price or prices at which a share of such other common stock or Other Property may be purchased upon exercise of Class B Warrants), after giving effect to such adjustment. The Company shall promptly cause a signed copy of such certificate to be delivered to the Warrant Agent and to each Holder in accordance with Section 16.2. The Company shall keep at its office or agency designated pursuant to Section 12 copies of all such certificates and cause the same to be available for inspection at said office during normal business hours by any Holder or any prospective purchaser of Class B Warrants designated by a Holder thereof. 7. NO IMPAIRMENT The Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant Agreement, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holders against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any shares of Common Stock receivable upon the exercise of a Class B Warrant above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of a Class B Warrant, and (c) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant Agreement. 8. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY From and after the Closing Date, the Company shall at all times reserve and keep available for issue upon the exercise of Class B Warrants such number of authorized but unissued shares of Common Stock as will be sufficient to permit the exercise in full of all outstanding Class B Warrants. All shares of Common Stock which shall be so issuable, when issued upon exercise of any Class B Warrant and payment therefor in accordance with the terms of this Warrant Agreement, shall be duly and validly issued and fully paid and nonassessable, not subject to preemptive rights, and free from all taxes, liens, charges, security interests, encumbrances and other restrictions created by or through the Company. Before taking any action which would cause an adjustment reducing the Current Class B Warrant Price below the then par value, if any, of the shares of Common Stock issuable upon exercise of the Class B Warrants, the Company shall take any corporate action which may be necessary in order that the Company may validly and legally issue fully paid and nonassessable shares of such Common Stock at such adjusted Current Class B Warrant Price. Before taking any action which would result in an adjustment in the number of shares of Common Stock for which Class B Warrants are exercisable or in the Current Class B Warrant Price, the Company shall use its best efforts to obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof. If any shares of Common Stock required to be reserved for issuance upon exercise of Class B Warrants require registration or qualification with any governmental authority or other governmental approval or filing under any federal or state law before such shares may be so issued, the Company will in good faith (subject to all applicable laws including, without limitation, those rules and regulations promulgated under the Securities Act) and as expeditiously as possible and at its expense endeavor to cause such shares to be duly registered. 9. STOCK AND WARRANT TRANSFER BOOKS The Company will not at any time, except upon dissolution, liquidation or winding up of the Company, close its stock transfer books or Class B Warrant transfer books so as to result in preventing or delaying the exercise or transfer of any Class B Warrant. 10. SUPPLYING INFORMATION The Company shall cooperate with each Holder of a Class B Warrant and each holder of Class B Warrant Stock in supplying such information as may be reasonably necessary for such holder to complete and file any information reporting forms presently or hereafter required by the Commission as a condition to the availability of an exemption from the Securities Act for the sale of any Class B Warrant or Class B Warrant Stock. 11. LOSS OR MUTILATION Upon receipt by the Company from any Holder of evidence satisfactory to the Company of the ownership of and the loss, theft, destruction or mutilation of a Class B Warrant Certificate and indemnity satisfactory to the Company, and in case of mutilation upon surrender and cancellation thereof, the Company will execute and deliver to such Holder in exchange for or in lieu thereof a new Class B Warrant Certificate of like tenor and for the same aggregate number of Class B Warrants. 12. OFFICE OF COMPANY As long as any of the Class B Warrants remain outstanding, the Warrant Agent, on behalf of the Company, shall maintain an office or agency (which shall be the principal executive offices of the Warrant Agent) where the Class B Warrants may be presented for exercise, registration of transfer, division or combination as provided in this Warrant Agreement. 13. APPRAISAL The determination of the Appraised Value per share of Common Stock shall be made by an investment banking firm of nationally recognized standing selected by the Company. The Company shall retain, at its sole cost, such investment banking firm as may be necessary for the determination of Appraised Value required by the terms of this Warrant Agreement. 14. LIMITATION OF LIABILITY No provision hereof, in the absence of affirmative action by a Holder to purchase shares of Common Stock, and no enumeration herein of the rights or privileges of a Holder hereof, shall give rise to any liability of such Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. 15. CONCERNING THE WARRANT AGENT The Warrant Agent undertakes the duties and obligations imposed by this Warrant Agreement upon the following terms and conditions, by all of which the Company and the Holders, by their acceptance of the Class B Warrants, shall be bound: 15.1. Correctness of Statement. The statements contained herein and in the Class B Warrant Certificates shall be taken as statements of the Company, and the Warrant Agent assumes no responsibility for the correctness of any of the same except such as describe the Warrant Agent or action to be taken by it. The Warrant Agent assumes no responsibility with respect to the distribution of the Class B Warrant Certificates except as herein otherwise provided. 15.2. Breach of Covenants. The Warrant Agent shall not be responsible for any failure of the Company to comply with any of the covenants contained in this Warrant Agreement or in the Class B Warrant Certificates to be complied with by the Company. 15.3. Reliance on Counsel. The Warrant Agent may consult at any time with counsel satisfactory to it (who may be counsel for the Company) and the Warrant Agent shall incur no liability or responsibility to the Company or to any Holder in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the opinion or the advice of such counsel. 15.4. Reliance on Documents. The Warrant Agent shall incur no liability or responsibility to the Company or to any Holder for any action taken, suffered or omitted in reliance on any Class B Warrant Certificate, certificate of shares, notice, resolution, waiver, consent, order certificate, or other paper, document or instrument believed by it to be genuine and to have signed, sent or presented by the proper party or parties. 15.5. Compensation and Indemnification. The Company agrees to pay to the Warrant Agent reasonable compensation for all services rendered by the Warrant Agent in the execution of this Warrant Agreement, to reimburse the Warrant Agent for all expenses, taxes and governmental charges and other charges of any kind and nature incurred by the Warrant Agent in the execution of this Warrant Agreement to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and counsel fees, for anything done or omitted by the Warrant Agent in the execution of its duties and powers under this Warrant Agreement, except for such liabilities that arise as a result of the Warrant Agent's negligence, willful misconduct or bad faith. 15.6. Legal Proceedings. The Warrant Agent shall be under no obligation to institute any action, suit or legal proceeding or to take any other action likely to involve expense unless the Company or one or more Holders shall furnish the Warrant Agent with reasonable security and indemnity for any costs and expenses which may be incurred, but this provision shall not affect the power of the Warrant Agent to take such action as it may consider proper, whether with or without any such security indemnity. All rights of action under this Warrant Agreement or under any of the Class B Warrant Certificates may be enforced by the Warrant Agent without possession of any of the Class B Warrant Certificates or the production thereof at any trial or other proceeding relative thereto, and any such action, suit or proceeding instituted by the Warrant Agent shall be brought in its name as Warrant Agent, and any recovery of judgment shall be for the ratable benefit of the Holders, as their respective rights or interests may appear. 15.7. Other Transactions in Securities of the Company. Except as prohibited by law, the Warrant Agent, and any stockholder, director, officer or employee of it, may buy, sell or deal in any of the Class B Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Warrant Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity. 15.8. Liability of Warrant Agent. The Warrant Agent shall act hereunder solely as agent for the Company, and its duties shall be determined solely by the provisions hereof. The Warrant Agent shall not be liable for anything which it may do or refrain from doing in connection with this Warrant Agreement except for its own negligence, willful misconduct or bad faith. 15.9. Adjustments. The Warrant Agent shall not at any time be under any duty or responsibility to any Holder to make or cause to be made any adjustment of the Current Class B Warrant Price or number of shares of Class B Warrant Stock deliverable as provided in this Warrant Agreement, or to determine whether any facts exist which may require any of such adjustments, or with respect to the nature or extent of any such adjustments, when made, or with respect to the method employed in making the same. The Warrant Agent shall not be accountable with respect to the validity or value or the kind or amount of any shares of Class B Warrant Stock or of any securities or property which may at any time be issued or delivered upon the exercise of any Class B Warrant or with respect to whether any such shares of Class B Warrant Stock or other securities will be, when issued, validly issued, fully paid and nonassessable, and makes no representation with respect thereto. 16. MISCELLANEOUS 16.1. Nonwaiver. No course of dealing or any delay or failure to exercise any right hereunder on the part of any Holder shall operate as a waiver of such right or otherwise prejudice Holder's rights, powers or remedies. 16.2. Notice Generally. Any notice, demand, request, consent, approval, declaration, delivery or other communication hereunder to be made pursuant to the provisions of this Warrant Agreement shall be sufficiently given or made if in writing and either (i) delivered in person with receipt acknowledged, (ii) sent by registered or certified mail, return receipt requested, postage prepaid, or (iii) by telecopy and confirmed by telecopy answer back, addressed as follows: (a) If to any Holder or holder of Class B Warrant Stock, at its last known address appearing on the books of the Company maintained by the Warrant Agent for such purpose; (b) If to the Warrant Agent, to Wachovia Bank, N.A., as Warrant Agent, Corporate Trust Group, Corporate Actions Department, 1525 West W.T. Harris Blvd., Bldg. 3C3, Charlotte, NC 28262-1153 (overnight courier) 28288-1153 (first class mail); or (c) If to the Company, at 3445 Peachtree Road, N.E. - Suite 700, Atlanta, Georgia 30326, Attn: General Counsel; or at such other address as may be substituted by notice given as herein provided. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. Every notice, demand, request, consent, approval, declaration, delivery or other communication hereunder shall be deemed to have been duly given or served on the date on which personally delivered, with receipt acknowledged, telecopied and confirmed by telecopy answerback, or three (3) Business Days after the same shall have been deposited in the United States mail. Failure or delay in delivering copies of any notice, demand, request, approval, declaration, delivery or other communication to the person designated above to receive a copy shall in no way adversely affect the effectiveness of such notice, demand, request, approval, declaration, delivery or other communication. 16.3. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the instructions set forth herein, and the Warrant Agent hereby accepts such appointment. 16.4. Successors and Assigns. This Warrant Agreement and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company, the Warrant Agent and the successors and assigns of each Holder. The provisions of this Warrant Agreement are intended to be for the benefit of all Holders from time to time of a Class B Warrant or Class B Warrants and holders of Class B Warrant Stock, and shall be enforceable by any such Holder or holder of Class B Warrant Stock. 16.5. Amendment. The Company and the Warrant Agent may from time to time supplement or amend this Warrant Agreement without the approval of any Holders in order to cure any ambiguity or to correct or supplement any provision contained herein which may be defective or inconsistent with any other provision herein, or to make any other provisions or change in regard to matters or questions arising hereunder which the Company and the Warrant Agent may deem necessary or desirable and which shall not adversely affect the interests of any Holder. 16.6. Severability. Wherever possible, each provision of this Warrant Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Warrant Agreement. 16.7. Headings. The headings used in this Warrant Agreement are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant Agreement. 16.8. Governing Law. This Warrant Agreement shall be governed by the laws of the State of Delaware, without regard to the provisions thereof relating to conflict of laws. IN WITNESS WHEREOF, the Company and the Warrant Agent have caused this Warrant Agreement to be duly executed as of the date first written above. LODGIAN, INC. By: /s/ Daniel E. Ellis ------------------------------------ Name: Daniel E. Ellis Title: Vice President and Secretary WACHOVIA BANK, N.A. By: /s/ Ted Wiener ------------------------------------ Name: Ted Wiener Title: Assistant Vice President EXHIBIT A FORM OF CLASS B WARRANT CERTIFICATE CLASS B WARRANT LODGIAN, INC. No. __________________ [______] Class B Warrants Incorporated Under the Laws of the State of Delaware THIS CERTIFIES THAT, for value received, ______________________, the registered holder hereof or registered assigns (the "Holder"), is the owner of the number of Class B Warrants set forth above, each of which represents the right to purchase from LODGIAN, INC., a Delaware corporation (the "Company"), at any time commencing with the opening of business on November __, 2002, and until the close of business on November __, 2009 (the "Expiration Date"), at the purchase price of $25.44 (subject to adjustment as described below) (the "Current Class B Warrant Price"), one fully paid and nonassessable share of Common Stock, par value $0.01 per share (the "Common Stock"), of the Company. The number of shares of Common Stock purchasable upon exercise of each Class B Warrant and the Current Class B Warrant Price per whole share shall be subject to adjustment from time to time as set forth in the Warrant Agreement referred to below. The Class B Warrants represented hereby may be exercised in whole or in part by presentation of this Class B Warrant Certificate with the Subscription Form included herein duly executed, which signature shall, in certain circumstances (as indicated on the Subscription Form), be guaranteed by a bank or trust company having an office or correspondent in the United States or a broker or dealer which is a member of a registered securities exchange or the National Association of Securities Dealers, Inc., and simultaneous payment of the exercise price thereof (in the form indicated on the Subscription Form) to the Company at 3445 Peachtree Road - Suite 700, Atlanta, Georgia 30326, Attn: General Counsel, or as otherwise provided in the Warrant Agreement (defined below). The Class B Warrants represented hereby are of a duly authorized issue of Class B Warrants evidencing the right to purchase up to an aggregate of 1,029,366 shares of Common Stock and are issued under and in accordance with a Warrant Agreement (the "Warrant Agreement"), dated as of November __, 2002, between the Company and Wachovia Bank, N.A. (the "Warrant Agent") and are subject to the terms and provisions contained in the Warrant Agreement, to all of which the Holder of this Class B Warrant Certificate by acceptance hereof consents. A copy of the Warrant Agreement is available for inspection at the principal office of the Company. Upon any partial exercise of the Class B Warrants represented hereby, there shall be countersigned and issued to the Holder hereof a new Warrant Certificate in respect of the shares of Common Stock as to which the Class B Warrants represented hereby shall not have been exercised. The Class B Warrants represented hereby may be exchanged at the office of the Warrant Agent by surrender of this Class B Warrant Certificate properly endorsed either separately or in combination with one or more other Class B Warrant Certificates for one or more new Class B Warrant Certificates representing Class B Warrants entitling the Holder thereof to purchase the same aggregate number of shares of Common Stock as were purchased on exercise of the Class B Warrant or Class B Warrants exchanged. No fractional shares will be issued upon the exercise of these Class B Warrants. Subject to compliance with applicable securities laws, the Class B Warrants represented hereby are transferable at the office of the Warrant Agent, in the manner and subject to the limitations set forth in the Warrant Agreement. The Holder hereof may be treated by the Company, the Warrant Agent and all other persons dealing with this Warrant Certificate as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented hereby, or to the transfer hereof on the books of the Company, any notice to the contrary notwithstanding, and until such transfer on such books, the Company may treat the Holder hereof as the owner for all purposes. The Class B Warrants represented hereby do not entitle any Holder hereof to any of the rights of a shareholder of the Company. The Class B Warrants represented hereby shall not be valid or obligatory for any purpose until this Warrant Certificate shall have been countersigned by the Warrant Agent. Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers. Dated: [_______________] Countersigned and Registered: WACHOVIA BANK, N.A. as Warrant Agent By: --------------------------- Authorized Signature LODGIAN, INC. By: --------------------------------- President or Vice President Attest: ----------------------------- Secretary or Assistant Secretary EXHIBIT B SUBSCRIPTION FORM [To be executed only upon exercise of a Warrant or Warrants] The undersigned ___________ (the "Registered Holder") hereby irrevocably exercises the right to purchase _______ shares of Common Stock of LODGIAN, INC., an entity organized and existing under the laws of the State of Delaware (the "Company"), evidenced by the attached Warrant Certificate, and herewith makes payment of the exercise price against delivery of the shares with respect to such shares in full in the form of (check the appropriate box) (i) certified or official bank check or wire transfer in the amount of $________; (ii) by surrendering ______ shares of Class B Warrant Stock, which represent the amount of Class B Warrant Stock, as provided in the Warrant Agreement, to be cancelled in connection with such exercise; or (iii) by the surrender to the Company of the attached original debt securities of the Company in the principal amount (plus accrued interest and premium (if any) or less any unamortized discount thereon) of $______, all in accordance with the conditions and provisions of the Warrant Agreement, and requests that certificates for the shares of Common Stock hereby purchased (and any securities or other property issuable upon such exercise) be issued in the name of and delivered to [_____________] whose address is [______________________________] and, if such shares of Common Stock shall not include all of the shares of Common Stock issuable as provided in the Class B Warrant Certificate, that a new Class B Warrant Certificate of like tenor and date for the balance of the shares of Common Stock issuable thereunder be delivered to the undersigned. ------------------------------------ (Name of Registered Owner) ------------------------------------ (Signature of Registered Owner) ------------------------------------ (Street Address) - ----------------------------- ------------------------------------ (Signature Guarantee) (City)(State) (Zip Code) NOTICE: The signature on this subscription form must correspond with the name as written upon the face of the Class B Warrant Certificate in every particular, without alteration or enlargement or any change whatsoever. Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officer. Dated: [_______________] Countersigned and Registered: WACHOVIA BANK, N.A. as Warrant Agent By: --------------------------- Authorized Signature [Name] [Title] LODGIAN, INC. By: -------------------------------------- President and Chief Executive Officer Attest: --------------------------------- Secretary EXHIBIT C ASSIGNMENT FORM FOR VALUE RECEIVED the undersigned registered owner of the Class B Warrant(s) represented by Class B Warrant Certificate No. [_______] hereby sells, assigns and transfers unto the Assignee named below all of the rights of the undersigned under the Warrant Agreement, with respect to the number of Class B Warrants set forth below: Name and Address of Assignee No. of Class B Warrants - ---------------------------- ----------------------- and does hereby irrevocably constitute and appoint [_____________________] attorney-in-fact to register such transfer on the books of LODGIAN, INC. maintained for the purpose, with full power of substitution in the premises. Dated: Print Name: ---------------------- ------------------------- Signature: ------------------------- Witness: ------------------------- - ------------------------------- (Signature Guarantee) NOTICE: The signature on this assignment must correspond with the name as written upon the face of the Warrant in every particular, without alteration or enlargement or any change whatsoever. EX-10.1 7 lo112502_10-1.txt REGISTRATION RIGHTS AGREEMENT EXHIBIT 10.1 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT, dated as of November ___, 2002 (this "Agreement"), by and among LODGIAN, INC., a Delaware corporation (the "Company"), and the other signatories hereto (the "Shareholders"). WHEREAS, pursuant to the First Amended Joint Plan of Reorganization (the "Plan") of the Company and certain of its subsidiaries, as confirmed by the United States Bankruptcy Court for the Southern District of New York on November 5, 2002, the Shareholders shall receive shares of the Company's Common Stock, par value $0.01 per share (the "Original Issue Common Stock"), shares of the Company's Series A Preferred Stock, par value $0.01 per share (the "Original Issue Preferred Stock"), Class A Warrants and/or Class B Warrants (the "Original Issue Warrants") in connection with the Plan. WHEREAS, in connection with the foregoing, the Company has agreed, subject to the terms, conditions and limitations set forth in this Agreement, to provide the Shareholders and their respective successors, assigns and transferees as permitted herein with certain registration rights in respect of the Original Issue Common Stock, the Original Issue Preferred Stock, the Original Issue Warrants and the Warrant Shares (as hereinafter defined). NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties hereto agree as follows: ARTICLE I DEFINITIONS 1.1. Definitions. Capitalized words and phrases used and not otherwise defined in this Agreement shall have the following meanings: Class A Warrants: means the Class A Warrants of the Company issued pursuant to the Plan, each of which is exercisable for one share of Common Stock and, in the case of a reclassification, recapitalization or other similar change in such warrants or in the case of a consolidation or merger of the Company with or into another Person, such consideration to which a holder of a warrant would have been entitled upon the occurrence of such event. Class B Warrants: means the Class B Warrants of the Company issued pursuant to the Plan, each of which is exercisable for one share of Common Stock and, in the case of a reclassification, recapitalization or other similar change in such warrants or in the case of a consolidation or merger of the Company with or into another Person, such consideration to which a holder of a warrant would have been entitled upon the occurrence of such event. Commission: means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. Common Stock: means the common stock, par value $0.01 per share, of the Company and all shares hereafter authorized of any class of common stock of the Company, and, in the case of a reclassification, recapitalization or other similar change in such Common Stock or in the case of a consolidation or merger of the Company with or into another Person, such consideration to which a holder of a share of Common Stock would have been entitled upon the occurrence of such event. Company: includes, in addition to the Company, any successor or assignee corporation or corporations into which or with which Lodgian, Inc. may be merged or consolidated; any corporation for whose shares the Common Stock, Preferred Stock, Class A Warrants and Class B Warrants may be exchanged; and any assignee of or successor to all or substantially all of the assets of the Company. Effective Date: shall have the meaning set forth in the recitals. Exchange Act: means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder. Holder: means each of those Persons listed on Schedule A hereto, and each Person who is a Permitted Transferee of any Shareholder. Original Issue Common Stock: shall have the meaning set forth in the recitals. Original Issue Preferred Stock: shall have the meaning set forth in the recitals. Original Issue Warrants: shall have the meaning set forth in the recitals. Permitted Transferee: means: (i) In the case of a Shareholder which is a corporation, partnership, limited liability company or other entity, (a) any corporation, partnership, limited liability company or other Person controlled by, controlling, or under common control with any Shareholder to whom any Shareholder has Transferred shares of Common Stock, Preferred Stock, Class A Warrants, Class B Warrants or Warrant Shares or (b) any corporation, partnership, limited liability company or other Person to whom any Shareholder has Transferred, in the aggregate, 15% or more of such Shareholder's shares of Common Stock, Preferred Stock, Class A Warrants, Class B Warrants or Warrant Shares; (ii) In the case of any Shareholder which is an individual, any spouse (including a former spouse under a legally terminated marriage), or descendant (whether natural, step or adopted) of any such individual Shareholder or any trust formed exclusively for the benefit of any such individual Shareholder; and (iii) In the case of any Shareholder, any other Shareholder. Notwithstanding any Person's status as a Permitted Transferee, any Transfer of Registrable Securities shall be subject to the provisions of Section 10.1. Person: means any individual, corporation, partnership, trust or other entity of any nature whatsoever. Piggyback Registration: shall have the meaning set forth in Section 3.1. Plan: shall have the meaning set forth in the recitals. Preferred Stock: means the Series A preferred stock, par value $0.01 per share, of the Company, and, in the case of a reclassification, recapitalization or other similar change in such preferred stock or in the case of a consolidation or merger of the Company with or into another Person, such consideration to which a holder of a share of preferred stock would have been entitled upon the occurrence of such event. Registrable Securities: means, with respect to any Holder, (a) all shares of Original Issue Common Stock, Original Issue Preferred Stock, Original Issue Warrants and Warrant Shares (collectively, with the Original Issue Common Stock, Original Issue Preferred Stock and Original Issue Warrants, the "Original Issue Securities") beneficially owned by such Holder; and (b) all other securities issued or distributed by the Company with respect to, or in exchange for, the Original Issue Securities pursuant to a stock dividend or distribution, stock split, merger, consolidation, reorganization, recapitalization, reclassification, conversion right or otherwise. Shares of Original Issue Securities held by any Holder shall cease to be Registrable Securities when (i) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act pursuant to Section 2.1 of this Agreement and such securities shall have been disposed of pursuant to such registration statement, (ii) such securities shall have been sold or otherwise distributed pursuant to Rule 144 (or any successor provision) under the Securities Act, (iii) they may be freely transferred by such Holder pursuant to Rule 144 under the Securities Act without compliance with paragraph (e) thereto, (iv) all such securities then held by such Holder can be transferred within a single 90-day period pursuant to Rule 144 under the Securities Act within the limits specified in paragraph (e)(1)(i) thereof, provided that, in the case of clauses (iii) and (iv), the Company shall have complied with paragraph (c) thereof, or (v) such securities shall have ceased to be outstanding. Registration Statement: shall have the meaning set forth in Section 2.1. Securities Act: means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. Shareholders: shall have the meaning set forth in the recitals. Shelf Registration: shall have the meaning set forth in Section 2.1. Transfer: means any transfer, sale, gift, assignment, distribution, conveyance, pledge, hypothecation, encumbrance or other voluntary or involuntary transfer of title or beneficial interest, whether or not for value, including, without limitation, any disposition by operation of law or any grant of a derivative or economic interest therein. Warrant Shares: means the shares of Common Stock issuable upon exercise of the Class A Warrants or the Class B Warrants. ARTICLE II SHELF REGISTRATION 2.1. Shelf Registration. The Company shall use its reasonable best efforts to cause to be filed with the Commission, on or before six months after the Effective Date, a shelf registration statement (the "Registration Statement") on an appropriate form under the Securities Act, relating to the offer and sale of the Registrable Securities by the Holders thereof from time to time in accordance with the methods of distribution set forth in the Registration Statement and Rule 415 under the Securities Act (the "Shelf Registration"). The Company shall use its reasonable best efforts to have such Shelf Registration declared effective by the Commission as promptly as practicable thereafter and in no event later than eighteen months after the Effective Date. The Company shall use its reasonable best efforts to keep the Registration Statement continuously effective, supplemented and amended in order to permit the prospectus included therein to be lawfully delivered by the Holders of the relevant Registrable Securities for the period beginning on the date on which such Registration Statement is declared effective and ending on the first date that there are no Registrable Securities (the "Shelf Registration Period"). (As used herein, except as otherwise provided or unless the context otherwise requires, the term "prospectus" refers to the prospectus included in the Registration Statement at the time such Registration Statement is declared effective, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such prospectus.) The Company's obligations under this Section 2.1 are subject to the provisions of Section 4.1. 2.2. Notice of Offering. Notwithstanding anything in Section 2.1 to the contrary, in the event that the Registration Statement is prepared on a Form S-1, any Holder intending to distribute a prospectus in connection with the sale of Registrable Securities, shall, prior to such distribution, provide the Company with 5 business days prior written notice of such intention, in order to provide the Company with sufficient time to amend, supplement, and/or otherwise update the Registration Statement to permit the prospectus included therein to be lawfully delivered. ARTICLE III PIGGYBACK REGISTRATION 3.1. Notice of Registration. In the event that the Company proposes to register any of its Common Stock, either for its own account or for the account of any Person other than the Holders, but not including a registration (i) relating to employee stock option or purchase plans or (ii) relating to a transaction pursuant to Rule 145 under the Securities Act (a "Piggyback Registration"), the Company will: (X) promptly give written notice thereof to the Holders; and (Y) use its best efforts to include in such Piggyback Registration and in any underwriting involved therein up to all of the Registrable Securities which the Holders request in writing to be so included within 20 days after receipt of such written notice from the Company. Any Holder of Registrable Securities shall have the right to withdraw its request for inclusion of its Registrable Securities in any registration statement pursuant to this Section 3 by giving written notice to the Company, within a reasonable time, of its request to withdraw. The Company's obligations under this Section 3.1 are subject to the provisions of Section 4.1. 3.2. Underwriting. If the registration of which the Company gives notice is for a registered underwritten public offering, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 3.1, and the right of the Holders to include Registrable Securities in such registration shall be conditioned upon the Holders' participation in such underwriting and the entry of the participating Holders (together with the Company and other holders distributing their securities through such underwriting) into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company. 3.3. Priority. If the underwriter of the registered public offering referred to in Section 3.2 shall advise the Company in writing that marketing factors require a limitation of the amount of securities to be underwritten, securities shall be included in such offering in the following priority: first, the Common Stock proposed to be registered by the Company; and second, Registrable Securities requested to be included in such registration by requesting Holders pursuant to Section 3.1, pro rata on the basis of the number of Registrable Securities requested to be included by such Holders. Any securities excluded pursuant to the provisions of this Section 3.3 shall be withdrawn from and shall not be included in such Piggyback Registration. ARTICLE IV PERMITTED DELAYS IN REGISTRATION; HOLDBACK AGREEMENTS 4.1. Suspension of Company Obligations. Notwithstanding anything to the contrary set forth in this Agreement, the Company's obligation under Article II of this Agreement to file the Registration Statement and to use its best efforts to cause Registrable Securities to be registered as provided therein shall be suspended in the event either (i) the Company is engaged in an underwritten primary offering and the Company is advised in writing by the underwriters that the sale of Registrable Securities would have a material adverse effect on such primary offering, or (ii) in the good faith opinion of counsel to the Company's Board of Directors, effecting the registration of Registrable Securities would adversely affect a material financing, acquisition, disposition of assets or stock, merger or other comparable transaction or would require the Company to make public disclosure of information the public disclosure of which would have a material adverse effect upon the Company (any of the events set forth in clauses (i) and (ii) being hereinafter referred to as a "Suspension Event"), but such suspension shall occur on not more than one occasion in a 365-day period and shall continue only for so long as such event or its effect is continuing, but in no event will any such suspension exceed 100 days. The Company shall promptly notify the Holders in writing of the existence of any Suspension Event, and with such notice shall provide the Holders with a copy of such underwriters' determination (in the case of clause (i) above), or such opinion of counsel to the Board of Directors (in the case of clause (ii) above). 4.2. Restrictions on Public Sale by Holders. Each Holder agrees, if requested in writing by: (i) the managing underwriter or underwriters in an underwritten primary offering of equity securities of the Company made pursuant to the Securities Act; or (ii) the principal placement agent or agents in any offering of equity securities to be effected by the Company pursuant to an exemption from registration under the Securities Act; not to effect any public sale or distribution of any Registrable Securities, including a sale pursuant to Rule 144 (or any successor provision) under the Securities Act (except to the extent included in any such offering or distribution pursuant to Sections 2.1 or 3.1), during the period starting with the date 15 days prior to and ending on the date 90 days after the closing date of any such offering, sale or distribution; provided that, with respect to a given offering of securities, (x) each other Holder is similarly restricted and (y) each director and executive officer (including any "key" employees) of the Company agrees in writing to identical restrictions. 4.3. Release from Restrictions. The Company may, in its sole and absolute discretion, elect to waive the applicability in any particular instance of the provisions of Section 4.2. ARTICLE V REGISTRATION PROCEDURES 5.1. Registration Procedures. In connection with each registration to be effected by the Company pursuant to this Agreement in which any Holder is participating, the Company shall keep the Holder advised in writing as to the initiation of each registration and as to the completion thereof. In connection with each such offering, the Company shall as expeditiously as possible, at its sole expense: (a) prepare and file with the Commission a registration statement with respect to such Holder's Registrable Securities and use its reasonable best efforts to cause such registration statement to become effective, and thereafter use its best efforts to keep such registration statement, in the case of the Shelf Registration, continuously effective for the Shelf Registration Period, and in the case of the Piggyback Registration, until the distribution described in the registration statement relating thereto has been completed; (b) in connection with the preparation and filing of a registration statement, give the Holders, the underwriters, if any, and their respective counsel, the opportunity to participate (including the inclusion of any reasonable comments proposed by the Holders) in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto (provided that the Company shall not file any such registration statement including Registrable Securities or amendment thereto or any related prospectus or any supplement thereto to which such Holders or the managing underwriter or underwriters, if any, shall reasonably object in writing), and give each of them such access to its books and records and such opportunities to discuss the business of the Company with its officers, its counsel and the independent public accountants who have certified its financial statements as shall be necessary, in the opinion of the Holder's and such underwriters' respective counsel, to conduct a reasonable due diligence investigation within the meaning of the Securities Act; (c) furnish to the Holders and to the underwriters of the Registrable Securities such number of copies of the registration statement, preliminary prospectus, final prospectus and other documents incident thereto as such underwriters and Holders from time to time may reasonably request; (d) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement; (e) register or qualify the Registrable Securities under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by any of the Holders for the distribution of the Registrable Securities covered by the registration statement to be sold by such Holders; and to take any other action which may be reasonably necessary to enable such Holders to consummate the disposition in such jurisdictions in the United States of such Registrable Securities owned by such Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, or to subject itself to taxation in any such jurisdiction; (f) enter into an underwriting agreement in customary form and substance reasonably satisfactory to the Company, the Holders and the managing underwriter or underwriters of the public offering of Registrable Securities, if the offering is to be underwritten, in whole or in part, provided that the Holders shall be a party to such underwriting agreement and the Holders may, at their option, require that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of the Holders. The Holders shall not be required to make any representations or warranties to or agreement with the Company or the underwriters other than representations, warranties or agreements regarding the Holders and their intended method of distribution and any other representation or warranty required by law; (g) promptly notify the Holders at any time when a prospectus relating thereto covered by such registration statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and at the request of any such Holder prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, provided that each Holder agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in this Section 5.1(g), such Holder shall forthwith discontinue its disposition of Registrable Securities pursuant to the registration statement relating to such Registrable Securities until such Holder's receipt of the copies of the supplemented or amended prospectus contemplated by this Section 5.1(g) and, if so directed by the Company, such Holder shall use its reasonable best efforts to deliver to the Company all copies, other than permanent file copies then in such Holder's possession, of the prospectus relating to such Registrable Securities current at the time of receipt of such notice; (h) use its reasonable best efforts promptly to obtain the withdrawal of any stop order suspending the effectiveness of a registration statement, or any order suspending or preventing the use of any related prospectus or suspending the qualification of any securities included in such registration statement for sale in any jurisdiction; (i) furnish, at the request of a Holder on the date that any Registrable Securities are to be delivered to the underwriters for sale in connection with a registration pursuant to this Agreement, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to such Holder and (ii) a letter dated such date, from the independent certified public accountants of the Company who have certified the Company's financial statements included in such registration statement, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to such Holder; (j) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission to effect the prompt registration of the securities covered by the registration statement, and make generally available to the Holders, as soon as reasonably practicable, an earnings statement covering a period of at least twelve months beginning after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act; and (k) list all Registrable Securities covered by such registration statement on the American Stock Exchange or such other national securities exchange or inter-dealer quotation system as may be mutually agreed upon by the parties and such securities exchange. ARTICLE VI INDEMNIFICATION 6.1. Indemnification by the Company. In the event of any registration of any Registrable Securities pursuant to this Agreement under the Securities Act, the Company will, and hereby does, indemnify and hold harmless each participating Holder, each of its trustees, beneficiaries, directors, officers, employees, agents, advisors and controlling persons, if any, each other Person who participates as an underwriter in the offering or sale of such securities and each other Person who controls any such underwriter within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such participating Holder or any such Person, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement under which such Registrable Securities were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and the Company will reimburse each participating Holder and each such Person, underwriter and controlling person for any reasonable legal or any other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such participating Holder or any other Person who participates as an underwriter in the offering or sale of such securities, in either case, specifically stating that it is for use in the preparation thereof; and provided, further, that the Company shall not be liable to any Person who participates as an underwriter in the offering or sale of Registrable Securities or any other Person, if any, who controls such underwriter within the meaning of the Securities Act in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of such Person's failure to send or give a copy of the final prospectus or supplement to the Persons asserting an untrue statement or alleged untrue statement or omission or alleged omission at or prior to the written confirmation of the sale of Registrable Securities to such Person if such statement or omission was corrected in such final prospectus or supplement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any participating Holder or any such underwriter or controlling person and shall survive the transfer of such securities by the Holder. 6.2. Indemnification by Participating Holders. Each of the participating Holders whose Registrable Securities are included or to be included in any registration statement, as a condition to including Registrable Securities in such registration statement, agrees to indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 6.1) the Company, each director of the Company, each officer of the Company and each other Person, if any, who controls the Company within the meaning of the Securities Act, and each other Person who participates as an underwriter in the offering or sale of such securities and each other Person who controls any such underwriter within the meaning of the Securities Act with respect to any untrue statement or alleged untrue statement of a material fact in or omission or alleged omission to state a material fact from such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, if such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company pertaining to such participating Holder by such participating Holder specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement. The obligation to provide indemnification pursuant to this Section 6.2 shall be several, and not joint and several, among the participating Holders. The indemnity provided by each Holder under this Section 6.2 shall be limited to an amount equal to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such registration statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any such director, officer, or any such underwriter or controlling person and shall survive the transfer of such securities by any participating Holder. 6.3. Notices of Claims. Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in Section 6.1 or 6.2, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the latter of the commencement of such action; provided, however, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under Section 6.1 or 6.2, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist in respect of such claim, the indemnifying party shall be entitled to participate in and to assume the defense thereof, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to the indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation, provided that the indemnified party may participate in such defense at the indemnified party's expense and provided, further, that all indemnified parties shall have the right to employ one counsel to represent them if, in the reasonable judgment of such indemnified parties, it is advisable for them to be represented by separate counsel by reason of having legal defenses which are different from or in addition to those available to the indemnifying party, and in that event the reasonable fees and expenses of such one counsel shall be paid by the indemnifying party. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it will not be obligated to pay the fees and expenses of more than one counsel for the indemnified parties with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel for the indemnified parties. No indemnifying party shall consent to entry of any judgment or enter into any settlement without the consent of the indemnified party which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. No indemnifying party shall be subject to any liability for any settlement made without its consent, which consent shall not be unreasonably withheld. 6.4. Other Indemnification. Indemnification similar to that specified in the preceding Sections of this Article VI (with appropriate modifications) shall be given by the Company and any participating Holder with respect to any required registration or other qualification of securities under any federal or state law or regulation of any governmental authority other than the Securities Act. 6.5. Indemnification Payments. The indemnification required by this Article VI shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred. 6.6. Contribution. If, for any reason, the foregoing indemnity is unavailable, or is insufficient to hold harmless an indemnified party, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of the expense, loss, claim, damage or liability (a) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other (determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the indemnifying party or the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission), or (b) if the allocation provided by clause (a) above is not permitted by applicable law or provides a lesser sum to the indemnified party than the amount otherwise payable hereunder, in the proportion as is appropriate to reflect not only the relative fault of the indemnifying party and the indemnified party, but also the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other, as well as any other relevant equitable considerations. No indemnified party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any indemnifying party who was not guilty of such fraudulent misrepresentation. The contribution provided by each participating Holder under this Section 6.6 shall be limited to an amount equal to the net proceeds received by such participating Holder from the sale of Registrable Securities pursuant to such registration statement. ARTICLE VII REGISTRATION EXPENSES 7.1. Registration Expenses. All expenses incident to the Company's performance of or compliance with this Agreement will be borne by the Company, including, without limitation: (i) all registration, filing and National Association of Securities Dealers fees and expenses; (ii) all fees and expenses associated with compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing of certificates for the Common Stock, Preferred Stock, Class A Warrants, Class B Warrants, Warrant Shares and the prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Company and the Holders, except to the extent otherwise provided in this Section 7.1; (v) all application and filing fees in connection with listing the Registrable Securities on a securities exchange pursuant to the requirements hereof; and (vi) all fees and disbursements of independent certified public accountants of the Company (including the expenses associated with preparing any special audit and comfort letters required by or incident to such performance or compliance). The Company will reimburse the Holders of Registrable Securities registered pursuant to the Registration Statement, or any Piggyback Registration, for the reasonable fees and disbursements of not more than one counsel, which shall be chosen by Holders of a majority of Registrable Securities being registered pursuant to such registration. Notwithstanding the provisions of this Section 7.1, each Holder shall bear the expense of any broker's commission, agency fee or underwriter's discount or commission. ARTICLE VIII INFORMATION BY HOLDERS 8.1. Information Regarding Holders. Each Holder shall furnish to the Company and any applicable underwriter such information regarding such Holder and the distribution proposed by such Holder as the Company or such underwriter may request in writing and as shall be required in connection the registration referred to in this Agreement. ARTICLE IX RULE 144 SALES 9.1. Reporting. With a view to making available to the Holders the benefits of certain rules and regulations of the Commission which may permit the sale of Registrable Securities (and shares of Original Issue Common Stock, Original Issue Preferred Stock, Original Issue Warrants and Warrant Shares held by a Holder which are eligible for sale or distribution under Rule 144 (or any successor provision) promulgated under the Securities Act) to the public without registration or through short form registration forms the Company agrees to: (a) make and keep public information available, as those terms are understood and defined in Rule 144, at all times after 90 days after the Effective Date; (b) file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and (c) furnish to each Holder, so long as such Holder owns any Registrable Securities (or any shares of Original Issue Common Stock, Original Issue Preferred Stock, Original Issue Warrants or Warrant Shares held by a Holder which are eligible for sale or distribution under Rule 144 (or any successor provision) promulgated under the Securities Act), forthwith upon request a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after 90 days after the Effective Date), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as such Holder may reasonably request in availing itself of any rule or regulation of the Commission permitting such Holder to sell any such securities without registration. ARTICLE X TRANSFER OF RIGHTS 10.1. Transfer or Assignment. The rights granted hereunder by the Company may be assigned or otherwise conveyed to the respective Permitted Transferees of the Shareholders. It shall be a condition to any Transfer that (a) such Transfer is effected in accordance with applicable federal and state securities laws, (b) such transferee or assignee becomes a party to this Agreement or agrees in writing to be subject to the terms hereof to the same extent as if it were the Holder hereunder, and (c) the Company is given written notice by the Holder of said Transfer, stating the name and address of said transferee and identifying the securities with respect to which such registration rights are being assigned. ARTICLE XI TERMINATION 11.1. Termination. This Agreement and the rights provided hereunder shall terminate and be of no further force and effect with respect to each Holder on such date as such Holder shall no longer hold any Registrable Securities. ARTICLE XII MISCELLANEOUS 12.1. Remedies for Breach. It is expressly understood that the equitable remedies of specific performance and injunction shall be available for the enforcement of the covenants and agreements herein, and that the availability of these equitable remedies shall not be deemed to limit any other right or remedy to which any party to this Agreement would otherwise be entitled. 12.2. Successors and Assigns. Subject to the provisions of Section 10.1, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors, assigns and transferees of the parties. If any successor, assignee or transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such Person shall be conclusively deemed to have agreed to be bound by all of the terms and provisions hereof. 12.3. Notices. All notices and other communications provided for hereunder shall be in writing and sent by registered or certified mail, return receipt requested, postage prepaid or delivered in person or by courier, telecopier or electronic mail, and shall be deemed to have been duly given when received, by the party to whom such notice is to be given at its address set forth below, or at such other address for the party as shall be specified by notice given pursuant hereto: (a) if to the Company, to: LODGIAN, INC. 3445 Peachtree Road - Suite 700 Atlanta, Georgia 30326 Attention: General Counsel with a copy to: Cadwalader, Wickersham & Taft 100 Maiden Lane New York, NY 10038 Attention: Michael C. Ryan (b) If to a Holder, to such Holder at the address set forth for such Holder in the stock records of the Company. 12.4. Governing Law. This Agreement and any controversy or claim arising out of or relating to this Agreement shall be governed by the laws of the State of Delaware, without giving effect to the principles of conflicts of laws. 12.5. Consent to Jurisdiction and Service of Process. Each of the Company and each Holder hereby irrevocably appoints the Corporation Trust Company, at its office at 1209 Orange Street, Wilmington, DE 19801, its lawful agent and attorney to accept and acknowledge service of any and all process against it in any action, suit or proceeding arising in connection with this Agreement and upon whom such process may be served, with the same effect as if such party were a resident of the State of Delaware and had been lawfully served with such process in such jurisdiction, and waives all claims of error by reason of such service, provided that in the case of any service upon such agent and attorney, the party effecting such service shall also deliver a copy thereof to each other party at the address and in the manner specified in Section 12.3. Each of the Company and each Holder will enter into such agreements with such agent as may be necessary to constitute and continue the appointment of such agent hereunder. In the event that such agent and attorney resigns or otherwise becomes incapable of acting as such, each party will appoint a successor agent and attorney in Wilmington, Delaware, reasonably satisfactory to the Company, with like powers. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the United States District Court for the District of Delaware or any court of the State of Delaware located in the City of Wilmington in any such action, suit or proceeding, and agrees that any such action, suit or proceeding shall be brought only in such court (and waives any objection based on forum non conveniens or any other objection to venue therein); provided, however, that such consent to jurisdiction is solely for the purpose referred to in this Section 12.5 and shall not be deemed to be a general submission to the jurisdiction of said courts or in the State of Delaware other than for such purpose. Nothing herein shall affect the right of any party to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against any other party in any other jurisdiction. 12.6. Entire Agreement; Amendments and Waivers. This Agreement constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions whether oral or written, of the parties. No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by all parties. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. 12.7. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Copies of executed counterparts transmitted by telecopy or other electronic transmission service shall be considered original executed counterparts for purposes of this Section 12.7. 12.8. Severability. In the event that any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement. 12.9. Attorneys' Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs and disbursements in addition to any other relief to which such party may be entitled. 12.10. Headings. The headings of the Articles and Sections herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. 12.11. Gender and Other References. Unless the context clearly indicates otherwise, the use of any gender pronoun in this Agreement shall be deemed to include all other genders, and singular references shall include the plural and vice versa. [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. LODGIAN, INC. By: --------------------------------------------- Name: Title: OCM REAL ESTATE OPPORTUNITIES FUND II, L.P. By: OAKTREE CAPITAL MANAGEMENT, LLC, its General Partner By: --------------------------------------- Name: Title: By: --------------------------------------- Name: Title: BRE/HY FUNDING, L.L.C. By: --------------------------------------------- Name: Title: THIRD AVENUE TRUST, on behalf of THIRD AVENUE VALUE FUND By: --------------------------------------------- Name: Title: THIRD AVENUE TRUST, on behalf of THIRD AVENUE REAL ESTATE VALUE FUND By:_____________________________________________ Name: Title: THIRD AVENUE MANAGEMENT LLC, as Investment Advisor for, and on behalf of, Aegon/Transamerica Series Fund, Inc. By: --------------------------------------------- Name: Title: GENERAL MOTORS TRUST COMPANY By: --------------------------------------------- Name: Title: SCHEDULE A NAME OF SHAREHOLDER NUMBER OF SHARES NUMBER OF SHARES OF NUMBER OF SHARES OF ORIGINAL ORIGINAL ISSUE OF ORIGINAL ISSUE ISSUE COMMON PREFERRED STOCK WARRANTS STOCK -----END PRIVACY-ENHANCED MESSAGE-----