- 1 -

 
   Company shall: (i) pay You (or Your estate if applicable), withinthirty (30) days of Your termination date, a lump sum payment equal to fifty percent (50%) of Your then currentannual Base Salary; (ii) reimburse Your and Your eligible dependents’ COBRA premiums underthe Company’s major medical group health plan on a monthly basis for a period of six (6)months; (iii) pay You (or Your estate if applicable), within thirty (30) days of Yourtermination date, a lump sum payment of Thirty Seven Thousand Five Hundred One Dollars andFifty Cents ($37,501.50); and (iv) notwithstanding anything to the contrary in anyapplicable documents evidencing a grant of an award under the Lodgian, Inc. 2002 StockIncentive Plan or any similar plan, accelerate the vesting of any such awards granted to Youby the Company (the “Award(s)”) so that any such Award(s) comprised of options to purchaseCompany stock shall be immediately exercisable in full, or so that all vesting restrictionsupon any such Award(s) comprised of restricted stock shall lapse (collectively, the paymentsand benefits set forth in the preceding sub-clauses (i) – (iv) to be referred to as the“Separation Benefits”). The Company shall have no other obligations to You, including underthis Agreement, any Company policy, or otherwise. The Separation Benefits shall constitutefull satisfaction of the Company’s obligations under this Agreement, the Lodgian, Inc.Executive Incentive Plan (the “Incentive Plan”), any Company policy, or otherwise. TheCompany’s obligation to provide the Separation Benefits shall be subject to Section 5 belowand conditioned upon Your satisfaction of the following conditions (the “Separation BenefitsConditions”): (i) Execution and non-revocation of a Separation & Release Agreement in a form preparedby the Company, which includes, but is not limited to, Your releasing the Company from anyand all liability and claims of any kind; and  (ii) Your compliance with (a) the restrictive covenants set forth in Section 7 below,and (b) all other post-termination obligations to which You are subject.   If You do not execute an effective Separation & Release Agreement as set forth above,the Company shall have no obligation to provide the Separation Benefits to You under thissub-section. The Company’s obligation to provide the Separation Benefits set forth aboveshall terminate immediately upon any breach by You of any post-termination obligations towhich You are subject.4. Post Change In Control Payment Obligations. (a) Change In Control Separation Benefits. If, withinsixty (60) days before or three hundred sixty five (365) days after a Changein Control, this Agreement terminates for the reasons set forth in Sections 6(d) or 6(e)below, then the Company will pay You all accrued but unpaid Base Salary through thetermination date. In addition, upon Your “separation from service” (within the meaning ofCode § 409A(a)(2)(A)(i)), the Company shall: (i) pay You a lump sum payment equal to Yourthen current annual Base Salary, to be paid within thirty (30) days after the date oftermination; (ii) pay You a lump sum payment of Seventy Five Thousand Three Dollars($75,003.00) to be paid within thirty (30) days after the date of termination; (iii)reimburse Your and Your eligible dependents’ COBRA premiums under the Company’s majormedical group health plan on a monthly basis for a period of twelve (12) months; and (iv)notwithstanding anything to the contrary in any applicable documents evidencing a grant ofan award under the Lodgian, Inc. 2002 Stock Incentive Plan or any similar plan, acceleratethe vesting of any such awards granted to You by the Company (the “Award(s)”) so that anysuch Award(s) comprised of options to purchase Company stock shall be immediatelyexercisable in full, or so that all vesting
- 2 -

 
   restrictions upon any such Award(s) comprised ofrestricted stock shall lapse (collectively, the payments and benefits set forth in thepreceding sub-clauses (i) — (iv) to be referred to as the“Change In Control Separation Benefits”). Your right to receive the Change In ControlSeparation Benefits shall be subject to Section 5 below and the Separation BenefitsConditions set forth in Section 3(b) above. The Change In Control Separation Benefits to beprovided under this Section 4 shall constitute full satisfaction of the Company’sobligations under this Agreement, the Incentive Plan, any Company policy, or otherwise. (b) Change In Control Completion Bonus. In the event of the closing of anytransaction constituting a Change In Control, provided (1) such closing occurs on or beforeDecember 31, 2008, and (2) You are employed within sixty (60) days before or on the date ofsuch closing, then the Company shall (i) pay You a lump sum payment equal to twenty-fivepercent (25%) of Your then current annual Base Salary; (ii) pay You a lump sum paymentEighteen Thousand Seven Hundred Fifty Dollars and Seventy Five Cents ($18,750.75), and (ii)grant You Twenty Seven Thousand Two Hundred (27,200) restricted shares of Common Stocksubject to the terms and conditions of the Employee Restricted Stock Agreement attached asExhibit B (sub-sections (i) through (iii) collectively, the “Completion Bonus”).Notwithstanding anything to the contrary set forth in the Incentive Plan or this Agreement,the Completion Bonus, if any, shall fully satisfy the Company’s payment obligations underthe Incentive Plan for the calendar year in which the closing occurs. The Company shall payYou the Completion Bonus within thirty (30) days following the closing of the Change InControl; provided, however, the Company’s obligation to provide the Completion Bonus shallbe subject to Section 5 below and conditioned upon Your execution and non-revocation of aRelease Agreement in a form prepared by the Company, which includes, but is not limited to,Your releasing the Company from any and all liability and claims of any kind.5. Delay In Payments To Comply With Code § 409A. Notwithstanding any provision of this Agreement to the contrary, if You are a “specifiedemployee” within the meaning of Code §409A(a)(2)(B)(i), then any payment that is required to bemade under Section 3 or Section 4 above within the first six (6) months following Your “separationfrom service” (within the meaning of Code § 409A(a)(2)(A)(i)) shall be paid on the date that is thefirst business day of the seventh (7th) month after the date of Your “separation from service” andshall be paid in a single lump sum payment, provided that You satisfy the Separation BenefitsConditions. The provisions of this Section are intended to require a delay in a payment underSection 3 or Section 4 above only to the extent that such a delay is required in order for suchpayment to comply with Code § 409A(a)(2)(B)(i), and shall not otherwise apply. In addition,immediately prior to Your “separation from service” (within the meaning of Code §409A(a)(2)(A)(i),the Company shall (i) establish an irrevocable grantor trust (the “Trust”) that shall have termsdesigned to be consistent with those allowed under the model trust set forth in IRS RevenueProcedure 92-64 and that shall have an independent financial institution as trustee, (ii)contribute to the Trust the amount of each payment delayed for six (6) months under this Section asof the date such payment would otherwise be required to be paid absent the provisions of thisSection applying to delay such payment, and (iii) provide the trustee of the Trust with a writtendirection to (A) hold said amount in a segregated account for Your benefit and (B) pay from suchsegregated account all payments delayed under this Section (with earnings thereon) to You on thefirst business day of the seventh (7th) month after the date of Your “separation from service.”Trust assets shall be invested in the highest-yielding available money market account of thetrustee (or, if the trustee does not have such an account, then the highest-yielding availablemoney market account of Bank of America), and earnings on amounts contributed to the Trust forpurposes of the preceding sentence shall be determined based on such chosen investment. Allexpenses of the trustee shall be paid by the Company and not from the Trust’s assets. Theprovisions of this Section shall not be required if You so agree in writing. Upon the trustee’sfinal payment of the entire corpus of the Trust in a single lump sum, the Trust shall terminate.
- 3 -

 
6. Termination of Employment. As an at-will employee, Your employment may be terminated at any time for any or no reason,including, but not limited to: (a) Your death;  (b) Your disability which renders You unable to perform the essential functions of Your jobwith or without reasonable accommodation;  (c) For Cause. For Cause shall mean a termination by the Company because of any oneof the following events: (i) Your willful refusal to follow the lawful direction of the CEO and/or the person towhom You report or Your material failure to perform Your duties (other than by reason ofDisability, as defined in sub-paragraph 6(b) above), in either case, only after You havebeen given written notice by the CEO and/or the person to whom You report detailing thedirectives You have refused to follow or the duties You have failed to perform and at least30 days to cure;  (ii) Your material and willful failure to comply with Company policies, only after Youhave been given written notice by the CEO and/or the person to whom You report detailing thepolicies with which You have failed to comply and at least 30 days to cure;  (iii) Your actively seeking a position with another business, applying for suchposition, and being likely to accept such a position without the Company’s written consent;  (iv) Your engaging in any of the following conduct: (1) an act of fraud or dishonesty that materially harms the Company or itsaffiliates,  (2) a felony or any violation of any federal or state securities law or Yourbeing enjoined from violating any federal or state securities law or beingdetermined to have violated any such law;  (3) gross negligence in connection with any property or activity of theCompany and/or its subsidiaries, affiliates or successors;  (4) repeated and intemperate use of alcohol or illegal drugs after writtennotice from the CEO and/or the person to whom You report;  (5) material breach of any of Your obligations under any agreement between Youand the Company (other than by reason of physical or mental illness orinjury), but only after You have been given written notice of the breach bythe CEO and/or the person to whom You report and at least thirty (30) days tocure;  (6) becoming barred or prohibited by the SEC from holding Your position withthe Company.
- 4 -

 
 (v) Your resignation from the Company without Good Reason; (d) Your resignation from the Company for Good Reason. (e) Without Cause. Without Cause means any termination of employment by Companywhich is not defined in sub-paragraphs 6(a) – 6(d) above.7. Restrictive Covenants. You acknowledge and agree that: (a) Your position is a position of trust and responsibility withaccess to Confidential Information, Trade Secrets, and information concerning employees, customers,and prospective customers of the Company; (b) the Trade Secrets and Confidential Information, andthe relationship between the Company and each of its Employees, Customers, and ProspectiveCustomers, are valuable assets of the Company and may not be used for any purpose other than theCompany’s business; and (c) the restrictions contained in this Section 7 are reasonable andnecessary to protect the legitimate business interests of the Company, and will not impair orinfringe upon Your right to work or earn a living after Your employment with the Company ends. (a) Trade Secrets and Confidential Information. You represent and warrant that: (i) You are not subject to any legal or contractualduty or agreement that would prevent or prohibit You from performing the duties contemplatedby this Agreement or otherwise complying with this Agreement, and (ii) You are not in breachof any legal or contractual duty or agreement, including any agreement concerning tradesecrets or confidential information owned by any other party.        You agree that You will not: (i) use, disclose, or reverse engineer the Trade Secretsor the Confidential Information for any purpose other than the Company’s Business, except asauthorized in writing by the Company; (ii) during Your employment with the Company, use,disclose, or reverse engineer (a) any confidential information or trade secrets of anyformer employer or third party, or (b) any works of authorship developed in whole or in partby You during any former employment or for any other party, unless authorized in writing bythe former employer or third party; or (iii) upon Your resignation or termination (a) retainTrade Secrets or Confidential Information, including any copies existing in any form(including electronic form), which are in Your possession or control, or (b) destroy,delete, or alter the Trade Secrets or Confidential Information without the Company’s writtenconsent.        The obligations under this sub-section shall: (i) with regard to the Trade Secrets,remain in effect as long as the information constitutes a trade secret under applicable law,and (ii) with regard to the Confidential Information, remain in effect during the RestrictedPeriod. The confidentiality, property, and proprietary rights protections available in thisAgreement are in addition to, and not exclusive of, any and all other rights to which theCompany is entitled under federal and state law, including, but not limited to, rightsprovided under copyright laws, trade secret and confidential information laws, and lawsconcerning fiduciary duties. (b) Non-Disclosure of Customer or Prospective Customer Information. During the Restricted Period, You shall not, except as authorized by the Company, divulgeor make accessible to any person or entity (i) the names of Customers or ProspectiveCustomers, or (ii) any information contained in a Customer’s or Prospective Customer’saccount. (c) Non-Solicitation of Customers. During the Restricted Period, You shall not, directly or indirectly, solicit any Customerof the Company for the purpose of selling or providing any products or services competitivewith the Business. The restrictions set forth in this sub-section
- 5 -

 
   apply only to Customerswith whom You had Contact during the term of Your employment. Nothing in this sub-sectionshall be construed to prohibit You from soliciting any Customer of the Company for thepurpose of selling or providing any products or services competitive with the Business: (i)which You never sold or provided while employed by the Company; (ii) to a Customer thatexplicitly severed its business relationship with the Company unless You, directlyor indirectly, caused or encouraged the Customer to sever the relationship; or (iii) whichproducts or services the Company no longer offers. (d) Non-Solicitation of Prospective Customers. During the Restricted Period, Youshall not, directly or indirectly, solicit any Prospective Customer of the Company for thepurpose of selling or providing any products or services competitive with the Business. Therestrictions set forth in this sub-section apply only to Prospective Customers with whom Youhad Contact during the last year of Your employment with the Company (or during Youremployment if employed less than a year). Nothing in this sub-section shall be construed toprohibit You from soliciting any Prospective Customer of the Company for the purpose ofselling or providing any products or services competitive with the Business which theCompany no longer offers. (e) Non-Recruit of Employees. During the Restricted Period, You shall not, directly or indirectly, solicit, recruit, orinduce any Employee to (i) terminate his or her employment relationship with the Company, or(ii) work for any other person or entity engaged in the Business. The restrictions setforth in this sub-section shall apply only to Employees (a) with whom You had MaterialInteraction, or (b) You, directly or indirectly, supervised. (f) Post-Employment Disclosure. During the Restricted Period, You shall provide a copy of this Agreement to persons and/orentities for whom You work or consult as an owner, partner, joint venturer, employee orindependent contractor. (g) Injunctive Relief. You agree that if You breach any portion of this Section 7: (i) the Company would sufferirreparable harm; (ii) it would be difficult to determine damages, and money damages alonewould be an inadequate remedy for the injuries suffered by the Company, and (iii) if theCompany seeks injunctive relief to enforce this Agreement, You shall waive and shall not (a)assert any defense that the Company has an adequate remedy at law with respect to thebreach, (b) require that the Company submit proof of the economic value of any Trade Secretor Confidential Information, or (c) require the Company to post a bond or any othersecurity. Nothing contained in this Agreement shall limit the Company’s right to any otherremedies at law or in equity. (h) Independent Enforcement. The covenants set forth in this Section 7 shall be construed as agreements independent of(i) any other agreements, or (ii) any other provision in this Agreement, and the existenceof any claim or cause of action by You against the Company, whether predicated on thisAgreement or otherwise, regardless of who was at fault and regardless of any claims thateither You or the Company may have against the other, shall not constitute a defense to theenforcement by the Company of the covenants set forth in this Section 7. The Company shallnot be barred from enforcing the restrictive covenants set forth in this Section 7 by reasonof any breach of (i) any other part of this Agreement, or (ii) any other agreement with You.8. Release. You release and discharge the Company from any claim or liability, whether known or unknown,arising out of any event, act or omission occurring on or before the day You sign this Agreement,including, but not limited to, claims arising out of Your employment, claims arising out of or
- 6 -

 
relating to the Prior Agreement or the termination of the Prior Agreement, claims arising by virtueof Your status as a shareholder of Company, claims for breach of contract, tort, negligent hiring,negligent training, negligent supervision, negligent retention, employment discrimination,retaliation, or harassment, claims arising out of or relating to equity or other ownership interestin Company, as well as any other statutory or common law claims, at law or in equity, recognizedunder any federal, state, or local law. You also release any claims for unpaid back pay, sick pay, vacation pay, expenses,bonuses, commissions, attorneys’ fees, or any other compensation.9. Entire Agreement. This Agreement, including Exhibit A and Exhibit B which are incorporated by reference,constitutes the entire agreement between the Parties concerning the subject matter of thisAgreement. This Agreement supersedes any prior communications, agreements, or understandings,whether oral or written, between the Parties relating to the subject matter of this Agreement.Other than the terms of this Agreement, no other representation, promise or agreement has been madewith You to cause You to sign this Agreement.10. Governing Law. The laws of the State of Georgia shall govern this Agreement. If Georgia’s conflict of lawrules would apply another state’s laws, the Parties agree that Georgia law shall still govern.11. Waiver. The Company’s failure to enforce any provision of this Agreement shall not act as a waiver ofthat or any other provision. The Company’s waiver of any breach of this Agreement shall not act asa waiver of any other breach.12. Severability. The provisions of this Agreement are severable. If any provision is determined to be invalid,illegal, or unenforceable, in whole or in part, the remaining provisions and any partiallyenforceable provisions shall remain in full force and effect.13. Amendments. As a condition of employment and a material term under this Agreement, You agree that, at anytime during Your employment, You shall sign an amendment to this Agreement which would modify theRestrictive Covenants in Section 7 of this Agreement (the “Amendment”) based on changes to Yourduties or changes in the law regarding restrictive covenants. You agree that You shall not beentitled to any additional consideration to execute the Amendment. You agree that Your refusal tosign any such Amendment shall constitute a material breach of this Agreement. This Agreement maynot otherwise be amended or modified except in writing signed by both Parties.     The Parties further understand and acknowledge that modifications to this Agreement may beappropriate after final regulations are issued under Code § 409A. The Parties agree to negotiatein good faith regarding any such modifications that may be required in order to comply with Code §409A and avoid additional and accelerated taxation to You pursuant to Code § 409A.14. Successors and Assigns. This Agreement shall be assignable to, and shall inure to the benefit of, the Company’ssuccessors and assigns, including, without limitation, successors through merger, name change,consolidation, or sale of a majority of the Company’s stock or assets, and shall be binding uponYou and Your heirs and assigns.15. Consent to Jurisdiction and Venue. You agree that any claim arising out of or relating to this Agreement shall be brought in astate or federal court of competent jurisdiction in Georgia. You consent to the personaljurisdiction of the state and/or federal courts located in Georgia. You waive (i) any objection tojurisdiction or venue, or (ii) any defense claiming lack of jurisdiction or improper venue, in anyaction brought in such courts.
- 7 -

 
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Effective Date.       **Lodgian, Inc.** **James McGrath**   By: /s/ Edward J. Rohling /s/ James McGrath          Name: Edward J. Rohling           Title: President & CEO       
- 8 -

 
**EXHIBIT A****DEFINITIONS**A. “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule12b -2 promulgated under the Securities Exchange Act of 1934, as amended. B. “Base Salary” means the wages the Company pays You on an annual basis, exclusive of allbenefits, bonuses, equity, commissions, or any other incentive-based compensation. C. “Beneficial Owner” shall have the meaning ascribed to that term in Rule 13d-3 promulgatedunder the Securities Exchange Act of 1934, as amended. D. “Business” means the business of owning and operating hotels including, but not limited to,full-service hotels which have food and beverage operations and meeting spaces. E. “Change in Control” means: (i) when any Person (other than the Company, any Subsidiary of the Company, anyemployee benefit plan of the Company or of any Subsidiary of the Company, or any personor entity organized, appointed or established by the Company or any Subsidiary of theCompany for or pursuant to the terms of any such plan), alone or together with itsAffiliates and Associates (collectively, an “Acquiring Person”), shall become theBeneficial Owner of 40 percent or more of the then outstanding shares of Common Stockor the Combined Voting Power of the Company,  (ii) when, during any period of two consecutive years, individuals who at thebeginning of such period constitute the Board of Directors of the Company (the“Board”), and any new director (other than a director who is a representative ornominee of an Acquiring Person) whose election by the Board or nomination for electionby the Company’s shareholders was approved by a vote of at least a majority of thedirectors then still in office who either were directors at the beginning of the periodor whose election or nomination for election was previously so approved (collectively,the “Continuing Directors”), cease for any reason to constitute a majority of theBoard,  (iii) the consummation of a merger or consolidation of the Company with any othercorporation, other than a merger or consolidation which would result in the votingsecurities of the Company outstanding immediately prior thereto continuing to represent(either by remaining outstanding or by being converted into voting securities of thesurviving entity or any Parent of such surviving entity) at least a majority of theCombined Voting Power of the Company, such surviving entity, or the Parent of suchsurviving entity outstanding immediately after such merger or consolidation;  (iv) the consummation of a plan of reorganization (other than a reorganization underthe United States Bankruptcy Code) or complete liquidation of the Company or anagreement for the sale or disposition by the Company of all or substantially all of theCompany’s assets, other than a sale of all or substantially all of the Company’s assetsto a transferee, the majority of whose voting securities are held by the Company; or
- 9 -

 
 (v) when the shareholders of the Company approve an agreement for the sale ordisposition by the Company of all or substantially all of the Company’s assets in atransaction or series of transactions to an entity that is not owned, directly orindirectly, by the Company’s common stock shareholders in substantially the sameproportions as the owners of the Company’s common stock before such transaction orseries of transactions.F. “Combined Voting Power” means the combined voting power of the Company’s or other relevantentity’s then outstanding voting securities.G. “Common Stock “ means the Common Stock, par value $.01 per share, of the Company.H. “Confidential Information” means (a) information of the Company, to the extent not considereda Trade Secret under applicable law, that (i) relates to the business of the Company, (ii)possesses an element of value to the Company, (iii) is not generally known to the Company’scompetitors, and (iv) would damage the Company if disclosed, and (b) information of any thirdparty provided to the Company which the Company is obligated to treat as confidential,including, but not limited to, information provided to the Company by its licensors,suppliers, or customers. Confidential Information includes, but is not limited to, (i) futurebusiness plans, (ii) the composition, description, schematic or design of products, futureproducts or equipment of the Company or any third party, (iii) communication systems, audiosystems, system designs and related documentation, (iv) advertising or marketing plans, (v)information regarding independent contractors, employees, clients, licensors, suppliers,customers, or any third party, including, but not limited to, customer lists compiled by theCompany, and customer information compiled by the Company, and (vi) information concerning theCompany’s or a third party’s financial structure and methods and procedures of operation.Confidential Information shall not include any information that (i) is or becomes generallyavailable to the public other than as a result of an unauthorized disclosure, (ii) has beenindependently developed and disclosed by others without violating this Agreement or the legalrights of any party, or (iii) otherwise enters the public domain through lawful means.I. “Contact” means any interaction between You and a Customer or Prospective Customer whichtakes place in an effort to perform services on behalf of the Company or to establish,maintain, and/or further a business relationship on behalf of the Company.J. “Customer” means any person or entity to whom the Company has sold its products or services..K. “Employee” means any person who (i) is employed by the Company at the time Your employmentwith the Company ends, or (ii) was employed by the Company during the last year of Youremployment with the Company (or during Your employment if employed less than a year).L. “Good Reason” shall exist if (i) the Company, without Your written consent, (A) takes anyaction which results in the material reduction of Your then current duties orresponsibilities, (B) reduces Your then-current Base Salary, (C) reduces the benefits to whichYou are entitled on the Effective Date, unless a similar reduction is made for other executiveemployees, (D) commits a material breach of this Agreement, or (E) requires You to relocatemore than fifty (50) miles from the location where you provide services to the Company as ofthe Effective Date; (ii) You provide written notice to the Company of such action and providethe Company with thirty (30) days to remedy such action (the “Cure Period”), (iii) the Companyfails to remedy such action within the Cure Period, and (iv) You resign within ten (10) daysof the expiration of the Cure Period. Good Reason shall not include any isolated,insubstantial or inadvertent action that (i) is not taken in bad faith, and (ii) is remediedby the Company within the Cure Period.
- 10 -

 
M. “Material Interaction” means any interaction between You and an Employee which relates orrelated, directly or indirectly, to the performance of Your duties for the Company.N. “Parent” means any corporation which is a “parent corporation” within the meaning of Section424(e) of the Internal Revenue Code of 1986, as amended, with respect to the relevant entity.O. “Person” means any person, entity or “group” within the meaning of Section 13(d)(3) orSection 14(d)(2) of the Exchange Act.P. “Prospective Customer” means any person or entity to whom the Company has solicited to sellits products or services.Q. “Restricted Period” means the time period during Your employment with the Company, and forone (1) year after Your employment with the Company ends.R. “Subsidiary” means any corporation which is a “subsidiary corporation” within the meaning ofSection 424(f) of the Internal Revenue Code of 1986, as amended, with respect to the Company.S. “Trade Secrets” means information of the Company, and its licensors, suppliers, clients, andcustomers, without regard to form, including, but not limited to, technical or nontechnicaldata, a formula, a pattern, a compilation, a program, a device, a method, a technique, adrawing, a process, financial data, financial plans, product plans, a list of actualcustomers, clients, licensors, or suppliers, or a list of potential customers, clients,licensors, or suppliers which is not commonly known by or available to the public and whichinformation (i) derives economic value, actual or potential, from not being generally knownto, and not being readily ascertainable by proper means by, other persons who can obtaineconomic value from its disclosure or use, and (ii) is the subject of efforts that arereasonable under the circumstances to maintain its secrecy.
- 11 -