**Exhibit 10.12****SEPARATION AGREEMENT AND GENERAL RELEASE**     THIS SEPARATION AGREEMENT AND GENERAL RELEASE (“Agreement”) is made and entered into by andamong Mark D. Linch (“Employee”) and **LODGIAN, INC.**(“Lodgian” or “Company”) and any of its formeror current employees, managers, supervisors, attorneys, agents, officers, directors, andaffiliates, including parent companies, subsidiaries, employee benefits plans, and divisions(collectively, the “Releasees”).W I T N E S S E T H     **WHEREAS**, Employee and the Releasees want to settle fully and finally all differences andpotential disputes between them arising out of Employee’s employment or termination of employmenton August 22, 2007, with the Releasees (the “Separation Date”);     **WHEREAS**, Employee and the Company previously entered into an “Amended and Restated ExecutiveEmployment Agreement” (the “Employment Agreement”) dated March 29, 2007, which requires Employee toenter into this Agreement in order to receive certain separation benefits;     **NOW, THEREFORE,**in consideration of the premises and mutual promises herein contained, it isagreed as follows:     1. Denial of Liability or Wrongful Conduct.     This Agreement shall not in any way be construed as an admission by the Releasees that theyhave acted wrongfully with respect to Employee or any other person, or that Employee has any rightswhatsoever against the Releasees. The Releasees specifically disclaim and deny any liability to,or wrongful acts against, Employee or any other person, on the part of themselves, their employeesor their agents.     2. No Pending Claims.     Employee represents that he has not filed, nor assigned to others the right to file, nor arethere pending any complaints, charges or lawsuits against the Releasees with any governmentalagency or any court, and that he will not file any claims against the Releasees with anygovernmental agency or any court at any time hereafter for actions taken up to and including thedate on which this Agreement becomes effective arising out of Employee’s employment or terminationof employment by Releasees.     3. Consideration.     Provided the Employee satisfies the conditions of this Agreement (including returning allCompany property as provided in Paragraph 9 below, and complying with all restrictive covenants ofthe Employment Agreement) and does not revoke this Agreement, the Company will:
 

 
 a. Make lump-sum payment equal to 50% of Employee’s base salary in thetotal amount of $112,500, plus an additional sum of $37,501.50 (together, the “LumpSum Payment”) less applicable withholdings and deductions; the Company shall alsobe entitled, and Employee hereby authorizes the Company to off-set any amounts owedby Employee to the Company from the Lump Sum Payment. The Lump Sum payment shallbe paid no later than thirty (30) days following the expiration of any applicablerevocation period.  b. The Company shall pay 100% of the Employee’s and his eligibledependents’ health care coverage under COBRA, for a period six (6)months. If the Employee obtains other healthcare coverage during this six (6)month period, the Employee will notify the Company in writing and the Company willdiscontinue these COBRA payments.    Because the Employee is no longer employed, the Employee’s rights to any particularemployee benefit will be governed by applicable law and the terms and provisions ofthe Company’s various employee benefit plans and arrangements. The Employee’sSeparation Date will be the date use in determining benefits under all Companyemployee benefit plans.  c. Pay the Employee’s accrued, but unused vacation as of the employmenttermination date, less applicable withholdings and deductions. The Company and theEmployee agree that the Employee has 136 hours of accrued, but unused vacation,which entitles the Employee to a cash payment of $ 14,711.12.  d. Not contest any claim by Employee for unemployment compensation relatedto Employee’s separation from employment with the Company.  e. Pay Employee’s actual business expenses incurred as part of theordinary course of employment with the Company within 15 days after receipt ofproper documentation.  f. The Company agrees that Section 7 of the Employment Agreement shallsurvive such that Employee will be entitled to the payments and other benefitsprovided for in said Section 7 of the Employment Agreement if a Change in Control,as defined in Exhibit A of the Employment Agreement, shall occur on or beforeOctober 20, 2007. Employee acknowledges that the right to receive any payments orother benefits as provided for in Section 7 of the Employment Agreement shall ceaseand the Company shall have no further obligation with regard to said provisionafter October 20, 2007.
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     In addition to the foregoing, provided that Employee satisfies the conditions of thisAgreement (including returning all Company property as provided in Paragraph 9 below, and complyingwith all restrictive covenants of the Separation Pay Agreement) and does not revoke this Agreement,the Company and Employee acknowledge and agree that, notwithstanding anything to the contrary inany applicable documents evidencing a grant of an award under the Lodgian, Inc. 2002 StockIncentive Plan or any similar plan, any awards of options to purchase Company stock held byEmployee shall be immediately exercisable in full, and all vesting restrictions upon any restrictedstock held by Employee shall lapse.     4. General Release.     As a material inducement to Employee to enter into this Agreement, Employee hereby irrevocablyand unconditionally releases, acquits, and forever discharges Releasees from any and all charges,complaints, claims, liabilities, obligations, promises, agreements, controversies, damages,actions, causes of action, suits, rights, demands, costs, losses, debts and expenses (includingattorneys’ fees and costs actually incurred) of any nature whatsoever, known or unknown, suspectedor unsuspected, including, but not limited to, any claims for compensatory damages, specialdamages, punitive damages, or any other form of compensation from the Releasees or any of them, anycovenant of good faith and fair dealing, or any tort, or any federal, state, or other governmentalstatute, regulation, or ordinance, including, without limitation (1) O.C.G.A. § 13-6-11; (2)O.C.G.A. § 13-1-11; (3) breach of any covenant of good faith and fair dealing; (4) breach of anexpress or implied contract; (5) violation of any other legal or contractual duty arising under thelaws of the State of Georgia, the laws of any other state, or the laws of the United States; (6)Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e, etseq.;42 U.S.C. § 1981; Executive Order 11246, 30 Fed. Reg. 12319; 42 U.S.C. § 1985(3); theRehabilitation Act of 1973, as amended, 29 U.S.C. § 701, etseq.; the AgeDiscrimination in Employment Act, 29 U.S.C. § 621, etseq., as amended by the OlderWorkers Benefit Protection Act, P.L. 101-433; the Americans with Disabilities Act, 42 U.S.C. §12101, etseq.; the Family and Medical Leave Act, 29 U.S.C. § 2601, etseq.; the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001,etseq.; the Fair Labor StandardsAct, 29 U.S.C. § 201, etseq.; the Worker Adjustment and Retraining NotificationAct, 29 U.S.C. § 2102, etseq.; and the Sarbanes-Oxley Act of 2002, 18 U.S.C.§ 1514A, etseq., which Employee now has, owns or holds, or claims to have, own orhold, which Employee at any time heretofore had, owned or held, or claimed to have, against each orany of the Releasees arising out of Employee’s employment, termination from employment by Releaseesand/or his/her claim of age discrimination.     5. Compliance with Age Discrimination Laws.     Employee hereby acknowledges and agrees that this Agreement and all actions taken inconnection therewith are in compliance with the ADEA and the Older Workers Benefits Protection Act(“these Acts”) and that the release set forth in Paragraph 4 hereof shall be applicable, withoutlimitation, to any claims brought under these Acts. The Releasees and Employee further acknowledgeand agree that:
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 (a) the release given by Employee in this Agreement is given solely in exchange forone-half of the total consideration set forth in Paragraph 3 of this Agreement and suchconsideration is in addition to anything of value to which Employee was entitled priorto entering into this Agreement;  (b) by entering into this Agreement, Employee does not waive rights or claims thatmay arise after the date this Agreement is executed;  (c) Employee has been advised to consult an attorney of the Employee’s choosing andat the Employee’s expense prior to entering into this Agreement and acknowledges thatthis provision of this Agreement satisfies the requirement of the Older WorkersBenefits Protection Act (including Exhibit A attached);  (d) Employee has had proffered a period of at least forty-five (45) calendar daysfrom receipt of this Settlement Agreement within which to consider this Agreement;  (e) Employee agrees that to the extent s/he chooses not to wait forty-five (45)calendar days to execute this Agreement, it is because he freely and unilaterallychooses to execute the Agreement before that time; and  (f) for a period of seven (7) calendar days following execution of this Agreement,Employee or the Company may revoke this Agreement by producing written notice to theother party; this Agreement shall not become effective or enforceable until such seven(7) calendar day period has expired.  (g) If Employee revokes his acceptance, such revocation will be effective only asto Employee’s release of any ADEA claims he may have. In the event of revocation,Employee agrees and understands that Company shall be entitled to an offset/reduction,and shall not pay to Employee one-half of the consideration set forth in Paragraph 3,above, which is the amount the parties have allocated to the release of any claimsEmployee might have or assert under the ADEA.  (h) Employee further acknowledges and agrees that Employee has been or is hereininformed by the Company in writing of (1) the class, unit, or group of individualscovered by the exit incentive or other employment termination program in connectionwith which the Company is requesting this Release (the “Program”) and (2) theeligibility factors and applicable time limits for the Program. Employee furtheracknowledges and agrees that attached to this agreement as Exhibit A is a schedule of(1) the job titles and ages of all individuals eligible or selected for the Program and(2) the ages of all individuals in the same job classifications or organizational unitswho are not eligible or selected for the Program.
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     6. Confidentiality.     Employee represents and agrees that he will keep the terms, amount, and facts of thisAgreement, as well as the alleged facts and events underlying the released Claims, confidential,and that he will not hereafter disclose any information concerning this Agreement to anyone otherthan his attorneys, spouse, and financial representative(s) who will be informed of and bound bythis confidentiality clause, or pursuant to a lawfully issued subpoena or court order, for a periodof five (5) years following the Separation Date. Employee shall be liable for all damagesoccasioned by a breach of this confidentiality provision, including all attorneys’ fees incurred inthe enforcement of any breach.     7. Non-Disparagement.     Employee and Employer mutually agree agrees that neither will disparage or speak negativelyabout the other or the Company’s employees or third party contractors.     8. Return of Company Property     Employee agrees to return to the Company all of the Company’s property, including, but notlimited to, keys, passcards, credit cards, customer lists, rolodexes, tapes, software, computerfiles, marketing and sales materials, and any other record, document or piece of equipmentbelonging to the Company. Employee agrees not retain any copies of the Company’s property,including any copies existing in electronic form, which are in the Employee’s possession orcontrol. Employee acknowledges that he has not and will not destroy, delete, or alter any Companyproperty without the Company’s consent. Employee’s compliance with this Paragraph 8 is acondition precedent to the Company’s obligation to pay Employee the consideration set forth inParagraph 3 hereof.     9. Employment References.     Employee agrees that in response to any requests for employment references from futureprospective employers of Employee, the Company will only provide dates of employment and lastposition held.     10. Modification.     No provision of this Agreement may be changed, altered, modified or waived except in writingsigned by Employee and a senior officer of the Company, which writing shall specifically referencethis Agreement and the provisions which the parties intend to waive or modify.
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     11. Consultation with Counsel.     Employee represents and agrees that he fully understands his right to discuss all aspects ofthis Agreement with his attorneys and acknowledges that he has been given a reasonable time toconsider whether he should sign this Agreement.     12. Attorneys’ Fees and Costs.     In the event that any party to this Agreement commences an action, at law or in equity, toenforce any right under any provision of this Agreement or to compel compliance with any provisionof this Agreement, Employee and the Releasees covenant and agree that the prevailing party in anysuch action shall be entitled to recover all reasonable attorneys’ fees and costs incurred inconnection with such action.     13. Entire Agreement.     Except as expressly provided herein, this Agreement constitutes and contains the entireagreement and final understanding concerning Employee’s relationship with the Company and the othersubject matters addressed herein between the parties, and supersedes and replaces all priornegotiations and all other agreements, proposed or otherwise, whether written or oral, concerningthe subject matters hereof, including, without limitation, the Employment Agreement. Anyrepresentation, promise or agreement not specifically included in this Agreement shall not bebinding upon or enforceable against either party. This Agreement constitutes an integratedagreement. Notwithstanding the foregoing, the parties acknowledge and agree that Sections 8, 9,10, 12, 13, 15, 17, 18 and 22 of the Employment Agreement shall survive this Agreement inaccordance with their terms, to the extent not inconsistent with any provision of this Agreement.In addition, the parties agree that Section 7 of the Employment Agreement shall survive untilOctober 20, 2007.     14. Applicable Law.     This Agreement has been entered into in and shall be governed by and construed under the lawsof the State of Georgia, notwithstanding its provisions governing choice of law.     15. Severability.     The provisions of this Agreement are severable, and if any part of it is found to beunenforceable, the other paragraphs shall remain fully valid and enforceable. This Agreement shallsurvive the termination of any arrangements contained herein.     16. Headings and Captions.
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     The headings and captions used in this Agreement are for convenience of reference only, andshall in no way define, limit, expand or otherwise affect the meaning or construction of anyprovision of this Agreement.     17. Construction.     In the event that an ambiguity or question of intent or interpretation arises, this Agreementshall be construed as if drafted jointly by the parties, and no presumption or burden of proofshall arise favoring or disfavoring any party by virtue of the authorship of any of the provisionsof this Agreement.     EMPLOYEE ATTESTS THAT HE HAS READ THIS AGREEMENT CAREFULLY AND UNDERSTAND THAT THIS AGREEMENTINCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS ARISING OUT OF EMPLOYEE’S EMPLOYMENT AND/ORTERMINATION FROM EMPLOYMENT WITH RELEASEES.     IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date shown below.     Executedthis 11th day of September, 2007.              **LODGIAN, INC.** **MARK D. LINCH**        By: /s/ Edward J. Rohling /s/ Mark. D. Linch         Name: Edward J. Rohling    Title: President & Chief Executive Officer    
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