Document:

<PAGE>

                                                                    SCHEDULE A-1
                                                                    TO TRADEMARK
                                                              SECURITY AGREEMENT

                                  See Attached

<PAGE>

                                                                       EXHIBIT B

                           PATENT SECURITY AGREEMENT

               (PATENTS, PATENT APPLICATIONS AND PATENT LICENSES)

         WHEREAS, [NAME OF GRANTOR, a corporation] (together with any successors
thereto, the "GRANTOR") owns, or in the case of licenses, is a party to, the
Patent Collateral (as defined below);

         WHEREAS, Grantor, as a [Borrower] [Guarantor], the [other] Borrower[s]
party thereto, the other Guarantors party thereto, the Lenders party thereto
(the "DIP LENDERS"), and Morgan Stanley Senior Funding, Inc., as
Administrative Agent are parties to a Revolving Credit and Guaranty Agreement
dated as of December 31, 2001 (as the same may be amended from time to time, the
"DIP CREDIT AGREEMENT"); and

         WHEREAS, pursuant to the terms of a Security and Pledge Agreement dated
as of December 31, 2001 (as such agreement may be further amended from time to
time, the "DIP SECURITY AGREEMENT") among Grantor, the other lien grantors
party thereto and Morgan Stanley Senior Funding, Inc., as Collateral Agent for
the Secured Parties (as defined in the DIP Security Agreement) (in such
capacity, together with its successors in such capacity, "GRANTEE"), Grantor
has granted to Grantee for the benefit of the Secured Parties a continuing
security interest in substantially all the assets of Grantor, including all
right, title and interest of Grantor in, to and under the Patent Collateral (as
defined herein), whether now owned or existing or hereafter acquired or arising,
to secure the Obligations (as defined in the DIP Credit Agreement);

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee, to secure the Obligations, a continuing security interest in all of
Grantor's right, title and interest in, to and under the following (all of the
following items or types of property being herein collectively referred to as
the "PATENT COLLATERAL"), whether now owned or existing or hereafter acquired
or arising:

         (i)      each Patent (as defined in the DIP Security Agreement) owned
by Grantor, including, without limitation, each Patent referred to in Schedule
B-1 hereto;

         (ii)     each Patent License (as defined in the DIP Security
Agreement), including, without limitation, each Patent License identified in
Schedule B-1 hereto; and

         (iii)    all proceeds of and revenues from the foregoing, including,
without limitation, all proceeds of and revenues from any claim by Grantor
against third parties for past, present or future infringement of any Patent
owned by Grantor, including, without limitation, any Patent referred to in
Schedule B-1 hereto (including, without

<PAGE>

limitation, any such Patent issuing from any application referred to in Schedule
B-1 hereto), and all rights and benefits of Grantor under any Patent License,
including, without limitation, any Patent License identified in Schedule B-1
hereto.

         Grantor hereby irrevocably constitutes and appoints Grantee and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full power and authority in the name of Grantor or
in its name, from time to time, in Grantee's discretion, so long as any Event of
Default (as defined in the DIP Credit Agreement) has occurred and is continuing,
to take with respect to the Patent Collateral any and all appropriate action
which Grantor might take with respect to the Patent Collateral and to execute
any and all documents and instruments which may be necessary or desirable to
carry out the terms of this Patent Security Agreement and to accomplish the
purposes hereof.

         Except to the extent permitted in the DIP Credit Agreement, Grantor
agrees not to sell, license, exchange, assign or otherwise transfer or dispose
of, or grant any rights with respect to, or mortgage or otherwise encumber, any
of the Patent Collateral.

         The foregoing security interest is granted in conjunction with the
security interests granted to Grantee pursuant to the DIP Security Agreement.
Grantor does hereby further acknowledge and affirm that the rights and remedies
of Grantee with respect to the security interest in the Patent Collateral
granted hereby are more fully set forth in the DIP Security Agreement, the terms
and provisions of which are incorporated by reference herein as if fully set
forth herein.

<PAGE>

         IN WITNESS WHEREOF, Grantor has caused this Patent Security Agreement
to be duly executed by its officer thereunto duly authorized as of the day of ,
200__.

                                       [NAME OF GRANTOR]

                                       By:
                                          -------------------------------------
                                       Title:

Acknowledged:

By:
------------------------------------
Title:

STATE OF NEW YORK  )
                                   ) ss.:
COUNTY OF NEW YORK )

         I, ______________________, a Notary Public in and for said County, in
the State aforesaid, DO HEREBY CERTIFY, that ___________________, of [NAME OF
GRANTOR], personally known to me to be the same person whose name is subscribed
to the foregoing instrument as such ___________________, appeared before me this
day in person and acknowledged that (s)he signed, executed and delivered the
said instrument as her/his own free and voluntary act and as the free and
voluntary act of said Company, for the uses and purposes therein set forth being
duly authorized so to do.

         GIVEN under my hand and Notarial Seal this ______ day of _____________
______________________, 200__.

[Seal]

Signature of notary public
My Commission expires
                      ---------

<PAGE>

                                                                    SCHEDULE B-1
                                                                       TO PATENT
                                                              SECURITY AGREEMENT

                                     PATENTS

A. U.S. Patents and Design Patents

<TABLE>
<CAPTION>
I.D. No.        Patent No.        Issued        Expiration        Title
<S>             <C>               <C>           <C>               <C>
</TABLE>

B. U.S. Patent Applications

<TABLE>
<CAPTION>
Case No.        Serial No.        Date          Filing Title
<S>             <C>               <C>           <C>
</TABLE>

C. Foreign Patents

<TABLE>
<CAPTION>
I.D. No.        Patent No.        Issued        Expiration        Country Title
<S>             <C>               <C>           <C>               <C>
</TABLE>

                                PATENT LICENSES

<TABLE>
<CAPTION>
Parties
Name of Agreement     Licensor/Licensee    Date of Agreement    Subject Matter
<S>                   <C>                  <C>                  <C>
</TABLE>

<PAGE>

                                                                       EXHIBIT C

                          COPYRIGHT SECURITY AGREEMENT

                 (COPYRIGHTS, COPYRIGHT REGISTRATIONS, COPYRIGHT
                      APPLICATIONS AND COPYRIGHT LICENSES)

         WHEREAS, [NAME OF GRANTOR], a _________________________ [corporation]
(together with any successors thereto, the "GRANTOR") owns, or in the case of
licenses, is a party to, the Copyright Collateral (as defined below);

         WHEREAS, Grantor, as a [Borrower] [Guarantor], the [other] Borrower[s]
party thereto, the other Guarantors party thereto, the Lenders party thereto
(the "DIP LENDERS"), and Morgan Stanley Senior Funding, Inc., as
Administrative Agent are parties to a Revolving Credit and Guaranty Agreement
dated as of December 31, 2001 (as the same may be amended from time to time, the
"DIP CREDIT AGREEMENT"); and

         WHEREAS, pursuant to the terms of a Security and Pledge Agreement dated
as of December 31, 2001 (as such agreement may be further amended from time to
time, the "DIP SECURITY AGREEMENT") among Grantor, the other lien grantors
party thereto and Morgan Stanley Senior Funding, Inc., as Collateral Agent for
the Secured Parties (as defined in the DIP Security Agreement) (in such
capacity, together with its successors in such capacity, "GRANTEE"), Grantor
has granted to Grantee for the benefit of the Secured Parties a continuing
security interest in substantially all the assets of Grantor, including all
right, title and interest of Grantor in, to and under the Copyright Collateral
(as defined herein), whether now owned or existing or hereafter acquired or
arising, to secure the Obligations (as defined in the DIP Security Agreement);

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee, to secure the Obligations, a continuing security interest in all of
Grantor's right, title and interest in, to and under the following (all of the
following items or types of property being herein collectively referred to as
the "COPYRIGHT COLLATERAL"), whether now owned or existing or hereafter
acquired or arising:

                  (i)      each Copyright (as defined in the DIP Security
         Agreement) owned by Grantor, including, without limitation, each
         Copyright registration or application therefor referred to in Schedule
         C-1 hereto;

                  (ii)     each Copyright License (as defined in the DIP
         Security Agreement), including, without limitation, each Copyright
         License identified in Schedule C-1 hereto; and

<PAGE>

                  (iii)    all proceeds of and revenues from, accounts and
         general intangibles arising out of, the foregoing, including, without
         limitation, all proceeds of and revenues from any claim by Grantor
         against third parties for past, present or future infringement of any
         Copyright, including, without limitation, any Copyright owned by
         Grantor referred to in Schedule C-1 annexed hereto, and all rights and
         benefits of Grantor under any Copyright License, including, without
         limitation, any Copyright License identified in Schedule C-1 hereto.

         Grantor hereby irrevocably constitutes and appoints Grantee and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full power and authority in the name of Grantor or
in its name, from time to time, in Grantee's discretion, so long as any Event of
Default (as defined in the DIP Credit Agreement) has occurred and is continuing,
to take with respect to the Copyright Collateral any and all appropriate action
which Grantor might take with respect to the Copyright Collateral and to execute
any and all documents and instruments which may be necessary or desirable to
carry out the terms of this Copyright Security Agreement and to accomplish the
purposes hereof.

         Except to the extent permitted by the DIP Credit Agreement, Grantor
agrees not to sell, license, exchange, assign or otherwise transfer or dispose
of, or grant any rights with respect to, or mortgage or otherwise encumber, any
of the foregoing Copyright Collateral.

         The foregoing security interest is granted in conjunction with the
security interests granted to Grantee pursuant to the DIP Security Agreement.
Grantor does hereby further acknowledge and affirm that the rights and remedies
of Grantee with respect to the security interest in the Copyright Collateral
granted hereby are more fully set forth in the DIP Security Agreement, the terms
and provisions of which are incorporated by reference herein as if fully set
forth herein.

<PAGE>

         IN WITNESS WHEREOF, Grantor has caused this Copyright Security
Agreement to be duly executed by its officer thereunto duly authorized as of the
_____ day of ___________________, 200__.

                                       [NAME OF GRANTOR]

                                       By:
                                          --------------------------------------
                                       Title:

Acknowledged:

By:
---------------------------------------
Title:

STATE OF NEW YORK  )
                               ) ss.:
COUNTY OF NEW YORK )

         I, ________________________________, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY, that ________________, of
[NAME OF GRANTOR], personally known to me to be the same person whose name is
_________________________ subscribed to the foregoing instrument as such
______________________, appeared before me this day in person and acknowledged
that (s)he signed, executed and delivered the said instrument as her/his own
free and voluntary act and as the free and voluntary act of said Company, for
the uses and purposes therein set forth being duly authorized so to do.

         GIVEN under my hand and Notarial Seal this _______ day of ____________
_________________.

[Seal]

---------------------------------------
Signature of notary public
My Commission expires
                      -----------------

<PAGE>

                                                                    SCHEDULE C-1
                                                                    TO COPYRIGHT
                                                              SECURITY AGREEMENT

                     COPYRIGHTS AND COPYRIGHT REGISTRATIONS

<TABLE>
<CAPTION>
Registration No.                  Registration Date             Title
<S>                               <C>                           <C>
</TABLE>

                     APPLICATIONS FOR COPYRIGHT REGISTRATION

<TABLE>
<CAPTION>
Serial No.       Date Filed       Title
<S>              <C>              <C>
</TABLE>

                               COPYRIGHT LICENSES

Name of Agreement                             Parties
Licensor/Licensee                             Date of
Agreement                                     Subject
Matter
As Licensee                                   As Licensor

<PAGE>

                                                                       EXHIBIT D

                             PERFECTION CERTIFICATE

         The undersigned are duly authorized officers of [NAMES OF ALL GRANTORS]
(the "GRANTORS"). With reference to the Security and Pledge Agreement dated as
of December 31, 2001 among the Grantors and Morgan Stanley Senior Funding, Inc.,
as Collateral Agent (terms defined therein being used herein as therein
defined), the undersigned certify to the Collateral Agent and each Secured Party
as follows:

         A.       INFORMATION REQUIRED FOR FILINGS AND SEARCHES FOR PRIOR
                  FILINGS.

                  1.       Name; Jurisdiction of Organization . Set forth below
is the exact name, type of entity and jurisdiction of organization of each
Grantor as it appears in its organizational documents:

                  2.       Prior Names. (a) Set forth below is each other name
that each Grantor has had since its organization, together with the date of the
relevant change:

                  (b)      Except as set forth in Schedule A-2(b) hereto, no
Grantor has changed its corporate structure in any way within the past five
years.

                  (c)      None of any Grantor's Collateral was acquired from
another Person within the past five years, except

                  (i)      property sold to a Grantor by another Person in the
ordinary course of such other Person's business;

                  (ii)     property with respect to which the Liens under the
Security and Pledge Agreement are to be perfected by taking possession or
control thereof;

                  (iii)    property acquired in transactions described in
Schedule A-2(c) hereto; and

<PAGE>

                  (iv)     other property having an aggregate fair market value
not exceeding $_____________________________.

                  3.       Filing Office. In order to perfect the Liens granted
by the Grantors under the Security and Pledge Agreement, a duly signed financing
statement on Form UCC-1, with the collateral described as set forth on Schedule
A-3(a) hereto, should be on file in the Uniform Commercial Code filing office in
the jurisdiction of organization of each Grantor as set forth in Part A-1
hereof. Within 30 days hereafter, the Grantors will deliver to the Collateral
Agents to be attached hereto as Schedule A-3(b), a true copy of each such filing
duly acknowledged by the filing officer.

         B.       ADDITIONAL INFORMATION REQUIRED FOR SEARCHES FOR PRIOR FILINGS
                  UNDER OLD ARTICLE 9.

                  1.       Current Locations. (a) The chief executive office of
each Grantor is located at the following address:

<TABLE>
<CAPTION>
NAME OF GRANTOR              MAILING ADDRESS                  COUNTY     STATE
<S>                          <C>                              <C>        <C>
</TABLE>

                  (b)      The following are all places of business of any
Grantor not identified above:

<TABLE>
<CAPTION>
NAME OF GRANTOR              MAILING ADDRESS                  COUNTY     STATE
<S>                          <C>                              <C>        <C>
</TABLE>

         (c)      The following are all locations not identified above where any
Grantor maintains any Inventory:

<TABLE>
<CAPTION>
NAME OF GRANTOR              MAILING ADDRESS                  COUNTY     STATE
<S>                          <C>                              <C>        <C>
</TABLE>

         (d)      The following are the names and addresses of all Persons
(other than the Grantors) that have possession of any Grantor's Inventory:

<TABLE>
<CAPTION>
NAME OF GRANTOR              MAILING ADDRESS                  COUNTY     STATE
<S>                          <C>                              <C>        <C>
</TABLE>

         2.       Prior Locations . (a) Set forth below is the information
required by paragraphs (a) and (b) of Part B-1 above with respect to each other
location or

<PAGE>

place of business maintained by any Grantor at any time during the past five
years:

         (b)      Set forth below is the information required by paragraphs (c)
and (d) of Part B-1 above with respect to each other location or bailee where or
with whom any Grantor's Inventory has been lodged at any time during the past
four months:

         C.       SEARCH REPORTS.

         Attached hereto as Schedule C-1 is a true copy of a file search report
from the central UCC filing office in each jurisdiction identified in Part A-1
and Part B above with respect to each name set forth in Part A-1 and Part A-2
above (searches in local filing offices, if any, are not required). Attached
hereto as Schedule C-2 is a true copy of each financing statement or other
filing identified in such file search reports.

         D.       UCC FILINGS.

         Attached hereto as Schedule D-1 is a schedule setting forth filing
information with respect to the filings referred to in Part A-3 above. All
filing fees and taxes payable in connection with such filings have been paid.
Attached hereto as Schedule D-2 is a true copy of each such filing duly
acknowledged by the filing officer.

<PAGE>

         IN WITNESS WHEREOF, I have hereunto set my hand this __ day of
__________________, _____.

                                       ----------------------------------------
                                       Name:
                                       Title:

<PAGE>

                                                                    SCHEDULE A-3
                                                       TO PERFECTION CERTIFICATE

                            DESCRIPTION OF COLLATERAL

All assets of the debtor, whether now owned or hereafter acquired, wherever
located, and all proceeds thereof.

<PAGE>

                                                                 SCHEDULE D-1 TO
                                                          PERFECTION CERTIFICATE

                               SCHEDULE OF FILINGS

I.                         1075 HOSPITALITY, L.P.

II.                        12801 NWF BEVERAGE, INC.

III.                       ALBANY HOTEL, INC.

IV.                        AMI OPERATING PARTNERS, L.P.

V.                         AMIOP ACQUISITION CORP

VI.                        APICO HILLS, INC.

VII.                       APICO INNS OF GREEN TREE, INC.

VIII.                      APICO INNS OF PENNSYLVANIA, INC.

IX.                        APICO INNS OF PITTSBURGH, INC.

X.                         APICO MANAGEMENT CORP.

XI.                        ATLANTA-BOSTON SPE, INC.

XII.                       ATLANTA-BOSTON HOLDINGS,  LLC

XIII.                      ATLANTA-BOSTON LODGING, LLC

XIV.                       ATLANTA-HILLSBORO LODGING, L.L.C.

XV.                        BRECKSVILLE HOSPITALITY, INC.

XVI.                       BRECKSVILLE HOSPITALITY, L.P.

XVII.                      BRUNSWICK MOTEL ENTERPRISES, INC.

XVIII.                     COLUMBUS HOSPITALITY ASSOCIATES, LIMITED
                           PARTNERSHIP

XIX.                       DEDHAM BEVERAGE MANAGEMENT, INC.

XX.                        DEDHAM LODGING ASSOCIATES I, LIMITED
                           PARTNERSHIP

XXI.                       DOTHAN HOSPITALITY 3053, INC.

XXII.                      DOTHAN HOSPITALITY 3071, INC.

<PAGE>

XXIII.                     EAST WASHINGTON HOSPITALITY LIMITED
                           PARTNERSHIP

XXIV.                      EUROPEAN VENTURES, INC.

XXV.                       FAYETTEVILLE MOTEL ENTERPRISES, INC.

XXVI.                      FORT WAYNE HOSPITALITY ASSOCIATES II,
                           LIMITED PARTNERSHIP

XXVII.                     FOURTH STREET HOSPITALITY, INC.

XXVIII.                    GADSDEN HOSPITALITY, INC.

XXIX.                      GREAT SOUTHERN MINING CO., INC

XXX.                       GROUPERS & COMPANY SEAFOOD RESTAURANT

XXXI.                      HARRISBURG MOTEL ENTERPRISES, INC.

XXXII.                     HEARTLANDS GARDEN GRILLE, INC.

XXXIII.                    HILTON HEAD MOTEL ENTERPRISES, INC.

XXXIV.                     IMPAC DEVELOPMENT AND CONSTRUCTION, L.L.C.

XXXV.                      IMPAC HOLDINGS III, L.L.C.

XXXVI.                     IMPAC HOTEL GROUP, L.L.C.

XXXVII.                    IMPAC HOTEL MANAGEMENT L.L.C.

XXXVIII.                   IMPAC HOTELS I, L.L.C.

XXXIX.                     IMPAC SPE #1, INC.

XL.                        IMPAC SPE #2, INC.

XLI.                       IMPAC SPE #3, INC.

XLII.                      IMPAC SPE #4, INC.

XLIII.                     IMPAC SPE #5, INC.

XLIV.                      IMPAC SPE #6, INC.

XLV.                       ISLAND MOTEL ENTERPRISES, INC.

XLVI.                      KDS CORPORATION

XLVII.                     KINSER MOTEL ENTERPRISES, INC.

XLVIII.                    LAFAYETTE BEVERAGE MANAGEMENT, INC.

<PAGE>

XLIX.                      LAWRENCE HOSPITALITY ASSOCIATES, L.P

L.                         LITTLE ROCK LODGING ASSOCIATES, LIMITED
                           PARTNERSHIP

LI.                        LODGIAN ACQUISITION, LLC.

LII.                       LODGIAN AMI, INC.

LIII.                      LODGIAN ANAHEIM, INC.

LIV.                       LODGIAN AUSTIN BEVERAGE, CORP.

LV.                        LODGIAN DALLAS BEVERAGE, CORP.

LVI.                       LODGIAN FINANCING CORP.

LVII.                      LODGIAN FLORIDA, INC.

LVIII.                     LODGIAN HOTELS, INC.

LIX.                       LODGIAN MANAGEMENT CORP

LX.                        LODGIAN MARKET CENTER BEVERAGE, CORP.

LXI.                       LODGIAN MOUNT LAUREL, INC.

LXII.                      LODGIAN ONTARIO, INC.

LXIII.                     LODGIAN RICHMOND SPE, INC.

LXIV.                      LODGIAN RICHMOND, L.L.C.

LXV.                       LODGIAN YORK MARKET STREET, INC.

LXVI.                      MANHATTAN HOSPITALITY ASSOCIATES, L.P.

LXVII.                     MCKNIGHT MOTEL, INC.

LXVIII.                    MELBOURNE HOSPITALITY ASSOCIATES, LIMITED
                           PARTNERSHIP

LXIX.                      MINNEAPOLIS MOTEL ENTERPRISES, INC.

LXX.                       MOON AIRPORT MOTEL, INC.

LXXI.                      MULLIGAN'S, INC.

LXXII.                     NEW ORLEANS AIRPORT MOTEL ENTERPRISES, INC.

LXXIII.                    NH MOTEL ENTERPRISES, INC.

LXXIV.                     PALM BEACH MOTEL ENTERPRISES, INC.

<PAGE>

LXXV.                      PENMOCO, INC.

LXXVI.                     RALEIGH MOTEL ENTERPRISES, INC.

LXXVII.                    RALEIGH DOWNTOWN ENTERPRISES, INC.

LXXVIII.                   ROYCE HOLDING CORP.

LXXIX.                     ROYCE HOTEL CORPORATION OF DELAWARE

LXXX.                      ROYCE MANAGEMENT CORP. OF GEORGIA

LXXXI.                     SAGINAW HOSPITALITY, LIMITED PARTNERSHIP

LXXXII.                    SECOND FAYETTEVILLE MOTEL ENTERPRISES, INC.

LXXXIII.                   SECOND PALM BEACH MOTEL ENTERPRISES, INC.

LXXXIV.                    SERVICO ACQUISITION CORP.

LXXXV.                     SERVICO AUSTIN, INC.

LXXXVI.                    SERVICO CEDAR RAPIDS, INC.

LXXXVII.                   SERVICO CENTRE ASSOCIATES, LTD.

LXXXVIII.                  SERVICO COLESVILLE, INC.

LXXXIX.                    SERVICO COLUMBIA II, INC.

XC.                        SERVICO COLUMBIA, INC.

XCI.                       SERVICO COLUMBUS, INC.

XCII.                      SERVICO CONCORD, INC.

XCIII.                     SERVICO COUNCIL BLUFFS, INC.

XCIV.                      SERVICO EAST WASHINGTON, INC.

XCV.                       SERVICO FLAGSTAFF, INC.

XCVI.                      SERVICO FORT WAYNE II, INC.

XCVII.                     SERVICO FORT WAYNE, INC.

XCVIII.                    SERVICO FRISCO, INC.

XCIX.                      SERVICO FT. PIERCE, INC.

C.                         SERVICO GRAND ISLAND, INC.

CI.                        SERVICO HILTON HEAD, INC.

<PAGE>

CII.                       SERVICO HOSPITALITY, INC.

CIII.                      SERVICO HOTELS I, INC.

CIV.                       SERVICO HOTELS II, INC.

CV.                        SERVICO HOTELS III, INC.

CVI.                       SERVICO HOTELS IV, INC.

CVII.                      SERVICO HOUSTON, INC.

CVIII.                     SERVICO INVESTMENT COMPANY OF DELAWARE,
                           INC.

CIX.                       SERVICO JAMESTOWN, INC.

CX.                        SERVICO LANSING, INC.

CXI.                       SERVICO LAWRENCE II, INC.

CXII.                      SERVICO LAWRENCE, INC.

CXIII.                     SERVICO MANAGEMENT CORPORATION

CXIV.                      SERVICO MANAGEMENT CORP.

CXV.                       SERVICO MANHATTAN, INC.

CXVI.                      SERVICO MANHATTAN II, INC.

CXVII.                     SERVICO MARKET CENTER, INC.

CXVIII.                    SERVICO MARYLAND, INC.

CXIX.                      SERVICO MELBOURNE, INC.

CXX.                       SERVICO METAIRIE, INC.

CXXI.                      SERVICO NEW YORK, INC.

CXXII.                     SERVICO NIAGARA FALLS, INC.

CXXIII.                    SERVICO NORTHWOODS, INC.

CXXIV.                     SERVICO OMAHA CENTRAL, INC.

CXXV.                      SERVICO OMAHA, INC.

CXXVI.                     SERVICO OPERATIONS CORPORATION

CXXVII.                    SERVICO PENSACOLA 7200, INC.

<PAGE>

CXXVIII.                   SERVICO PENSACOLA 7330, INC.

CXXIX.                     SERVICO PENSACOLA, INC.

CXXX.                      SERVICO ROLLING MEADOWS, INC.

CXXXI.                     SERVICO ROSEVILLE, INC.

CXXXII.                    SERVICO SAGINAW, INC.

CXXXIII.                   SERVICO SILVER SPRING, INC.

CXXXIV.                    SERVICO SUMMERVILLE, INC.

CXXXV.                     SERVICO TUCSON, INC.

CXXXVI.                    SERVICO WEST DES MOINES, INC.

CXXXVII.                   SERVICO WEST PALM BEACH, INC.

CXXXVIII.                  SERVICO WICHITA, INC.

CXXXIX.                    SERVICO WINDSOR, INC.

CXL.                       SERVICO WINTER HAVEN,  INC.

CXLI.                      SERVICO WORCESTER, INC.

CXLII.                     SERVICO, INC.

CXLIII.                    SHARON MOTEL ENTERPRISES, INC.

CXLIV.                     SHC OF DELAWARE, INC.

CXLV.                      SHEFFIELD MOTEL ENTERPRISES, INC.

CXLVI.                     SIOUX CITY HOSPITALITY, L.P.

CXLVII.                    SIXTEEN HOTELS, INC.

CXLVIII.                   STEVENS CREEK HOSPITALITY, INC.

CXLIX.                     W.V.B.M., INC.

CL.                        WASHINGTON MOTEL ENTERPRISES, INC.

CLI.                       WILPEN, INC.

CLII.                      WORCESTER HOSPITALITY ASSOCIATES, LIMITED
                           PARTNERSHIP

<PAGE>

                                                             SCHEDULE D-2 TO THE
                                                          PERFECTION CERTIFICATE

ORGANIZATION OF GRANTORS

           -        1075 HOSPITALITY, L.P.

                    State of Partnership

                             Georgia

           -        12801 NWF BEVERAGE, INC.

                    State of Incorporation

                             Texas

           -        ALBANY HOTEL, INC.

                    State of Incorporation

                             Florida

           -        AMI OPERATING PARTNERS, L.P.

                    State of Incorporation

                             Delaware

           -        AMIOP ACQUISITION CORP.

                    State of Incorporation

                             Delaware

           -        APICO HILLS, INC.

                    State of Incorporation

                             Pennsylvania

           -        APICO INNS OF GREEN TREE, INC.

                    State of Incorporation

                             Pennsylvania

<PAGE>

           -        APICO INNS OF PENNSYLVANIA, INC.

                    State of Incorporation

                             Pennsylvania

           -        APICO INNS OF PITTSBURGH, INC.

                    State of Incorporation

                             Pennsylvania

           -        APICO MANAGEMENT CORP.

                    State of Incorporation

                             Pennsylvania

           -        ATLANTA-BOSTON SPE, INC.

                    State of Incorporation

                             Georgia

           -        ATLANTA-BOSTON HOLDINGS,  LLC

                    State of Organization

                             Georgia

           -        ATLANTA-BOSTON LODGING, LLC

                    State of Organization

                             Georgia

           -        ATLANTA-HILLSBORO LODGING, L.L.C.

                    State of Incorporation

                             Georgia

           -        BRECKSVILLE HOSPITALITY, INC.

                    State of Incorporation

                             Ohio

<PAGE>

           -        BRECKSVILLE HOSPITALITY, L.P.

                    State of Partnership

                             Ohio

           -        BRUNSWICK MOTEL ENTERPRISES, INC.

                    State of Incorporation

                             Georgia

           -        COLUMBUS HOSPITALITY ASSOCIATES, LIMITED
                    PARTNERSHIP

                    State of Partnership

                             Florida

           -        DEDHAM BEVERAGE MANAGEMENT, INC.

                    State of Incorporation

                             Massachusetts

           -        DEDHAM LODGING ASSOCIATES I, Limited Partnership

                    State of Partnership

                             Georgia

           -        DOTHAN HOSPITALITY 3053, INC.

                    State of Incorporation

                             Alabama

           -        DOTHAN HOSPITALITY 3071, INC.

                    State of Incorporation

                             Alabama

           -        EAST WASHINGTON HOSPITALITY LIMITED PARTNERSHIP

                    State of Partnership

                             Florida

<PAGE>

           -        EUROPEAN VENTURES, INC.

                    State of Incorporation

                             Florida

           -        FAYETTEVILLE MOTEL ENTERPRISES, INC.

                    State of Incorporation

                             North Carolina

           -        FORT WAYNE HOSPITALITY ASSOCIATES II, Limited Partnership

                    State of Partnership

                             Florida

           -        FOURTH STREET HOSPITALITY, INC.

                    State of Incorporation

                             Iowa

           -        GADSDEN HOSPITALITY, INC.

                    State of Incorporation

                             Alabama

           -        GREAT SOUTHERN MINING CO., INC.

                    State of Incorporation

                             Alabama

           -        GROUPERS & COMPANY SEAFOOD RESTAURANT

                    State of Incorporation

                             South Carolina

           -        HARRISBURG MOTEL ENTERPRISES, INC.

                    State of Incorporation

                             Pennsylvania

           -        HEARTLANDS GARDEN GRILLE, INC.

                    State of Incorporation

                             Kansas

<PAGE>

           -        HILTON HEAD MOTEL ENTERPRISES, INC.

                    State of Incorporation

                             South Carolina

           -        IMPAC DEVELOPMENT AND CONSTRUCTION, L.L.C.

                    State of Organization

                             Georgia

           -        IMPAC HOLDINGS III, L.L.C.

                    State of Incorporation

                             Georgia

           -        IMPAC HOTEL GROUP, L.L.C.

                    State of Incorporation

                             Georgia

           -        IMPAC HOTEL MANAGEMENT L.L.C.

                    State of Organization

                             Georgia

           -        IMPAC HOTELS I, L.L.C.

                    State of Organization

                             Georgia

           -        IMPAC SPE #1, INC.

                    State of Incorporation

                             Georgia

           -        IMPAC SPE #2, INC.

                    State of Incorporation

                             Georgia

           -        IMPAC SPE #3, INC.

                    State of Incorporation

                             Georgia

<PAGE>

           -        IMPAC SPE #4, INC.

                    State of Incorporation

                             Georgia

           -        IMPAC SPE #5, INC.

                    State of Incorporation

                             Georgia

           -        IMPAC SPE #6, INC.

                    State of Incorporation

                             Georgia

           -        ISLAND MOTEL ENTERPRISES, INC.

                    State of Incorporation

                             Georgia

           -        KDS CORPORATION

                    State of Incorporation

                             Nevada

           -        KINSER MOTEL ENTERPRISES, INC.

                    State of Incorporation

                             Indiana

           -        LAFAYETTE BEVERAGE MANAGEMENT, INC.
                    Awaiting information on this entity.

           -        LAWRENCE HOSPITALITY ASSOCIATES, L.P.

                    State of Partnership

                             Kansas

           -        LITTLE ROCK LODGING ASSOCIATES, LIMITED PARTNERSHIP

                    State of Incorporation

                             Georgia

<PAGE>

           -        LODGIAN ACQUISITION, LLC.

                    State of Incorporation

                             Georgia

           -        LODGIAN AMI, INC.

                    State of Incorporation

                             Maryland

           -        LODGIAN ANAHEIM, INC.

                    State of Incorporation

                             California

           -        LODGIAN AUSTIN BEVERAGE, CORP.

                    State of Incorporation

                             Texas

           -        LODGIAN DALLAS BEVERAGE, CORP.

                    State of Incorporation

                             Texas

           -        LODGIAN FINANCING CORP.

                    State of Incorporation

                             Delaware

           -        LODGIAN FLORIDA, INC.

                    State of Incorporation

                             Florida

           -        LODGIAN HOTELS, INC.

                    State of Incorporation

                             Delaware

           -        LODGIAN MANAGEMENT CORP.

                    State of Incorporation

                             Delaware

<PAGE>

           -        LODGIAN MARKET CENTER BEVERAGE, CORP.

                    State of Incorporation

                             Texas

           -        LODGIAN MOUNT LAUREL, INC.

                    State of Incorporation

                             New Jersey

           -        LODGIAN ONTARIO, INC.

                    State of Incorporation

                             California

           -        LODGIAN RICHMOND SPE, INC.

                    State of Incorporation

                             Georgia

           -        LODGIAN RICHMOND, L.L.C.

                    State of Incorporation

                             Georgia

           -        LODGIAN YORK MARKET STREET, INC.

                    State of Incorporation

                             Pennsylvania

           -        MANHATTAN HOSPITALITY ASSOCIATES, L.P.

                    State of Incorporation

                             Kansas

           -        MCKNIGHT MOTEL, INC.

                    State of Incorporation

                             Pennsylvania

           -        MELBOURNE HOSPITALITY ASSOCIATES, LIMITED
                    PARTNERSHIP

<PAGE>

                    State of Partnership

                             Florida

           -        MINNEAPOLIS MOTEL ENTERPRISES, INC.

                    State of Incorporation

                             Minnesota

           -        MOON AIRPORT MOTEL, INC.

                    State of Incorporation

                             Pennsylvania

           -        MULLIGAN'S, INC.

                    State of Incorporation

                             Alabama

           -        NEW ORLEANS AIRPORT MOTEL ENTERPRISES, INC.

                    State of Incorporation

                             Louisiana

           -        NH MOTEL ENTERPRISES, INC.

                    State of Incorporation

                             Michigan

           -        PALM BEACH MOTEL ENTERPRISES, INC.

                    State of Incorporation

                             Florida

           -        PENMOCO, INC.

                    State of Incorporation

                             Michigan

           -        RALEIGH MOTEL ENTERPRISES, INC.

                    State of Incorporation

                             North Carolina

<PAGE>

           -        RALEIGH DOWNTOWN ENTERPRISES, INC.

                    State of Incorporation

                             North Carolina

           -        ROYCE HOLDING CORP.

                    State of Incorporation

                             Delaware

           -        ROYCE HOTEL CORPORATION OF DELAWARE

                    State of Incorporation

                             Delaware

           -        ROYCE MANAGEMENT CORP. OF GEORGIA

                    State of Incorporation

                             Georgia

           -        SAGINAW HOSPITALITY, LIMITED PARTNERSHIP

                    State of Partnership

                             Michigan

           -        SECOND FAYETTEVILLE MOTEL ENTERPRISES, INC.

                    State of Incorporation

                             North Carolina

           -        SECOND PALM BEACH MOTEL ENTERPRISES, INC.

                    State of Incorporation

                             Florida

           -        SERVICO ACQUISITION CORP.

                    State of Incorporation

                             Florida

           -        SERVICO AUSTIN, INC.

                    State of Incorporation

<PAGE>

                             Texas

           -        SERVICO CEDAR RAPIDS, INC.

                    State of Incorporation

                             Iowa

           -        SERVICO CENTRE ASSOCIATES, LTD.

                    State of Partnership

                             Florida

           -        SERVICO COLESVILLE, INC.

                    State of Incorporation

                             Maryland

           -        SERVICO COLUMBIA II, INC.

                    State of Incorporation

                             Maryland

           -        SERVICO COLUMBIA, INC.

                    State of Incorporation

                             Maryland

           -        SERVICO COLUMBUS, INC.

                    State of Incorporation

                             Florida

           -        SERVICO CONCORD, INC.

                    State of Incorporation

                             California

           -        SERVICO COUNCIL BLUFFS, INC.

                    State of Incorporation

                             Iowa

           -        SERVICO EAST WASHINGTON, INC.

<PAGE>

                    State of Incorporation

                             Florida

           -        SERVICO FLAGSTAFF, INC.

                    State of Incorporation

                             Arizona

           -        SERVICO FORT WAYNE II, INC.

                    State of Incorporation

                             Florida

           -        SERVICO FORT WAYNE, INC.

                    State of Incorporation

                             Florida

           -        SERVICO FRISCO, INC.

                    State of Incorporation

                             Colorado

           -        SERVICO FT. PIERCE, INC.

                    State of Incorporation

                             Delaware

           -        SERVICO GRAND ISLAND, INC.

                    State of Incorporation

                             New York

           -        SERVICO HILTON HEAD, INC.

                    State of Incorporation

                             South Carolina

           -        SERVICO HOSPITALITY, INC.

                    State of Incorporation

                             Florida

<PAGE>

           -        SERVICO HOTELS I, INC.

                    State of Incorporation

                             Florida

           -        SERVICO HOTELS II, INC.

                    State of Incorporation

                             Florida

           -        SERVICO HOTELS III, INC.

                    State of Incorporation

                             Florida

           -        SERVICO HOTELS IV, INC.

                    State of Incorporation

                             Florida

           -        SERVICO HOUSTON, INC.

                    State of Incorporation

                             Texas

           -        SERVICO INVESTMENT COMPANY OF DELAWARE, INC

                    State of Incorporation

                             Delaware

           -        SERVICO JAMESTOWN, INC.

                    State of Incorporation

                             New York

           -        SERVICO LANSING, INC.

                    State of Incorporation

                             Michigan

           -        SERVICO LAWRENCE II, INC.

                    State of Incorporation

<PAGE>

                             Kansas

           -        SERVICO LAWRENCE, INC.

                    State of Incorporation

                             Kansas

           -        SERVICO MANAGEMENT CORPORATION

                    State of Incorporation

                             Texas

           -        SERVICO MANAGEMENT CORP.

                    State of Incorporation

                             Florida

           -        SERVICO MANHATTAN, INC.

                    State of Incorporation

                             Kansas

           -        SERVICO MANHATTAN II, INC.

                    State of Incorporation

                             Kansas

           -        SERVICO MARKET CENTER, INC.

                    State of Incorporation

                             Texas

           -        SERVICO MARYLAND, INC.

                    State of Incorporation

                             Maryland

           -        SERVICO MELBOURNE, INC.

                    State of Incorporation

                             Florida

           -        SERVICO METAIRIE, INC.

<PAGE>

                    State of Incorporation

                             Louisiana

           -        SERVICO NEW YORK, INC.

                    State of Incorporation

                             New York

           -        SERVICO NIAGARA FALLS, INC.

                    State of Incorporation

                             New York

           -        SERVICO NORTHWOODS, INC.

                    State of Incorporation

                             Florida

           -        SERVICO OMAHA CENTRAL, INC.

                    State of Incorporation

                             Nebraska

           -        SERVICO OMAHA, INC.

                    State of Incorporation

                             Nebraska

           -        SERVICO OPERATIONS CORPORATION

                    State of Incorporation

                             Florida

           -        SERVICO PENSACOLA 7200, INC.

                    State of Incorporation

                             Delaware

           -        SERVICO PENSACOLA 7330, INC.

                    State of Incorporation

                             Delaware

<PAGE>

           -        SERVICO PENSACOLA, INC.

                    State of Incorporation

                             Delaware

           -        SERVICO ROLLING MEADOWS, INC.

                    State of Incorporation

                             Illinois

           -        SERVICO ROSEVILLE, INC.

                    State of Incorporation

                             Minnesota

           -        SERVICO SAGINAW, INC.

                    State of Incorporation

                             Michigan

           -        SERVICO SILVER SPRING, INC.

                    State of Incorporation

                             Florida

           -        SERVICO SUMMERVILLE, INC.

                    State of Incorporation

                             South Carolina

           -        SERVICO TUCSON, INC.

                    State of Incorporation

                             Arizona

           -        SERVICO WEST DES MOINES, INC.

                    State of Incorporation

                             Iowa

           -        SERVICO WEST PALM BEACH, INC.

                    State of Incorporation

<PAGE>

                             Florida

           -        SERVICO WICHITA, INC.

                    State of Incorporation

                             Kansas

           -        SERVICO WINDSOR, INC.

                    State of Incorporation

                             Florida

           -        SERVICO WINTER HAVEN,  INC.

                    State of Incorporation

                             Florida

           -        SERVICO WORCESTER, INC.

                    State of Incorporation

                             Florida

           -        SERVICO, INC.

                    State of Incorporation

                             Delaware

           -        SHARON MOTEL ENTERPRISES, INC.

                    State of Incorporation

                             Pennsylvania

           -        SHC OF DELAWARE, INC.

                    State of Incorporation

                             Delaware

           -        SHEFFIELD MOTEL ENTERPRISES, INC.

                    State of Incorporation

                             Alabama

           -        SIOUX CITY HOSPITALITY, L.P.

<PAGE>

                    State of Partnership

                             Iowa

           -        SIXTEEN HOTELS, INC.

                    State of Incorporation

                             Maryland

           -        STEVENS CREEK HOSPITALITY, INC.

                    State of Incorporation

                             Georgia

           -        W.V.B.M., INC.

                    State of Incorporation

                             West Virginia

           -        WASHINGTON MOTEL ENTERPRISES, INC.

                    State of Partnership

                             Pennsylvania

           -        WILPEN, INC.

                    State of Incorporation

                             Pennsylvania

           -        WORCESTER HOSPITALITY ASSOCIATES, LIMITED PARTNERSHIP

                    State of Partnership

                             Florida

<PAGE>

                                                             SCHEDULE D-3 TO THE
                                                          PERFECTION CERTIFICATE

FILE SEARCH REPORT AND
PRIOR FILINGS

<PAGE>

                                                          SCHEDULE D-4(A) TO THE
                                                          PERFECTION CERTIFICATE

                            DESCRIPTION OF COLLATERAL

All assets of the debtor, whether now owned or hereafter acquired, wherever
located, and all proceeds thereof.

<PAGE>

                                                          SCHEDULE D-4(B) TO THE
                                                          PERFECTION CERTIFICATE

                              FINANCING STATEMENTS

<PAGE>

                                                             SCHEDULE D-5 TO THE
                                                          PERFECTION CERTIFICATE

                               FILING INFORMATION

<PAGE>

                                                                       EXHIBIT E

                            [FORM OF LOCKBOX LETTER]

                                                          ____________ ___, 200_

[Name and Address of Lockbox bank]

Re: [Name of Grantor]

To Whom It May Concern:

         We hereby notify you that effective ___________________, 200_, we have
transferred exclusive ownership and control of our lock-box account[s] no[s].
_____________________ (the "LOCKBOX ACCOUNT[S]") maintained with you [under the
terms of the [Lockbox Agreement] attached hereto as Exhibit A] to Morgan Stanley
Senior Funding, Inc., as Collateral Agent (the "COLLATERAL AGENT").

         We hereby irrevocably instruct you to make all payments to be made by
you out of or in connection with the Lockbox Account[s] (i) to the Collateral
Agent for credit to account no. _______________ maintained by it at its office
at ____________________ or (ii) as you may otherwise be instructed by the
Collateral Agent.

         We also hereby notify you that the Collateral Agent shall be
irrevocably entitled to exercise any and all rights in respect of or in
connection with the Lockbox Account[s], including, without limitation, the right
to specify when payments are to be made out of or in connection with the Lockbox
Account[s].

         All funds deposited into the Lockbox Account[s] will not be subject to
deductions, set-off, banker's lien or any other right in favor of any other
person than the Collateral Agent, except that you may set-off against the
Lockbox Account[s] the face amount of any check deposited in and credited to
such Lockbox Account[s] which is subsequently returned for any reason. Your
compensation for providing the services contemplated herein shall be as mutually
agreed between you and us from time to time and we will continue to pay such
compensation.

         Please confirm your acknowledgment of and agreement to the foregoing
instructions by signing in the space provided below.

<PAGE>

                                       Very truly yours,

                                       [NAME OF GRANTOR]

                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:

Acknowledged and agreed to
as of this ____ day of ___________________, 200_.

[LOCKBOX BANK]

By:
   ----------------------------------
   Name:
   Title:

<PAGE>

                                                          SCHEDULE 1 TO SECURITY
                                                            AND PLEDGE AGREEMENT

                        DESCRIPTION OF PLEDGED SECURITIES

<TABLE>
<CAPTION>
                                                                                                      Grantor's
                                                                                                    Percentage of
Grantor                                    Issuer                                                Ownership Interest
<S>                                        <C>                                                   <C>
Stevens Creek Hospitality                  1075 Hospitality, L.P.                                        51%

Lodgian Acquisition, LLC.                  1075 Hospitality, L.P.                                        49%

                                           12801 NWF Beverage
Servico Houston, Inc.                           Management, Inc.                                        100%

Lodgian Financing Corp.                    Albany Hotel, Inc.                                           100%

AMIOP Acquisition Corp.                    AMI Operating Partners, L.P.

Lodgian Financing Corp                     AMI Operating Partners, L.P.

Lodgian Financing Corp.                    AMIOP Acquisition Corporation                                100%

Lodgian Financing Corp.                    APICO Hills, Inc.                                            100%

Lodgian Financing Corp.                    APICO Inns of Green Tree, Inc.                               100%

                                           APICO Inns of
Sharon Motel Enterprises                        Pennsylvania, Inc.                                      100%

Servico Operations Corp.                   APICO of Pittsburgh, Inc.                                    100%

Servico Operations Corp.                   APICO Management Corp.                                       100%

Impac Hotel Group, L.L.C.                  Atlanta-Boston SPE, Inc.                                     100%

Impac Hotel Group, L.L.C.                  Atlanta-Boston Holdings L.L.C.

Atlanta-Boston SPE, Inc.                   Atlanta-Boston Lodging L.L.C.                                  1%

Atlanta-Boston Holdings, LLC               Atlanta-Boston Lodging L.L.C.                                 99%

                                           Atlanta-Hillsboro
Lodgian Financing Corp.                         Lodging, L.L.C.                                         100%

Servico Operations
Corporation                                Brecksville Hospitality, Inc.100%

Brecksville Hospitality, Inc.              Brecksville Hospitality, L.P.                                 51%

Lodgian Acquisition L.L.C.                 Brecksville Hospitality, L.P.                                 49%
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                                      Grantor's
                                                                                                    Percentage of
Grantor                                    Issuer                                                Ownership Interest
<S>                                        <C>                                                   <C>
                                           Brunswick Motel
Lodgian Financing Corp.                         Enterprises, Inc.                                       100%

                                           Columbus Hospitality Associates,
Servico Columbus, Inc.                          Limited Partnership                                     30%

                                           Dedham Beverage
Impac Hotel Group, LLC                          Management, Inc.                                        100%

                                           Dedham Lodging
Impac Hotel Group, L.L.C.                       Associates I, L.P.

                                           Dedham Lodging
Impac SPE #3, Inc.                              Associates I, L.P.

Lodgian Financing Corp.                    Dothan Hospitality 3053, Inc.                                100%

Lodgian Financing Corp.                    Dothan Hospitality 3071, Inc.                                100%

                                           East Washington Hospitality
Servico East Washington, Inc.                   Limited Partnership                                      51%

                                           East Washington Hospitality
Servico Tucson, Inc.                            Limited Partnership                                      49%

Servico Operations, Corp.                  European Ventures, Inc.                                      100%

                                           Fayetteville Motel
Lodgian Financing Corp.                         Enterprises, Inc.                                       100%

                                           Fort Wayne Hospitality
Servico Fort Wayne II, Inc.                     Associates II, L.P.                                     51%

                                           Fort Wayne Hospitality
Lodgian Acquisition LLC                         Associates II, L.P.                                     49%

Servico Operations Corp.                   Fourth Street Hospitality, Inc.                              100%

Lodgian Financing Corp.                    Gadsden Hospitality, Inc.                                    100%

Servico Operations Corp.                   Great Southern Mining Co., Inc.                              100%

                                           Groupers & Company Seafood
Servico Operations Corp.                        Restaurant                                              100%

                                           Harrisburg Motel
Servico Operations Corp.                        Enterprises, Inc.                                       100%

Servico Operations Corp.                   Heartlands Garden Grille, Inc.                               100%
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                                      Grantor's
                                                                                                    Percentage of
Grantor                                    Issuer                                                Ownership Interest
<S>                                        <C>                                                   <C>
                                           Hilton Head Motel
Servico Operations Corp.                        Enterprises, Inc.                                       100%

                                           Impac Development and
Impac SPE #5, Inc.                              Construction L.L.C.

                                           Impac Development and
Impac Hotel Group L.L.C.                        Construction L.L.C.

Impac Hotel Group, L.L.C.                  Impac Holdings III, L.L.C.                                   100%

Lodgian, Inc.                              Impac Hotel Group, L.L.C.                                    100%

Impac SPE #4, Inc.                         Impac Management L.L.C.                                        1%

Impac Hotel Group L.L.C.                   Impac Management L.L.C.                                       99%

Impac SPE #1, Inc.                         Impac Hotels I, L.L.C.

Lodgian Financing Corp.                    Impac Hotels I, L.L.C.

Impac SPE #2, Inc.                         Impac Hotels II, L.L.C.                                        1%

Impac Hotel Group, L.L.C..                 Impac Hotels II, L.L.C.                                       99%

Impac SPE #6, Inc.                         Impac Hotels III, L.L.C.                                       1%

Impac Holding III, LLC                     Impac Hotels III, L.L.C.                                     99%

Lodgian Financing Corp.                    Impac SPE #1, Inc.                                           100%

Impac Hotel Group, L.L.C.                  Impac SPE #2, Inc.                                           100%

Impac Hotel Group, L.L.C.                  Impac SPE #3, Inc.                                           100%

Impac Hotel Group, L.L.C.                  Impac SPE #4, Inc.                                           100%

Impac Hotel Group, L.L.C.                  Impac SPE #5, Inc.                                           100%

Impac Hotel Group, L.L.C.                  Impac SPE #6, Inc.                                           100%

Servico Operations Corp.                   Island Motel Enterprises                                    100%*

Servico Operations Corp                    KDS Corporation                                              100%

Servico Operations Corp                    Kinser Motel Enterprises                                     100%

                                           Lawrence Hospitality
Servico Lawrence, Inc.                          Associates, L.P.                                         51%
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                                      Grantor's
                                                                                                    Percentage of
Grantor                                    Issuer                                                Ownership Interest
<S>                                        <C>                                                   <C>
                                           Lawrence Hospitality
Servico Lawrence II, Inc.                       Associates, L.P.                                         49%

                                           Little Rock Lodging Associates,
Lodgian Richmond SPE, Inc.                      Limited Partnership                                       1%

                                           Little Rock Lodging Associates,
Lodgian Financing Corp.                         Limited Partnership                                      99%

Lodgian Financing Corp.                    Lodgian Acquisition, LLC                                     100%

Servico Operations Corp.                   Lodgian AMI, Inc.                                            100%*

Lodgian Financing Corp.                    Lodgian Anaheim, Inc..                                       100%

Servico Austin, Inc.                       Lodgian Austin Beverage Corp.                                100%

Lodgian, Inc.                              Lodgian Capital Trust I                                      100%

Impac Hotels I, LLC                        Lodgian Dallas Beverage Corp.                                100%

Lodgian, Inc.                              Lodgian Financing Corp.                                      100%

Servico Operations Corp.                   Lodgian Florida, Inc.                                        100%

Lodgian, Inc.                              Lodgian Hotels, Inc.                                         100%

Servico Operations Corp.                   Lodgian Management Corp.                                     100%

                                           Lodgian Market Center
Servico Market Center, Inc.                     Beverage Corp.                                          100%

Lodgian Financing Corp.                    Lodgian Mount Laurel                                         100%

Lodgian Financing Corp.                    Lodgian Ontario, Inc.                                        100%

Lodgian Financing Corp.                    Lodgian Richmond SPE, Inc.                                   100%

Lodgian Financing Corp.                    Lodgian Richmond, LLC                                         99%

Lodgian Richmond SPE, Inc.                 Lodgian Richmond, LLC                                          1%

Servico Operations Corp.                   Lodgian York Market Street, Inc.                             100%

Impac Hotel Group, L.L.C.                  Macon Hotel Associates, L.L.C.                             60%**

                                           Manhattan Hospitality
Servico Manhattan, Inc.                         Associates, L.P.                                         51%

                                           Manhattan Hospitality
Servico Manhattan II, Inc.                      Associates, L.P.                                         49%
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                                      Grantor's
                                                                                                    Percentage of
Grantor                                    Issuer                                                Ownership Interest
<S>                                        <C>                                                   <C>
Sharon Motel Enterprises, Inc.             McKnight Motel, Inc.                                         100%

                                           Melbourne Hospitality Associates,
Servico Melbourne, Inc.                         Limited Partnership                                      50%

                                           Minneapolis Motel
Lodgian Financing Corp.                         Enterprises, Inc.                                       100%

Servico Operations Corp.                   Moon Airport Motel, Inc.                                     100%

Servico Operations Corp.                   Mulligan's, Inc.                                             100%

New Orleans Airport Motel                  New Orleans Airport Motel
     Enterprises, Inc.                          Associates, Ltd.                                        100%

                                           New Orleans Airport Motel
Servico Operations Corp.                        Enterprises, Inc.                                       100%

Lodgian Financing Corp.                    NH Motel Enterprises, Inc.                                   100%

                                           Palm Beach Motel
Lodgian Financing Corp.                         Enterprises, Inc.                                       100%

Servico Operations Corp.                   Penmoco, Inc.                                               100%*

Servico Operations Corp.                   Raleigh Motel Enterprises, Inc.                              100%

                                           Raleigh-Downtown
Servico Operations Corp.                        Enterprises, Inc.                                       100%

Servico Operations Corp.                   Royce Holdings Corp.                                         100%

                                           Royce Hotel Corporation
Servico, Inc.                                   of Delaware                                             100%

                                           Royce Management Corporation
Servico Operations Corp.                        of Georgia                                              100%

Servico Saginaw, Inc.                      Saginaw Hospitality, LP                                       51%

Lodgian Acquisition, LLC                   Saginaw Hospitality, LP                                       49%

                                           Second Fayetteville Motel
Sharon Motel Enterprises, Inc.                  Enterprises, Inc.                                       100%

                                           Second Palm Beach Motel
Sharon Motel Enterprises, Inc.                  Enterprises, Inc.                                       100%

Servico, Inc.                              Servico Acquisition Corp.                                    100%
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                                      Grantor's
                                                                                                    Percentage of
Grantor                                    Issuer                                                Ownership Interest
<S>                                        <C>                                                   <C>
Lodgian Financing Corp.                    Servico Austin, Inc.                                         100%

Lodgian Financing Corp.                    Servico Cedar Rapids, Inc.                                   100%

Palm Beach Motel
     Enterprises, Inc.                     Servico Centre Associates, Ltd.                              100%

Lodgian Financing Corp.                    Servico Colesville, Inc.                                     100%

Servico Operations Corp.                   Servico Columbia II, Inc.                                    100%

Lodgian Financing Corp.                    Servico Columbia, Inc                                        100%

Servico Operations Corp.                   Servico Columbus, Inc.                                       100%

Servico Operations Corp.                   Servico Concord, Inc.                                        100%*

Servico Operations Corp.                   Servico Council Bluffs, Inc.                                 100%

Servico Operations Corp.                   Servico East Washington, Inc.                                100%

Lodgian Financing Corp.                    Servico Flagstaff, Inc.                                      100%

Servico Operations Corp.                   Servico Fort Wayne II, Inc.                                  100%

Servico Operations Corp.                   Servico Fort Wayne, Inc.                                     100%

Servico Operations Corp.                   Servico Frisco, Inc.                                         100%

Lodgian Financing Corp.                    Servico Ft. Pierce, Inc.                                     100%

Lodgian Financing Corp.                    Servico Grand Island, Inc.                                   100%

Lodgian Financing Corp.                    Servico Hilton Head, Inc.                                    100%

Servico Operations Corp.                   Servico Hospitality, Inc.                                    100%

KDS Corporation                            Servico Hotels I, Inc.                                       100%

KDS Corporation                            Servico Hotels II, Inc.                                      100%

KDS Corporation                            Servico Hotels III, Inc.                                     100%

KDS Corporation                            Servico Hotels IV, Inc.                                      100%

Lodgian Financing Corp.                    Servico Houston, Inc.                                        100%

Sheffield Motel Enterprises,               Servico Investment Company  of
Inc.                                            Delaware, Inc.                                          100%

Lodgian Financing Corp.                    Servico Jamestown, Inc.                                      100%
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                                      Grantor's
                                                                                                    Percentage of
Grantor                                    Issuer                                                Ownership Interest
<S>                                        <C>                                                   <C>
Servico Operations Corp.                   Servico Lansing, Inc.                                        100%

Servico Operations Corp.                   Servico Lawrence II, Inc.                                    100%

Servico Operations Corp.                   Servico Lawrence , Inc.                                      100%

Servico Management Corp.
Servico Operations Corp.                        (Texas)                                                 100%

Servico Operations Corp.                   Servico Management Corp.                                     100%

Servico Operations Corp.                   Servico Manhattan, Inc.                                      100%

Servico Operations Corp.                   Servico Manhattan II, Inc.                                   100%

Lodgian Financing Corp.                    Servico Market Center, Inc.                                  100%

Lodgian Financing Corp.                    Servico Maryland, Inc.                                       100%

Servico Operations Corp.                   Servico Melbourne, Inc.                                      100%

Lodgian Financing Corp.                    Servico Metairie, Inc.                                       100%

Lodgian Financing Corp.                    Servico New York, Inc.                                       100%

Lodgian Financing Corp.                    Servico Niagara Falls, Inc.                                  100%

Lodgian Financing Corp.                    Servico Northwoods, Inc.                                     100%

Servico Operations Corp.                   Servico Omaha Central, Inc.                                  100%

Servico Operations Corp.                   Servico Omaha, Inc.                                          100%

Servico, Inc.                              Servico Operations Corp.                                     100%

Lodgian Financing Corp.                    Servico Pensacola 7200, Inc,                                 100%

Lodgian Financing Corp.                    Servico Pensacola 7330, Inc,                                 100%

Lodgian Financing Corp.                    Servico Pensacola, Inc,                                      100%

Lodgian Financing Corp.                    Servico Rolling Meadows, Inc.                                100%

Lodgian Financing Corp.                    Servico Roseville, Inc.                                      100%

Servico Operations Corp.                   Servico Saginaw, Inc.                                        100%

Lodgian Financing Corp.                    Servico Silver Spring, Inc.                                  100%

Servico Operations Corp.                   Servico Summerville, Inc.                                    100%

Servico Operations Corp.                   Servico Tucson, Inc.                                         100%
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                                      Grantor's
                                                                                                    Percentage of
Grantor                                    Issuer                                                Ownership Interest
<S>                                        <C>                                                   <C>
Servico Operations Corp.                   Servico West Des Moines, Inc.                                100%

Lodgian Financing Corp.                    Servico West Palm Beach, Inc.                                100%

Servico Operations Corp.                   Servico Wichita, Inc.                                        100%

Lodgian Financing Corp.                    Servico Windsor, Inc.                                        100%

Lodgian Financing Corp.                    Servico Winter Haven, Inc.                                   100%

Servico Operations Corp.                   Servico Worcester, Inc.                                      100%

Lodgian, Inc.                              Servico, Inc.                                                100%

Servico Operations Corp.                   Sharon Motel Enterprises, Inc.                               100%

Servico, Inc. or Servico
Operations Corp.                           SHC of Delaware, Inc.                                        100%

Lodgian Financing Corp.                    Sheffield Motel Enterprises, Inc.                            100%

Forth Street Hospitality, Inc.             Sioux City Hospitality, LP                                   100%

Lodgian Acquisition, LLC                   Sioux City Hospitality, LP                                   100%

AMI Operating Partners                     Sixteen Hotels, Inc.                                         70%

Servico Operations Corp.                   Stevens Creek Hospitality, Inc.                              100%

Impac Hotel Group, L.L.C.                  W.V.B.M., Inc.                                               100%

                                           Washington Motel
Servico Operations Corp.                        Enterprises, Inc.                                       100%

Sharon Motel Enterprises, Inc.             Wilpen, Inc.                                                 100%

                                           Worcester Hospitality
Servico Worcester, Inc.                         Associates, LP                                          100%

                                           Worcester Hospitality
Lodgian Acquisition, LLC                        Associates, LP                                          100%
</TABLE>

*        The stock of these entities is pledged to Banc One Funding Corporation.

**       The membership interest in this entity is pledged to Fidelity
         Investments.

<PAGE>

                                                          SCHEDULE 2 TO SECURITY
                                                            AND PLEDGE AGREEMENT

                                  PLEDGED NOTES

                                      NONE
<PAGE>
                                                                   EXHIBIT 10.37

CADWALADER, WICKERSHAM & TAFT
Attorneys for the Debtors and Debtors in Possession
100 Maiden Lane
New York, New York 10038
(212) 504-6000
Gregory M. Petrick (GP-2175)
Adam C. Rogoff (AR-0820)
Barry N. Seidel (BS-1945)

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK

In re:                                Chapter 11

LODGIAN, INC., et al.,                Case No. 01-16345 (BRL)

                    Debtors.          (Jointly Administered)

                         FINAL ORDER AUTHORIZING DEBTORS
                         TO USE CASH COLLATERAL IN WHICH
                   CERTAIN MORTGAGE LENDERS CLAIM AN INTEREST

            Lodgian, Inc. ("Lodgian") and the other above-captioned debtors
(collectively, the "Guarantors" and, together with Lodgian, the "Debtors"), as
debtors in possession, having filed with the Court their "Motion Pursuant to
Sections 105, 361, 363, 364, 503(b) and 507 of the Bankruptcy Code and Rule 4001
of the Federal Rules of Bankruptcy Procedure for Entry of Orders (I) Authorizing
the Debtors-in-Possession to (A) Obtain Postpetition Financing, (B) Grant Liens
and Priority Administrative Expense Claim Status, (C) Modify the Automatic Stay,
and (D) Enter into Financing Agreement; (II) Approving the Use of Cash
Collateral and Granting Adequate Protection; and (III) Scheduling Final Hearing
on Postpetition Financing and Use of Cash Collateral and Approving Form and
Manner of Notice of Such Final Hearing" (the Motion"); and the

<PAGE>

Debtors having requested, in accordance with Rule 4001(c) of the Federal Rules
of Bankruptcy Procedure (the "Bankruptcy Rules"), that the Court schedule a
hearing on an expedited basis (the "Interim Hearing") to consider granting the
interim relief requested by the Debtors in the Motion, so as to avoid immediate
and irreparable harm to the Debtors, their creditors and estates (the "Interim
Relief"); and, it appearing that the Debtors furnished notice of the Interim
Hearing and the Interim Relief telephonically or by fax to the United States
Trustee for the Southern District of New York ( the "US Trustee"), the Debtors'
twenty (20) largest unsecured creditors as set forth on the consolidated list of
unsecured creditors accompanying the Debtors' chapter 11 petitions (the "20
Largest Creditors"), and each of those parties which the Debtors believe
asserts, or may assert, an interest in the Debtors' cash, as set forth in
Exhibit D to the Motion (collectively, the "Prepetition Mortgage Lenders"); and
the Interim Hearing to consider the Interim Relief requested in the Motion
having been held by this Court on December 21, 2001; and the Court having
considered the Motion and the arguments of counsel, and having granted Interim
Relief to the extent set forth in the Court's "Interim Order Authorizing Debtors
To Use Cash Collateral In Which Certain Mortgage Lenders Claim An Interest"
dated December 21, 2001 (the "Interim Cash Collateral Order"); and pursuant to
the Interim Cash Collateral Order, the Court having scheduled a final hearing to
consider the relief requested in the Motion (the "Final Hearing") for January
23, 2002; and it appearing that the Debtors have provided notice of the Final
Hearing and the Motion as required by the Interim Cash Collateral Order and that
such notice is due and sufficient; and the Final Hearing having been adjourned
from time to time and having come on for hearing before the Court on February
14, 2002; and the Court having reviewed and considered all pleadings filed in
opposition to the Motion (collectively, the

                                     - 2 -
<PAGE>

"Objections") and having heard the arguments of counsel; and sufficient cause
appearing therefor,

            AND IT APPEARING that:

            A. The Debtors filed petitions for reorganization under title 11,
United States Code (the "Bankruptcy Code") on December 20, 2001 and December 21,
2001;

            B. The filing of such petitions commenced cases under chapter 11 of
the Bankruptcy Code (collectively, the "Cases");

            C. The Debtors, as debtors in possession, have been continued in
possession and management of their business and property pursuant to Sections
1107 and 1108 of the Bankruptcy Code;

            D. No trustee has been appointed in the Debtors' Cases;

            E. An official committee of unsecured creditors has been appointed
by the Office of the United States Trustee to serve in the Debtors' Cases (the
"Committee") and such committee has engaged counsel and a financial advisor and
is active in the Debtors' Cases;

            F. The Court has jurisdiction over the Motion pursuant to 28 U.S.C.
Section 1334 and the Motion constitutes a core proceeding pursuant to 28 U.S.C.
Sections 157(b)(2)(A), (D), (G) and (M);

            G. The Debtors continue to have an immediate need to use cash
collateral to operate their business;

            H. Absent the ability to use cash collateral, the Debtors will not
be able to operate their business and the Debtors, their creditors and estates
will suffer irreparable harm as a result of the loss of the Debtors' going
concern value. Accordingly,

                                      - 3 -
<PAGE>

the granting of the Motion is in the best interests of the Debtors, their
creditors and estates;

            I. The notice of the Final Hearing provided by the Debtors was
appropriate and sufficient;

            J. Lodgian, as borrower, and the Guarantors, as guarantors, are also
seeking approval from this Court to enter into a Revolving Credit and Guaranty
Agreement (the "DIP Credit Agreement") with certain lenders (the "DIP Lenders")
and Morgan Stanley Senior Funding, Inc. ("MSSF"), as administrative and
collateral agent for the DIP Lenders, pursuant to which the Debtors wish to
borrow, pursuant to Sections 364(b), (c) and (d) of the Bankruptcy Code, on a
revolving credit basis, up to $25,000,000 to supplement the Debtors' working
capital requirements and enable the Debtors to meet their postpetition
obligations; and

            K. The Debtors have engaged in discussions with many of the
Prepetition Mortgage Lenders and have reached agreements which, subject to the
entry of appropriate Stipulated Orders, will result in the withdrawal of the
Objections.

            IT IS THEREFORE ORDERED that:

            1. Any term not otherwise defined herein shall have the meaning
ascribed to such term in the Motion.

            2. (a) The provisions of this Order shall not apply to the MSSF
Prepetition Mortgage Lenders or to MSSF, as agent under the prepetition Credit
Agreement dated July 23, 1999 (the "Prepetition Agent"), or to the use by the
Debtors of cash or other property as to which the Prepetition Agent or the MSSF
Prepetition Mortgage Lenders claim an interest (the "MSSF Prepetition
Collateral"). The Debtors' right to use MSSF Prepetition Collateral, including
cash collateral, shall in all respects be

                                     - 4 -
<PAGE>

governed by this Court's Interim Order (I) Authorizing Debtors (A) to Obtain
Post-Petition Financing Pursuant to 11 U.S.C. Sections 105, 361, 362,
364(c)(1), 364(c)(2), 364(c)(3) and 364(d)(1) and (B) to Utilize Cash Collateral
Pursuant to 11 U.S.C. Section 363, (II) Granting Adequate Protection to
Pre-Petition Secured Parties Pursuant to 11 U.S.C. Sections 361, 362 and
363 and (III) Scheduling Final Hearing Pursuant to Bankruptcy Rules 4001(B) and
4001(C), as such order may be modified or superseded by a final order.

            (b) The provisions of this Order shall not apply to The Chase
Manhattan Bank (f/k/a Chemical Bank), as Trustee for the Registered Holders of
DLJ Mortgage Acceptance Corporation, Commercial Mortgage Pass-Through
Certificates, Series 1995-CF2 and LaSalle Bank National Bank, as Trustee for the
benefit of Certificateholders of American Southwest Financial Securities
Corporation Commercial Pass-Through Certificates, Series 1995-C1 (collectively,
the "Trusts") or to Lennar Partners, Inc. ("Lennar"), as special servicer to the
Trusts, or to the use by the Debtors of cash or other property as to which the
Trusts claim an interest (the "Trust Collateral"). The Debtors' right to use
Trust Collateral, including cash collateral, shall in all respects be governed
by this Court's "Stipulation and Order Among The Debtors And Lennar Partners,
Inc., As Special Servicer, Providing For (i) Limited Use of Cash Collateral And
Adequate Protection And (ii) Related Relief".

            (c) The provisions of this Order shall not apply to Registered
Holders of the First Union-Lehman Brothers Commercial Mortgage Trust II,
Commercial Mortgage Pass-Through Certificates, Series 1997-C2 ("Trust I"),
LaSalle Bank, N.A., as Trustee for the Registered Holders of the LB Commercial
Conduit Mortgage Trust II, Multiclass Pass-Through Certificates, Series 1996-C2
("Trust II"), and State Street Bank and Trust Company, as Trustee for the
Registered Holders of First Union-Lehman

                                     - 5 -
<PAGE>

Brothers Commercial Mortgage Trust, Commercial Mortgage Pass-Through
Certificates, Series 1997-C1 ("Trust III", and together with Trust I and Trust
II, the "Trusts") or to Criimi Mae Services, L.P., as special servicer to the
Trusts, or to the use by the Debtors of cash or other property as to which the
Trusts claim an interest (the "Trust Collateral"). The Debtors' right to use
Trust Collateral, including cash collateral, shall in all respects be governed
by this Court's "Stipulation and Order Among The Debtors And Criimi Mae
Services, L.P., As Special Servicer, Providing For (i) Limited Use of Cash
Collateral And Adequate Protection And (ii) Related Relief".

            (d) To the extent the Motion requests an order "priming" Qualified
Prepetition Liens held or asserted by various creditors, the Debtors have agreed
to adjourn the Motion as to such request.

            3. The Debtors are hereby authorized to use their cash, including
cash constituting "cash collateral" (as such term is defined in Section 363(a)
of the Bankruptcy Code) in which the Debtors' Prepetition Mortgage Lenders
assert a security or other interest, upon the terms and conditions set forth
herein. This Order supersedes the Interim Cash Collateral Order and shall govern
the Debtors' use of cash collateral from and after the date hereof.

            4. Each Debtor is hereby authorized to use cash in which a
Prepetition Mortgage Lender claims an interest only to:

            (a)   pay its own Designated Expenses;

            (b)   pay the Designated Expenses of any other Debtor in its
                  collateral pool (i.e., any Debtors whose properties serve as
                  collateral for each other's secured loans); or

            (c)   make Limited Intercompany Advances.

                                      - 6 -
<PAGE>

            5. As used herein, "Designated Expenses" shall mean each Debtor's:

                  (a)   property level operating expenses (including, without
                        limitation, payroll, utilities(1), franchise fees, food
                        and beverage, taxes, and supplies);

                  (b)   capital expenditures;

                  (c)   pro rata share (based upon its last month's revenue as a
                        percentage of the Debtors' total revenue) of actual
                        Lodgian corporate overhead expenses for that month; and

                  (d)   pro rata share (based upon its last month's revenue as a
                        percentage of the Debtors' total revenue) of the
                        Debtors' actual reorganization expenses, for that month.

"Designated Expenses" shall not include any prepetition expenses or interest on
any prepetition indebtedness unless an order of the Bankruptcy Court approving
payment of such prepetition expenses or such interest has been entered.

            6. As used herein, a "Limited Intercompany Advance" shall mean a
cash advance which meets each of the following criteria:

                  (a)   The Debtor making the advance is the owner of a Hotel
                        Property(2);

(1) To the extent the Debtors establish a segregated bank account for the
benefit of one or more utility companies (the "Utility Reserve Account"), such
account shall be ratably funded up to $1 million by each Debtor (based on the
ratio that the projected revenue from each of the Debtors' hotels bears to the
total projected revenue for all of the Debtors' hotels) with its cash
collateral. Notwithstanding the provision of any Order of this Court to the
contrary, no lien, security interest or other encumbrance on the Utility Reserve
Account shall be granted to any person; notwithstanding the foregoing, the
Debtors, with this Court's approval, may grant an interest in the Utility
Reserve Account to one or more utility companies as "adequate assurance" of the
Debtors' future performance of its obligations to such utility companies. Upon
the effective date of a plan(s) in the Debtors' Cases (or on such earlier date
as the Court shall determine) any funds remaining in the Utility Reserve Account
shall be returned to each of the Debtors in proportion to their respective cash
contributions into such account. Upon such return, such funds shall become
property of the estate of the Debtor receiving such funds and shall be subject
to all liens granted on such Debtor's property in priority order.

(2) Such Debtor shall be credited with interest on such advance at the same rate
Lodgian is charged for borrowing money under the DIP Credit Agreement (the "DIP
Rate") (estimated today to be approximately 6% per annum) from the day of
advance until repaid.

                                      - 7 -
<PAGE>

                  (b)   the Debtor receiving the advance is a Low Leverage
                        Debtor;

                  (c)   the cash so advanced is only used to pay Designated
                        Expenses;

                  (d)   the cash so advanced constitutes a chapter 11
                        administrative priority claim (under Section 364(b) of
                        the Bankruptcy Code), which claim is secured by a lien
                        on all of the Debtor/borrower's property (a "Specific
                        I/C Lien") which is subject and junior to the Carveout
                        if the DIP Lenders have been granted a lien under
                        Section 364(d) of the Bankruptcy Code (a "DIP Priming
                        Lien") with respect to such property, and the following
                        liens: (w) any DIP Priming Lien on the borrowing
                        Debtor's property, (x) any and all liens, mortgages and
                        other security interests existing on or as of the Filing
                        Date which are valid, perfected and unavoidable or to
                        interests in such property arising out of liens arising
                        after the Filing Date as permitted by Section 546(b) of
                        the Bankruptcy Code (collectively, the "Qualified
                        Prepetition Liens"), (y) any Specific AP Lien (as
                        hereinafter defined) granted with respect to such
                        property; and (z) any Primed Lender AP Lien granted with
                        respect to such property, provided that the property
                        subject to any Specific I/C Lien shall exclude the
                        Debtors' claims and causes of action under sections
                        502(d), 544, 545, 547, 548, 549, 550 or 551 of the
                        Bankruptcy Code, or any other avoidance action under the
                        Bankruptcy Code;

                  (e)   The Debtor/borrower shall be charged interest at the DIP
                        Rate on cash advanced to such Debtor from the date of
                        advance to the date of repayment; and

                  (f)   the cash so advanced may be repaid by the
                        Debtor/borrower at any time without penalty and shall be
                        repaid on the effective date of any plan of
                        reorganization for the Debtor/borrower or upon the sale
                        of the Debtor/borrower's Hotel Property.

            7. Nothing herein contained is intended to, nor shall, adjudicate,
or create any presumption or inference with respect to:

                  (a)   the validity, priority, avoidability or amount of any
                        claim of any Prepetition Mortgage Lender against any of
                        the Debtors (a "Prepetition Mortgage Lender Claim"), or

                                      - 8 -
<PAGE>

                  (b)   the validity, priority, extent or enforceability of any
                        security interest, mortgage or any other lien or
                        encumbrance on any property of the Debtors which
                        secures, or purports to secure, any Prepetition Mortgage
                        Lender Claim. The Debtors reserve all of their rights to
                        (i) challenge the validity, enforceability, priority or
                        extent of the Prepetition Mortgage Lender Claims or the
                        liens, security interests or mortgages securing such
                        claims, and (ii) to assert any claims or causes of
                        action against the Prepetition Mortgage Lenders or their
                        agents.

Each of the Prepetition Mortgage Lenders shall be entitled to the adequate
protection provided under this Order unless the Court shall determine such
lender to be an unsecured creditor.

            8. As "adequate protection" for any diminution in a Prepetition
Mortgage Lender's interest in a particular Debtor's property (including cash
collateral) resulting from such Debtor's use of such property during its Case,

                  (a)   such Prepetition Mortgage Lender shall be granted a
                        replacement lien (a "Specific AP Lien") on all of the
                        prepetition and postpetition property (including,
                        without limitation, all postpetition hotel revenue and
                        other charges) of such lender's Debtor/borrower(s),
                        which lien shall be junior only to (x) any DIP Priming
                        Lien on such property, (y) any Qualified Prepetition
                        Liens on such property and (z) the Carveout;

                  (b)   subject to the provisions of paragraph 9 hereof, such
                        Prepetition Mortgage Lender shall be granted a
                        replacement lien (the "General AP Lien") on all of the
                        prepetition and postpetition property (including,
                        without limitation, all postpetition hotel revenue and
                        other charges) owned by the Debtors, which lien shall be
                        pari passu with other General AP Liens granted to other
                        lenders on such property, but subject and junior to the
                        Carveout, but only if a DIP Priming Lien has been
                        granted with respect to such property, and the following
                        liens: (u) any DIP Priming Lien on such property, (v)
                        any Qualified Prepetition Liens on such property and any
                        Section 506(c) charges assessed against such liens, (w)
                        all Specific AP Liens on such property, (x) any Primed
                        Lender AP Lien on such property, (y) any Specific I/C
                        Lien on such property; and (z) any liens

                                      - 9 -
<PAGE>

                        granted to the DIP Lenders under Section 364(c) of the
                        Bankruptcy Code on such property, but only if such
                        property is owned by a Low Leverage Debtor;

                  (c)   the property subject to any Specific AP Lien or General
                        AP Lien shall exclude the Debtors' claims and causes of
                        action under sections 502(d), 544, 545, 547, 548, 549,
                        550 or 551 of the Bankruptcy Code, or any other
                        avoidance actions under the Bankruptcy Code;

                  (d)   such replacement liens shall be valid and enforceable
                        against all parties in interest without the need for
                        such Prepetition Mortgage Lenders to file or record
                        financing statements, mortgages, notices of lien or
                        similar instruments in any jurisdiction or take any
                        other action in order to validate and perfect the
                        security interests and liens to be granted to them as
                        adequate protection as provided above; and

                  (e)   the Debtors shall provide to each Prepetition Mortgage
                        Lender a monthly statement of operating results and
                        sources and uses of cash with respect to such lender's
                        Hotel Property, no later than thirty (30) days after the
                        end of each calendar month.

            9. Notwithstanding any provision hereof to the contrary, (a) no lien
or security interest shall be granted to any Prepetition Mortgage Lender as
adequate protection if such grant would be an ultra vires act or would otherwise
not be an act authorized by the certificate of incorporation or similar
constitutive document of such purported grantor/Debtor, and (b) absent the
express written consent of the Committee and the Debtors, no General AP Lien
shall secure the diminution in value, if any, of a Prepetition Mortgage Lender's
interest in the property owned by any High Leverage Debtor from and after the
commencement of such Debtor's case.

            10. Absent the consent of a particular Prepetition Mortgage Lender
with respect to cash in which it asserts an interest, no Debtor shall be
entitled to use cash collateral except in accordance with the foregoing
provisions.

                                     - 10 -
<PAGE>

            11. The Debtors shall be permitted to consolidate their cash in a
bank account maintained in the name of "Lodgian, Inc." (the "Concentration
Account"), provided, however, that the Debtors shall maintain detailed
accounting records which shall enable the Court and parties in interest to
ascertain what each Debtor's account balance is, and provided further, that each
Debtor's net cash balance in such bank account shall be deemed to be held by
such Debtors subject to any and all liens, claims and encumbrances thereon, as
if such Debtor had at all times segregated, and had not commingled, its cash in
the Concentration Account.

            12. Not later than five (5) days after the date of this Order, the
Debtors shall serve a copy of this Order, by regular mail, postage prepaid, upon
(i) the US Trustee, (ii) the Committee's counsel, (iii) each Prepetition
Mortgage Lender, (iv) any party which has filed a notice of appearance in the
Debtors' cases, and (v) Davis Polk & Wardwell, counsel to MSSF.

            13. Notwithstanding any other provision of this Order to the
contrary, (a) any cash collateral held by, or for the benefit of, CCA shall
continue to be collected by, or on behalf of, CCA and remitted to the Debtors in
accordance with the prepetition agreements between CCA and its Debtor borrowers
(collectively, the "CCA Borrowers"); (b) no lien shall be granted or otherwise
created pursuant to this Order in favor of any party on any property owned by
the CCA Borrowers; and (c) the entry of this Order is without prejudice to the
respective rights of the Debtors and CCA with respect to the Motion,
notwithstanding the entry of this Order.

                                     - 11 -
<PAGE>

            14. To the extent any Objection (other than the objection filed by
CCA) has not been withdrawn, it is hereby overruled and denied.

DATED: New York, New York
       FEBRUARY 14, 2002

                                          /S/ JUDGE BURTON R. LIFLAND
                                           ------------------------------
                                           United States Bankruptcy Judge

                                     - 12 -<PAGE>
                                                                   Exhibit 10.38

                         UNITED STATES BANKRUPTCY COURT

                          SOUTHERN DISTRICT OF NEW YORK

In re                             )
                                  )
LODGIAN, INC., et al.,            )                Chapter 11
                                  )
                       Debtors.   )                Case No.  01-16345 (BRL)
                                  )
                                  )                Jointly Administered
                                  )

   FINAL ORDER (I) AUTHORIZING DEBTORS (A) TO OBTAIN POST-PETITION FINANCING
   PURSUANT TO 11 U.S.C. "105, 361, 362, 364(C)(1), 364(C)(2), 364(C)(3) AND
364(D)(1) AND (B) TO UTILIZE CASH COLLATERAL PURSUANT TO 11 U.S.C. '363 AND (II)
  GRANTING ADEQUATE PROTECTION TO PRE-PETITION SECURED PARTIES PURSUANT TO 11
                           U.S.C. " 361, 362 AND 363

      Upon the motion (the "MOTION"), dated December 20, 2001, of Lodgian, Inc.
("LODGIAN" or the "BORROWER") and the other above-captioned debtors and
debtors-in-possession (the "GUARANTORS," collectively with the Borrower, the
"DEBTORS"), pursuant to sections 105, 361, 362, 363(c)(2), 364(c)(1), 364(c)(2),
364(c)(3) and 364(d)(1) of the United States Bankruptcy Code, 11 U.S.C. "101, et
seq. (the "BANKRUPTCY CODE"), and Rules 2002, 4001 and 9014 of the Federal Rules
of Bankruptcy Procedure (the "BANKRUPTCY Rules"), seeking, among other things:

            (1) authorization for the Borrower to obtain post-petition financing
      (the "FINANCING"), and for the Guarantors to guaranty the payment by the
      Borrower of its obligations thereunder, up to a maximum aggregate
      principal amount of $25,000,000 (the actual available principal amount at
      any time being subject to conditions precedent as set forth in the DIP
      Credit Agreement, as defined

<PAGE>
                                       2

      herein), from Morgan Stanley Senior Funding, Inc. ("MSSF"), as acting
      administrative agent and collateral agent (the "AGENT") for itself and a
      syndicate of financial institutions (together with the Agent, the "DIP
      LENDERS") to be arranged by MSSF and Lehman Brothers Inc.;

            (2) the granting of adequate protection to the lenders and
      administrative agent under the Credit Agreement dated July 23, 1999 (as
      amended, the "PRE-PETITION AGREEMENT") among Lodgian Financing Corp.,
      Lodgian, Inc., Impac Hotel Group, LLC, Servico, Inc., the Other Affiliate
      Guarantors party thereto, the lenders party thereto (the "PRE-PETITION
      LENDERS"), MSSF, as Administrative Agent (the "PRE-PETITION AGENT"),
      Collateral Agent, Co-Lead Arranger, Joint Book Manager and Syndication
      Agent, Lehman Brothers Inc., as Co-Lead Arranger and Joint-Book Manager
      and Lehman Commercial Paper Inc., as Documentation Agent, whose liens and
      security interests are being primed by the Financing;

            (3) authorization for the use by the Debtors of cash collateral (as
      such term is defined in the Bankruptcy Code) in which the Pre-Petition
      Lenders, have an interest, and the granting of adequate protection to the
      Pre-Petition Lenders with respect to such use of their cash collateral;

            (4) pursuant to Bankruptcy Rule 4001, that an interim hearing (the
      "INTERIM HEARING") on the Motion be held for this Court to consider entry
      of the proposed interim order annexed to the Motion (the "INTERIM ORDER"):
      (a) authorizing the Borrower, on an interim basis, to forthwith borrow or
      obtain letters of credit from the DIP Lenders under the Documents (as
      defined below) up to an aggregate principal amount of $10,000,000, (b)
      authorizing the use by

<PAGE>
                                       3

      the Debtors of cash collateral, and (c) granting the adequate protection
      hereinafter described; and

            (5) that the Court schedule a final hearing (the "FINAL HEARING") to
      be held within 30 days of the entry of the Interim Order to consider entry
      of a final order authorizing the balance of the borrowings and letter of
      credit issuances under the Documents on a final basis, as set forth in the
      Motion and the Documents filed with this Court and as disclosed on the
      record at the Interim hearing;

      The Interim Hearing on the Motion having been held by this Court on
December 21, 2001 at which the Court (a) issued and entered an interim order (i)
authorizing the Borrower to borrow or obtain letters of credit, pursuant to the
Financing, and authorizing the Guarantors to guarantee such borrowings, up to an
aggregate of $10,000,000 of the Financing from the DIP Lenders as provided for
in the Interim Order, (ii) authorizing the use by the Debtors of cash collateral
and (iii) granting adequate protection to the Pre-Petition Lenders and (b)
scheduled the Final Hearing to consider entry of an order authorizing the
balance of the Financing, all as set forth in the Motion, the Interim Order and
the loan documentation filed with this Court.

      Due and appropriate notice of the Motion, the relief requested therein and
the Final Hearing having been served by the Debtors upon the twenty largest
unsecured creditors of the Debtors, all mortgage lenders to the Debtors and the
United States Trustee for the Southern District of New York; and

      Upon the record made by the Debtors at the Interim Hearing and the Final
Hearing, and after due deliberation and consideration and sufficient cause
appearing therefor;

<PAGE>
                                       4

      IT IS HEREBY FOUND, DETERMINED, ORDERED AND ADJUDGED,

that:

      1. Jurisdiction. This Court has core jurisdiction over the cases of the
Debtors (the "CASES") and the parties and property affected hereby pursuant to
28 U.S.C. "157(b) and 1334.

      2. Notice. Under the circumstances, the notice given by the Debtors of the
Motion, the Interim Hearing and the Final Hearing constitutes due and sufficient
notice thereof.

      3. Debtors' Stipulations. Without prejudice to the rights of any other
party (but subject to the limitations thereon contained in paragraph 15 below),
the Debtors stipulate and agree that:

            (a) (i) in accordance with the terms of the Pre-Petition Agreement
and as of the date hereof and as of the filing of the Debtors' chapter 11
petitions herein (the "PETITION DATE"), the Borrower was truly and justly
indebted and liable to the Pre-Petition Lenders, without defense, counterclaim
or offset of any kind, in the approximate principal amount of $195,625,000,
together with interest thereon and fees, expenses and other obligations incurred
in connection therewith as provided in the Pre-Petition Agreement (collectively,
the "PRE-PETITION DEBT") and (ii) no portion of the Pre-Petition Debt is subject
to avoidance or subordination pursuant to the Bankruptcy Code or applicable
nonbankruptcy law and (iii) the Debtors do not have, and hereby forever release,
any claims, counterclaims, causes of action, defenses or offset rights, whether
arising under the Bankruptcy Code or otherwise, against the Pre-Petition
Lenders, the Pre-Petition Agent and their respective affiliates, Agent,
officers, directors, employees and attorneys with respect to the Pre-Petition
Agreement;

<PAGE>
                                       5

            (b) the liens and security interests granted to the Pre-Petition
Agent pursuant to the Pre-Petition Agreement and pursuant to all mortgages,
deeds of trust and other security documents executed by any of the Debtors in
favor of the Pre-Petition Lenders in connection with the Pre-Petition Agreement,
are (i) valid, perfected, enforceable, first-priority liens and security
interests in the personal and real property described in such agreement,
mortgages, deeds of trust and security documents (the "PRE-PETITION
COLLATERAL"), (ii) not subject to avoidance or subordination pursuant to the
Bankruptcy Code or applicable nonbankruptcy law, and (iii) subject only to (x)
the priming liens and security interests granted to the Agent and the DIP
Lenders pursuant to this Order and the DIP Credit Agreement (the "DIP PRIMING
LIENS"), (y) the Carve-Out (as defined below) to which the DIP Priming Liens are
subject, and (z) liens permitted under the Pre-Petition Agreement to the extent
such permitted liens are permitted thereunder to be senior to or pari passu with
the liens of the Pre-Petition Lenders on the Pre-Petition Collateral; and

            (c) the aggregate value of the Pre-Petition Collateral for the loans
and other amounts outstanding under the Pre-Petition Agreement substantially
exceeds the aggregate amount of the pre-petition debt outstanding under such
agreement.

      4. Findings Regarding the Financing. Good cause has been shown for entry
of this Order.

            (a) The Debtors have a need to obtain post-petition financing as
provided for in the Documents (the "FINANCING") in order to permit, among other
things, the orderly continuation of the operation of their businesses, to
maintain business relationships with vendors and suppliers, to make capital
expenditures and to satisfy other working capital needs. The ability of the
Debtors to obtain sufficient

<PAGE>
                                       6

working capital and liquidity through the use of the cash collateral, incurrence
of new indebtedness for borrowed money and other financial accommodations is
vital to the preservation and maintenance of the going concern values of the
Debtors and a successful reorganization of the Debtors.

            (b) The Debtors are unable to obtain adequate unsecured credit
allowable under section 503(b)(1) of the Bankruptcy Code as an administrative
expense, and a credit facility in the amount and on the terms provided by the
Financing is unavailable to the Debtors without the Debtors granting to the
Agent and the DIP Lenders (subject to the Carve-Out, as defined below) the
Superpriority Claims and the DIP Liens (each as defined below).

            (c) The terms of the Financing are fair and reasonable, reflect the
Debtors' exercise of prudent business judgment consistent with their fiduciary
duty and are supported by reasonably equivalent value and fair consideration.

            (d) The Financing has been negotiated in good faith and at
arm's-length between the Debtors and the Agent, and any credit extended, letters
of credit issued for the account of and loans made to the Debtors by the DIP
Lenders pursuant to the Revolving Credit and Guaranty Agreement in substantially
the form attached as Exhibit A to the Motion (the "DIP CREDIT AGREEMENT"), and
any credit extended in respect of overdrafts referred to in the DIP Credit
Agreement, shall be deemed to have been extended by the DIP Lenders in good
faith, as that term is used in section 364(e) of the Bankruptcy Code.

            (e) The Debtors have requested entry of this Order pursuant to
Bankruptcy Rules 4001(b)(2) and 4001(c)(2). Absent entry of this Order, the
Debtors' estates will be immediately and irreparably harmed. Consummation of the
Financing in

<PAGE>
                                       7

accordance with this Order and the Documents is therefore in the best interest
of the Debtors' estates.

      5. Authorization of the Financing and the Documents.

            (a) The Borrower is hereby authorized to borrow or obtain letters of
credit pursuant to the DIP Credit Agreement, and the Guarantors are hereby
authorized to guaranty such borrowings, up to a maximum aggregate principal
amount of $25,000,000 (inclusive of amounts authorized under the Interim Order),
in accordance with the terms of the DIP Credit Agreement which shall be used,
among other things, for the purpose of providing working capital for the
Borrower and certain of the Guarantors. In addition, the Debtors are hereby
authorized to incur overdrafts and related liabilities arising from treasury,
depository and cash management services or in connection with any automated
clearing house fund transfers provided to or for the benefit of the Debtors by
MSSF or any of its affiliates (in addition to the amount of borrowings and
letters of credit obtained pursuant to the DIP Credit Agreement).

            (b) In furtherance of the foregoing, each Debtor is authorized and
directed to do and perform all acts, to make, execute and deliver all
instruments and documents (including, without limitation, the execution of
security agreements, mortgages and financing statements), and to pay all fees,
that may be reasonably required or necessary for the Debtors' performance of the
Financing, including, without limitation:

            (i) the execution, delivery and performance of the Loan Documents
      (as defined in the DIP Credit Agreement) and any exhibits attached
      thereto, including, without limitation, the DIP Credit Agreement, the
      Security and Pledge Agreement (as defined in the DIP Credit Agreement)
      substantially in the

<PAGE>
                                       8

      forms attached to the Motion, and the mortgages contemplated thereby
      (collectively, and together with the letter agreement referred to in
      clause (iv) below, the "DOCUMENTS"),

            (ii) causing the Guarantors to execute, deliver and perform the
      Documents,

            (iii) the execution and delivery of one or more amendments to the
      DIP Credit Agreement for, among other things, the purpose of adding
      additional financial institutions as DIP Lenders and reallocating the
      commitments for the Financing among the DIP Lenders in each case in such
      form as the Debtors, the Agent and the DIP Lenders may agree (it being
      understood that no further approval of the Court shall be required for
      amendments to the DIP Credit Agreement that do not shorten the maturity of
      the extensions of credit thereunder, increase either the commitments or
      the rate of interest payable thereunder or materially adversely affect the
      interests of the Debtors or their creditors), provided that prior to
      entering into any such amendment the Debtors shall notify the Official
      Committee of Unsecured Creditors of its intent to do so (which notice
      shall include the form of such proposed amendment),

            (iv) the non-refundable payment to the Agent or the DIP Lenders, as
      the case may be, of the fees referred to in the DIP Credit Agreement (and
      in the separate letter agreement dated December 20, 2001 between the
      Borrower and the Agent referred to in the DIP Credit Agreement) and such
      Letter of Credit Fees, Commitment Fees and reasonable costs and expenses
      as may be due from time to time, including, without limitation, fees and
      disbursements of the

<PAGE>
                                       9

      professionals retained as provided for in the Documents, all as such terms
      are defined in the Documents, and

            (v) performance of all other acts required under or in connection
      with the Documents.

            (c) Upon execution and delivery of the Documents, the Documents
shall constitute valid and binding obligations of the Debtors, enforceable
against each Debtor party thereto in accordance with their terms. No obligation,
payment or transfer under the Documents shall be stayed, restrained, voidable,
or recoverable under the Bankruptcy Code or under any applicable law, or subject
to any defense, reduction, offset or counterclaim.

      6. Superpriority Claims.

            (a) Pursuant to section 364(c)(1) of the Bankruptcy Code, all of the
Debtors' obligations, indebtedness and liabilities arising under or in respect
of the Financing and the Documents (including, without limitation, in respect of
overdrafts referred to in Section 6.03(iv) of the DIP Credit Agreement) (the
"DIP OBLIGATIONS") shall constitute obligations of the Debtors with priority
over any and all administrative expenses of the kind specified in sections
503(b) and 507(b) of the Bankruptcy Code, and over any and all administrative
expenses or other claims under sections 105, 326, 328, 506(c) or 507(a) of the
Bankruptcy Code (the "SUPERPRIORITY CLAIMS"), subject only upon the occurrence
and during the continuance of an Event of Default (as defined in the DIP Credit
Agreement) (an "EVENT OF DEFAULT") or event which, upon notice or lapse of time
or both, would constitute an Event of Default (a "DEFAULT") to the payment of
the Carve Out (as hereinafter defined). Nothing herein is intended to affect the
priority set forth under section 726(b) of the Bankruptcy Code.

<PAGE>
                                       10

            (b) For purposes hereof, the "CARVE OUT" means, (i) all fees
required to be paid to the Clerk of the Bankruptcy Court and to the Office of
the United States Trustee under Section 1930(a) of title 28 of the United States
Code and (ii) an amount not exceeding $1,500,000 in the aggregate, which amount
may be used after the occurrence of an Event of Default (as defined in the DIP
Credit Agreement) or Default and for so long as such Default or Event of Default
continues uncured and unwaived, to pay fees or expenses incurred by the Debtors
and any statutory committees appointed in the Cases (each, a "COMMITTEE") in
respect of (A) allowances of compensation for services rendered or reimbursement
or expenses awarded by the Bankruptcy Court to the Debtors' or any Committee's
professionals and (B) the reimbursement of expenses allowed by the Bankruptcy
Court incurred by Committee members in the performance of their duties (but
excluding fees and expenses of third-party professionals employed by such
members); provided, however, that such dollar limitation on fees and
disbursements shall not be reduced by the amount of any compensation and
reimbursement of expenses paid prior to the occurrence of an Event of Default in
respect of which the Carve-Out is invoked or any fees, expenses, indemnities or
other amounts paid to the Agent, the DIP Lenders and their respective attorneys
and Agent under the DIP Credit Agreement or otherwise; and provided, further,
that nothing herein shall be construed to impair the ability of any party to
object to any of the fees, expenses, reimbursement or compensation described in
clauses (A) and (B) above.

      7. DIP Liens. As security for the DIP Obligations, effective upon the date
of this Order and without the necessity of the execution by the Debtors, the
Agent or the DIP Lenders, of mortgages, security agreements or otherwise, the
following security interests and liens are hereby granted to the Agent and the
DIP Lenders (all property

<PAGE>
                                       11

identified in clauses (a), (b), (c) and (d) below being collectively referred to
as the "COLLATERAL," and such security interests and liens being collectively
referred to as the "DIP LIENS"), subject (i) to the rights of certain utilities
with respect to up to $1,000,000 in cash set aside for the benefit such
utilities pursuant to an order of this Court (the "UTILITY RESERVE") and (ii)
only in the event of the occurrence of a Default or an Event of Default to the
payment of the Carve-Out (except in the case of amounts identified in clause (a)
below), which shall not be subject to the Carve-Out or the Utility Reserve):

            (a) First Priority Lien on Cash Balances. Pursuant to section
364(c)(2) of the Bankruptcy Code, the Agent and the DIP Lenders are hereby
granted a perfected first priority security interest in and lien upon all cash
and cash equivalents in the Letter of Credit Account under the DIP Credit
Agreement of the Debtors (whether maintained with the Agent or otherwise) and
any investment of the funds contained therein.

            (b) Lien Priming Pre-Petition Lenders' Liens. Pursuant to section
364(d)(1) of the Bankruptcy Code, the Agent and the DIP Lenders are hereby
granted a perfected first priority senior priming security interest in and lien
upon all pre- and post-petition property of the Debtors (including, without
limitation, cash collateral, inventory, accounts receivable, other rights to
payment, contracts, property, plant, equipment, general intangibles, documents,
instruments, interests in leaseholds, real property, patents, copyrights,
trademarks, trade names, other intellectual property, capital stock of
subsidiaries, and the proceeds of all the foregoing, but subject, in the case of
a debtor's interest in a hotel franchise or hotel franchise agreement, to the
provisions of any agreement between the applicable franchisor and the Agent),
whether now existing or hereafter acquired, that is subject to (a) the existing
liens presently

<PAGE>
                                       12

securing the Debtors' indebtedness (including in respect of issued but undrawn
letters of credit) to the Pre-Petition Lenders and (b) the liens securing the
Debtors' indebtedness to other pre-petition lenders which, pursuant to a
separate order of this Court, are to be primed by the DIP Liens (with respect to
such indebtedness only, the "OTHER PRIMED LENDERS" and, together with the
Pre-Petition Lenders, the "PRIMED LENDERS"). Such security interests and liens
shall be senior in all respects to the interests in such property of the Primed
Lenders arising from present and future liens of the Primed Lenders (including,
without limitation, adequate protection liens granted hereunder) but shall not
be senior to the interests of other parties arising out of liens, if any, in
such property existing immediately prior to the Petition Date, or to interests
in such property arising out of liens to which the liens of the Primed Lenders
become subject subsequent to the Petition Date as permitted by section 546(b) of
the Bankruptcy Code (collectively "QUALIFIED PRE-PETITION LIENS") provided that
the lien of the Agent and the DIP Lenders shall be senior to the existing liens
of any Other Primed Lender only to the extent of the Attributable Debt Amount
(as defined in the DIP Credit Agreement) of such Other Primed Lender and
otherwise (i) in the case of Low Leverage Debtors, immediately senior to the
General AP Liens (as defined in the Motion) and (ii) in the case of High
Leverage Debtors, immediately junior to the General AP Liens.

            (c) Junior Lien on Unencumbered Properties. Pursuant to section
364(c)(2) of the Bankruptcy Code, the Agent and the DIP Lenders are hereby
granted a perfected security interest in and lien and upon all other pre- and
post-petition property of the Debtors, whether existing on the Petition Date or
thereafter acquired, that, on or as of the Petition Date is not subject to
valid, perfected and non-avoidable liens (collectively, "UNENCUMBERED
PROPERTY"), including, without limitation, cash,

<PAGE>
                                       13

inventory, accounts receivable, other rights to payment whether arising before
or after the Petition Date, contracts, property, plant, equipment, general
intangibles, documents, instruments, interests in leaseholds, real property,
patents, copyrights, trademarks, trade names, other intellectual property,
capital stock of subsidiaries, and the proceeds of all the foregoing, but
subject, in the case of a Debtor's interest in a hotel franchise or hotel
franchise agreement, to the provisions of any agreement between the applicable
franchisor and the Agent. Unencumbered Property shall exclude the Debtors'
claims and causes of action under sections 502(d), 544, 545, 547, 548, 549, 550
or 551 of the Bankruptcy Code, or any other avoidance actions under the
Bankruptcy Code (collectively, "AVOIDANCE ACTIONS"). Such security interests and
liens shall be junior only to (i) security interests and liens granted as
adequate protection to the Pre-Petition Agent and Pre-Petition Lenders under
paragraph 11(a) of this Order and to the Other Primed Lenders in a separate
order of this court entered as of the same date as this order (the "PRIMED
LENDER AP LIENS"), (ii) the Specific IC Liens, as defined in the Motion (the
"SPECIFIC IC LIENS"), and (iii) the General AP Liens, as defined in the Motion
(the "GENERAL AP LIENS").

            (d) Lien Junior to Certain Other Liens. Pursuant to section
364(c)(3) of the Bankruptcy Code, the Agent and the DIP Lenders are hereby
granted a perfected security interest in and lien upon all pre- and
post-petition property of the Debtors (other than the property described in
clause (b) of this paragraph 7, as to which the liens and security interests in
favor of the Agent will be as described in such clause), whether now existing or
hereafter acquired, that is subject to Qualified Pre-Petition Liens, Primed
Lender AP Liens, Specific IC Liens (in the case of Low Leverage Debtors)
Specific AP Liens and General AP Liens.

<PAGE>
                                       14

            (e) Liens Senior to Certain Other Liens. The DIP Liens and the
Adequate Protection Liens (as defined below) shall not be subject or subordinate
to (i) any lien or security interest that is avoided and preserved for the
benefit of the Debtors and their estates under section 551 of the Bankruptcy
Code or (ii) any liens arising after the Petition Date including, without
limitation, any liens or security interests granted in favor of any federal,
state, municipal, or other governmental unit, commission, board or court for any
liability of the Debtors.

      8. Protection of DIP Lenders' Rights.

            (a) So long as there are any borrowings or letters of credit
outstanding, or the DIP Lenders have any Commitment (as defined in the DIP
Credit Agreement) under the DIP Credit Agreement, the Pre-Petition Lenders shall
take no action to foreclose upon the liens granted to the Pre-Petition Lenders
pursuant to the Pre-Petition Agreements and this Order or otherwise exercise
remedies against the Collateral, in each case to the extent not authorized by an
order of this Court.

            (b) Automatic Stay and Certain Remedies. Subject only to the
provisions of the DIP Credit Agreement, the automatic stay provisions of section
362 of the Bankruptcy Code are vacated and modified to the extent necessary to
permit the Agent and the DIP Lenders to exercise, upon the occurrence and during
the continuance of an Event of Default and the giving of the five business days'
prior written notice provided for in the DIP Credit Agreement, all rights and
remedies against the Collateral provided for in the Documents (including,
without limitation, the right to setoff monies of the Debtors in accounts
maintained with the Agent or any DIP Lender) and, in connection with the
exercise of remedies with respect to a hotel property that is subject to a
franchise agreement, to permit the applicable franchisor to terminate such
franchise

<PAGE>
                                       15

agreement at the request of the Agent. The Debtors hereby waive their right to
seek relief, including, without limitation, under section 105 of the Bankruptcy
Code, to the extent such relief would in any way impair or restrict the rights
and remedies of the Agent set forth in this Order or the Documents. In no event
shall the Agent or the Pre-Petition Agent be subject to the equitable doctrine
of "marshaling" or any similar doctrine with respect to the Collateral.

            (c) In connection with the pursuit of its remedies against the
Collateral as provided for in the Documents and in paragraph 8(b) of this Order,
the DIP Agent is hereby authorized, in the name of and as attorney-in-fact for
the mortgagee thereunder, to foreclose any mortgage on any real property
securing the Borrower's and Guarantors' obligations under the Pre-Petition
Agreement.

            (d) Except as otherwise provided in the DIP Credit Agreement, the
Debtors' right to use Cash Collateral, as provided in paragraph 10 below, shall
terminate automatically on the Termination Date (as defined in the DIP Credit
Agreement); provided that the foregoing shall not limit the Debtors' rights to
seek an order of this Court further authorizing the Debtors' use of cash
collateral.

      9. The Cash Collateral. To the extent that, as of the Petition Date, any
funds were on deposit with the Pre-Petition Lenders, such funds were subject to
rights of set-off. By virtue of such set-off rights, such funds are subject to a
lien in favor of such Pre-Petition Lenders pursuant to sections 506(a) and 553
of the Bankruptcy Code. The Pre-Petition Lenders are obligated, to the extent
provided for in the Pre-Petition Agreements, to share the benefit of such liens
with the other Pre-Petition Lenders party to such Pre-Petition Agreements based
upon their respective pro rata shares of the obligations under such Pre-Petition
Agreements. Any proceeds of the Pre-Petition

<PAGE>
                                       16

Collateral (including any fees, charges, accounts or other payments for the use
of occupancy of rooms and other public facilities in hotels, motels or other
lodging facilities and including funds on deposit at the Pre-Petition Lenders or
at any other institution as of the Petition Date) are cash collateral of the
Pre-Petition Lenders within the meaning of section 363(a) of the Bankruptcy
Code. All funds subject to such setoff rights and all such proceeds of
Pre-Petition Collateral are referred to herein as "CASH COLLATERAL."

      10. Use of Cash Collateral. Except as otherwise set forth herein and in
the DIP Credit Agreement, the Debtors are hereby authorized to use all Cash
Collateral of the Pre-Petition Lenders, provided that the Pre-Petition Lenders
are granted adequate protection as hereinafter set forth. In furtherance of and
subject to the foregoing, the Pre-Petition Lenders are directed promptly to turn
over to the Debtors all Cash Collateral within the meaning of section 363(a) of
the Bankruptcy Code received or held by them.

      11. Adequate Protection for Pre-Petition Lenders. The Pre-Petition Lenders
are entitled, pursuant to sections 361, 363(e) and 364(d)(1) of the Bankruptcy
Code, to adequate protection of their interest in the Pre-Petition Collateral,
including the Cash Collateral, for any diminution in value of the Pre-Petition
Lenders' interests in the Pre-Petition Collateral, including, without
limitation, any such diminution resulting from the use by the Debtors of Cash
Collateral and any other Pre-Petition Collateral, the priming of the
Pre-Petition Agent's security interests and liens in the Pre-Petition Collateral
by the Agent and the DIP Lenders pursuant to the Documents and this Order and
the imposition of the automatic stay pursuant to section 362 of the Bankruptcy
Code. As

<PAGE>
                                       17

adequate protection, the Pre-Petition Agent and the Pre-Petition Lenders are
hereby granted the following (collectively, the "PRE-PETITION LENDERS ADEQUATE
PROTECTION"):

            (a) Adequate Protection Liens. The Pre-Petition Agent and the
Pre-Petition Lenders are hereby granted (effective upon the date of this Order
and without the necessity of the execution by the Debtors of mortgages, security
agreements, pledge agreements, financing statements or other agreements) a
replacement security interest in and lien upon all the Collateral, subject and
subordinate only to (i) the security interests and liens granted to the Agent
for the benefit of the DIP Lenders under paragraph 7(b) of this Order and
pursuant to the Documents and any liens (other than the lien granted pursuant to
this paragraph 11(a)) on the Collateral to which such liens so granted to the
Agent are junior, (ii) the Specific AP Liens, (iii) the applicable provisions of
the Carve-Out and (iv) the Utility Reserve (the "PRE-PETITION LENDERS ADEQUATE
PROTECTION LIENS").

            (b) Section 507(b) Claim. The Pre-Petition Agent and the
Pre-Petition Lenders are hereby granted, subject, in the event of the occurrence
of a Default or an Event of Default, to the payment of the Carve-Out, a
superpriority claim as provided for in section 507(b) of the Bankruptcy Code,
immediately junior to the claims under section 364(c)(1) of the Bankruptcy Code
held by the Agent and the DIP Lenders.

            (c) Interest, Fees and Expenses. The Pre-Petition Agent and the
Pre-Petition Lenders shall receive from the Debtors (i) immediate cash payment
of all accrued and unpaid letter of credit fees and interest on the Pre-Petition
Debt at the non-default rate provided for in the Pre-Petition Agreement, and all
other accrued and unpaid fees and disbursements (including, but not limited to,
fees owed to the Pre-Petition Agent) incurred prior to the Petition Date owing
under the Pre-Petition

<PAGE>
                                       18

Agreement, (ii) current cash payments of all fees and expenses payable to the
Pre-Petition Agent and otherwise under the Pre-Petition Agreement, including but
not limited to, the reasonable fees and disbursements of counsel, financial and
other consultants for the Pre-Petition Agent and (iii) on the first business day
of each month, all accrued but unpaid letter of credit and other fees, and
interest on the Pre-Petition Debt at the contract rate (including LIBOR pricing
options) under the Pre-Petition Agreement. The foregoing shall not limit the
right of the Pre-Petition Agent and the Pre-Petition Lenders to seek allowance
of claims in respect of interest at the default rate to the extent provided in
the Pre-Petition Credit Agreement.

            (d) Preservation and Monitoring of Collateral. Subject to the
provisions of the DIP Credit Agreement, the Debtors are hereby authorized and
directed to take all steps reasonably necessary to protect and maintain the
value of the Collateral (other than the High Leverage Hotel Properties),
including, without limitation, making such capital expenditures and performing
such maintenance as may be necessary for purposes of maintaining such value. The
Pre-Petition Lenders shall be permitted to continue to retain expert consultants
and financial advisors at the expense of the Debtors, which consultants and
advisors shall be given reasonable access for purposes of monitoring the value
of the Collateral and the compliance by the Debtors with the provisions of this
paragraph.

            (e) Payment from Proceeds of Collateral. The Debtors are authorized
and directed to pay to the Pre-Petition Agent, for the benefit of the
Pre-Petition Lenders, the portion of the Net Proceeds (as defined in the DIP
Credit Agreement as in effect on the Closing Date) resulting from any sale or
other disposition of other property outside the ordinary course of business as
permitted by the DIP Credit Agreement, in each case

<PAGE>
                                       19

limited to the Net Proceeds that are not required to be paid in respect of
Obligations as defined in the DIP Credit Agreement (such payments to the
Pre-Petition Agent, for the benefit of the Pre-Petition Lenders, to be made each
time that cumulative Net Cash Proceeds that are so payable, but have not yet
been paid, reach $100,000).

            (f) Limitation of Charging Expenses Against Collateral. Except to
the extent of the Carve-Out, no fees, expenses, reimbursement or compensation
described in clauses (A) or (B) of paragraph 6(b) (including any that may result
from liquidation in bankruptcy or other proceedings under the Bankruptcy Code),
to the extent such expenses are incurred prior to repayment in full of all DIP
Obligations, shall be charged against or recovered from the Collateral, pursuant
to section 506(c) of the Bankruptcy Code or any similar principal of law,
without prior written consent of the Agent, and no such consent shall be implied
from any other action, inaction, or acquiescence by the Agent.

      12. Reservation of Certain Rights of Pre-Petition Lenders and Other
Parties. (a) Under the circumstances and given that the above-described adequate
protection is consistent with the Bankruptcy Code (including section 5.06(b)
thereof), the Court finds that, notwithstanding any other provision hereof, the
adequate protection provided herein is reasonable and sufficient to protect the
interests of the Pre-Petition Lenders. However, the Pre-Petition Agent and the
Pre-Petition Lenders may request further or different adequate protection, and
the Debtors or any other party may contest any such request.

            (b) The provisions of paragraph 11(c) are without prejudice to the
rights of parties other than the Debtors to seek an order causing cash payments
made pursuant to paragraph 11(c) to be applied to the principal of the
Pre-Petition Debt rather than as set

<PAGE>
                                       20

forth in paragraph 11(c) on the basis that interest on the Pre-Petition Debt
would not be allowable under Section 506(b) of the Bankruptcy Code.

      13. Perfection of DIP Liens and Adequate Protection Liens. The Agent, the
DIP Lenders and the Pre-Petition Lenders that have been granted security
interests and liens hereunder shall not be required to file or record financing
statements, mortgages, notices of lien or similar instruments in any
jurisdiction or take any other action in order to validate and perfect the
security interests and liens granted to them pursuant to this Order. If the
Agent on behalf of the DIP Lenders or the Pre-Petition Agent on behalf of the
Pre-Petition Lenders shall, in its sole discretion, choose to file such
financing statements, mortgages, notices of lien or similar instruments or
otherwise confirm perfection of such security interests and liens, the liens and
security interests granted herein shall be deemed perfected at the time and on
the date of entry of this Order. The Pre-Petition Lenders shall not file such
financing statements, mortgages, notices of lien or similar instruments, or
otherwise confirm perfection of such security interests and liens, unless the
Agent on behalf of the DIP Lenders shall theretofore have done so. Upon the
request of the Agent, each of the Pre-Petition Lenders and the Pre-Petition
Agent, without any further consent of any party, is authorized to take, execute
and deliver such instruments (in each case without representation or warranty of
any kind) to enable the Agent to further perfect, preserve and enforce the
security interests and liens granted to the Agent for the benefit of the DIP
Lenders by the Documents and this Order.

      14. Preservation of Rights Granted Under the Order.

            (a) No claim having a priority superior to or pari passu with that
granted by this Order to the Agent and the DIP Lenders or, except as provided by
the cash

<PAGE>
                                       21

collateral orders being issued on the date hereof and other cash collateral
orders that are approved by the Agent, to the Pre-Petition Agent and the
Pre-Petition Lenders, respectively, shall be granted while any portion of the
Financing (or any refinancing thereof) or the commitment thereunder, or any
adequate protection obligation granted hereunder remains outstanding, and the
security interests and liens granted to the Agent on behalf of the DIP Lenders
hereunder and to the Pre-Petition Agent on behalf of the Pre-Petition Lenders
shall not be (i) subject or junior to any lien or security interest that is
avoided and preserved for the benefit of the Debtors' estates under section 551
of the Bankruptcy Code or (ii) subordinated to or made pari passu with any other
lien or security interest under section 364(d) of the Bankruptcy Code or
otherwise; provided that the Primed Lender AP Liens granted to the Other Primed
Lenders may rank pari passu with the Pre-Petition Lenders' Adequate Protection
Liens.

            (b) Unless all obligations and indebtedness owing to the Agent and
the DIP Lenders under the DIP Credit Agreement shall theretofore have been paid
in full (and, with respect to outstanding Letters of Credit issued pursuant to
the DIP Credit Agreement, cash collateralized in accordance with the provisions
of the DIP Credit Agreement), the Debtors shall not seek, and it shall
constitute an Event of Default if any of the Debtors seek, or if there is
entered, an order dismissing any of the Cases. If an order dismissing any of the
Cases under section 1112 of the Bankruptcy Code or otherwise is at any time
entered, such order shall provide (in accordance with sections 105 and 349 of
the Bankruptcy Code) that (i) the superpriority claims, priming liens and
security interests and replacement security interests granted to the Agent and
the DIP Lenders and the Pre-Petition Lenders, as the case may be, pursuant to
this Order shall continue in full force and effect and shall maintain their
priorities as provided in this

<PAGE>
                                       22

Order until all DIP Obligations shall have been paid and satisfied in full (and
that such superpriority claims, priming liens and replacement liens, shall,
notwithstanding such dismissal, remain binding on all parties in interest) and
(ii) this Court shall retain jurisdiction, notwithstanding such dismissal, for
the purposes of enforcing the claims, liens and security interests referred to
in (i) above.

            (c) If any or all of the provisions of this Order are hereafter
reversed, modified, vacated or stayed, such reversal, stay, modification or
vacation shall not affect (i) the validity of any DIP Obligations prior to
written notice to the Agent of the effective date of such reversal, stay,
modification or vacation or (ii) the validity and enforceability of any lien or
priority authorized or created hereby or pursuant to the DIP Credit Agreement
with respect to any such DIP Obligation. Notwithstanding any such reversal,
stay, modification or vacation, any use of Cash Collateral or any DIP Obligation
incurred by the Debtors to the Agent or DIP Lenders prior to the actual receipt
of written notice by Pre-Petition Agent and the Agent of the effective date of
such reversal, stay, modification or vacation shall be governed in all respects
by the original provisions of this Order, and the Agent and the DIP Lenders and
the Pre-Petition Lenders shall be entitled to all the rights, remedies,
privileges and benefits granted in this Order and/or pursuant to the DIP Credit
Agreement with respect to all uses of Cash Collateral and DIP Obligations.

            (d) The obligations of the Debtors under this Order and the
Documents shall not be discharged by the entry of an order confirming a plan of
reorganization in any of the Cases and, pursuant to section 1141(d)(4) of the
Bankruptcy Code, the Debtors have waived such discharge.

<PAGE>
                                       23

      15. Effect of Stipulations on Third Parties. The findings and admissions
contained in this Order, including, without limitation, the findings and
admissions contained in paragraph 3 of this Order, shall be binding upon all
parties in interest, including any Committee, unless (a) a party in interest has
timely filed an adversary proceeding or contested matter (subject to the
limitations contained herein, including, inter alia, in paragraph 16) by no
later than April 15, 2002 (or such later date as has been agreed to, in writing,
by the relevant Pre-Petition Agent in its sole discretion or ordered by this
Court after notice and a hearing), (i) challenging the validity, enforceability,
priority or extent of the Pre-Petition Debt or the Pre-Petition Agent's or the
Pre-Petition Lenders' liens on the Pre-Petition Collateral, or (ii) otherwise
asserting any claims or causes of action against the Pre-Petition Agent or the
Pre-Petition Lenders, and (b) the Court rules in favor of the plaintiff in any
such timely filed adversary proceeding or contested matter. If no such adversary
proceeding or contested matter is timely filed as of such date, (x) the
Pre-Petition Debt and all related obligations of the Debtors (the "PRE-PETITION
OBLIGATIONS") shall constitute allowed claims, not subject to counterclaim,
offset, subordination, defense or avoidance, for all purposes in the Cases and
any subsequent chapter 7 cases, (y) the Pre-Petition Agent's and the
Pre-Petition Lenders' liens on the Pre-Petition Collateral shall be deemed to
have been, as of the Petition Date, legal, valid, binding, perfected, not
subject to recharacterization, subordination or avoidance and (z) the
Pre-Petition Obligations, the Pre-Petition Agent's and the Pre-Petition Lenders'
liens on the Pre-Petition Collateral and the Pre-Petition Agent and the
Pre-Petition Lenders shall not be subject to any other or further challenge by
any party in interest seeking to exercise the rights of the Debtors' estate,
including, without limitation, any successor thereto. If any such

<PAGE>
                                       24

adversary proceeding or contested matter is timely filed as of such date, the
findings and admissions contained in paragraph 3 shall nonetheless remain
binding and preclusive (as provided in the second sentence of this paragraph)
except to the extent that such findings and admissions were expressly challenged
in such adversary proceeding or contested matter.

      If (but only to the extent that and for so long as) the holder of any
Pre-Petition Indebtedness (as defined in the DIP Credit Agreement) of any
Guarantor has the benefit of an express restriction or prohibition contained in
the certificate of incorporation or similar constitutive document of the
Guarantor that prevents the creation of any obligation or the security interest
or lien provided for herein (including without limitation Impac Hotels II, LLC
and Impac Hotels III, LLC), then, such obligation or security interest and lien
shall become effective and enforceable (and the assets of such Guarantor shall
become part of the Collateral) only (i) with the consent of such creditor or
(ii) upon the payment in full of such Pre-Petition Indebtedness. Nothing herein
shall limit the right or ability of the DIP Lenders or the Debtors to challenge
the legal effectiveness of any such restriction or prohibition.

      16. Limitation on Use of Financing Proceeds and Collateral.

Notwithstanding anything herein to the contrary, no borrowings, letters of
credit, Cash Collateral, Collateral or the Carve-Out (collectively, the
"DESIGNATED ASSETS") may be used to (a) object, contest or raise any defense to
or investigate, the validity, perfection, priority, extent or enforceability of
any amount due under the Documents, the liens granted under this Order, the
Pre-Petition Debt or the liens securing the Pre-Petition Debt, (b) assert any
claims, counterclaims, defenses or causes of action against the Agent, the DIP
Lenders, the Pre-Petition Lenders or the Pre-Petition Agent or any of

<PAGE>
                                       25

their respective affiliates, (c) prevent, hinder or otherwise delay the Agent's
or the Pre-Petition Agent's assertion, enforcement or realization on the Cash
Collateral or the Collateral in accordance with the Documents or this Order or
(d) seek to modify any of the rights granted to the Agent, the DIP Lenders, the
Pre-Petition Lenders or the Pre-Petition Agent hereunder or under the Documents,
in each of the foregoing cases without such parties' prior written consent;
provided that up to $150,000 (plus reasonable disbursements and out-of-pocket
expenses, including UCC searches and real estate title reports) of the
Designated Assets may be used by an official committee of creditors appointed in
the Cases to analyze the matters referred to in clause (a) of the first sentence
of paragraph 15 (subject to Court approval of any related professional fees and
the rights of the Pre-Petition Lenders to object to such fees) and to analyze
and respond to any proposed exercise of remedies under the DIP Credit Agreement
as to which notice is given pursuant to paragraph 8(b).

      17. Order Governs. In the event of any inconsistency between the
provisions of this Order and of the Documents, the provisions of this Order
shall govern.

      18. Successors and Assigns. The Documents and the provisions of this Order
shall be binding upon the Agent, the DIP Lenders, the Pre-Petition Agent, the
Pre-Petition Lenders and the Debtors and their respective successors and assigns
(including any chapter 7 or chapter 11 trustee hereinafter appointed or elected
for the estate of any of the Debtors) and inure to the benefit of the Agent, the
DIP Lenders, the Pre-Petition Agent, the Pre-Petition Lenders and the Debtors
and (except with respect to any trustee hereinafter appointed or elected for the
estate of any of the Debtors) their respective successors and assigns.

<PAGE>
                                       26

DATED: FEBRUARY 14, 2002
New York, New York

                                            /s/ JUDGE BURTON R. LIFLAND
                                           ------------------------------
                                           UNITED STATES BANKRUPTCY JUDGE

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