Document:

<PAGE>
UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF NEW
YORK

                                                     Chapter 11
                                                     Case Nos. ( )
In re:                                               (Jointly Administered)

Lodgian, Inc., et al.,
          Debtors.

          AFFIDAVIT AND DISCLOSURE STATEMENT OF RICHARD CARTOON LLC IN
          SUPPORT OF APPLICATION TO EMPLOY RICHARD CARTOON LLC AS CHIEF
                        FINANCIAL OFFICER FOR THE DEBTORS

STATE OF GEORGIA      )
                      )ss.:
COUNTY OF FULTON      )

Richard Cartoon, being duly sworn, deposes and says:

         1.       I am currently the President of Richard Cartoon LLC ("RCLLC")
and I maintain an office at 2000 RiverEdge Parkway, Atlanta GA 30328. I submit
this affidavit and disclosure statement in support of the application of
Lodgian, Inc. et al ("the Debtors") for an order authorizing the employment and
retention of RCLLC to provide services to the Debtors customarily provided by
the office of the Chief Financial Officer pursuant to the terms and conditions
set forth in the agreement dated November 13, 2001 ("the Engagement Agreement"),
a copy of which is attached hereto as Exhibit A..

         2.       The facts set forth in my affidavit are based upon my personal
knowledge, information and belief.

                                       1
<PAGE>

         3.       RCLLC is well qualified to provide services to the Debtors
customarily provided by the office of the Chief Financial Officer. I am the
President of RCLLC and will serve as Chief Financial Officer of the Debtors.
During the period from October 1989 through September 1999, I was a partner in
the restructuring group of a "Big 5" accounting firm. While partner of the Big 5
accounting firm, I acted as the chief financial advisor to Servico, Inc.
("Servico") a hotel owner and management group, throughout its Chapter 11
proceedings. Servico successfully emerged from Chapter 11 in 1992 and
subsequently merged with the Impac group to form Lodgian, Inc. As a result of my
involvement with the Servico Chapter 11 cases, I am familiar with the
hospitality industry and with a number of the existing properties of the
Debtors. I continued as a partner of the Big 5 accounting firm until September
1999. I formed my own company, RCLLC effective October 1, 1999 and continued to
provide restructuring services to companies, creditors' committees and other
parties-in-interest.

         4.       On December x, 2001 ("the Petition Date") Lodgian, Inc. and
most of its subsidiaries filed for protection under Chapter 11 of the Bankruptcy
Code. Prior to the Petition Date RCLLC was retained on October 11, 2001 to
perform financial advisory services to Lodgian, Inc. and its subsidiaries. On
November 13, 2001 the scope of the engagement was changed and RCLLC was retained
to provide services to the Company customarily provided by the office of the
Chief Financial Officer. I was designated by RCLLC to act as its representative
to serve as the Chief Financial Officer of the Company reporting to the Chief
Executive Officer subject to the terms and conditions set forth in the
Engagement Agreement.

         5.       Prior to the Petition Date RCLLC received compensation in the
aggregate amount of [$161,427] for services rendered and costs and expenses
incurred in providing services by its management and associates.

                                        2
<PAGE>

         6.       On October 11, 2001 RCLLC received a $50,000 retainer from
Lodgian, Inc. for services to be rendered and expenses to be incurred and this
retainer was continued through and remained fully funded as of the Petition
Date.

         7.       RCLLC has not provided services to any entities or individuals
in connection with these Chapter 11 cases, other than the provision of services
to the Debtors mentioned above. RCLLC does not represent any interest adverse to
the Debtors and will not represent any entity, other than the Debtors, in
connection with these Chapter 11 cases. To my knowledge, none of the clients of
RCLLC is a creditor or party in interest in these Chapter 11 cases.

         8.       Accordingly, based upon the preceding, I submit that RCLLC is
a "disinterested person" as defined in section 101(14) of the Bankruptcy Code
and as required by section 327(a) of the Bankruptcy Code.

         9.       As compensation for its services, RCLLC has agreed that it
will receive its customary hourly rates, which are as follows:

<TABLE>
       <S>                                           <C>
       President/Managing Director                   $310

       Staff/Consultants                             $200 - $250

       Support Staff                                 $ 50 - $100
</TABLE>

These rates are equivalent to those currently being charged by RCLLC to its
other clients. In the ordinary course of business, RCLLC will revise its hourly
rates on June 30 of each year.

         11.      In addition to compensation for professional services rendered
by RCLLC, RCLLC shall seek reimbursement for reasonable and necessary expenses
incurred in connection with the above- captioned cases, including, but not
limited to, transportation, lodging, food, telephone, copying, messenger service
and research.

                                       3
<PAGE>

         12.      RCLLC shall make proper application to the Bankruptcy Court
for compensation for the services rendered to the Debtors and/or the Committee
in these proceedings pursuant to sections 330 and 331 of the Bankruptcy Code,
and the Administrative Order entered in these cases.

         13.      No agreement or understanding exists between RCLLC and any
other person for the sharing of compensation to be received in connection with
these cases.

         14.      The proposed engagement of RCLLC is not prohibited by Rule
5002 of the Bankruptcy Rules.

         15.      RCLLC requests that its retention as Chief Financial Officer
be approved nunc pro tunc to the Petition Date.

       FURTHER AFFIANT SAYETH NOT.

                                  By:  /s/ Richard Cartoon
                                       -------------------
                                           Richard Cartoon

SWORN TO before me, this x day
of December 2001.

/s/
----------------
Notary Public

                                       4<PAGE>

                                                                    EXHIBIT 10.3

                                   AGREEMENT

         This agreement (the "Agreement") is made as of the 25th day of August,
1997, by and between High Street Banking Company a North Carolina banking
corporation (the "Company") and J. Edgar McFarland,.(the "Employee").

                                    RECITALS

         The Company is a North Carolina-state chartered bank operating as a
full service commercial bank in Buncombe and Catawba Counties, North Carolina,
with expectations of expansion into Henderson County, North Carolina.

         The Company wishes to employ the Employee as its President and Chief
Executive Officer. The Employee desires to accept such engagement pursuant to
the terms hereof.

         Now, therefore, in consideration of the mutual promises and conditions
herein contained and other valuable consideration, the receipt and sufficiency
of which are acknowledged, the parties agree:

         1. Engagement. The Company hereby engages the Employee as President and
Chief Executive Officer.

         2. Duties. Subject to the direction and control of the Board of
Directors of the Company, the Employee shall supervise and control the
management of the Company and shall have such duties and authority as are
normally incident to the position of chief executive officer of a bank together
with such other duties and authority as may be prescribed from time to time by
the Board of Directors. The Employee shall at all times discharge his duties in

<PAGE>

                                                                             -2-

consultation with, and under the supervision of, the Board of Directors. The
Employee shall diligently and conscientiously devote his full and exclusive
business time and attention and best efforts in discharging his duties. The
Employee shall not take any action which interferes with or detracts from the
Company's business or reputation in any way. The Employee shall not directly or
indirectly render any services of a business, commercial or professional nature
to any other person or organization, whether for compensation or otherwise,
without the prior written consent of the Company. The Employee shall make his
principal office in such place as the Company's Board of Directors and the
Employee may from time to time agree.

         3. Term. This Agreement shall continue in full force and effect for a
period of five years commencing on the date hereof and terminating on August 24,
2002 unless sooner terminated as provided below. The Employee and the Executive
Committee of the Board of Directors of the Company (the "Executive Committee")
shall meet during the third year of employment to discuss this Agreement, any
extension thereof, and the Employee's performance hereunder.

         4. Compensation. For the services to be performed hereunder, the
Employee shall be entitled to compensation as follows:

         4.1 The Company shall pay to the Employee a salary of at least One
Hundred Fifty-Thousand and 00/100 Dollars ($150,000.00) per year, payable in
equal semi-monthly installments, subject to applicable withholding, together
with such performance bonuses as the Board of Directors may from time to time
determine. The salary shall be paid in addition to any benefits which the
Company may pay to or on behalf of the Employee.

<PAGE>

                                                                             -3-

         4.2 The Employee shall be entitled to group health insurance
commensurate with that provided for all employees, and to participate pate in
pension or profit sharing programs established for all employees.

         4.3 The Company shall provide the Employee WITH A FULLY equipped
automobile approved by the Executive Committee for his use and shall pay all
costs and expenses incurred in connection with the vehicle. The Employee
acknowledges that he will be responsible for all tax liability arising in
connection with any personal use of the vehicle. The Company shall reimburse the
Employee for reasonable lodging and meal expenses incurred in connection with
Company business upon presentation of documentation and invoices acceptable to
the Company.

         4.4 The Company shall reimburse the Employee for the monthly membership
dues of the Biltmore Forest Country Club and may, at the direction and in the
discretion of the Executive Committee, pay initiation fees and membership dues
at additional clubs.

         4.5 The Company shall provide and pay for a life insurance policy,
approved by the Executive Committee, on the life of the Employee. The policy
shall be owned by the Employee and shall have a face amount of $1,000,000.00.
The Employee may increase such coverage at the Employee's expense. THE COMPANY
SHALL PROVIDE long-term disability insurance coverage for the Employee with a
benefit of $7,500.00 monthly pursuant to a policy approved by the Executive
Committee.

         4.6 The Employee shall be entitled to sick leave and vacation days on
the same basis as all OTHER EMPLOYEES.

<PAGE>

                                                                             -4-

         5. Non-Competition.

         5.1 Restriction. The Employee, acknowledging the sufficiency of the
consideration therefor, during the term hereof and for a period of two years
after termination of employment with the Company, will not, in any manner,
directly or indirectly, for himself or on behalf of any other person, firm,
partnership, corporation or other entity, as employee, agent, independent
contractor, stockholder, proprietor, partner, lender, financial backer, or in
any other capacity, engage in or finance any bank or deal in any related
services, or engage in any bank business directly or indirectly in competition
with that of the Company, within Buncombe County, Catawba County and, at and
after such time as the Company has established its Hendersonville office,
Henderson County, North Carolina, except that the Employee may acquire up to 2$
of any publicly traded bank stock.

         5.2 No Interference with Clients. The Employee, acknowledging the
sufficiency of the consideration therefor, during the term hereof and for a
period of two years after termination of employment with the Company, will not,
in any manner, directly or indirectly, for himself or on behalf of any other
person, firm, partnership, corporation or other entity, as employee, agent,
independent contractor, stockholder, proprietor, partner, lender, financial
backer, or in any other capacity, (i) directly or indirectly induce any
customers or clients of the Company to patronize any bank other than the
Company; (ii) canvass, solicit, or accept any such business from a client of the
Company; or directly or indirectly request or ADVISE ANY CLIENT OF THE Company
to withdraw, curtail or cancel its business with the Company.

<PAGE>

                                                                             -5-

         5.3 Confidential Information. The Employee acknowledges that he will
occupy a position of trust and fiduciary responsibility in the Company and that
he is or will be making use of, acquiring or adding to the Company's
confidential information which includes, without limitation, customer accounts
and related information, service requirements, contract information, memoranda,.
technical data, other materials or records of a proprietary nature, and records
and policy matters relating to research, finance, accounting, sales, personnel,
management, and operations (all of such matters, collectively "Confidential
Information"). The Employee expressly acknowledges that all Confidential
Information is a valuable asset of the Company, developed and maintained through
a substantial investment of time, effort and expense. The Employee expressly
acknowledges that the Company will suffer extensive loss and damage if, during
his employment or after the termination thereof for any reason, he should take,
disclose, reveal or otherwise make known, or use, directly or indirectly, any
Confidential Information to the detriment of the Company or for the benefit of
competitors of the Company. In order to protect the Confidential Information and
to protect other employees who depend on the Company for regular EMPLOYMENT, THE
EMPLOYEE SHALL NOT, during or at any time after THE TERM OF EMPLOYMENT, IN ANY
WAY USE any Confidential Information except in furtherance of employment by the
Company, and will not copy, reproduce, or take the original or any copies of
Confidential Information, and will not disclose any such confidential
Information to anyone. Upon termination of employment, the Employee shall
deliver all Confidential

<PAGE>

                                                                             -6-

Information, including all copies and excerpts, to the Company. The Employee
expressly acknowledges that the Confidential Information is protected under the
North Carolina Trade Secrets Act, N.C.G.S. S66-152 et. seq.

         5.4 Judicial Modification. If any provision of this Paragraph 5 is
deemed to exceed the limitations permitted by applicable law, then such
provision shall be deemed reformed to preserve the intent hereof to the maximum
extent permitted by law.

         5.5 Right to Injunction. .The Employee expressly recognizes that in the
event of a breach of any covenant of this Paragraph 5 the remedy at law would be
inadequate, and that any such breach would cause such immediate and permanent
damage to the Company as would be irreparable and difficult to ascertain, and
that the Company shall therefore have the right to obtain immediate temporary
and permanent injunctive relief without the necessity of proving actual damages,
which remedy shall be in addition to all other rights and remedies of the
Company and not in derogation thereof. It is further understood and agreed that
should the Company file suit to restrain and enjoin the Employee from violating
the provisions of this Paragraph, the covenants set forth above will be extended
by a period of time equivalent to the period of time during which such
LITIGATION CONTINUES, REGARDLESS of whether a preliminary injunction is SOUGHT,
GRANTED OR DENIED.

         5.6 Survival. The provisions of this Paragraph 5 shall survive the
termination of this Agreement.

         6. Termination. This Agreement and the Employee's employment may be
terminated as follows:

<PAGE>

                                                                             -7-

         6.1 The Company may terminate this Agreement immediately for Cause by
giving written notice of termination to the Employee without prejudice to-any
other remedy to which the Company may be entitled at law or in equity. For
purposes of this Agreement "Cause" shall mean acts or omissions which are
disloyal, dishonest or illegal; breach of fiduciary duty; breach of this
Agreement; working under the influence of controlled substances; violation of
statutes, rules, or regulations pertaining to banks and banking and applicable
to the Company; neglect of duties or failure to diligently and effectively
perform the duties required hereunder.

         6.2 This Agreement shall terminate upon the death or disability of the
Employee.

         6.3 The Company may terminate the Employee's employment for reasons
other than for Cause upon 90 days' notice to the Employee. In the event of such
termination without Cause, the Employee shall have no further rights under this
Agreement except to continue to receive the base salary described in Paragraph
4.1, exclusive of bonuses, and the Company shall continue to pay the premiums on
the life insurance policy described in Paragraph 4.5, throughout the original
contract period ending August 24, 2002.

         7. Entire Agreement; Binding Effect and Prohibition of Assignments No
Waiver of Subsequent Breach. This Agreement contains the entire understanding of
the parties with respect to its subject matter. The provisions of this Agreement
shall be binding upon the Company and the Employee and their respective heirs,
personal representatives, successors and assigns. The rights of the Employee
UNDER THIS AGREEMENT ARE PERSONAL to the Employee and may not be assigned
without the Company's prior written consent. The waiver of a breach of this
Agreement shall not be construed as a waiver of any subsequent breach.

<PAGE>

                                                                             -8-

         8. Governing Law. This Agreement shall be construed and enforced under
the laws of North Carolina in North Carolina courts.

         9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

         10. Amendments. All amendments of this Agreement shall be in writing
signed by the parties.

         11. Notices. All notices, offers, acceptances, requests and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered or mailed by certified mail to the recipient at the
address indicated under the signatures to this Agreement or at such other
address as any party hereto shall designate to the other parties in writing.

         In Witness Whereof, the Company has caused this Agreement to be
executed by its duly authorized officers, and its corporate seal to be hereunto
affixed, and the Employee has herewith affixed his hand and seal, all as of the
day and year first above written.

                                        THE COMPANY:

                                        HIGH STREET BANKING COMPANY

ATTEST:

/s/ Anne d. Martin, Secretary           By /s/ Hurshell H. Keener
------------------------------          ---------------------------------
Anne D. Martin, Secretary                 Hurshell H. Keener, Chairman
                                          1292 Hendersonville Road
                                          Asheville, NC 28803

(CORPORATE SEAL)
                                        THE EMPLOYEE:

                                        /s/ J. Edgar McFarlnd
                                        ---------------------------------
                                        J. Edgar McFarland
                                        200 Crum Drive
                                        Lake Junaleska, NC 28745

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00037-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00037-of-00352.parquet"}]]