Exhibit 1.1
Exhibit 1.1
EXECUTION VERSION
Choice Hotels International, Inc.
5.750% Senior Notes due 2022
Underwriting Agreement
June 22, 2012
Deutsche Bank Securities Inc.
As representative (the “Representative”) of the several
Underwriters named in Schedule I hereto,
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005
Ladies and Gentlemen:
Choice Hotels International, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell to the Underwriters named in Schedule I
hereto (the “Underwriters”) an aggregate of $400,000,000 principal amount of 5.750% Senior Notes due 2022 of the Company (the “Notes”). The Notes shall be guaranteed on an unsecured senior basis (the “Guarantees” and
together with the Notes, the “Securities”) by the guarantors listed on the signature page hereto (the “Guarantors”).
1. Each of the Company and the Guarantors, jointly and severally, represents and warrants to, and agrees with, each of the Underwriters that:
(a) An “automatic shelf registration statement” as defined under Rule 405 under the Securities Act of 1933, as
amended (the “Act”) on Form S-3 (File No. 333-168914) in respect of the Securities has been filed with the Securities and Exchange Commission (the “Commission”) not earlier than three years prior to the date hereof; such
registration statement, and any post-effective amendment thereto, became effective on filing; and no stop order suspending the effectiveness of such registration statement or any part thereof has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission, and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act has been received by the Company
or any Guarantor (the base prospectus filed as part of such registration statement, in the form in which it has most recently been filed with the Commission on or prior to the date of this Agreement, is hereinafter called the “Basic
Prospectus”; any preliminary prospectus (including any preliminary prospectus supplement) relating to the Securities filed with the Commission pursuant to Rule 424(b) under the Act is hereinafter called a “Preliminary Prospectus”; the
various parts of such registration statement, including all exhibits thereto but excluding Form T-1 and including any prospectus
supplement relating to the Securities that is filed with the Commission and deemed by virtue of Rule 430B under the Act to be part of such registration statement, each as amended at the time such
part of the registration statement became effective, are hereinafter collectively called the “Registration Statement”; the Basic Prospectus, as amended and supplemented (including by the Preliminary Prospectus) prior to the Applicable Time
(as defined in Section 1(c) hereof), is hereinafter called the “Pricing Prospectus”; the form of the final prospectus supplement relating to the Securities filed with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof is hereinafter called the “Prospectus”; any reference herein to the Registration Statement, the Basic Prospectus, the Pricing Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date of such Registration Statement or prospectus; any reference to any amendment or supplement to the Registration
Statement, the Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any post-effective amendment to the Registration Statement, any prospectus supplement relating to the Securities filed with the
Commission pursuant to Rule 424(b) under the Act and any documents filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and incorporated therein, in each case after the date of the Basic Prospectus, such
Preliminary Prospectus, or the Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any documents and reports of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement; and any “issuer free writing prospectus” as defined in Rule 433 under the Act relating to the
Securities is hereinafter called an “Issuer Free Writing Prospectus”);
(b) No order preventing or
suspending the use of any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the
Act and the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”) and the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through the Representative expressly for use therein;
(c) For the purposes of this Agreement, the “Applicable Time” is 12:53 pm (Eastern time) on the date of this
Agreement; the Pricing Prospectus as supplemented by the final term sheet prepared and filed pursuant to Section 5(a) hereof, taken together (collectively, the “Pricing Disclosure Package”) as of the Applicable Time, did not include
any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus
listed on Schedule II(a) hereto does not conflict with the information contained in the Registration Statement, the Pricing Prospectus or the Prospectus and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the
Pricing Disclosure Package as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation and warranty shall not apply to statements or omissions made in an Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through the Representative expressly for use therein;
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(d) The documents incorporated by reference in the Registration Statement,
the Pricing Prospectus and the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; any
further documents so filed and incorporated by reference in the Registration Statement and the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein not misleading; and no such documents were filed with the Commission since the Commission’s close of business on the business day immediately prior to the date of
this Agreement and prior to the execution of this Agreement, except as set forth on Schedule II(b) hereto;
(e)
The Registration Statement conforms, the Pricing Prospectus and the Prospectus and any further amendments or supplements to the Registration Statement, the Pricing Prospectus and the Prospectus will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to each part of the Registration Statement and as of the applicable filing
date as to the Pricing Prospectus and the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter
through the Representative expressly for use therein;
(f) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements included or incorporated by reference in the Pricing Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus; and, since the respective dates as of which information is given in the
Registration Statement and the Pricing Prospectus, there has not been any change in the capital stock or long term debt (other than under the Company’s senior unsecured revolving credit facility) of the Company or any of its subsidiaries, other
than (i) changes due to repurchases of the Company’s capital stock pursuant to previously announced repurchase programs or in connection with awards issued under the Company’s employee benefit plans and (ii) changes resulting
from issuances of the Company’s capital stock under the Company’s employee benefit plans, or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management,
financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole (collectively, a “Material Adverse Effect”), otherwise than as set forth or contemplated in the Pricing Disclosure
Package;
(g) To the Company’s and the Guarantors’ knowledge, except as disclosed in the Pricing
Disclosure Package and the Prospectus (exclusive of any amendment or supplement thereto made after the date hereof), no disputes exist or, to the Company’s and the Guarantors’ knowledge, are threatened with any franchisee of the Company or
any of its subsidiaries that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
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(h) The Company and its subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects except such as are described in the Pricing Prospectus or such as do not materially
affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its subsidiaries or where the failure to have such title to be free and clear of such liens, encumbrances and
defects would not, individually or in the aggregate, have a Material Adverse Effect; and any real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries;
(i) Each of the Company, the Guarantors and the Company’s subsidiaries has been duly incorporated or formed and is
validly existing as a corporation or limited liability company in good standing under the laws of the jurisdiction of its incorporation or formation, with power and authority (corporate and other) to own its properties and conduct its business as
described in the Pricing Disclosure Package, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except where the failure to be so qualified or be in good standing would not, individually or in the aggregate, have a Material Adverse Effect;
(j) The Company has an authorized capitalization as set forth in the Registration Statement and the Pricing Disclosure
Package and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; and all of the issued shares of capital stock of each subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable and (except for directors’ qualifying shares and except as otherwise set forth in the Pricing Disclosure Package) are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims;
(k) This Agreement has been duly authorized,
executed and delivered by the Company and the Guarantors.
(l) The Securities have been duly authorized and,
when issued and delivered pursuant to this Agreement, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company, in the case of the Notes, and of the Guarantors, in the
case of the Guarantees, which are enforceable against the Company, in the case of the Notes, and against the Guarantors, in the case of the Guarantees, in each case in accordance with their terms and in each case subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and which in each case are entitled to the benefits provided by the base indenture dated
as of August 25, 2010 (the “Base Indenture”) between the Company and Wells Fargo Bank, National Association as Trustee (the “Trustee”), as amended and supplemented by a supplemental indenture to be dated on or about
June 27, 2012 (the “Second Supplemental Indenture” and together with the Base Indenture, the “Indenture”), under which they are to be issued, which is substantially in the form filed as an exhibit to the Registration
Statement; the Indenture has been duly authorized and duly qualified under the Trust Indenture Act and, when the Second Supplemental Indenture is executed and delivered by the Company and the Trustee, will constitute a valid and legally
binding instrument, enforceable against the Company and the Guarantors in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency,
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reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles; and the Securities and the Indenture will conform to the
descriptions thereof in the Pricing Disclosure Package and the Prospectus;
(m) The issue and sale of the
Securities and the compliance by the Company and the Guarantors with all of the provisions of the Securities, the Indenture and this Agreement and the consummation of the transactions herein and therein contemplated will not conflict with or result
in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will such action result in any violation of the provisions of the Certificate of Incorporation,
By-laws or Limited Liability Company Agreement, as applicable, of the Company or any Guarantor or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties, except for such conflicts, breaches or violations (other than those in respect of the Certificate of Incorporation, By-laws or Limited Liability Company Agreement, as applicable, of the Company or any
Guarantor) as would not, individually or in the aggregate, have a Material Adverse Effect; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the
issue and sale of the Securities or the consummation by the Company and the Guarantors of the transactions contemplated by this Agreement or the Indenture except such as have been obtained under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Underwriters;
(n) Neither the Company nor any of its subsidiaries is in violation of its Certificate of Incorporation, By-laws or
Limited Liability Company Agreement, as applicable, or any law, administrative regulation or administrative or court decree applicable to the Company or any of its subsidiaries or in default in the performance or observance of any obligation,
covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except in each case (other than with
respect to any violation of the Certificate of Incorporation or By-laws of the Company) for any violation or default that would not, individually or in the aggregate, have a Material Adverse Effect;
(o) The statements set forth in the Pricing Disclosure Package and the Prospectus under the caption “Description of
Notes and Guarantees” insofar as they purport to constitute a summary of the terms of the Securities are accurate, complete and fair;
(p) Other than as set forth in the Pricing Disclosure Package, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of
the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect; and, to the best of the Company’s and the
Guarantors’ knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others;
(q) Neither the Company nor any Guarantor is or, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof, will be an “investment company,” as
such term is defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”);
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(r) (A) (i) At the time of filing the Registration Statement,
(ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of
the Exchange Act or form of prospectus), (iii) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the Act) made any offer relating to the Securities in reliance on the
exemption of Rule 163 under the Act and (iv) at the Applicable Time, the Company was a “well-known seasoned issuer” as defined in Rule 405 under the Act; and (B) at the earliest time after the filing of the Registration Statement
that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of the Securities, the Company was not an “ineligible issuer” as defined in Rule 405 under the Act;
(s) PricewaterhouseCoopers LLP, who have audited certain financial statements of the Company and its subsidiaries, and
have audited the effectiveness of the Company’s internal control over financial reporting, are an independent registered public accounting firm as required by the Act and the applicable rules and regulations adopted by the Commission and the
Public Accounting Oversight Board (United States) (“PCAOB”);
(t) The Company and its subsidiaries
maintain systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their
respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. The Company and its subsidiaries maintain internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management’s general or specific authorization; (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences and (v) the interactive data in eXtensible Business Reporting Language incorporated by reference in the Pricing Prospectus and the Prospectus fairly present the information called for in all
material respects and are prepared in accordance with the Commission’s rules and guidelines applicable thereto. The Company’s internal control over financial reporting is effective and the Company is not aware of any material weaknesses or
significant deficiencies in its internal control over financial reporting;
(u) Since the date of the latest
audited financial statements included or incorporated by reference in the Pricing Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting;
(v) The Company and its
subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in reports that it
files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods
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specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as
appropriate to allow timely decisions regarding required disclosure. The Company and its subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act; and
such disclosure controls and procedures are effective;
(w) Neither the Company nor any of its subsidiaries
nor, to the knowledge of the Company and the Guarantors, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated
or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment;
(x) The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company and the Guarantors, threatened;
(y) None of the Company, any of its subsidiaries or, to the knowledge of the Company and the Guarantors, any director,
officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose
of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC;
(z)
The Company and, to the knowledge of the Company, its directors and officers, in their capacities as such, are in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications;
(aa) None of the Company or any of the Guarantors has taken, directly or indirectly, any action designed to or that would be reasonably expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the Securities; and
(bb) The
financial statements filed with the Commission as a part of or incorporated by reference in the Registration Statement and included or incorporated by reference in the Pricing Disclosure Package and the Prospectus present fairly in all material
respects the consolidated financial position of the Company and its subsidiaries as of and at the dates indicated and the results
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of their operations and cash flows for the periods specified. The supporting schedules, if any, included or incorporated by reference in the Registration Statement present fairly in all material
respects the information required to be stated therein. Such financial statements and supporting schedules comply as to form in all material respects with the applicable accounting requirements of Regulation S-X and have been prepared in conformity
with generally accepted accounting principles as applied in the United States applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto and except that the Company has not revised
its consolidated financial statements as of December 31, 2011 and 2010 and for each of the three years in the period ended December 31, 2010 included in the Form 10-K to reflect other comprehensive income in accordance with ASU
No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” (“ASU 2011-12”). No
other financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement. The financial data set forth in the Preliminary Prospectus and the Prospectus under the captions
“Prospectus Supplement Summary—Summary Consolidated Financial Data and Other Financial Data,” and “Capitalization” present fairly in all material respects the information set forth therein on a basis consistent with that of
the audited financial statements contained in the Registration Statement. The interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus
fairly present the information called for in all material respects and have been prepared in accordance with the Commission’s rules and guidelines applicable thereto.
Any certificate signed by any officer of the Company or the Guarantors and delivered to the Representative or counsel for the Underwriters in connection with the offering of the Securities shall be deemed
a representation and warranty by the Company or the Guarantors, as to matters covered thereby, to each Underwriter.
2. (a)
Subject to the terms and conditions herein set forth, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price of 98.375% of
the principal amount thereof, plus accrued interest, if any, from June 27, 2012 to the Time of Delivery (as defined below) hereunder, the principal amount of Securities set forth opposite the name of such Underwriter in Schedule I hereto.
(b) Each of the Guarantors, jointly and severally, agrees to fully and unconditionally guarantee the Notes pursuant to the
terms of the Indenture.
3. Upon the authorization by you of the release of the Securities, the several Underwriters propose
to offer the Securities for sale upon the terms and conditions set forth in the Pricing Disclosure Package.
4. (a) The
Securities to be purchased by each Underwriter hereunder will be represented by one or more definitive global Securities in book-entry form which will be deposited by or on behalf of the Company with The Depository Trust Company (“DTC”) or
its designated custodian. The Company will deliver the Securities to Deutsche Bank Securities Inc., for the account of each Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Company to Deutsche Bank Securities Inc. at least forty-eight hours in advance, by causing DTC to credit the Securities to the account of Deutsche Bank Securities Inc. at DTC. The Company will cause
the certificates representing the Securities to be made available to Deutsche Bank Securities Inc. for checking at least twenty-four hours prior to the Time of Delivery (as
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defined below) at the office of DTC or its designated custodian (the “Designated Office”). The time and date of such delivery and payment shall be 9:30 a.m., New York City time, on
June 27, 2012 or such other time and date as Deutsche Bank Securities Inc. and the Company may agree upon in writing. Such time and date are herein called the “Time of Delivery.”
(b) The documents to be delivered at the Time of Delivery by or on behalf of the parties hereto pursuant to Section 8 hereof,
including the cross-receipt for the Securities (as applicable) and any additional documents requested by the Underwriters pursuant to Section 8 hereof, will be delivered at the offices of Cahill Gordon & Reindel LLP, 80 Pine Street,
New York, NY 10005 (the “Closing Location”), and the Securities will be delivered at the Designated Office, all at the Time of Delivery. For the purposes of this Section 4, “New York Business Day” shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive order to close.
5. Each of the Company and the Guarantors, jointly and severally, agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such Prospectus pursuant to Rule 424(b) under the Act
not later than the Commission’s close of business on the second business day following the date of this Agreement; to make no further amendment or any supplement to the Registration Statement, the Basic Prospectus or the Prospectus prior to the
Time of Delivery which shall be disapproved by you promptly after reasonable notice thereof; to advise you, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective
or any amendment or supplement to the Prospectus has been filed and to furnish you with copies thereof; to prepare a final term sheet, containing solely a description of the Securities, in a form approved by you and to file such term sheet pursuant
to Rule 433(d) under the Act within the time required by such Rule; to file promptly all other material required to be filed by the Company with the Commission pursuant to Rule 433(d) under the Act; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus
(or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required in connection with the offering or sale of the Securities; to advise you, promptly after it receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus in respect of the Securities, of any notice of objection of the Commission to the use of the Registration Statement or any post-effective
amendment thereto pursuant to Rule 401(g)(2) under the Act, if the Company becomes the subject of a proceeding under Section 8A of the Act in connection with the offering of the Securities, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or
for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus or suspending any such qualification, to promptly use its best efforts
to obtain the withdrawal of such order; and in the event of any such issuance of a notice of objection, promptly to take such steps including, without limitation, amending the Registration Statement or filing a new registration statement, at its own
expense, as may be necessary to permit offers and sales of the Securities by the Underwriters (references herein to the Registration Statement shall include any such amendment or new registration statement);
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(b) If required by Rule 430B(h) under the Act, to prepare a form of
prospectus in a form approved by you and to file such form of prospectus pursuant to Rule 424(b) under the Act not later than may be required by Rule 424(b) under the Act; and to make no further amendment or supplement to such form of prospectus
which shall be disapproved by you promptly after reasonable notice thereof;
(c) If by the third anniversary
(the “Renewal Deadline”) of the initial effective date of the Registration Statement, any of the Securities remain unsold by the Underwriters, the Company will file, if it has not already done so and is eligible to do so, a new automatic
shelf registration statement relating to the Securities, in a form satisfactory to you. If at the Renewal Deadline the Company is no longer eligible to file an automatic shelf registration statement, the Company will, if it has not already done so,
file a new shelf registration statement relating to the Securities, in a form satisfactory to you and will use its reasonable efforts to cause such registration statement to be declared effective within 180 days after the Renewal Deadline. The
Company will take all other action necessary or appropriate to permit the public offering and sale of the Securities to continue as contemplated in the expired registration statement relating to the Securities. References herein to the Registration
Statement shall include such new automatic shelf registration statement or such new shelf registration statement, as the case may be;
(d) Promptly from time to time to take such action as you may reasonably request to qualify the Securities for offering and sale under the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Securities, provided that in connection therewith neither the Company nor
any Guarantor shall be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction;
(e) To furnish the Underwriters with written and electronic copies of the Pricing Disclosure Package in such quantities as they may reasonably request. If at any time prior to delivery of the Prospectus
to the Underwriters (i) any event shall occur or condition shall exist as a result of which the Pricing Disclosure Package as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (ii) it is necessary to amend or supplement the Pricing Disclosure Package to comply with the Act, the Exchange
Act or the Trust Indenture Act, the Company will promptly notify the Underwriters thereof and will upon their request prepare and furnish to the Underwriters such amendments or supplements to the Pricing Disclosure Package (or any document to be
filed with the Commission and incorporated by reference therein) as the Underwriters may from time to time reasonably request so that the statements in the Pricing Disclosure Package as so amended or supplemented (including such documents to be
incorporated by reference therein) will not, in light of the circumstances under which they were made, be misleading or so that the Pricing Disclosure Package will comply with the Act, the Exchange Act or the Trust Indenture Act.
(f) Prior to 3:00 p.m., New York City time, on the second New York Business Day next succeeding the date of this Agreement
and from time to time, to furnish the Underwriters with written and electronic copies of the Prospectus in New York City in such quantities as you may reasonably request, and, if the delivery of a prospectus (or in lieu thereof, the notice referred
to in Rule 173(a) under the Act) is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Securities and if at such time any event shall have occurred as
a result of which the Prospectus as then amended
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or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to notify you and upon your request to file such document and to
prepare and furnish without charge to each Underwriter and to any dealer in securities as many written and electronic copies as you may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance; and in case any Underwriter is required to deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) in connection with sales of any of the Securities
at any time nine months or more after the time of issue of the Prospectus, upon your request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many written and electronic copies as you may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Act;
(g) To make generally available to
its securityholders as soon as practicable, but in any event not later than sixteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158);
(h) During the period beginning from the date hereof and continuing to and including the Time of Delivery or such earlier
time as you may notify the Company, not to offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose, except as provided hereunder of, any securities of the Company or of any Guarantor that are
substantially similar to the Securities;
(i) To pay the required Commission filing fees relating to the
Securities within the time required by Rule 456(b)(1) under the Act without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) under the Act; and
(j) To use the net proceeds received by it from the sale of the Securities pursuant to this Agreement in the manner
specified in the Pricing Disclosure Package under the caption “Use of Proceeds.”
6. (a) (i) The Company
represents and agrees that, other than the final term sheet prepared and filed pursuant to Section 5(a) hereof, without the prior consent of the Representative, it has not made and will not make any offer relating to the Securities that would
constitute a “free writing prospectus” as defined in Rule 405 under the Act;
(ii) each Underwriter severally
represents and agrees that, without the prior consent of the Company and the Representative, other than one or more term sheets relating to the Securities containing customary information conveyed to purchasers of Securities and other customary
Bloomberg communications, it has not made and will not make any offer relating to the Securities that would constitute a free writing prospectus; and
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(iii) any such free writing prospectus the use of which has been consented to by the Company
and the Representative (including the final term sheet prepared and filed pursuant to Section 5(a) hereof) is listed on Schedule II(a) hereto;
(b) The Company has complied and will comply with the requirements of Rule 433 under the Act applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or retention
where required and legending; and
(c) The Company agrees that if at any time following issuance of an Issuer Free Writing
Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, the Pricing Prospectus or the Prospectus or would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Representative and, if
requested by the Representative, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided, however, that this
covenant shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through the Representative expressly for use
therein.
7. Each of the Company and the Guarantors jointly and severally covenants and agrees with the several Underwriters
that the Company and the Guarantors will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel and accountants in connection with the registration of the Securities under the Act and all
other expenses in connection with the preparation, printing, reproduction and filing of the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, any Issuer Free Writing Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, the Indenture, the Blue Sky Memorandum, closing
documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the qualification of the Securities for offering and
sale under state securities laws as provided in Section 5(d) hereof, including the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky survey; (iv) any
fees charged by securities rating services for rating the Securities; (v) the filing fees incident to, and the reasonable fees and disbursements of counsel for the Underwriters in connection with, any required review by the Financial Industry
Regulatory Authority of the terms of the sale of the Securities; (vi) the cost of preparing the Securities; (vii) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee
in connection with the Indenture and the Securities; and (viii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 9 and 12 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities by them, and any
advertising expenses connected with any offers they may make.
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8. The obligations of the Underwriters hereunder shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of the Company and the Guarantors herein are, on the date hereof and as of the Time of Delivery, true and correct, the condition that the Company and the Guarantors shall
have performed all of their obligations hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof; the final term sheet contemplated by Section 5(a) hereof, and any other material required to be filed by the Company pursuant to Rule 433(d) under the Act, shall have been filed with the
Commission within the applicable time periods prescribed for such filings by Rule 433; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission and no notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act shall have been received; no stop
order suspending or preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall have been initiated or threatened by the Commission and no proceedings for such purpose shall have been instituted or threatened by the Commission;
and all requests for additional information on the part of the Commission shall have been complied with to your reasonable satisfaction;
(b) Cahill Gordon & Reindel LLP, counsel for the Underwriters, shall have furnished to you such written opinion or opinions, dated the Time of Delivery, in form and substance satisfactory to you,
and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;
(c) Each of Hogan Lovells US LLP, counsel for the Company and the Guarantors, and Alston & Bird LLP, special Georgia counsel for the Company and the Guarantors, shall have furnished to you their
written opinions (drafts of such opinions are attached as Annex I hereto), dated the Time of Delivery, in form and substance satisfactory to you;
(d) On the date of the Prospectus at a time prior to the execution of this Agreement, at 9:30 a.m., New York City time, on the effective date of any post effective amendment to the Registration Statement
filed subsequent to the date of this Agreement and also at the Time of Delivery, PricewaterhouseCoopers LLP shall have furnished to you a “comfort letter” or “bringdown comfort letter”, as the case may be, dated the respective
dates of delivery thereof, in form and substance satisfactory to you and PricewaterhouseCoopers LLP;
(e) (i)
Neither the Company nor any of its subsidiaries shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Pricing Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Disclosure Package, and (ii) since
the respective dates as of which information is given in the Pricing Prospectus there shall not have been any change in the capital stock or long term debt of the Company or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, otherwise than as set forth or contemplated in the Pricing Disclosure
Package, the effect of which, in any such case described in clause (i) or (ii), is in your judgment so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities on the
terms and in the manner contemplated in the Pricing Disclosure Package;
(f) On or after the Applicable Time,
other than as a result of the offering of the Securities or the use of the proceeds thereof as described in the Pricing Disclosure Package, (i) no
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downgrading shall have occurred in the rating accorded the Company’s debt securities by any “nationally recognized statistical rating organization,” as that term is defined by the
Commission for purposes of Rule 3(a)(62) of the Exchange Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company’s
debt securities;
(g) On or after the Applicable Time there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange (the “NYSE”); (ii) a suspension or material limitation in trading in the Company’s securities on the NYSE;
(iii) a general moratorium on commercial banking activities declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States;
(iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial, political
or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in your judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the Prospectus;
(h) The Company shall have complied
with the provisions of Section 5(e) hereof with respect to the furnishing of prospectuses on the New York Business Day next succeeding the date of this Agreement;
(i) The Company shall have furnished or caused to be furnished to you at the Time of Delivery certificates of officers of
the Company and of each Guarantor satisfactory to you as to the accuracy of the representations and warranties of the Company and each Guarantor herein at and as of such time, as to the performance by the Company and the Guarantors of all of their
obligations hereunder to be performed at or prior to such time, as to the matters set forth in subsections (a) and (e) of this Section and as to such other matters as you may reasonably request; and
(j) The Company and the Guarantors shall have executed and delivered the Second Supplemental Indenture, in form and
substance reasonably satisfactory to the Underwriters and the Trustee, and the Underwriters shall have received executed copies thereof. The Company shall have executed and delivered the Securities, in form and substance reasonably satisfactory to
the Underwriters and the Trustee, and the Trustee shall have received such executed counterparts.
9. (a) The Company and each
of the Guarantors, jointly and not severally, will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon, (i) an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or caused by any
omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, not misleading, or (ii) an untrue statement or alleged untrue statement of a material fact
contained in the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed
pursuant to Rule 433(d) under the Act, or caused by any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however,
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that neither the Company nor any Guarantor shall be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus, in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Representative expressly for use therein.
(b) Each Underwriter will, severally and jointly, indemnify and hold harmless the Company and each Guarantor against any losses, claims,
damages or liabilities to which the Company or any Guarantor may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon, (i) an untrue
statement or alleged untrue statement of a material fact contained in the Registration Statement or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the
statements therein, not misleading, or (ii) an untrue statement or alleged untrue statement of a material fact contained in the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, any Issuer Free Writing Prospectus, or caused by any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the
Pricing Prospectus or the Prospectus or any such amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the
Representative expressly for use therein; and will reimburse the Company and the Guarantors for any legal or other expenses reasonably incurred by the Company or the Guarantors in connection with investigating or defending any such action or claim
as such expenses are incurred. The Company and the Guarantors hereby acknowledge that the only information that the Underwriters have furnished to the Company through the Representative expressly for use in the Registration Statement, the Basic
Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus or any such amendment or supplement thereto, or any Issuer Free Writing Prospectus are the statements set forth in the third paragraph of text under the caption
“Underwriting,” concerning the terms of the offering by the Underwriters; the third sentence of the sixth paragraph of text under the caption “Underwriting,” concerning market making by the Underwriters; the seventh paragraph of
text under the caption “Underwriting,” concerning short sales, stabilizing transactions and purchases to cover short sales by the Underwriters; and the eighth paragraph of text under the caption “Underwriting,” concerning the
imposition of a penalty bid in the Preliminary Prospectus and the Prospectus.
(c) Promptly after receipt by an indemnified
party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall
be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in connection with
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the defense thereof other than reasonable costs of investigation unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the contrary; (ii) the
indemnifying party has failed within a reasonable time after notice of the institution of such action to retain counsel reasonably satisfactory to the indemnified party; (iii) the indemnified party shall have reasonably concluded, after
consultation with counsel, that there may be legal defenses available to it that are different from or in addition to those available to the indemnifying party; or (iv) the named parties in any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified person and the indemnified party has been advised by counsel that the representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests
between them. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of
which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of
the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors on the one hand and the Underwriters on
the other from the offering of the Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection
(c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the
Guarantors on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Guarantors on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses)
received by the Company and the Guarantors bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors on the one hand or the
Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Guarantors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person
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guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company and the Guarantors under this Section 9 shall be in addition to any liability which the Company
and the Guarantors may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act and each officer, director and any affiliate of any Underwriter; and the
obligations of the Underwriters under this Section 9 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company
and the Guarantors and to each person, if any, who controls the Company or the Guarantors within the meaning of the Act.
10.
(a) If any Underwriter shall default in its obligation to purchase the Securities which it has agreed to purchase hereunder, you may in your discretion arrange for you or another party or other parties to purchase such Securities on the terms
contained herein. If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of thirty six hours within which to procure another
party or other parties satisfactory to you to purchase such Securities on such terms. In the event that, within the respective prescribed periods, you notify the Company that you have so arranged for the purchase of such Securities, or the Company
notifies you that it has so arranged for the purchase of such Securities, you or the Company shall have the right to postpone the Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in your opinion may
thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or
Underwriters by you and the Company as provided in subsection (a) above, the aggregate principal amount of such Securities which remains unpurchased does not exceed one eleventh of the aggregate principal amount of all the Securities, then the
Company shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Securities which such Underwriter agreed to purchase hereunder and, in addition, to require each non-defaulting Underwriter to purchase its
pro rata share (based on the principal amount of Securities which such Underwriter agreed to purchase hereunder) of the Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for
the purchase of the Securities of a defaulting Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the aggregate principal amount of Securities which remains unpurchased exceeds one eleventh of the aggregate
principal amount of all the Securities, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Securities of a defaulting Underwriter or Underwriters, then this
Agreement shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 7 hereof and the indemnity and
contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.
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11. The respective indemnities, agreements, representations, warranties and other statements
of the Company, the Guarantors or any of their respective officers and of the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Company, or any Guarantor, or any officer or director or controlling person of
the Company or any Guarantor, and shall survive delivery of and payment for the Securities.
12. If this Agreement shall be
terminated pursuant to Section 10 hereof, the Company and the Guarantors shall not then be under any liability to any Underwriter except as provided in Sections 7 and 9 hereof; but, if for any other reason, the Securities are not delivered by
or on behalf of the Company and the Guarantors as provided herein, the Company and the Guarantors will jointly and severally reimburse the Underwriters through you for all out of pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of the Securities, but the Company and the Guarantors shall then be under no further liability to any Underwriter except as
provided in Sections 7 and 9 hereof.
13. In all dealings hereunder, Deutsche Bank Securities Inc. shall act on behalf of each
of the Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by Deutsche Bank Securities Inc. on behalf of the Underwriters.
All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by
mail, telex or facsimile transmission to you as the Representative in care of Deutsche Bank Securities Inc., 60 Wall Street, 4th Floor, New York, New York 10005, Attention: Equity Capital Markets—Syndicate Desk, fax: (212) 797-9344 , with
a copy to Deutsche Bank Securities Inc., 60 Wall Street, 36th Floor, New York, New York 10005, Attention: General Counsel, fax: (212) 797-4564; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Registration Statement, Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 9(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters’ Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by you upon request. Any such statements, requests, notices or agreements
shall take effect upon receipt thereof.
In accordance with the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company and the Guarantors, which information may include the name and
address of their respective clients, as well as other information that will allow the underwriters to properly identify their respective clients.
14. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company, the Guarantors and, to the extent provided in Sections 9 and 11 hereof, the officers and
directors of the Company and of each Guarantor and each person who controls the Company, any Guarantor or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any
right under or by virtue of this Agreement. No purchaser of any of the Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.
15. Time shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.
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16. The Company and each of the Guarantors acknowledges and agrees that (i) the
purchase and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Company and the Guarantors, on the one hand, and the several Underwriters, on the other, (ii) in connection therewith and
with the process leading to such transaction each Underwriter is acting solely as a principal and not the agent or fiduciary of the Company or any Guarantor, (iii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of
the Company or any Guarantor with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company or any Guarantor on other matters) or any other
obligation to the Company or any Guarantor except the obligations expressly set forth in this Agreement and (iv) the Company and each of the Guarantors has consulted its own legal and financial advisors to the extent it deemed appropriate. The
Company and each of the Guarantors agrees that it will not claim that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Company or any Guarantor, in connection with
such transaction or the process leading thereto.
17. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company, the Guarantors and the Underwriters, or any of them, with respect to the subject matter hereof.
18. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS TRANSACTION SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAWS OF THE STATE OF NEW YORK. Each of the Company and the Guarantors agrees that any suit or proceeding arising in respect of this agreement or
our engagement will be tried exclusively in the U.S. District Court for the Southern District of New York or, if that court does not have subject matter jurisdiction, in any state court located in The City and County of New York and each of the
Company and the Guarantors agrees to submit to the jurisdiction of, and to venue in, such courts.
19. The Company, each
of the Guarantors and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
20. This Agreement may be executed by any one or more of the parties hereto in any number of
counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument.
21. Notwithstanding anything herein to the contrary, the Company is authorized to disclose to any persons the U.S. federal and state income tax treatment and tax structure of the potential transaction and
all materials of any kind (including tax opinions and other tax analyses) provided to the Company relating to that treatment and structure, without the Underwriters, imposing any limitation of any kind. However, any information relating to the tax
treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to comply with securities laws. For this purpose, “tax structure” is limited to any facts that
may be relevant to that treatment.
-19-
If the foregoing is in accordance with your understanding, please sign and return to us one
for the Company and the Guarantors and the Representative plus one for each counsel counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this Agreement and such acceptance hereof shall constitute a
binding agreement between each of the Underwriters, the Company and each of the Guarantors. It is understood that your acceptance of this Agreement on behalf of each of the Underwriters is pursuant to the authority set forth in a form of agreement
among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on your part as to the authority of the signers thereof.
|
|
|
|
|
| Very truly yours, |
|
| CHOICE HOTELS INTERNATIONAL, INC. |
|
|
| By: |
|
/s/ David L. White |
|
|
Name: |
|
David L. White |
|
|
Title: |
|
Chief Financial Officer and Treasurer |
|
| CHOICE HOTELS INTERNATIONAL SERVICES CORP. |
|
|
| By: |
|
/s/ David L. White |
|
|
Name: |
|
David L. White |
|
|
Title: |
|
Chief Financial Officer and Treasurer |
|
| CHOICE CAPITAL CORP. |
|
|
| By: |
|
/s/ David L. White |
|
|
Name: |
|
David L. White |
|
|
Title: |
|
Chief Financial Officer and Treasurer |
|
| SUBURBAN FRANCHISE SYSTEMS, INC. |
|
|
| By: |
|
/s/ David L. White |
|
|
Name: |
|
David L. White |
|
|
Title: |
|
Chief Financial Officer and Treasurer |
[Signature
page to Underwriting Agreement]
|
|
|
|
|
| SUBURBAN FRANCHISE HOLDING COMPANY, INC. |
|
|
| By: |
|
/s/ David L. White |
|
|
Name: |
|
David L. White |
|
|
Title: |
|
Chief Financial Officer and Treasurer |
|
| PARK LANE DRIVE HOTEL DEVELOPMENT, LLC |
|
|
| By: |
|
CHOICE HOTELS INTERNATIONAL SERVICES CORP. |
|
|
| Its: |
|
Member |
|
|
| By: |
|
/s/ David L. White |
|
|
Name: |
|
David L. White |
|
|
Title: |
|
Chief Financial Officer and Treasurer |
|
| BRENTWOOD BOULEVARD HOTEL DEVELOPMENT, LLC |
|
|
| By: |
|
CHOICE HOTELS INTERNATIONAL SERVICES CORP. |
|
|
| Its: |
|
Member |
|
|
| By: |
|
/s/ David L. White |
|
|
Name: |
|
David L. White |
|
|
Title: |
|
Chief Financial Officer and Treasurer |
|
| DRY POCKET ROAD HOTEL DEVELOPMENT, LLC |
|
|
| By: |
|
CHOICE HOTELS INTERNATIONAL SERVICES CORP. |
|
|
|
| Its: |
|
Member |
|
|
|
|
| By: |
|
/s/ David L. White |
|
|
Name: |
|
David L. White |
|
|
Title: |
|
Chief Financial Officer and Treasurer |
[Signature
page to Underwriting Agreement]
|
|
|
|
|
| CSES, LLC |
|
|
| By: |
|
CHOICE HOTELS INTERNATIONAL SERVICES CORP. |
|
|
| Its: |
|
Member |
|
|
| By: |
|
/s/ David L. White |
|
|
Name: |
|
David L. White |
|
|
Title: |
|
Chief Financial Officer and Treasurer |
[Signature
page to Underwriting Agreement]
Accepted as of the date hereof:
Deutsche Bank Securities Inc.
|
|
|
| DEUTSCHE BANK SECURITIES INC. |
|
|
| By: |
|
/s/ Nicholas Hayes |
|
|
Name: Nicholas Hayes |
|
|
Title: Managing Director |
|
|
| By: |
|
/s/ Stephen P. Cunningham |
|
|
Name: Stephen P. Cunningham |
|
|
Title: Managing Director |
[Signature
page to Underwriting Agreement]
SCHEDULE I
|
|
|
|
|
| Underwriter |
|
Principal
Amount of
Securities to be
Purchased |
|
| Deutsche Bank Securities Inc. |
|
$ |
180,000,000 |
|
| Wells Fargo Securities, LLC |
|
$ |
88,000,000 |
|
| Merrill Lynch, Pierce, Fenner & Smith Incorporated |
|
$ |
40,000,000 |
|
| Goldman, Sachs & Co |
|
$ |
40,000,000 |
|
| J.P. Morgan Securities LLC |
|
$ |
40,000,000 |
|
| SunTrust Robinson Humphrey, Inc. |
|
$ |
12,000,000 |
|
|
|
| Total |
|
$ |
400,000,000 |
|
|
|
|
|
|
SCHEDULE II
| (a) |
Issuer Free Writing Prospectuses not included in the Pricing Disclosure Package: |
NONE.
| (b) |
Additional Documents Incorporated by Reference: |
NONE.
Opinion of Hogan Lovells US LLP
(a) The Company is validly existing as a corporation and in good standing under the laws of the State of Delaware as of the date of the
applicable certificate referred to in Schedule A.
(b) Each Delaware Guarantor is, as applicable, validly existing
as a corporation or limited liability company and in good standing or existence under the laws of the State of Delaware, as of the date of the applicable certificate referred to in Schedule A.
(c) Each Georgia Guarantor is validly existing as a corporation and in good standing under the laws of the State of Georgia, as of the
date of the applicable certificate referred to in Schedule A.
(d) The Company has the corporate power to execute,
deliver and perform its obligations under the Operative Agreements and to own, lease and operate its current properties and to conduct its business as described in the Pricing Disclosure Package and the Prospectus.
(e) Each Delaware Guarantor has the corporate power or limited liability company power, as applicable, to execute, deliver and perform
its obligations under the Guarantor Agreements and to own, lease and operate its current properties and to conduct its business as described in the Pricing Disclosure Package and the Prospectus.
(f) The Notes have been duly authorized by the Company. The Notes, when executed, authenticated, issued and delivered in the manner
provided for in the Indenture, the Agreement and the Second Supplemental Indenture, against payment therefor in accordance with the Agreement, will constitute valid and binding obligations of the Company entitled to the benefits of the Indenture and
the Second Supplemental Indenture and enforceable against the Company in accordance with their terms. In expressing the foregoing opinions, we have assumed that the Notes conform as to form to the specimen of the global certificates referred to in
Paragraph 16 of Schedule B attached hereto, which we have not verified by inspection of the individual Notes. The specimen of the global certificate referred to in Paragraph 16 of Schedule B attached hereto is in the
form contemplated in the Second Supplemental Indenture.
(g) The Operative Agreements (other than the Notes, which are
addressed in paragraph (f) above) have been duly authorized, executed and delivered by the Company.
(h) The Guarantor
Agreements have been duly authorized, executed and delivered by the Delaware Guarantors.
(i) The Indenture has been duly
qualified under the TIA.
(j) The Indenture constitutes a valid and binding obligation of the Company enforceable against the
Company in accordance with its terms.
(k) The Second Supplemental Indenture constitutes a valid and binding obligation of the
Company and the Guarantors enforceable against the Company and the Guarantors in accordance with its terms.
(l) The Notes,
the Indenture and the Second Supplemental Indenture conform as to legal matters in all material respects to the descriptions thereof set forth in the Pricing Disclosure Package and the Prospectus under the captions “Description of Notes and
Guarantees” and “Description of Debt Securities and Guarantees of Debt Securities.”
(m) The information in the
Pricing Disclosure Package and the Prospectus under the captions “Description of Notes and Guarantees” and “Description of Debt Securities and Guarantees of Debt Securities,” to the extent that such information constitutes
matters of law or legal conclusions, has been reviewed by us and is correct in all material respects.
(n) At the time the
Registration Statement became effective and at the date hereof, the Registration Statement, Pricing Disclosure Package and the Prospectus (except for the financial statements and supporting schedules included therein and the Statement of Eligibility
on Form T-1 of the Trustee, as to which we express no opinion), excluding the documents incorporated by reference therein, comply as to form in all material respects with the requirements of the TIA and the Securities Act and the applicable rules
and regulations thereunder.
(o) The documents incorporated by reference in the Prospectus pursuant to Item 12 of
Form S-3 under the Securities Act (other than the financial statements and schedules and financial information and data included therein or omitted therefrom, as to which we express no opinion), at the time they were filed with the Commission,
complied as to form in all material respects with the requirements of the Exchange Act, and the regulations thereunder.
(p)
The execution, delivery and performance on the date hereof by the Company of the Operative Agreements and by the Delaware Guarantors of the Guarantor Agreements does not (i) in the case of the Company and the Delaware Guarantors that are
organized as corporations under the Delaware Corporation Act, violate the Delaware Corporation Act or the certificate of incorporation or bylaws of the Company or the Delaware Guarantors, (ii) in the case of the Delaware Guarantors that are
organized as limited liability companies under the Delaware LLC Act, violate the Delaware LLC Act or the certificate of formation or limited liability company agreement of the Delaware Guarantors, (iii) violate any provision of Applicable
Federal Law or any provision of Applicable State Law, (iv) breach or constitute a default under any of the Company Contracts (except that we express no opinion with respect to any matters that would require a mathematical calculation or a
financial or accounting determination) or (iv) violate any of the Company Orders.
(q) No approval or consent of, or
registration or filing with, any federal governmental agency or any New York or Delaware governmental agency is required to be obtained or made by the Company or the Delaware Guarantors under Applicable Federal Law or Applicable State Law, under the
Delaware Corporation Act in the case of the Delaware Guarantors that are organized as corporations under such law, under the Delaware LLC Act in the case of the Delaware Guarantors that are organized as limited liability companies under such law, in
connection with the execution, delivery and performance on the date hereof by the Company of the Operative Agreements and by the Delaware Guarantors of the Guarantor Agreements.
(r) Neither the Company nor any of the Guarantors is, nor immediately following the issuance and sale of the Notes and the application of
the proceeds thereof as described in the Prospectus will be, an “investment company” within the meaning of the ICA.
(s) The information in the Prospectus under the caption “United States Federal Income Tax Considerations” has been reviewed by
us and, to the extent such information constitutes matters of law or legal conclusions, is correct in all material respects.
(t) Based solely upon our review of the information regarding the Company provided through the EDGAR System on the Commission’s
website, the Registration Statement became effective under the Securities Act, and, to our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued under the Securities and no proceedings for that purpose
have been instituted or threatened by the Commission.
Opinion of Alston & Bird LLP
1. Each Georgia Guarantor has the corporate power and authority to (i) own, lease and operate its properties and to conduct its
business as described in the Pricing Disclosure Package, the Prospectus and the Prospectus Supplement and (ii) enter into and perform its obligations under the Underwriting Agreement and the Second Supplemental Indenture.
2. The Underwriting Agreement has been duly authorized, executed and delivered by each Georgia Guarantor.
3. The Second Supplemental Indenture has been duly authorized, executed and delivered by each Georgia Guarantor.
4. No consent, approval, license, authorization or other order of, or registration or filing with, any court or other governmental or
regulatory authority or agency of the State of Georgia is required for each Georgia Guarantor’s (i) due execution, delivery or performance of the Underwriting Agreement and the Second Supplemental Indenture, or (ii) consummation of
the transactions contemplated by the Underwriting Agreement and the Second Supplemental Indenture, except for (a) those consents, approvals, licenses, authorizations, registrations, filings or other actions that have been obtained or made by a
Georgia Guarantor prior to the date hereof and are in full force and effect under Georgia law or Georgia securities or blue sky laws; (b) consents, waivers, filings, authorizations, approvals or actions required in connection with ordinary
course of conduct by a Georgia Guarantor of its business and ownership or operation by a Georgia Guarantor of its assets; and (c) any other consents, waivers, filings, authorizations, approvals or actions as are specifically provided for in the
Offering Documents to which a Georgia Guarantor is a party and those required after the date hereof in connection with the exercise of certain remedies by the parties under the Offering Documents to the extent required pursuant to the terms thereof
or applicable law.
5. The execution and delivery by each Georgia Guarantor of the Underwriting Agreement and the Second
Supplemental Indenture and, if each Georgia Guarantor were now to perform its obligations thereunder, the performance by each Georgia Guarantor of its obligations under the Underwriting Agreement and the Second Supplemental Indenture: (i) will
not result in any violation of the provisions of the Organizational Documents of such Georgia Guarantor, (ii) will not result in any violation of any Georgia statute, rule, or regulation applicable to such Georgia Guarantor, or
(iii) breach or constitute a default under any Company Contracts to which the Georgia Guarantor is a party. For purposes of this opinion, Company Contracts means the following agreements and contracts of the Georgia Guarantors and amendments,
waivers, consents and approvals related thereto: (i) Senior Unsecured Revolving Credit Facility Agreement dated February 24, 2011 among Choice Hotels International, Inc., Wells Fargo Bank, National Association, as administrative agent, and
a syndicate of lenders, as such agreement may be amended, modified, renewed, refunded, restated, refinanced or replaced from time to time, and (ii) executed copy of the First Supplemental Indenture dated as of August 25, 2010 among the
Company, the Guarantors, and the Trustee, as trustee, to the Indenture dated as of August 25, 2010.
