Exhibit 99.1
AMENDMENT AGREEMENT
This AMENDMENT AGREEMENT dated as of September 4, 2003 (the
"Agreement"), between CHOICE HOTELS INTERNATIONAL, INC., a Delaware corporation
("Choice") and SUNBURST HOSPITALITY CORPORATION, a Delaware corporation
("Sunburst").
RECITALS
WHEREAS, on January 4, 2001, Sunburst issued to Choice the 11.375%
Series A Senior Subordinated Discount Notes due 2008 (the "Note") containing the
terms set forth therein; and
WHEREAS, Sunburst desires to redeem the note in full; and
WHEREAS, Sunburst and Choice desire to amend the Note to allow for
redemption of the Note on the terms set forth herein.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound, the parties hereto agree as follows:
1. DEFINITIONS
As used herein, the following terms have the following meanings:
"Agreement" shall have the meaning set forth in the preamble to this
agreement.
"Applicable Law" shall mean all applicable federal, state, local,
municipal, foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute or
treaty.
"Choice" shall have the meaning set forth in the preamble to this
agreement.
"Closing" shall have the meaning set forth in Paragraph 4.a.
"Guarantors" shall have the meaning set forth in the Indenture.
"Indenture" means, the indenture, dated as of January 4, 2001, among
Sunburst, the Guarantors, and the Trustee.
"Note" shall have the meaning set forth in the Recitals.
"SEC" shall mean the United States Securities and Exchange Commission.
"Sunburst" shall have the meaning set forth in the preamble to this
agreement.
"Trustee" shall have the meaning set forth in the Indenture.
2. AMENDMENT
a. At the Closing, pursuant to paragraph 11 of the Note, the Note shall be
amended by deleting paragraph 5(b) and 5(c) therein and inserting the
following paragraphs:
(1) "At any time prior to January 5, 2005, the Company may
redeem all, but not less than all, of the Notes, at a
"Redemption Price" (expressed as a percentage of principal
amount) as defined below, plus accrued and unpaid interest
and Liquidated Damages, if any, on the Notes redeemed, to
the Redemption Date. The date of redemption for the
purposes of this Section 5 shall be referred to in the
Indenture as the "Redemption Date".
(2) The Redemption Price shall be a percentage that is equal to
(i) 105.6875%, plus (ii) 2.84375% multiplied by the number
of days prior to January 5, 2005 that redemption is made,
divided by 365 days."
b. At the Closing, pursuant to Section 9.02 of the Indenture, the
Indenture shall be amended by deleting Section 3.07(a) and 3.07(b)
therein and inserting the following paragraphs:
(1) "At any time prior to January 5, 2005, the Company may
redeem all, but not less than all, of the Notes, at a
"Redemption Price" (expressed as a percentage of principal
amount) as defined below, plus accrued and unpaid interest
and Liquidated Damages, if any, on the Notes redeemed, to
the Redemption Date. The date of redemption for the
purposes of this Section 5 shall be referred to in the
Indenture as the "Redemption Date".
(2) The Redemption Price shall be a percentage that is equal to
(i) 105.6875%, plus (ii) 2.84375% multiplied by the number
of days prior to January 5, 2005 that redemption is made,
divided by 365 days."
3. PAYMENT
a. At the Closing, Sunburst shall redeem the Note, in full, in accordance
with the amended provisions of the Note and Indenture set forth above.
4. CLOSING
a. Upon Sunburst's notice of its intent to redeem the Note, pursuant to
paragraph 8 of the Note and section 3.03 of the Indenture, the
Amendment and the Payment as set forth in Articles II and III, above,
(the "Closing") shall be held at the offices of Choice Hotels
International, Inc., 10750 Columbia Pike, Silver Spring, MD 20901 (or
such other place as agreed by the parties), on a date and time to be
specified by the parties.
5. PUBLIC ANNOUNCEMENTS
a. The parties shall consult with each other before issuing any press
release, making any public statement or filing any government
disclosures with respect to this Agreement and/or the other
transactions contemplated hereby and, except as may be required by
Applicable Law, will not issue any such press release or make any such
public statement without the approval of the other parties.
Notwithstanding the foregoing, immediately upon the signing of this
Agreement, Choice shall be permitted to issue a press release, to file
disclosure with the SEC and to make public statements regarding this
Agreement and the terms of this Agreement.
6. TERMINATION
a. This Agreement may be terminated at any time prior to the Closing:
i. by mutual written agreement of Choice and Sunburst.
ii. by either Choice or Sunburst if:
(1) the Closing shall not have occurred on or before January
31, 2004; or
(2) there shall be any law or regulation that makes
consummation of this Agreement illegal or otherwise
prohibited or any judgment, injunction, order or decree of
any governmental entity having competent jurisdiction
enjoining Choice or Sunburst from consummating this
Agreement is entered and such judgment, injunction, order
or decree shall have become final and non-appealable and,
prior to such termination, the party seeking to terminate
shall have used reasonable best efforts to resist, resolve
or lift, as applicable, such law, regulation, judgment,
injunction, order or decree.
7. FEES AND EXPENSES
a. All fees and expenses incurred in connection herewith and the
transactions contemplated hereby shall be paid by the party incurring
such expenses, whether or not this Agreement is consummated.
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8. MISCELLANEOUS
a. Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including facsimile or similar writing)
and shall be given,
if to Choice, to:
Choice Hotels International, Inc.
10750 Columbia Pike
Silver Spring, MD 20901
Attention: Michael DeSantis
Facsimile: (301) 592-6269
if to Sunburst, to:
Sunburst Hospitality Corporation
10770 Columbia Pike
Silver Spring, MD 20901
Attention: Pam Williams
Facsimile: (301) 592-3935
or such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the other parties hereto. Each
such notice, request or other communication shall be effective (a) if
given by facsimile, when such facsimile is transmitted to the facsimile
number specified in this Section and the appropriate facsimile
confirmation is received or (b) if given by any other means, when
delivered at the address specified in this Section.
b. Amendments. Any provision of this Agreement may be amended or waived
prior to the Closing if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by Choice and Sunburst
or in the case of a waiver, by the party against whom the waiver is to
be effective.
c. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware.
d. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Each such
counterpart shall be deemed an original, and it shall not be necessary
in making proof of this Agreement to produce or account for more than
one such counterpart.
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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly executed on its behalf by its representative thereunto duly
authorized, as of the day and year first written above.
CHOICE HOTELS INTERNATIONAL, INC.
a Delaware corporation
By: /s/ Michael J. DeSantis
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Michael J. DeSantis
Senior Vice President, General Counsel & Secretary
SUNBURST HOSPITALITY CORPORATION
a Delaware corporation
By: /s/ Pamela Mckenzie Williams
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Pamela Mckenzie Williams
Senior Vice President, General Counsel & Secretary
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