Document:

Advisory Group Warrants

 Exhibit 4.6 
  

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. 
  
  
 SONIC FOUNDRY, INC. 
  
 WARRANT 

 

			
	Warrant No.: ____________	  	Dated: _______________

  
 Sonic Foundry, Inc., a
Maryland corporation (the “Company”), hereby certifies that, in exchange for services to be provided, __________________ (“Holder”) is entitled, subject to the terms set forth below, to purchase from the Company up to a total of
__________ shares of common stock, $.01 par value per share (the “Common Stock”), of the Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price equal to ___________
per share (as adjusted from time to time as provided in Section 9, the “Exercise Price”), at any time and from time to time from and after the date hereof and through and including ___________________ (the “Expiration
Date”), and subject to the following terms and conditions: 
  
 1.                Registration of Warrant on Books and Records of the Company. The Company shall register this Warrant, upon records to be maintained by
the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all other purposes, and the Company shall not be affected by notice to the contrary. 

 2.                Registration of
Transfers and Exchanges. 
  
 (a)                The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form
of Assignment attached hereto duly completed and signed, to the Transfer Agent or to the Company at the office specified in or pursuant to Section 3(b). Upon any such registration or transfer, a new warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not
so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance of such transferee of all of the rights and obligations of a holder of a Warrant.

  
 (b)                This Warrant is exchangeable, upon the surrender hereof by the Holder to the office of the Company specified in or pursuant to
Section 3(b) for one or more New Warrants, evidencing in the aggregate the right to purchase the number of Warrant Shares which may then be purchased hereunder. Any such New Warrant will be dated the date of such exchange. 
  
 3.                Duration and Exercise of Warrants. 
  
 (a)                This Warrant shall be exercisable by the registered Holder on any
business day before 8:00 P.M., New York City time, at any time and from time to time on or after the date hereof to and including the Expiration Date. At 8:00 P.M., New York City time on the Expiration Date, the portion of this Warrant not exercised
prior thereto shall be and become void and of no value. Prior to the Expiration Date, the Company may not call or otherwise redeem this Warrant without the prior written consent of the Holder. 
  
 (b)                Subject to Sections 2(b), 6 and 10, upon surrender of this Warrant, with the Form of Election to Purchase attached hereto duly completed and
signed, to the Company at its address for notice set forth in Section 13 and upon payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, in the manner provided hereunder, all as
specified by the Holder in the Form of Election to Purchase, the Company shall promptly (but in no event later than 3 business days after the Date of Exercise (as defined herein)) issue or cause to be issued and cause to be delivered to or upon the
written order of the Holder and in such name or names as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise, free of restrictive legends except (i) either in the event that a registration statement
covering the resale of the Warrant Shares and naming the Holder as a selling stockholder thereunder is not then effective or the Warrant Shares are not freely transferable without volume restrictions pursuant to Rule 144(k) promulgated under the
Securities Act of 1933, as amended (the “Securities Act”), or (ii) if this Warrant shall have been issued pursuant to a written agreement between the original Holder and the Company, as required by such agreement. Any person so
designated by the Holder to receive Warrant Shares shall be 

  

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deemed to have become holder of record of such Warrant Shares as of the Date of Exercise of this Warrant. 
  
 A “Date of Exercise” means the date on which the Company shall
have received (i) this Warrant (or any New Warrant, as applicable), with the Form of Election to Purchase attached hereto (or attached to such New Warrant) appropriately completed and duly signed, and (ii) payment of the Exercise Price for
the number of Warrant Shares so indicated by the holder hereof to be purchased. 
  
 This Warrant shall be exercisable, either in its entirety or, from time to time, for a portion of the number of Warrant Shares. If less than all of the Warrant Shares which may be purchased under this Warrant are
exercised at any time, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Shares for which no exercise has been evidenced by this Warrant. 
  
 4.                Payment of Taxes. The Company will pay all documentary stamp taxes attributable to the issuance of Warrant Shares upon the exercise of
this Warrant; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the
Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof. 
  
 5.                Replacement of Warrant. If this
Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or destruction and indemnity, if requested, satisfactory to it. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable charges as the Company may prescribe. 
  
 6.                Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its
authorized but unissued Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this
entire Warrant, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares that
shall be so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. 
  

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 7.                Certain
Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 8. Upon each such adjustment of the Exercise Price pursuant to this
Section 8, the Holder shall thereafter prior to the Expiration Date be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of Warrant Shares obtained by multiplying the Exercise Price in effect immediately
prior to such adjustment by the number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. 
  
 (a)                If the Company, at any time while this Warrant is outstanding, (i) shall pay a stock dividend (except scheduled dividends paid on
outstanding preferred stock as of the date hereof which contain a stated dividend rate) or otherwise make a distribution or distributions on shares of its Common Stock or on any other class of capital stock payable in shares of Common Stock,
(ii) subdivide outstanding shares of Common Stock into a larger number of shares, or (iii) combine outstanding shares of Common Stock into a smaller number of shares, the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision or combination, and shall apply to successive subdivisions and combinations. 
  
 (b)                In case of any reclassification of the Common Stock, any consolidation
or merger of the Company with or into another person, the sale or transfer of all or substantially all of the assets of the Company or any compulsory share exchange pursuant to which the Common Stock is converted into other securities, cash or
property, then the Holder shall have the right thereafter to exercise this Warrant only into the shares of stock and other securities and property receivable upon or deemed to be held by holders of Common Stock following such reclassification,
consolidation, merger, sale, transfer or share exchange, and the Holder shall be entitled upon such event to receive such amount of securities or property equal to the amount of Warrant Shares such Holder would have been entitled to had such Holder
exercised this Warrant immediately prior to such reclassification, consolidation, merger, sale, transfer or share exchange. The terms of any such consolidation, merger, sale, transfer or share exchange shall include such terms so as to continue to
give to the Holder the right to receive the securities or property set forth in this Section 9(b) upon any exercise following any such reclassification, consolidation, merger, sale, transfer or share exchange. 
  
 (c)                If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common Stock (and not to holders of this
Warrant) evidences of its indebtedness or assets or rights or warrants to subscribe for or purchase any security (excluding those referred to in Sections 8(a), (b) and (d)), then in each such case the Exercise Price shall be 

  

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determined by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such
distribution by a fraction of which the denominator shall be the Exercise Price determined as of the record date mentioned above, and of which the numerator shall be such Exercise Price on such record date less the then fair market value at such
record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of Common Stock as determined by the Company’s independent certified public accountants that regularly examines the
financial statements of the Company (an “Appraiser”). 
  
 (d)                 In case of any (1) merger or consolidation of the Company with or into another Person, or (2) sale by the Company of more than
one-half of the assets of the Company (on a book value basis) in one or a series of related transactions, or (3) tender or other offer or exchange (whether by the Company or another Person) pursuant to which holders of Common Stock are
permitted to tender or exchange their shares for other securities, stock, cash or property of the Company or another Person; then the Holder shall have the right thereafter to (A) exercise this Warrant for the shares of stock and other
securities, cash and property receivable upon or deemed to be held by holders of Common Stock following such merger, consolidation or sale, and the Holder shall be entitled upon such event or series of related events to receive such amount of
securities, cash and property as the Common Stock for which this Warrant could have been exercised immediately prior to such merger, consolidation or sales would have been entitled, (B) in the case of a merger or consolidation, (x) require
the surviving entity to issue to the Holder a warrant entitling the Holder to acquire shares of such entity’s common stock, which warrant shall have terms identical (including with respect to exercise) to the terms of this Warrant and shall be
entitled to all of the rights and privileges set forth herein and the agreements pursuant to which this Warrant was issued (including, without limitation, as such rights relate to the acquisition, transferability, registration and listing of such
shares of stock other securities issuable upon exercise thereof), or (C) in the event of an exchange or tender offer or other transaction contemplated by clause (3) of this Section, tender or exchange this Warrant for such securities,
stock, cash and other property receivable upon or deemed to be held by holders of Common Stock that have tendered or exchanged their shares of Common Stock following such tender or exchange, and the Holder shall be entitled upon such exchange or
tender to receive such amount of securities, cash and property as the shares of Common Stock for which this Warrant could have been exercised immediately prior to such tender or exchange would have been entitled as would have been issued. In the
case of clause (B), the exercise price applicable for the newly issued warrant shall be based upon the amount of securities, cash and property that each shares of Common Stock would receive in such transaction and the Exercise Price immediately
prior to the effectiveness or closing date for such transaction. The terms of any such merger, sale, consolidation, tender or exchange shall include such terms so as continue to give the Holder the right to receive the securities, cash and property
set forth in this Section upon any conversion or redemption following such event. This provision shall similarly apply to successive such events. 
  

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 (e)                 For the purposes of this Section 8, the following clauses shall also be applicable: 
  
 (i)                 Record Date. In case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in Common Stock or in securities convertible or exchangeable into shares of Common Stock, or (B) to subscribe for or purchase Common Stock or securities convertible or exchangeable into shares of
Common Stock, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of
the granting of such right of subscription or purchase, as the case may be. 
  
 (ii)                 Treasury Shares. The number of shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock. 
  
 (f)                 No adjustments in the Exercise Price shall be required if such
adjustment is less than $0.01; provided, however, that any adjustments which by reason of this Section 8 are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this
Section 8 shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. 
  
 (g)                 Whenever the Exercise Price is adjusted pursuant to Section 8(c) above, the Holder, after receipt of the
determination by the Appraiser, shall have the right to select an additional appraiser (which shall be a nationally recognized accounting firm), in which case the adjustment shall be equal to the average of the adjustments recommended by each of the
Appraiser and such appraiser. The Holder shall promptly mail or cause to be mailed to the Company, a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Such
adjustment shall become effective immediately after the record date mentioned above. 
  

	(i)                	If: 

  

	 	(i)	the Company shall declare a dividend (or any other distribution) on its Common Stock; or 

  

	 	(ii)	the Company shall declare a special nonrecurring cash dividend on or a redemption of its Common Stock; or 

  

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	 	(iii)	the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any
rights; or 

  

	 	(iv)	the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a
party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; or 

  

	 	(v)	the Company shall authorize the voluntary dissolution, liquidation or winding up of the affairs of the Company, 

  
 then the Company shall cause to be mailed to each Holder at their last addresses as they
shall appear upon the Warrant Register, at least 30 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, share exchange, dissolution, liquidation or winding up; provided, however, that
the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. 
  
 10.                
Payment of Exercise Price. The Holder shall pay the Exercise Price in immediately available funds. 
  
 11.                 Fractional Shares. The Company shall not be required to issue or cause to be issued fractional Warrant Shares
on the exercise of this Warrant. The number of full Warrant Shares which shall be issuable upon the exercise of this Warrant shall be computed on the basis of the aggregate number of Warrant Shares purchasable on exercise of this Warrant so
presented. If any fraction of a Warrant Share would, except for the provisions of this Section, be issuable on the exercise of this Warrant, the Company shall pay an amount in cash equal to the Exercise Price multiplied by such fraction. 

 

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 12.                 Notices. Any
and all notices or other communications or deliveries hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section prior to 8:00 p.m. (New York City time) on a business day, (ii) the business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section later than 8:00 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the business day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Company, to Sonic Foundry, Inc., 222 W. Washington
Avenue, Suite 775, Madison, Wisconsin 53703, Attention: Chief Financial Officer, or to Facsimile No. (608) 443-1609, or (ii) if to the Holder, to the Holder at the address or facsimile number appearing on the Warrant Register or such other
address or facsimile number as the Holder may provide to the Company in accordance with this Section. 
  
 13.                 Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’
notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall
be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such
successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register. 
  
 14.                 Miscellaneous. 
  
 (a)                 This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns. This Warrant may be amended only in writing signed by the Company and the Holder and their successors and assigns. 
  
 (b)                 Subject to Section 14(a), above,
nothing in this Warrant shall be construed to give to any person or corporation other than the Company and the Holder any legal or equitable right, remedy or cause under this Warrant. This Warrant shall inure to the sole and exclusive benefit of the
Company and the Holder. 
  
 (c)                 The corporate laws of the State of Maryland shall govern all issues concerning the relative rights of the Company and its stockholders. All
other questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. The Company and the Holder hereby irrevocably submit to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed herein, and hereby 

  

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irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such
court, or that such suit, action or proceeding is improper. Each of the Company and the Holder hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by receiving a copy
thereof sent to the Company at the address in effect for notices to it under this instrument and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. 
  
 (d)                 The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof. 
  
 (e)                 In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute
therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant. 
  
 REMAINDER OF PAGE INTENTIONALLY LEFT BLANK, 
 SIGNATURE PAGE FOLLOWS 
  

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 IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as
of the date first indicated above. 
  

	 	

			
	SONIC FOUNDRY, INC.
		
	By:	 	 

			
		
	Name:	 	 Ken Minor

		
	Title:	 	 Chief Financial Officer 

	 	 	 

  
  

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 FORM OF ELECTION TO PURCHASE 
  
 (To be executed by the Holder to exercise the right to purchase shares of Common Stock under the foregoing
Warrant) 
  
 To Sonic Foundry, Inc.: 

 
 In accordance with the Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase _____________ shares of common stock, $.01 par value per share, of Sonic Foundry, Inc. (the “Common Stock”) and encloses herewith $________ in cash, certified or official bank
check or checks, which sum represents the aggregate Exercise Price (as defined in the Warrant) for the number of shares of Common Stock to which this Form of Election to Purchase relates, together with any applicable taxes payable by the undersigned
pursuant to the Warrant. 
  
 The undersigned requests that
certificates for the shares of Common Stock issuable upon this exercise be issued in the name of 
  
 PLEASE INSERT SOCIAL SECURITY OR 
 TAX IDENTIFICATION NUMBER 
  
  
 _____________________________ 
  
  
 (Please print name and address) 
  
  
  
  
 If the number of shares of Common Stock issuable upon this exercise shall not
be all of the shares of Common Stock which the undersigned is entitled to purchase in accordance with the enclosed Warrant, the undersigned requests that a New Warrant (as defined in the Warrant) evidencing the right to purchase the shares of Common
Stock not issuable pursuant to the exercise evidenced hereby be issued in the name of and delivered to: 
  
 ________________________________ 
 (Please print name and address) 
  
 ________________________________ 
  
 ________________________________ 
  

	Dated:	______________,
______                                       
                  Name of Holder: 

  

			
	 
		
	(Print)	 	 

			
		
	(By:)	 	 

			
		
	 (Name:)
	 	 

			
		
	 (Title:)
	 	 
	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

  
  

 FORM OF ASSIGNMENT 
  
 [To be completed and signed only upon transfer of Warrant] 
  
 FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the right represented by the within Warrant to purchase shares
of Common Stock of Sonic Foundry, Inc. to which the within Warrant relates and appoints attorney to transfer said right on the books of Sonic Foundry, Inc. with full power of substitution in the premises. 
  

					
	 Dated:
	 	 
			
	 	 	 	 	 
	 	 	 	 	 

  

			
	 	 	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)
		
	 	 	 
	 	 	 Address of Transferee

		
	 	 	 
		
	 	 	 
	 	 	 

  
  

			
	 In the presence of:Second Amended And Restated Employment Agreement

 Exhibit 10.1 
  
 SECOND AMENDED AND RESTATED 
 EMPLOYMENT AGREEMENT 
  
 This Agreement (“Agreement”) dated this 20th day of December, 2005 between Choice Hotels International, Inc. (“Employer”), a Delaware corporation with principal offices at 10750 Columbia Pike, Silver Spring, Maryland
20901, and Charles A. Ledsinger, Jr. (“Employee”), amends and restates that Amended and Restated Employment Agreement dated November 13, 2002 and sets forth the terms and conditions governing the employment relationship between
Employee and Employer. 
  
 1. Employment. During the term
of this Agreement, as hereinafter defined, Employer hereby employs Employee as President and Chief Executive Officer (“CEO”). Employee hereby accepts such employment upon the terms and conditions hereinafter set forth and agrees to
faithfully and to the best of his ability perform such duties as may be from time to time assigned by Employer’s Board of Directors, such duties to be rendered at the principal office of Employer, subject to reasonable travel. The Employer
shall assign to Employee only those duties consistent with his position as President and CEO. The Employee, in his position as President and CEO, shall report directly to the Employer’s Board of Directors and all senior executives of the
Employer shall report either directly to Employee or indirectly through other senior executives. Employee also agrees to perform his duties in accordance with policies established by Employer’s Board of Directors, which may be changed from time
to time. During the term of this Agreement, Employee shall be nominated by the Board of Directors for re-election to the Employer’s Board of Directors as a Class III director. 
  
 2. Term. Subject to the provisions for termination hereinafter provided, the term of this Agreement (the “
Term”) shall begin on December 20, 2005 (“Effective Date”) and shall terminate four (4) years thereafter (the “Termination Date”). 
  
 3. Compensation. For all services rendered by Employee under this Agreement during the term thereof, Employer shall
pay Employee the following compensation: 
  
 (a) Salary. A
base salary of Seven Hundred Twenty Thousand Dollars ($720,000) per annum payable in equal bi-weekly installments. Such salary shall be reviewed by the Compensation Committee of the Board of Directors of Employer on the next annual review of
officers and each annual review thereafter and may be increased at the discretion of Employer. 
  
 (b) Incentive Bonus. Beginning in fiscal year 2006, Employee shall have the opportunity to earn a target bonus of One Hundred Percent (100%) per annum of the base salary set forth in subparagraph 3(a)
above in Employer’s bonus plans as adopted from time to time by Employer’s Board of Directors. 
  
 (c) Restricted Stock. At the Effective Date, Employer shall issue to Employee such number of restricted shares of Choice Hotels common stock
(“Common Stock”) that would have a fair market value on such date in the amount of Two Million Dollars ($2,000,000). The restrictions on such shares shall lapse upon vesting, which shall occur in four (4) equal annual installments
beginning one year from the Effective Date; provided, however, vesting of any then unvested shares shall accelerate and shall occur immediately upon the death, Constructive Termination (as defined in Section 7(c) below) or Change of Control
Termination (as defined in Section 11(d)) of Employee. 
  
 (d) Automobile. Employer shall provide Employee with an allowance for automobile expenses of $1,100 per month beginning on the Effective Date. 
  

(e) Club Membership. Employer shall provide Employee with an appropriate corporate membership, including initial and annual fees, at a dining
and/or recreational club at the choice of Employee for the purpose of business entertainment. 

 (f) Stock Awards. Employee shall be eligible to receive annual awards of options to purchase
Common Stock and/or performance-based restricted stock (the “Awards”) under the Choice Hotels International, Inc. Long Term Incentive Plan (“LTIP”), or similar plan, in accordance with the policy of the Choice Hotels Board as in
effect from time to time. The aggregate annual Awards issued after the Effective Date will be based on a multiple of Employee’s Salary, which multiple shall be determined in the discretion of the Compensation Committee of the Board of
Directors. For stock options, the value will be based on a Black-Scholes valuation. Notwithstanding any provision of the LTIP to the contrary, the Awards issued after the Effective Date will continue to vest according to their respective schedules
during Employee’s employment and after Employee’s employment terminates (including upon death or disability), until and unless (i) Employee is terminated for Cause pursuant to Section 10(b); (ii) Employee materially breaches
any term of this Agreement; or (iii) without the consent of the Board of Directors, Employee unilaterally and voluntarily resigns prior to the Termination Date. 
  
 (g) SERP and Deferred Compensation Plan. From and after the commencement of Employee’s employment, Employee
shall participate in the Choice Hotels International, Inc. Supplemental Executive Retirement Plan (“SERP”) and the Choice Hotels International Executive Deferred Compensation Plan approved September 25, 2002 (“Deferred Comp
Plan”). As applied to the Employee: 
  

	 	•	Section 1.10 of the SERP shall be amended by adding the following at the end thereto: 

  
 “From and after attaining age fifty-five (55), the Participant’s Years of Service shall be deemed to be his
actual Years of Service plus ten (10) years”; 
  

	 	•	For purposes of Section 5.1 of the Deferred Comp Plan, Employee upon attaining age fifty-five (55), shall be deemed to have ten (10) Years of Services.

  
 (h) Use of Employer’s Aircraft.
Employee shall, subject to availability, have the right to use Employer’s corporate aircraft for personal use for up to twenty-five (25) flight hours per year during the Term of this Agreement consistent with Employer’s Aircraft Use
Policy. Employee understands that use of the corporate aircraft will result in imputed income to him in accordance with applicable law and that Employee is responsible for the payment of related taxes associated with such imputed income. 

 
 (i) Other Benefits. Employee shall, when eligible, be entitled to
participate in all other fringe benefits, including vacation policy, generally accorded the most senior executive officers of Employer as are in effect from time to time on the same basis as such other senior executive officers. 
  
 4. Extent of Services. Employee shall devote his full professional
time, attention, and energies to the business of Employer, and shall not, during the term of this Agreement, be engaged in any other business activity whether or not such business activity is pursued for gain, profit, or other pecuniary advantage;
but the foregoing shall not be construed as preventing Employee from investing his assets in (i) the securities of public companies, or (ii) the securities of private companies or limited partnerships outside the lodging industry, if such
holdings are passive investments of one percent (1%) or less of outstanding securities and Employee does not hold positions of officer, employee or general partner. Employee shall be permitted to serve as a director of companies outside of the
lodging industry so long as such service does not inhibit his performance of services to the Employer. Employee shall not be permitted to serve as a director of any company within the lodging industry unless (i) the Corporate Compliance officer
of the Employer has determined that there is no conflict of interest and (ii) such service does not inhibit his performance of services to the Employer. Employee warrants and represents that he has no contracts or obligations to others which
would materially inhibit the performance of his services under this Agreement. 

 5. Disclosure and Use of Confidential Information; Non-Compete. 
  
 (a) Employee recognizes and acknowledges that information about
Employer’s and affiliates’ present and prospective clients, customers, franchises, management contracts, acquisitions and personnel, as they may exist from time to time, and to the extent it has not been otherwise disclosed, is a valuable,
special and unique asset of Employer’s business (“Confidential Information”). Throughout the Term of this Agreement and after its termination or expiration for whatever cause or reason except as required by applicable law, Employee
shall not directly or indirectly, or cause others to, make use of or disclose to others any Confidential Information. Notwithstanding the foregoing, Confidential Information does not include information which (i) was or becomes generally
available to the public other than as a result of a disclosure by Employee or (ii) is developed by Employee or on his behalf without reliance on information furnished to Employee by Employer or its agents. 
  
 (b) For a period of two years after the expiration or termination of the
Employee’s employment with the Employer, the Employee will not, except with the prior written consent of the Board, directly or indirectly, own, manage, operate, join, control, finance or participate in the ownership, management, operation,
control or financing of, or be connected as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise with, or use or permit Employee’s name to be used in connection with, any business or enterprise
which is engaged in the mid-market or economy hotel franchising business or any other line of business in which the Employer is materially engaged at the time of termination (“Competing Business”); provided, however, the foregoing shall
not be construed as preventing Employee from (i) investing his assets in (A) the securities of any Competing Business that is a public company or (B) the securities of any Competing Business that is a privately-held corporation,
limited partnership, limited liability company or other business entity, if such holdings are passive investments of one percent (1%) or less of such entity’s outstanding securities or (ii) becoming an employee, agent or
representative of, consultant to, or otherwise connected with any business entity that has multiple lines of business, some of which are not a Competing Business, if Employee’s services for such entity are restricted so that he will provide no
services or other assistance in support of, and will not otherwise be involved with, any such Competing Business conducted by such entity. 
  
 (c) During the Term of this Agreement and for a period of two years after its expiration or termination, Employee agrees not to solicit for employment,
directly or indirectly, on his behalf or on behalf of any person or entity, other than on behalf of Employer, any person employed by Employer, or its subsidiaries or affiliates during such period, unless Employer consents in writing. Additionally,
during such period, Employee agrees not to solicit for business nor to solicit to end their relationship with Employer any person or entity who was a franchisee of Employer (or its subsidiaries) during the Term of this Agreement; provided, however,
the foregoing shall not be construed as preventing Employee from soliciting business from any such franchisee that is for a line of business other than any Competing Business. 
  
 (d) The Employee acknowledges and agrees that the restrictions contained in this Section are reasonable and necessary to
protect and preserve the legitimate interests, properties, goodwill and business of the Employer, that the Employer would not have entered into this Agreement in the absence of such restrictions and that irreparable injury will be suffered by the
Employer should the Employee breach any of those provisions. Employee represents and acknowledges that (i) the Employee has been advised by the Employer to consult Employee’s own legal counsel in respect of this Agreement, and
(ii) that the Employee has had full opportunity, prior to execution of this Agreement, to review thoroughly this Agreement with the Employee’s counsel. The Employee further acknowledges and agrees that a breach of any of the restrictions
in this Section cannot be adequately compensated by monetary damages and that the Employer shall be entitled to seek preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as any other appropriate
equitable relief, which rights shall be cumulative and in addition to any other rights or remedies to which the Employer may be entitled. In the event that any of the provisions of this Section should ever be adjudicated to exceed the time,
geographic, service, or other limitations permitted by applicable law in any jurisdiction, it is the intention of the parties that the provision shall be amended to the extent of the maximum time, geographic, service, or other limitations permitted
by applicable law, that such amendment shall apply only within the jurisdiction of the court that made such adjudication and that the provision otherwise be enforced to the maximum extent permitted by law. 

 6. Notices. Any notice, request or demand required or permitted to be given under this Agreement
shall be in writing, and shall be delivered personally to the recipient or, if sent by certified or registered mail or overnight courier service to his residence in the case of Employee, or to its principal office in the case of the Employer, return
receipt requested. Such notice shall be deemed given when delivered if personally delivered or when actually received if sent certified or registered mail or overnight courier. 
  
 7. Constructive Termination. 
  
 (a) Nothing contained in this Agreement is intended to nor shall be construed to abrogate, limit or affect the powers,
rights and privileges of the Board of Directors or stockholders to remove Employee from the positions set forth in Section 1, with or without Cause (as defined in Section 10 below), during the term of this Agreement or to elect someone
other than Employee to those positions, as provided by law and the By-Laws of Employer. 
  
 (b) If Employee is Constructively Terminated (as defined in Section 7(c) below), it is expressly understood and agreed that Employee’s rights under this Agreement shall in no way be prejudiced. Accordingly,
Employee shall be entitled to receive all forms of compensation referred to in Section 3 above through the expiration of the term specified in Section 2, including bonuses (calculated based only on the actual payout of the EPS portion of
the bonus as all Employer’s officers receive in a given year) but excluding ungranted stock options. Additionally, all unvested Restricted Stock and stock options then held by Employee shall become immediately fully vested. If required under
Section 409A of the Internal Revenue Code, any payments which would otherwise be made to Employee during the first six (6) months following the date of Constructive Termination will be deferred and paid to Employee in a lump sum amount six
(6) months following the date of Constructive Termination. From and after the date of Constructive Termination, Employee shall have no further obligation to provide any services to Employer under this Agreement, and shall not be required to
mitigate damages but nevertheless shall be entitled in his sole discretion to pursue other employment. If Employee chooses to pursue and accept other employment after Constructive Termination, Employer shall be entitled to receive as offset, and
thereby reduce its payment, the amount received by Employee from any other active employment. As a condition to Employee receiving his compensation from Employer, Employee agrees to permit verification of his employment records and Federal income
tax returns by an independent attorney or accountant, selected by Employer but reasonably acceptable to Employee, who agrees to preserve the confidentiality of the information disclosed by Employee except to the extent required to permit Employer to
verify the amount received by Employee from other active employment. Employer shall receive credit for unemployment insurance benefits, social security insurance or like amounts actually received by Employee. 
  
 (c) For purposes of this Agreement, “Constructively Terminated”
shall mean (i) Employer’s removal or termination of Employee other than in accordance with Section 10, (ii) failure of the Employer to place Employee’s name in nomination for re-election to the Employer’s Board,
(iii) assignment of duties by the Employer inconsistent with Section 1, (iv) a decrease in Employee’s compensation or benefits (unless a similar decrease is imposed on all senior executives), (v) a change in Employee’s
title or the line of reporting set forth in Section 1, (vi) a significant reduction in the scope of Employee’s authority, position, duties or responsibilities, (vii) the relocating of Employee’s office location to a location
more than 25 miles from the Employee’s prior principal place of employment; (viii) a significant change in Employer’s annual bonus program which adversely affects Employee, or (ix) any other material breach of this Agreement by
Employer, provided Employer shall be given fourteen (14) days advance written notice of such claim of material breach, which written notice shall specify in reasonable detail the grounds for such claim of material breach, and “Constructive
Termination” shall mean the occurrence of the foregoing. Except in the case of bad faith, Employer shall have an opportunity to cure the basis for Constructive Termination during the fourteen (14) day period after written notice. If
Employer fails to cure the material breach within such fourteen (14) day period, Employee shall be Constructively Terminated as of the last day of such fourteen (14) day period. 

 8. Waiver of Breach. The waiver of either party of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach. 
  
 9. Assignment. The rights and obligations of Employer under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of Employer. The obligations of Employee hereunder may not be assigned or
delegated. 
  
 10. Termination of Agreement. This Agreement
shall terminate upon the following events and conditions: 
  
 (a)
Upon expiration of its Term; 
  
 (b) For Cause, which means
Employee’s gross negligence, willful misconduct, willful nonfeasance, material breach of this Agreement, conviction following final disposition of any available appeal of a felony, or pleading guilty or no contest to a felony, or a
determination by the Board of Directors after an investigation in which Employee is accorded his right of due process that Employee has committed a material violation of the Employer’s anti-harassment, ethics or discrimination policies.
Employee shall be entitled to fourteen (14) days advance written notice of termination, except where the basis for termination constitutes willful misconduct on the part of Employee involving dishonesty or bad faith, in which case the
termination shall be effective upon the sending of notice. Such written notice shall specify in reasonable detail the grounds for Cause and Employee shall have an opportunity to contest or cure the basis for termination during the fourteen
(14) day period after written notice. 
  
 (c) Subject to
state and federal laws, if Employee is unable to perform the essential functions of the services described herein, after reasonable accommodation, for more than 180 days (whether or not consecutive) in any period of 365 consecutive days, Employer
shall have the right to terminate this Agreement by written notice to Employee. In the event of such termination, all non-vested stock option and other non-vested obligations of Employer to Employee pursuant to this Agreement granted prior to the
Effective Date shall terminate; all non-vested stock option and other non-vested obligations granted after the Effective Date shall continue to vest in accordance with their terms. 
  
 (d) In the event of Employee’s death during the term of this Agreement, the Agreement shall terminate as of the date
thereof. 
  
 (e) Upon voluntary resignation of Employee not due to
Constructive Termination, so long as Employee has given Employer one hundred eighty (180) days prior written notice of such resignation. 
  
 11. Change of Control Severance. 
  
 (a) If, within twelve (12) months after a Change in Control, as defined in Section 11(c), there occurs a Change of Control Termination, as
defined in Section 11(d), Employee shall receive as severance compensation a payment in an amount equal to 250% of his base salary at the rate in effect at the time of termination plus 250% of the amount of any full year bonus awarded to
Employee for the year immediately preceding the Change of Control (or the maximum target bonus if no bonus was awarded in the prior year). If required under Section 409A of the Internal Revenue Code, such payment will made six (6) months
following the date of the Change of Control Termination. Regardless of which alternative form of severance compensation is elected by Employee, all unvested Restricted Stock and stock options then held by Employee shall automatically become fully
vested as of the date of the Change of Control Termination. 
  
 (b) Employee’s right to receive the benefits described in Section 11(a) shall be conditioned upon Employee executing Employer’s standard release agreement in which Employee releases all claims against Employer. 

 (c) A Change in Control of the Employer shall occur upon the happening of the earliest to occur of the
following: 
  
 (1) Any “person” as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (other than (i) the Employer, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Employer,
(iii) any corporations owned, directly or indirectly, by the stockholders of the Employer in substantially the same proportions as their ownership of stock, or (iv) Stewart Bainum, his wife, their lineal descendants and their spouses (so
long as they remain spouses) and the estate of any of the foregoing persons, and any partnership, trust, corporation or other entity to the extent shares of common stock (or their equivalent) are considered to be beneficially owned by any of the
persons or estates referred to in the foregoing provisions of this subsection 11(b) or any transferee thereof) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Employer representing 33% or more of the combined voting power of the Employer’s then outstanding voting securities. 
  
 (2) Individuals constituting the Board on the Effective Date and the successors of such individuals (“Continuing Directors”)
cease to constitute a majority of the Board. For this purpose, a director shall be a successor if and only if he or she was nominated by a Board (or a Nominating Committee thereof) on which individuals constituting the Board on the Effective Date
and their successors (determined by prior application of this sentence) constituted a majority. 
  
 (3) The stockholders of the Employer approve a plan of merger or consolidation (“Combination”) with any other corporation or
legal person, other than a Combination which would result in stockholders of the Employer immediately prior to the Combination owning, immediately thereafter, more than sixty-five percent (65%) of the combined voting power of either the
surviving entity or the entity owning directly or indirectly all of the common stock, or its equivalent, of the surviving entity; provided, however, that if stockholder approval is not required for such Combination, the Change in Control shall occur
upon the consummation of such Combination. 
  
 (4) The stockholders of the Employer approve a plan of complete liquidation of the Employer or an agreement for the sale or disposition by the Employer of all or substantially all of the Employer’s stock and/or assets, or accept a
tender offer for substantially all of the Employer’s stock (or any transaction having a similar effect); provided, however, that if stockholder approval is not required for such transaction, the Change in Control shall occur upon consummation
of such transaction. 
  
 (d) A Change of Control Termination shall
mean and include the termination of Employee’s employment with Employer at any time during the twelve (12) month period after the Change of Control if such termination is (i) by the Employer, (ii) a Constructive Termination or
(iii) by the resignation of Employee, in his discretion, upon written notice to Employer given no less than sixty (60) days prior to the date of termination. 
  
 12. Excise Taxes. 
  
 (a) Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any payment or distribution to the Employee or for the
Employee’s benefit (whether paid or payable or distributed or distributable) pursuant to the terms of this Agreement or otherwise (the 

 “Payment”) would be subject to the excise tax imposed by section 4999 of the Internal Revenue Code (the
“Excise Tax”), then the Employee shall be entitled to receive from Employer an additional payment (the “Gross-Up Payment”) in an amount such that the net amount of the Payment and the Gross-Up Payment retained by the Employee
after the calculation and deduction of all Excise Taxes (including any interest or penalties imposed with respect to such taxes) on the payment and all federal, state and local income tax, employment tax and Excise Tax (including any interest or
penalties imposed with respect to such taxes) on the Gross-Up Payment provided for in this Section, and taking into account any lost or reduced tax deductions on account of the Gross-Up Payment, shall be equal to the Payment; 
  
 (b) All determinations required to be made under this Section, including
whether and when the Gross-Up Payment is required and the amount of such Gross-Up Payment, and the assumptions to be utilized in arriving at such determinations shall be made by Accountants which Employer shall request provide the Employee and
Employer with detailed supporting calculations with respect to such Gross-Up Payment at the time the Employee is entitled to receive the Payment. For the purposes of this Section, the “Accountants” shall mean Employer’s independent
certified public accountants. All fees and expenses of the Accountants shall be borne solely by Employer. For the purposes of determining whether any of the Payments will be subject to the Excise Tax and the amount of such Excise Tax, such Payments
will be treated as “parachute payments” within the meaning of section 280G of the Code, and all “parachute payments” in excess of the “base amount” (as defined under section 280G(b)(3) of the Code) shall be treated as
subject to the excise Tax, unless and except to the extent that in the opinion of the Accountants such Payments (in whole or in part) either do not constitute “parachute payments” or represent reasonable compensation for services actually
rendered (within the meaning of section 280G(b)(4) of the Code) in excess of the “base amount,” or such “parachute payments” are otherwise not subject to such Excise Tax; for purposes of determining the amount of the Gross-Up
Payment the Employee shall be deemed to pay Federal income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the Gross-Up Payment is to be made and to pay any applicable state and local income
taxes at the highest applicable marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in Federal income taxes which could be obtained from the deduction of such state or local taxes
if paid in such year (determined without regard to limitations on deductions based upon the amount of the Employee’s adjusted gross income); and to have otherwise allowable deductions for Federal, state and local income tax purposes at least
equal to those disallowed because of the inclusion of the Gross-Up Payment in the Employee’s adjusted gross income. Any Gross-Up Payment with respect to any Payment shall be paid by Employer at the time the Employee is entitled to receive the
Payment. Any determination by the Accountants shall be binding upon Employer and the Employee. As a result of uncertainty in the application of section 4999 of the Code at the time of the initial determination by the Accountants hereunder, it is
possible that the Gross-Up Payment made will have been an amount less than Employer should have paid pursuant to this Section (the “Underpayment’). In the event that Employer exhausts its remedies and the Employee is required to make a
payment of any Excise Tax, the Underpayment shall be promptly paid by Employer to or for the Employee’s benefit. 
  
 13. Legal Fees. Employer shall reimburse the Employee for all reasonable attorneys fees incurred in connection with the negotiation and execution
of this Agreement. 
  
 14. Tax Indemnity. Employer shall
indemnify Employee for any penalty, interest or additional taxes imposed under Section 409A of the Internal Revenue Code and the corresponding regulations with respect to amounts payable under Section 7(b) or 11(a) of this Agreement.
Employee shall give Employer timely notice of any IRS notices and proceedings to which this indemnity obligation applies. Any and all amounts incurred by Employee in a year which are subject to Employer’s indemnification obligations shall be
paid by Employer in that year (or pursuant to such other schedule or at such other times as may be required by comply with Section 409A). 
  
 15. Condition to Effectiveness. This Agreement shall not be effective until approved by Employer’s Board of Directors. 

 16. Entire Agreement. This instrument contains the entire agreement of the parties. It may be
changed only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. This Agreement supersedes all previous agreements between the parties with respect to the
matters contained herein. This Agreement shall be governed by the laws of the State of Maryland, and any disputes arising out of or relating to this Agreement shall be brought and heard in any court of competent jurisdiction in the State of
Maryland. 
  
 IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first set forth above. 
  

			
	 Employer:

	
	 CHOICE HOTELS INTERNATIONAL, INC.

		
	 By:
	 	  

	 	 	Michael J. DeSantis
	 	 	Senior Vice President
	
	 Employee:

	
	  

 Charles A. Ledsinger,
Jr.

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