Contract analysis

I. Purpose and Executive Summary A. Purpose. The purpose of this memorandum is to provide the engagement team with a comprehensive summary of VHG's existing credit facilities and outstanding indebtedness. This summary is intended to serve as foundational context for structuring and negotiating the proposed $700,000,000 Term Loan B refinancing (the "Proposed Refinancing") with Crescent Harbor Bank, N.A., as lead arran

II. Existing Senior Secured Term Loan B A. Overview and Key Terms The Existing TLB was originated on February 14, 2020 pursuant to the Existing TLB Credit Agreement. The following table summarizes the key structural terms of the facility: The guarantor group consists of five direct and indirect domestic subsidiaries of VHG. Each guarantor has provided a full and unconditional guaranty of VHG's obligations under the E

I. LIBOR Transition Considerations The Existing TLB uses LIBOR as its benchmark interest rate. As the engagement team is aware, the publication of most U.S. dollar LIBOR tenors (including overnight, 1-month, 3-month, 6-month, and 12-month settings) is expected to cease after June 30, 2023, following the announcements by ICE Benchmark Administration and the Financial Conduct Authority. The continued use of LIBOR as a

III. Senior Secured Revolving Credit Facility A. Overview and Key Terms VHG maintains a $400,000,000 Senior Secured Revolving Credit Facility (the "RCF") pursuant to the RCF Credit Agreement. The following table summarizes the key structural terms of the RCF: It is noteworthy that Crescent Harbor Bank, N.A. serves as the administrative agent under the RCF and is also the proposed lead arranger and administrative agen

IV. Senior Unsecured Notes Due 2028 A. Overview and Key Terms VHG has $245,000,000 in aggregate principal amount of Senior Unsecured Notes outstanding (the "Unsecured Notes"), issued pursuant to the Unsecured Notes Indenture with Atlantic Standard Trust Company as indenture trustee. The following table summarizes the key terms: The Unsecured Notes constitute senior unsecured obligations of VHG and rank pari passu in

V. Consolidated Capital Structure Summary Table The following table summarizes VHG's existing capital structure as of the date of this memorandum, prior to giving effect to the Proposed Refinancing: Additional Capital Structure Metrics (Pre-Refinancing): As reflected in the table above, VHG's pre-refinancing leverage profile is conservative, with a Total Net Leverage Ratio of approximately 2.29x against a 4.5x maximu

VI. Key Considerations for the Proposed Refinancing A. LIBOR-to-SOFR Transition As discussed in Section II.I above, the Existing TLB is benchmarked to LIBOR, which is scheduled to cease publication for most USD tenors after June 30, 2023. The Proposed Refinancing addresses this transition risk by replacing LIBOR with Adjusted Term SOFR as the benchmark rate for the new Term Loan B. The proposed pricing for the new fa

VII. Pro Forma Capitalization Table (Post-Refinancing) The following table sets forth VHG's pro forma capital structure following the closing of the Proposed Refinancing: Pro Forma Capital Structure Metrics (Post-Refinancing): The pro forma Total Net Leverage Ratio of 2.52x reflects a modest increase from the pre-refinancing ratio of approximately 2.29x, driven by the $75,000,000 upsize in the term loan facility (net

VIII. Open Items and Next Steps The following items remain open and will need to be addressed in connection with the Proposed Refinancing:

1. Payoff Quote. Obtain a formal payoff quote from Greystone Federal Credit Corp. (contact: Marion Stillwell, Vice President, Agency Services, 200 Park Avenue South, 22nd Floor, New York, NY 10003) to confirm the exact outstanding principal balance, accrued and unpaid interest, and prepayment premium as of the anticipated closing date. The payoff quote should also confirm the existence and amount of any additional fe

2. RCF Terms Confirmation. Confirm the maturity date, pricing, and other key terms of the RCF that were not available for inclusion in this memorandum (marked as "to be confirmed" in the tables above). In addition, review the RCF Credit Agreement to determine whether any consent, notice, or other procedural requirements apply in connection with the Proposed Refinancing, including the substitution of collateral agents

3. Unsecured Notes Indenture Review. Obtain and review the Unsecured Notes Indenture in full to confirm compliance with the limitation on indebtedness, limitation on liens, and change-of-control provisions, as discussed in Sections IV.C and VI.F above. This review should specifically address whether the $75,000,000 upsize in the term loan facility is permitted within the applicable covenant baskets.

4. UCC and Mortgage Search. Obtain a full and current list of all existing UCC-1 financing statements and mortgage recordings filed or recorded in connection with the Existing TLB and the RCF. This information is necessary for planning the lien release and re-perfection process described in Section VI.D above. UCC searches should be run against VHG and each Guarantor in all relevant filing jurisdictions, and title se

5. Existing TLB Provisions Analysis. Coordinate with Sophie Tremblay on the detailed analysis of the prepayment, assignment, and repricing provisions of the Existing TLB Credit Agreement (separate memorandum dated April 14, 2022). This analysis will determine whether the Proposed Refinancing constitutes a "repricing transaction" and whether any additional premiums or restrictions apply.

6. Tax Considerations. Coordinate with Leonard Cross (Tax Department) on the tax treatment of the following items arising from the Proposed Refinancing (separate memorandum to be circulated on or about April 18, 2022): (a) The prepayment premium of $3,125,000 payable in connection with the payoff of the Existing TLB; (b) The unamortized deferred financing costs and OID associated with the 2020 origination of the Exis

7. Closing Checklist. Prepare a comprehensive closing checklist for the Proposed Refinancing, incorporating all documentation, filing, recording, and administrative requirements identified in this memorandum and in the forthcoming memoranda from Sophie Tremblay and Leonard Cross. Please do not hesitate to reach out with any questions or if additional detail is required on any of the items discussed in this memorandum