Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze the confidential syndication flex provisions contained in the Letter Agreement — Syndication Flex Provisions dated May 27, 2022 (the "Flex Letter") between Verimark Hospitality Group Inc. ("VHG" or the "Borrower") and Crescent Harbor Bank, N.A. ("Crescent Harbor," "CHB," or the "Lead Arranger"), which was executed contemporaneously with the Commitment

II. Background and Deal Terms Recap A. Transaction Overview VHG is undertaking a refinancing of its existing $625,000,000 Term Loan B credit facility (the "Existing TLB"), which was originated on February 14, 2020 with Greystone Federal Credit Corp. ("Greystone") serving as administrative agent. The Existing TLB bears interest at LIBOR plus 425 basis points with a LIBOR floor of 75 basis points, and was issued at an

III. Summary of Flex Provisions The Flex Letter sets forth four categories of flex provisions available to Crescent Harbor as Lead Arranger: (A) margin flex (spread flex), (B) OID flex (Discount flex), (C) SOFR floor flex, and (D) structural flex (encompassing adjustments to amortization, the MFN threshold, and the repricing protection period). Each category is discussed below, together with an analysis of its econom

IV. Downside Scenario Analysis This section presents five pricing scenarios, ranging from the base case (no flex exercise) through the worst case (full exercise of all available flex provisions). Each scenario is modeled using a one-month Term SOFR rate assumption of approximately 2.29% as of late May 2022, plus the 10 basis point SOFR credit spread adjustment applicable to the one-month tenor. It should be noted tha

V. Covenant Compliance Analysis Under Flex Scenarios A. Maximum Total Net Leverage Ratio (4.50x Springing) The Term Loan B facility contains a single financial maintenance covenant: a springing maximum total net leverage ratio of 4.50x, tested quarterly on a trailing four-quarter basis. Critically, this covenant is a "springing" covenant that is only tested when aggregate revolving credit exposure under the $400,000,

VI. Interaction of Flex Provisions with MFN and Repricing Protection A. MFN Interaction The interaction between the margin flex and the MFN provision creates a dynamic that warrants careful analysis. The MFN clause provides that if VHG incurs incremental term loans during the 18-month sunset period at an effective yield exceeding the initial Term Loan B yield by more than the applicable MFN threshold, the initial Ter

VII. Tax Considerations Under Flex Scenarios This section provides a summary of the key tax considerations relevant to the exercise of flex provisions, drawing on the more detailed analysis set forth in the Internal Memorandum — Tax Considerations for TLB Refinancing prepared by Leonard Cross (Tax Partner) dated April 18, 2022. The discussion below is not intended to be a comprehensive tax analysis and should be read

VIII. Recommendations and Next Steps A. Client Communication Based on the foregoing analysis, we recommend the following communications with VHG management:

1. Management Briefing. We recommend scheduling a briefing with Renata Haines (Chief Financial Officer) and Glenn Fischbach (Treasurer) to present the range of potential outcomes under the flex provisions. The briefing should focus on the two key variables that most directly affect VHG's economic outcome: (a) the potential increase in annual interest expense from approximately $43.0 million (base case) to approximate

2. Walk-Away Thresholds. We recommend that VHG establish internal walk-away thresholds — pricing levels beyond which VHG management would reassess whether the refinancing remains economically justified. Based on our analysis, we suggest that a full margin flex to 425 basis points combined with an OID increase beyond 1.50% (i.e., OID exceeding $10,500,000) should trigger a formal re-evaluation by VHG management. At th

3. General Counsel Notification. Priya Narayanan (General Counsel) should be kept apprised of any flex exercise communications from Crescent Harbor. Specifically, any communication from Ted Marchetti or Anika Holm at CHB's syndication desk indicating potential flex exercise should be promptly shared with Ms. Narayanan so that she can coordinate VHG's response and ensure that any flex exercise is consistent with the l

1. Syndication Timeline. The syndication launch is anticipated for June 6, 2022, with lender presentations scheduled for the week of June 13–17, 2022. Final allocation is targeted for June 30, 2022. Calderwood & Harkness should actively monitor the syndication process during this period, including tracking lender feedback, commitment levels, and any indications from Crescent Harbor's syndication team that flex exerci

2. Flex Exercise Monitoring. If Crescent Harbor determines that flex exercise is reasonably necessary to achieve successful syndication, CHB is required to consult with VHG (Renata Haines and Glenn Fischbach) before exercising flex. C&H should be prepared to provide real-time advice to VHG on the implications of any proposed flex exercise and to ensure that CHB complies with the consultation requirement and the comme

3. Credit Agreement Updates. If flex is exercised, the draft Credit Agreement will need to be updated to reflect the revised pricing terms. The first draft of the Credit Agreement was circulated on May 16, 2022, and subsequent drafts are under negotiation. Any changes resulting from flex exercise — including changes to the applicable margin, OID, SOFR floor, MFN threshold, or repricing protection period — will need t

4. Financial Advisor Consultation. Elise Cavanaugh at Meridian Strauss Advisory LLC should be consulted on market conditions and syndication reception during the syndication period. Meridian Strauss's real-time market intelligence will be valuable in assessing whether Crescent Harbor's exercise of flex (or indicated exercise) is consistent with prevailing market conditions and whether VHG should consider alternative

1. Confidentiality of the Flex Letter. The Flex Letter is strictly confidential and may not be disclosed to syndicate lenders. The existence and terms of the flex provisions are known only to VHG and Crescent Harbor (and their respective counsel and advisors). Calderwood & Harkness must maintain rigorous confidentiality protocols with respect to the Flex Letter and this memorandum. Any documents referencing the Flex

2. Conforming Documentation Changes. If flex is exercised, conforming changes will be required in the following documents: (a) the Credit Agreement (applicable margin, OID, SOFR floor, MFN threshold, repricing protection period, and related definitions); (b) the Fee Letter (to the extent that changes to the OID or arrangement fee allocation are implicated); and (c) any compliance certificates or other closing deliver

3. Updates to Prior Memoranda. Any change to the MFN threshold or the repricing protection period resulting from structural flex exercise will require updates to the analysis contained in the Internal Memorandum — MFN Sunset and Repricing Protection Negotiation Strategy dated May 10, 2022. Additionally, the forthcoming Internal Memorandum — Repricing Protection / Soft Call Analysis, which is currently being finalized

IX. Appendices Appendix A: Detailed Calculations — All-In Cost Under Each Scenario The following table presents the detailed calculation of the all-in cost of the Term Loan B under each of the five modeled scenarios. All calculations assume a one-month Term SOFR rate of 2.29% as of late May 2022 and are illustrative only. Actual costs will vary based on the Term SOFR rate at closing and over the life of the facility.

1. Base Case | 375 | 1.00% | 50 | ~6.14% | ~$42.98M | — | ~$60.5M | 2.52x

2. Margin +25 | 400 | 1.00% | 50 | ~6.39% | ~$44.73M | +$1.75M | ~$60.5M | 2.52x

3. Full Margin | 425 | 1.00% | 50 | ~6.64% | ~$46.48M | +$3.50M | ~$60.5M | 2.52x

4. OID Only | 375 | 2.00% | 50 | ~6.14% | ~$42.98M | — (coupon same) | ~$53.5M | 2.52x

5. Worst Case | 425 | 2.00% | 75 | ~6.64% | ~$46.48M | +$3.50M | ~$53.5M | 2.52x Component | Scenario 1: Base Case | Scenario 2: Margin +25 | Scenario 3: Full Margin | Scenario 4: OID Only | Scenario 5: Worst Case 1-Month Term SOFR | 2.29% | 2.29% | 2.29% | 2.29% | 2.29% SOFR Credit Spread Adjustment | 0.10% | 0.10% | 0.10% | 0.10% | 0.10% Adjusted Term SOFR | 2.39% | 2.39% | 2.39% | 2.39% | 2.39% SOFR Floor | 0.50%