1021-00001 · Verimark Hospitality Group · Opinions

enforceability-opinion-ny-law.docx DOCUMENT Finance & Banking

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CALDERWOOD & HARKNESS LLP Attorneys at Law

One Liberty Plaza, 52nd Floor New York, New York 10006

Telephone: (212) 555-7800 Facsimile: (212) 555-7801

July 21, 2022

Crescent Harbor Bank, National Association, as Administrative Agent and Collateral Agent 600 Lexington Avenue, 34th Floor New York, New York 10022

The Lenders party to the Credit Agreement referred to below (each a "Lender" and collectively, the "Lenders")

Re: Enforceability Opinion — $700,000,000 Senior Secured Term Loan B Credit Facility — Verimark Hospitality Group Inc.

Ladies and Gentlemen:

We have acted as counsel to Verimark Hospitality Group Inc., a corporation organized and existing under the laws of the State of Delaware (the "Borrower" or "VHG"), in connection with the Credit Agreement dated as of July 21, 2022 (as defined more fully below, the "Credit Agreement"), among the Borrower, the Guarantors party thereto, Crescent Harbor Bank, National Association, as Administrative Agent and Collateral Agent (in such capacities, the "Administrative Agent"), and the Lenders party thereto, providing for a senior secured term loan B facility in the aggregate principal amount of Seven Hundred Million Dollars ($700,000,000) (the "Term Loan B Facility"). This opinion letter is the supplemental enforceability opinion delivered pursuant to Section 4.01(b)(ii) of the Credit Agreement and is delivered in addition to, and is not intended to supersede or modify, the opinion letter of borrower's counsel of even date hereof delivered pursuant to Section 4.01(b)(i) of the Credit Agreement (the "Companion Opinion"). This opinion letter is delivered at the request of the Administrative Agent in connection with the closing of the Term Loan B Facility.

Capitalized terms used but not otherwise defined herein have the meanings ascribed to such terms in the Credit Agreement.

1. Opinion Documents

The opinions set forth in this letter relate to the following agreements, each of which is referred to herein as an "Opinion Document" and which are collectively referred to as the "Opinion Documents":

1. Credit Agreement. The Credit Agreement, dated as of July 21, 2022, among Verimark Hospitality Group Inc. (as Borrower), the Guarantors party thereto, Crescent Harbor Bank, National Association (as Administrative Agent and Collateral Agent), and the Lenders party thereto (the "Credit Agreement"). The Credit Agreement provides for a senior secured Term Loan B facility in the aggregate principal amount of $700,000,000, bearing interest at a rate per annum equal to Adjusted Term SOFR plus 375 basis points, with a SOFR floor of 0.50%, maturing on July 21, 2029, subject to quarterly amortization at a rate of 1.00% per annum (equating to quarterly installments of $1,750,000), and subject to mandatory and voluntary prepayment provisions as set forth therein. The Credit Agreement contains, among other things, (a) a springing financial covenant in the form of a maximum total net leverage ratio of 4.50 to 1.00, (b) a most favored nation provision with a 50 basis point threshold and an 18-month sunset period expiring on January 21, 2024, (c) a repricing protection provision requiring a premium of 1.00% in connection with certain repricing transactions occurring within six months of the Closing Date (through January 21, 2023), and (d) incremental facility provisions permitting the incurrence of additional term loan and revolving credit commitments subject to the terms and conditions set forth therein. The Credit Agreement is governed by and construed in accordance with the laws of the State of New York.

2. Guarantee Agreement. The Guarantee Agreement, dated as of July 21, 2022, made by Verimark Resort Properties LLC, a Delaware limited liability company, VHG Management Services Inc., a Delaware corporation, Verimark Convention Holdings LLC, a Delaware limited liability company, Palmetto Beachfront Hotels LLC, a Florida limited liability company, and Cascadia Hospitality Corp., a Delaware corporation (each a "Guarantor" and collectively, the "Guarantors"), in favor of the Administrative Agent for the benefit of the Secured Parties (the "Guarantee Agreement"). The Guarantee Agreement provides for an unconditional guaranty by each Guarantor of the Borrower's obligations under the Credit Agreement and the other Loan Documents, subject to the terms, conditions, and limitations set forth therein. The Guarantee Agreement is governed by and construed in accordance with the laws of the State of New York.

3. Pledge and Security Agreement. The Pledge and Security Agreement, dated as of July 21, 2022, among the Borrower, the Guarantors, and Crescent Harbor Bank, National Association (as Collateral Agent) (the "Pledge and Security Agreement"). The Pledge and Security Agreement grants to the Collateral Agent, for the benefit of the Secured Parties, a first-priority security interest in substantially all assets of VHG and the Guarantors, including, without limitation, (a) 100% of the issued and outstanding equity interests in each domestic subsidiary of VHG and the Guarantors, (b) 65% of the issued and outstanding voting equity interests in each first-tier foreign subsidiary, and (c) all personal property of the Borrower and the Guarantors, in each case subject to the terms, exceptions, and limitations set forth therein and in the Credit Agreement. The Pledge and Security Agreement is governed by and construed in accordance with the laws of the State of New York.

4. Amended and Restated Intercreditor Agreement. The Amended and Restated Intercreditor Agreement, dated as of July 21, 2022, among Crescent Harbor Bank, National Association, in its capacity as agent under the Term Loan B Facility (the "TLB Agent"), Crescent Harbor Bank, National Association, in its capacity as agent under the $400,000,000 revolving credit facility (the "RCF Agent"), and the Lenders party thereto (the "Intercreditor Agreement"). The Intercreditor Agreement governs the pari passu sharing arrangements for the benefit of the first-lien secured parties under both the $700,000,000 Term Loan B Facility and the $400,000,000 revolving credit facility, including provisions relating to the exercise of remedies, the application of proceeds, and the relative rights of the secured parties with respect to the shared collateral. The Intercreditor Agreement is governed by and construed in accordance with the laws of the State of New York.

Each of the Opinion Documents described in clauses (1) through (4) above is governed by the laws of the State of New York.

2. Documents and Matters Examined

In rendering the opinions set forth below, we have examined originals or copies of the following documents, instruments, and other materials:

(a) Executed counterparts of each of the Opinion Documents, including all exhibits, schedules, and annexes thereto;

(b) The Omnibus Secretary's Certificate dated July 21, 2022, executed by Priya Narayanan in her capacity as Corporate Secretary of VHG, certifying as to the organizational documents (including the Certificate of Incorporation, as amended, and the Bylaws, as amended, of VHG, and the equivalent organizational documents of each Guarantor), board resolutions authorizing the transactions contemplated by the Opinion Documents, and the incumbency and signatures of the officers of VHG and each Guarantor authorized to execute and deliver the Opinion Documents and the other Loan Documents on behalf of such entities;

(c) The Board Resolutions of VHG adopted on May 12, 2022, by unanimous written consent of the Board of Directors of VHG, authorizing VHG to enter into the refinancing transaction contemplated by the Opinion Documents, including the execution, delivery, and performance of the Credit Agreement and the other Loan Documents, the incurrence of indebtedness under the Term Loan B Facility, and the granting of liens and security interests in the assets of VHG and the Guarantors in connection therewith;

(d) The Incumbency Certificate dated July 21, 2022, certifying the incumbency and specimen signatures of the following officers of VHG: Marcus Delvecchio, Chief Executive Officer; Renata Haines, Chief Financial Officer; Priya Narayanan, General Counsel and Corporate Secretary; and Glenn Fischbach, Treasurer;

(e) The Opinion Backup Certificate dated July 21, 2022, executed by Priya Narayanan in her capacity as General Counsel of VHG (the "Opinion Backup Certificate"), containing certain factual confirmations and representations relied upon by us in rendering this opinion;

(f) The Officer's Closing Certificate dated July 21, 2022, executed by Renata Haines, as Chief Financial Officer, and Priya Narayanan, as General Counsel, certifying the satisfaction of the conditions precedent to the initial borrowing under the Credit Agreement;

(g) The Solvency Certificate dated July 21, 2022, executed by Renata Haines in her capacity as Chief Financial Officer of VHG, certifying the solvency of VHG and its subsidiaries on a consolidated basis after giving effect to the transactions contemplated by the Opinion Documents;

(h) Certificates of good standing for VHG issued by the Secretary of State of the State of Delaware, dated July 18, 2022, and by the Department of State of the State of Florida, dated July 19, 2022, and certificates of good standing or equivalent certificates for each Guarantor issued by the Secretary of State or other appropriate governmental authority of its respective jurisdiction of organization, each dated within five business days of the date hereof;

(i) The Perfection Certificate dated July 21, 2022, executed by Priya Narayanan on behalf of VHG and each Guarantor, setting forth information regarding the legal names, jurisdictions of organization, chief executive offices, locations of collateral, and other information relevant to the perfection of the security interests granted under the Pledge and Security Agreement; and

(j) Such other documents, records, agreements, instruments, certificates, opinions, correspondence, and matters of law as we have deemed necessary or appropriate for the purposes of rendering the opinions expressed herein.

We have not independently verified or investigated any of the factual matters set forth in any of the certificates, documents, or instruments referred to above. With respect to all documents, certificates, instruments, and factual matters examined by us, where relevant facts were not independently established by us, we have relied upon the accuracy and completeness of the representations and statements of fact contained therein.

3. Assumptions

In rendering the opinions set forth herein, we have assumed, without independent investigation or verification, the following:

(a) Genuineness and Authenticity. All signatures on all documents reviewed by us are genuine and authentic. All documents submitted to us as originals are authentic, complete, and accurate. All documents submitted to us as copies, whether certified or uncertified, conform to the authentic originals of such documents, and all such originals are authentic, complete, and accurate. All documents submitted to us electronically, by facsimile, or in portable document format conform to the originals of such documents.

(b) Capacity of Other Parties. Each party to the Opinion Documents (other than VHG and the Guarantors, as to which we have separately opined in the Companion Opinion) has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization, and has the requisite corporate, limited liability company, or other organizational power and authority to execute, deliver, and perform its obligations under the Opinion Documents to which it is a party. Each such party has duly authorized the execution, delivery, and performance of the Opinion Documents to which it is a party by all necessary corporate, limited liability company, or other organizational action, and each such party has duly executed and delivered the Opinion Documents to which it is a party. The execution, delivery, and performance by each such party of the Opinion Documents to which it is a party do not violate or conflict with any law, rule, regulation, order, judgment, decree, charter, bylaw, operating agreement, or other governing document applicable to such party, or result in a breach of or default under any agreement, indenture, or instrument to which such party is a party or by which its property is bound.

(c) Factual Accuracy of Certificates. All factual statements, certifications, representations, and warranties made by or on behalf of VHG, the Guarantors, their respective officers, directors, managers, and representatives in the certificates, documents, and other instruments reviewed by us are true, complete, and correct as of the date hereof and do not omit any material fact necessary to make such statements, certifications, representations, or warranties not misleading.

(d) No Mutual Mistake, Duress, Fraud, or Unconscionability. The Opinion Documents were negotiated, executed, and delivered by all parties thereto in good faith and in arm's-length transactions, for adequate and lawful consideration, and without fraud, mistake of fact or law, duress, undue influence, unconscionability, or any other defense to the formation or enforcement of a contract.

(e) New York Choice of Law Honored. A court of the State of New York or a federal court sitting in the State of New York and applying the choice-of-law principles of the State of New York would give effect to and honor the New York governing law provisions of the Opinion Documents, and would determine that the Opinion Documents are governed by and are to be construed in accordance with the laws of the State of New York. This opinion addresses enforceability only under the internal laws of the State of New York (without regard to conflict-of-laws principles, other than Section 5-1401 of the New York General Obligations Law), and we express no opinion as to whether any court other than a New York state court or a federal court sitting in New York would apply New York law to the Opinion Documents.

(f) No Subsequent Amendments or Modifications. The Opinion Documents have not been amended, modified, supplemented, restated, or terminated since the execution and delivery thereof on the date hereof, and no party thereto has waived any provision or right thereunder.

(g) Financial Accommodation. The credit extensions made or to be made under the Credit Agreement, including the advances under the Term Loan B Facility, constitute "financial accommodations" within the meaning of Section 9-109(d)(13) of the New York Uniform Commercial Code.

(h) Value Given. The Administrative Agent and the Lenders have given, or will give contemporaneously with the initial borrowing under the Credit Agreement, value (within the meaning of Section 1-204 of the New York Uniform Commercial Code) in exchange for the obligations of the Borrower and the Guarantors arising under the Opinion Documents.

4. Enforceability Opinions

Based upon the foregoing and subject to the assumptions set forth in Section 3, the qualifications, exceptions, and limitations set forth in Section 5, and the other limitations set forth in Section 6, we are of the following opinions:

4.1 Credit Agreement

The Credit Agreement constitutes the legal, valid, and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject to the qualifications and exceptions set forth in Section 5 below.

Without limiting the generality of the foregoing opinion, we have specifically considered and we are of the opinion that the following key economic and operative provisions of the Credit Agreement are enforceable against the Borrower in accordance with their respective terms, subject to the qualifications and exceptions set forth in Section 5 below:

(a) the obligation of the Borrower to repay the aggregate principal amount of Seven Hundred Million Dollars ($700,000,000) advanced under the Term Loan B Facility;

(b) the obligation of the Borrower to make quarterly amortization payments of One Million Seven Hundred Fifty Thousand Dollars ($1,750,000) per quarter, representing amortization at a rate of 1.00% per annum of the original principal amount of the Term Loan B Facility;

(c) the obligation of the Borrower to pay a balloon payment equal to the then-outstanding principal amount of the Term Loans (anticipated to be Six Hundred Fifty-One Million Dollars ($651,000,000), assuming no voluntary or mandatory prepayments other than scheduled amortization) on the maturity date of July 21, 2029;

(d) the obligation of the Borrower to pay interest on the outstanding principal balance of the Term Loans at a rate per annum equal to Adjusted Term SOFR (subject to a floor of 0.50%) plus 375 basis points, and, upon the occurrence and during the continuance of an Event of Default, at the default rate equal to the otherwise-applicable interest rate plus 200 basis points;

(e) the most favored nation provision set forth in Section 2.14 of the Credit Agreement, including the 50 basis point threshold and the 18-month sunset period expiring on January 21, 2024, pursuant to which the applicable margin under the Term Loan B Facility shall be subject to adjustment in the event that subsequent incremental term loan facilities are established at a higher effective yield, subject to the specified threshold and sunset period;

(f) the repricing protection provision set forth in Section 2.11(e) of the Credit Agreement, requiring the payment of a premium equal to 1.00% of the principal amount prepaid or repriced in connection with certain repricing transactions (as defined therein) occurring during the six-month period following the Closing Date (through January 21, 2023);

(g) the springing financial covenant set forth in Section 7.11 of the Credit Agreement, requiring the Borrower and its restricted subsidiaries to maintain a maximum total net leverage ratio not in excess of 4.50 to 1.00, tested as of the last day of each fiscal quarter (commencing with the first full fiscal quarter ending after the Closing Date) but only to the extent that the aggregate outstanding amount of revolving credit loans and letters of credit (net of cash-collateralized letters of credit and undrawn letters of credit in an amount not exceeding a specified threshold) exceeds 35% of the aggregate revolving credit commitments as of such test date;

(h) the mandatory prepayment provisions set forth in Section 2.11 of the Credit Agreement, including prepayments required from excess cash flow (subject to stepdowns based on the total net leverage ratio), net cash proceeds of asset sales and casualty events (subject to reinvestment rights), and net cash proceeds of certain debt issuances;

(i) the voluntary prepayment provisions set forth in Section 2.11(a) of the Credit Agreement, permitting the Borrower to prepay the Term Loans in whole or in part, without premium or penalty (except as provided in clause (f) above with respect to repricing transactions during the repricing protection period), subject to minimum prepayment amounts and notice requirements; and

(j) the incremental facility provisions set forth in Section 2.14 of the Credit Agreement, permitting the incurrence of additional term loan commitments and revolving credit commitments, subject to satisfaction of the conditions and limitations set forth therein, including applicable leverage ratio tests and, with respect to incremental term loan facilities, the most favored nation provision described in clause (e) above during the sunset period.

4.2 Guarantee Agreement

The Guarantee Agreement constitutes the legal, valid, and binding obligation of each Guarantor party thereto, enforceable against each such Guarantor in accordance with its terms, subject to the qualifications and exceptions set forth in Section 5 below.

The Guarantors as of the date hereof are:

(i) Verimark Resort Properties LLC, a limited liability company organized and existing under the laws of the State of Delaware;

(ii) VHG Management Services Inc., a corporation organized and existing under the laws of the State of Delaware;

(iii) Verimark Convention Holdings LLC, a limited liability company organized and existing under the laws of the State of Delaware;

(iv) Palmetto Beachfront Hotels LLC, a limited liability company organized and existing under the laws of the State of Florida; and

(v) Cascadia Hospitality Corp., a corporation organized and existing under the laws of the State of Delaware.

We note that the enforcement of the guarantee obligations of each Guarantor under the Guarantee Agreement is subject to the application of fraudulent transfer and fraudulent conveyance laws, including the Uniform Voidable Transactions Act as adopted in New York (New York Debtor and Creditor Law, Sections 270–281), Section 548 of the Bankruptcy Code, and analogous provisions under the laws of other applicable jurisdictions. Under such laws, the amount recoverable from any Guarantor may be limited to the extent that enforcement of the full amount of such Guarantor's guarantee obligations would render such Guarantor insolvent (as determined under applicable law) or would otherwise constitute a fraudulent conveyance or fraudulent transfer. The Guarantee Agreement contains a "savings clause" limiting each Guarantor's obligations to the maximum amount that would not render such guarantee a fraudulent transfer or fraudulent conveyance under applicable law; while such savings clauses are intended to preserve the enforceability of the guarantee to the greatest extent permissible, we express no opinion as to the effectiveness of such savings clause in any particular set of circumstances or under the laws of any particular jurisdiction. We further note that a court could, in certain circumstances, hold that a Guarantor's guarantee obligation is voidable in its entirety, notwithstanding such savings clause, if the court determines that the Guarantor did not receive reasonably equivalent value or fair consideration in exchange for providing such guarantee, and was insolvent at the time of, or was rendered insolvent by, the incurrence of such obligation.

4.3 Pledge and Security Agreement

The Pledge and Security Agreement constitutes the legal, valid, and binding obligation of the Borrower and each Guarantor party thereto, enforceable against the Borrower and each such Guarantor in accordance with its terms, subject to the qualifications and exceptions set forth in Section 5 below.

We note that this opinion does not address the creation, attachment, perfection, or priority of any security interest granted under the Pledge and Security Agreement or the validity or effectiveness of any lien, pledge, or security interest purported to be created thereby. Those matters are addressed separately in the Companion Opinion and are subject to the Uniform Commercial Code as adopted in the relevant jurisdictions (including the State of New York and the State of Delaware), the requirements of applicable filing offices (including the Delaware Secretary of State, the Florida Secured Transaction Registry, applicable county recording offices in the jurisdictions in which real property collateral, if any, is located, the United States Patent and Trademark Office, and the United States Copyright Office), and other applicable law considerations. Nothing in this opinion should be construed as an opinion regarding the creation, attachment, perfection, enforceability (as against third parties), or priority of any security interest or lien, and we expressly disclaim any such opinion.

We further note that the enforceability of remedies provisions contained in the Pledge and Security Agreement, including without limitation those provisions relating to the disposition of collateral following the occurrence and during the continuance of an Event of Default, may be limited by the requirement that such disposition be conducted in a commercially reasonable manner, as required by Section 9-610 and related provisions of Article 9 of the New York Uniform Commercial Code. Additionally, the right of the Collateral Agent to accept collateral in full or partial satisfaction of the secured obligations may be limited by the requirements of Section 9-620 of the New York Uniform Commercial Code. Courts may also decline to enforce provisions that purport to waive in advance rights or protections afforded to debtors under Article 9 to the extent such waivers are prohibited by Section 9-602 of the New York Uniform Commercial Code.

4.4 Amended and Restated Intercreditor Agreement

The Amended and Restated Intercreditor Agreement constitutes the legal, valid, and binding obligation of each party thereto, enforceable against each such party in accordance with its terms, subject to the qualifications and exceptions set forth in Section 5 below.

The Intercreditor Agreement governs the pari passu first-lien sharing arrangements as between the secured parties under the $700,000,000 Term Loan B Facility and the secured parties under the $400,000,000 revolving credit facility. Crescent Harbor Bank, National Association serves as agent for both facilities and is a party to the Intercreditor Agreement in its capacities as TLB Agent and RCF Agent. The Intercreditor Agreement addresses, among other matters, the exercise of remedies with respect to shared collateral, the application of proceeds of collateral, the rights of the respective secured party groups in the event of an enforcement action, and the consent and cooperation obligations of the secured parties in connection with the shared collateral.

We note that certain provisions of the Intercreditor Agreement, including without limitation provisions relating to the standstill of remedies, subordination of claims, and turnover of proceeds, may be subject to modification, limitation, or avoidance in bankruptcy or insolvency proceedings, as more fully described in Section 5.1 below. In particular, the enforceability of contractual subordination provisions, lien-sharing arrangements, and standstill periods in a proceeding under Chapter 11 of the Bankruptcy Code is an evolving area of law, and courts may reach differing conclusions depending on the specific facts and circumstances of a given proceeding. We express no opinion as to the enforceability of any provision of the Intercreditor Agreement in any proceeding under the Bankruptcy Code or similar law beyond the general qualification set forth in Section 5.1 below.

5. Qualifications, Exceptions, and Limitations

The opinions expressed herein are subject to the following qualifications, exceptions, and limitations:

5.1 Bankruptcy, Insolvency, and Similar Laws

The enforceability opinions set forth in Section 4 above are subject to the effect of bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship, fraudulent transfer, fraudulent conveyance, preferential transfer, and other similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect, including without limitation:

(a) Title 11 of the United States Code (the "Bankruptcy Code"), including all provisions thereof relating to the commencement and administration of cases under Chapters 7, 11, 12, and 13 thereof;

(b) Applicable state fraudulent transfer and fraudulent conveyance statutes, including the Uniform Voidable Transactions Act as adopted in New York (New York Debtor and Creditor Law, Sections 270–281), and comparable statutes in other jurisdictions that may be applicable to VHG, the Guarantors, or their respective assets;

(c) The automatic stay imposed by Section 362 of the Bankruptcy Code upon the filing of a petition in bankruptcy, which would limit or preclude entirely the ability of the Administrative Agent, the Collateral Agent, the Lenders, and the other Secured Parties to enforce any of the Opinion Documents against the Borrower, any Guarantor, or any of their respective assets while such automatic stay is in effect, including without limitation the ability to exercise setoff rights, commence or continue litigation, enforce judgments, or exercise remedies with respect to collateral;

(d) The potential avoidance of preferential transfers under Section 547 of the Bankruptcy Code, including transfers made by VHG or any Guarantor on account of antecedent debt within the 90-day period (or one-year period, in the case of transfers to insiders) preceding the filing of a bankruptcy petition;

(e) The potential avoidance of fraudulent transfers under Section 548 of the Bankruptcy Code (and, in the case of transfers avoidable under applicable state law, under Section 544(b) of the Bankruptcy Code), including transfers made by VHG or any Guarantor within two years (or, in the case of state law claims, within the applicable limitations period) preceding the filing of a bankruptcy petition, where the debtor received less than reasonably equivalent value in exchange for such transfer and was insolvent at the time thereof, or was rendered insolvent thereby, or was engaged in business for which its remaining property was unreasonably small, or intended to incur debts beyond its ability to pay as such debts matured;

(f) The potential for modification of the contractual terms of the Opinion Documents pursuant to a plan of reorganization confirmed under Section 1129 of the Bankruptcy Code, including the modification of interest rates, extension of maturity dates, reduction of principal amounts, and other modifications of the rights of creditors, subject to the requirements of the Bankruptcy Code (including the best-interests-of-creditors test and the absolute priority rule, to the extent applicable);

(g) The power of a bankruptcy court to limit or enjoin the enforcement of ipso facto clauses (including provisions that terminate, modify, or accelerate obligations upon the filing of a bankruptcy petition or the insolvency of a party) under Sections 365(e)(1) and 541(c)(1) of the Bankruptcy Code;

(h) The provisions of Section 506 of the Bankruptcy Code, which may limit a secured creditor's claim to the value of its collateral and treat any excess as an unsecured claim; and

(i) Other applicable federal, state, and local laws, regulations, and judicial and administrative decisions affecting the rights of creditors generally.

5.2 General Principles of Equity

The enforceability opinions set forth in Section 4 above are subject to general principles of equity, regardless of whether enforcement is sought in a proceeding at law or in equity, including without limitation the following:

(a) The concepts of materiality, reasonableness, good faith, and fair dealing that may be applied by a court in interpreting and enforcing the terms of the Opinion Documents, including the implied covenant of good faith and fair dealing under New York law;

(b) The possible unavailability of the remedy of specific performance or injunctive relief, which remedies are equitable in nature and subject to the discretion of the court, and may not be available in all circumstances even where the Opinion Documents purport to provide for such remedies;

(c) The general discretion of the court in awarding equitable remedies, including the court's authority to deny, condition, or limit the enforcement of contractual provisions that, in the court's judgment, produce results that are inequitable, unconscionable, or contrary to public policy;

(d) Equitable defenses to enforcement, including but not limited to the defenses of laches, estoppel (including equitable estoppel and promissory estoppel), waiver, election of remedies, and unclean hands; and

(e) The equitable power of a court to refuse enforcement of contractual provisions that impose penalties or forfeitures, or that purport to provide for liquidated damages in amounts that the court determines to be disproportionate to the actual damages suffered.

5.3 Specific Enforceability Limitations

We note that certain provisions of the Opinion Documents may be unenforceable in whole or in part under applicable law, but that the unenforceability of any such provision would not, in our opinion, render the remaining provisions of the relevant Opinion Document unenforceable. The inclusion of severability provisions in the Opinion Documents supports this conclusion, and we have assumed that a court applying New York law would give effect to such severability provisions. Without limiting the generality of the foregoing, the following specific limitations apply:

(a) Jury Trial Waiver. The mutual waiver of the right to trial by jury contained in the Opinion Documents is enforceable under New York law as applied by the courts of the State of New York. We note, however, that the Seventh Amendment to the United States Constitution preserves the right to trial by jury in suits at common law in federal courts, and there can be no assurance that a federal court would enforce such a waiver in all circumstances. The enforceability of a contractual jury trial waiver in a federal court proceeding may depend upon the specific factual circumstances and the court's assessment of whether the waiver was knowing, voluntary, and intelligent.

(b) Indemnification and Contribution. The provisions of the Opinion Documents requiring indemnification or contribution may be limited by applicable public policy considerations. In particular, indemnification provisions may be unenforceable to the extent they purport to indemnify a party for losses, liabilities, or expenses arising from (i) such party's own gross negligence, willful misconduct, bad faith, or fraud, or (ii) violations of federal or state securities laws (including the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended), with respect to which indemnification may be held unenforceable as against public policy. Similarly, contribution provisions may be subject to limitation or adjustment by a court in accordance with applicable principles of equity and the relative fault of the parties.

(c) Interest and Late Charges. The enforceability of the default rate of interest (applicable rate plus 200 basis points) and any late charges or penalty provisions contained in the Opinion Documents is subject to applicable usury laws, penalty laws, and other limitations on the collection of interest or charges. New York General Obligations Law Sections 5-501 and 5-521 and New York Banking Law Section 14-a impose limitations on the rate of interest that may be charged or collected in certain transactions. However, we note that the Credit Agreement involves a principal amount in excess of $2,500,000, and accordingly, we would expect the Credit Agreement to be exempt from the civil usury limitations of New York law pursuant to New York General Obligations Law Section 5-501(6)(b), which exempts obligations in a principal amount of $2,500,000 or more from the civil usury rate. We express no opinion, however, as to the application of criminal usury limitations under New York Penal Law Section 190.40, which prohibits the charging or collection of interest at an annual rate exceeding 25%. A court may also decline to enforce a default rate of interest or late charge provision to the extent it determines that such provision constitutes an unenforceable penalty rather than a reasonable estimate of the damages resulting from the applicable default.

(d) Waiver of Rights. Blanket or advance waivers of rights, defenses, or protections contained in the Opinion Documents may be unenforceable to the extent that the rights, defenses, or protections purportedly waived cannot, as a matter of applicable law, be waived in advance. Examples include, without limitation, advance waivers of the right to a jury trial in federal court proceedings (as discussed in clause (a) above), advance waivers of debtor protections under Article 9 of the New York Uniform Commercial Code that are non-waivable under Section 9-602 thereof, and advance waivers of statutory rights or protections that by their terms cannot be waived.

(e) Forum Selection. The provisions of the Opinion Documents submitting to the exclusive jurisdiction of the Supreme Court of the State of New York, County of New York, and the United States District Court for the Southern District of New York are enforceable under New York law. We note, however, that such forum selection provisions are subject to the discretion of the designated court to decline jurisdiction on grounds of forum non conveniens or other applicable principles. Additionally, the enforceability of an exclusive forum selection clause in a federal court proceeding is subject to the standards set forth by the United States Supreme Court in Atlantic Marine Construction Co. v. United States District Court, 571 U.S. 49 (2013), and the court retains discretion to transfer or dismiss the proceeding under applicable law.

(f) Setoff and Similar Rights. The right to setoff set forth in the Opinion Documents may be limited, modified, or suspended in a bankruptcy or insolvency proceeding. In particular, the automatic stay imposed by Section 362 of the Bankruptcy Code would prevent the exercise of setoff rights absent an order of the bankruptcy court, and the exercise of setoff rights in bankruptcy is subject to the requirements and limitations of Section 553 of the Bankruptcy Code, including the requirement that the debt owed to the debtor and the claim against the debtor be mutual prepetition obligations.

(g) Acceleration and Cure. A court may, in the exercise of its equitable discretion, limit the right of the Administrative Agent or the Lenders to accelerate the obligations under the Credit Agreement or to exercise other remedies upon certain defaults, particularly in the case of non-monetary defaults, technical defaults, or defaults that a court determines to be immaterial. Additionally, under applicable equitable principles, a court may permit a defaulting party to cure a default after acceleration, notwithstanding provisions in the Opinion Documents that purport to preclude such cure. In a bankruptcy proceeding under Chapter 11 of the Bankruptcy Code, a debtor may have the right to cure defaults and reinstate pre-acceleration terms pursuant to Section 1124 of the Bankruptcy Code.

(h) Attorney's Fees. Provisions of the Opinion Documents requiring the payment of attorney's fees and expenses, including provisions providing for the recovery of attorney's fees incurred in connection with the enforcement of rights under the Opinion Documents, may be subject to a reasonableness standard as applied by the court. A court may reduce or disallow claims for attorney's fees to the extent the court determines that such fees are unreasonable in amount or were incurred in connection with unsuccessful claims or positions.

5.4 UCC Qualification

The opinions expressed herein do not address, and no opinion is expressed or implied with respect to, the creation, attachment, perfection, enforceability (as against third parties), or priority of any security interest, lien, or encumbrance under the Uniform Commercial Code as adopted in any jurisdiction, including without limitation Article 8 (Investment Securities) and Article 9 (Secured Transactions) of the Uniform Commercial Code as in effect in the State of New York, the State of Delaware, the State of Florida, or any other jurisdiction. Such matters are addressed separately in the Companion Opinion, and we refer the addressees hereof to such opinion for all matters relating to the UCC and the creation, perfection, and priority of security interests.

6. Reliance, Benefit, and Other Limitations

6.1 Governing Law Limitation

This opinion is limited in all respects to the internal laws of the State of New York as currently in effect, without regard to principles of conflict of laws (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law). We express no opinion as to the laws of any other jurisdiction, including without limitation:

(a) the laws of the State of Delaware, which is the jurisdiction of incorporation of VHG, VHG Management Services Inc., and Cascadia Hospitality Corp., and the jurisdiction of formation of Verimark Resort Properties LLC and Verimark Convention Holdings LLC;

(b) the laws of the State of Florida, which is the jurisdiction of formation of Palmetto Beachfront Hotels LLC and the state in which VHG maintains its principal executive offices; and

(c) federal law, except to the extent expressly referenced in Section 5 above (including references to the Bankruptcy Code and the federal securities laws).

We note that the organizational matters pertaining to VHG and the Guarantors, including due formation, valid existence, good standing, corporate or organizational power and authority, and due authorization of the transactions contemplated by the Opinion Documents under the laws of their respective jurisdictions of organization, are addressed in the Companion Opinion and are not the subject of this opinion.

6.2 Reliance. This opinion is furnished solely for the benefit of the Administrative Agent and the Lenders in connection with the Credit Agreement and the transactions contemplated thereby, and may not be relied upon by any other person or entity or for any other purpose without our prior written consent. This opinion may not be quoted, filed with any governmental authority, or otherwise disclosed to any person or entity (other than the addressees hereof and their respective legal counsel and financial advisors, in each case on a confidential basis) without our prior written consent, except as may be required by applicable law, regulation, or legal or administrative process.

Notwithstanding the foregoing, this opinion may be relied upon by any person or entity that becomes a Lender under the Credit Agreement after the date hereof pursuant to a duly executed Assignment and Assumption Agreement in the form attached as Exhibit B to the Credit Agreement (and incorporating the standard terms and conditions for par/near-par term loan trades published by the Loan Syndications and Trading Association), as if this opinion were addressed and delivered to such person or entity on the date hereof, subject in all respects to the same assumptions, qualifications, limitations, and exceptions set forth herein. Each such assignee Lender shall, by its acceptance of its assignment, be deemed to have acknowledged and agreed that (i) this opinion speaks only as of the date hereof, (ii) we assume no obligation to update or supplement this opinion for any reason, and (iii) such assignee Lender's reliance on this opinion is subject to all of the terms and conditions set forth herein.

6.3 Date Limitation

This opinion is rendered as of the date hereof, July 21, 2022, and is based solely upon the laws, regulations, and judicial and administrative decisions in effect and the facts and circumstances existing as of such date. We assume no obligation to update, supplement, or revise this opinion to reflect any changes in applicable law (whether by legislative action, judicial decision, administrative ruling, or otherwise) or any changes in fact or circumstance occurring after the date hereof, regardless of whether such changes would affect the opinions expressed herein.

6.4 No Implied Opinions

No opinion is expressed as to any matter not explicitly addressed herein. No opinion is implied or should be inferred beyond the enforceability opinions expressly stated in Section 4 above, as qualified by the assumptions, qualifications, exceptions, and limitations set forth in Sections 3, 5, and 6 hereof. Without limiting the generality of the foregoing, we express no opinion as to (a) the business or financial terms of the Opinion Documents or the fairness, advisability, or suitability of the transactions contemplated thereby, (b) the tax consequences of the transactions contemplated by the Opinion Documents, (c) the compliance of VHG, the Guarantors, or any other party with applicable regulatory requirements (including without limitation those of the Securities and Exchange Commission, the Federal Reserve Board, or any state regulatory authority), (d) the effect of any pending or threatened litigation involving VHG, the Guarantors, or any other party, or (e) the adequacy of the collateral securing the obligations under the Credit Agreement or the value thereof.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Ian Blackwood

Title: Partner

CALDERWOOD & HARKNESS LLP Attorneys at Law
One Liberty Plaza, 52nd Floor New York, New York 10006
Telephone: (212) 555-7800 Facsimile: (212) 555-7801
July 21, 2022
Crescent Harbor Bank, National Association, as Administrative Agent and Collateral Agent 600 Lexington Avenue, 34th Floor New York, New York 10022
The Lenders party to the Credit Agreement referred to below (each a "Lender" and collectively, the "Lenders")
Re: Enforceability Opinion — $700,000,000 Senior Secured Term Loan B Credit Facility — Verimark Hospitality Group Inc.
Ladies and Gentlemen:
We have acted as counsel to Verimark Hospitality Group Inc., a corporation organized and existing under the laws of the State of Delaware (the "Borrower" or "VHG"), in connection with the Credit Agreement dated as of July 21, 2022 (as defined more fully below, the "Credit Agreement"), among the Borrower, the Guarantors party thereto, Crescent Harbor Bank, National Association, as Administrative Agent and Collateral Agent (in such capacities, the "Administrative Agent"), and the Lenders party thereto, providing for a senior secured term loan B facility in the aggregate principal amount of Seven Hundred Million Dollars ($700,000,000) (the "Term Loan B Facility"). This opinion letter is the supplemental enforceability opinion delivered pursuant to Section 4.01(b)(ii) of the Credit Agreement and is delivered in addition to, and is not intended to supersede or modify, the opinion letter of borrower's counsel of even date hereof delivered pursuant to Section 4.01(b)(i) of the Credit Agreement (the "Companion Opinion"). This opinion letter is delivered at the request of the Administrative Agent in connection with the closing of the Term Loan B Facility.
Capitalized terms used but not otherwise defined herein have the meanings ascribed to such terms in the Credit Agreement.
1. Opinion Documents
The opinions set forth in this letter relate to the following agreements, each of which is referred to herein as an "Opinion Document" and which are collectively referred to as the "Opinion Documents":
1.  Credit Agreement. The Credit Agreement, dated as of July 21, 2022, among Verimark Hospitality Group Inc. (as Borrower), the Guarantors party thereto, Crescent Harbor Bank, National Association (as Administrative Agent and Collateral Agent), and the Lenders party thereto (the "Credit Agreement"). The Credit Agreement provides for a senior secured Term Loan B facility in the aggregate principal amount of $700,000,000, bearing interest at a rate per annum equal to Adjusted Term SOFR plus 375 basis points, with a SOFR floor of 0.50%, maturing on July 21, 2029, subject to quarterly amortization at a rate of 1.00% per annum (equating to quarterly installments of $1,750,000), and subject to mandatory and voluntary prepayment provisions as set forth therein. The Credit Agreement contains, among other things, (a) a springing financial covenant in the form of a maximum total net leverage ratio of 4.50 to 1.00, (b) a most favored nation provision with a 50 basis point threshold and an 18-month sunset period expiring on January 21, 2024, (c) a repricing protection provision requiring a premium of 1.00% in connection with certain repricing transactions occurring within six months of the Closing Date (through January 21, 2023), and (d) incremental facility provisions permitting the incurrence of additional term loan and revolving credit commitments subject to the terms and conditions set forth therein. The Credit Agreement is governed by and construed in accordance with the laws of the State of New York.
2.  Guarantee Agreement. The Guarantee Agreement, dated as of July 21, 2022, made by Verimark Resort Properties LLC, a Delaware limited liability company, VHG Management Services Inc., a Delaware corporation, Verimark Convention Holdings LLC, a Delaware limited liability company, Palmetto Beachfront Hotels LLC, a Florida limited liability company, and Cascadia Hospitality Corp., a Delaware corporation (each a "Guarantor" and collectively, the "Guarantors"), in favor of the Administrative Agent for the benefit of the Secured Parties (the "Guarantee Agreement"). The Guarantee Agreement provides for an unconditional guaranty by each Guarantor of the Borrower's obligations under the Credit Agreement and the other Loan Documents, subject to the terms, conditions, and limitations set forth therein. The Guarantee Agreement is governed by and construed in accordance with the laws of the State of New York.
3.  Pledge and Security Agreement. The Pledge and Security Agreement, dated as of July 21, 2022, among the Borrower, the Guarantors, and Crescent Harbor Bank, National Association (as Collateral Agent) (the "Pledge and Security Agreement"). The Pledge and Security Agreement grants to the Collateral Agent, for the benefit of the Secured Parties, a first-priority security interest in substantially all assets of VHG and the Guarantors, including, without limitation, (a) 100% of the issued and outstanding equity interests in each domestic subsidiary of VHG and the Guarantors, (b) 65% of the issued and outstanding voting equity interests in each first-tier foreign subsidiary, and (c) all personal property of the Borrower and the Guarantors, in each case subject to the terms, exceptions, and limitations set forth therein and in the Credit Agreement. The Pledge and Security Agreement is governed by and construed in accordance with the laws of the State of New York.
4.  Amended and Restated Intercreditor Agreement. The Amended and Restated Intercreditor Agreement, dated as of July 21, 2022, among Crescent Harbor Bank, National Association, in its capacity as agent under the Term Loan B Facility (the "TLB Agent"), Crescent Harbor Bank, National Association, in its capacity as agent under the $400,000,000 revolving credit facility (the "RCF Agent"), and the Lenders party thereto (the "Intercreditor Agreement"). The Intercreditor Agreement governs the pari passu sharing arrangements for the benefit of the first-lien secured parties under both the $700,000,000 Term Loan B Facility and the $400,000,000 revolving credit facility, including provisions relating to the exercise of remedies, the application of proceeds, and the relative rights of the secured parties with respect to the shared collateral. The Intercreditor Agreement is governed by and construed in accordance with the laws of the State of New York.
Each of the Opinion Documents described in clauses (1) through (4) above is governed by the laws of the State of New York.
2. Documents and Matters Examined
In rendering the opinions set forth below, we have examined originals or copies of the following documents, instruments, and other materials:
(a) Executed counterparts of each of the Opinion Documents, including all exhibits, schedules, and annexes thereto;
(b) The Omnibus Secretary's Certificate dated July 21, 2022, executed by Priya Narayanan in her capacity as Corporate Secretary of VHG, certifying as to the organizational documents (including the Certificate of Incorporation, as amended, and the Bylaws, as amended, of VHG, and the equivalent organizational documents of each Guarantor), board resolutions authorizing the transactions contemplated by the Opinion Documents, and the incumbency and signatures of the officers of VHG and each Guarantor authorized to execute and deliver the Opinion Documents and the other Loan Documents on behalf of such entities;
(c) The Board Resolutions of VHG adopted on May 12, 2022, by unanimous written consent of the Board of Directors of VHG, authorizing VHG to enter into the refinancing transaction contemplated by the Opinion Documents, including the execution, delivery, and performance of the Credit Agreement and the other Loan Documents, the incurrence of indebtedness under the Term Loan B Facility, and the granting of liens and security interests in the assets of VHG and the Guarantors in connection therewith;
(d) The Incumbency Certificate dated July 21, 2022, certifying the incumbency and specimen signatures of the following officers of VHG: Marcus Delvecchio, Chief Executive Officer; Renata Haines, Chief Financial Officer; Priya Narayanan, General Counsel and Corporate Secretary; and Glenn Fischbach, Treasurer;
(e) The Opinion Backup Certificate dated July 21, 2022, executed by Priya Narayanan in her capacity as General Counsel of VHG (the "Opinion Backup Certificate"), containing certain factual confirmations and representations relied upon by us in rendering this opinion;
(f) The Officer's Closing Certificate dated July 21, 2022, executed by Renata Haines, as Chief Financial Officer, and Priya Narayanan, as General Counsel, certifying the satisfaction of the conditions precedent to the initial borrowing under the Credit Agreement;
(g) The Solvency Certificate dated July 21, 2022, executed by Renata Haines in her capacity as Chief Financial Officer of VHG, certifying the solvency of VHG and its subsidiaries on a consolidated basis after giving effect to the transactions contemplated by the Opinion Documents;
(h) Certificates of good standing for VHG issued by the Secretary of State of the State of Delaware, dated July 18, 2022, and by the Department of State of the State of Florida, dated July 19, 2022, and certificates of good standing or equivalent certificates for each Guarantor issued by the Secretary of State or other appropriate governmental authority of its respective jurisdiction of organization, each dated within five business days of the date hereof;
(i) The Perfection Certificate dated July 21, 2022, executed by Priya Narayanan on behalf of VHG and each Guarantor, setting forth information regarding the legal names, jurisdictions of organization, chief executive offices, locations of collateral, and other information relevant to the perfection of the security interests granted under the Pledge and Security Agreement; and
(j) Such other documents, records, agreements, instruments, certificates, opinions, correspondence, and matters of law as we have deemed necessary or appropriate for the purposes of rendering the opinions expressed herein.
We have not independently verified or investigated any of the factual matters set forth in any of the certificates, documents, or instruments referred to above. With respect to all documents, certificates, instruments, and factual matters examined by us, where relevant facts were not independently established by us, we have relied upon the accuracy and completeness of the representations and statements of fact contained therein.
3. Assumptions
In rendering the opinions set forth herein, we have assumed, without independent investigation or verification, the following:
(a) Genuineness and Authenticity. All signatures on all documents reviewed by us are genuine and authentic. All documents submitted to us as originals are authentic, complete, and accurate. All documents submitted to us as copies, whether certified or uncertified, conform to the authentic originals of such documents, and all such originals are authentic, complete, and accurate. All documents submitted to us electronically, by facsimile, or in portable document format conform to the originals of such documents.
(b) Capacity of Other Parties. Each party to the Opinion Documents (other than VHG and the Guarantors, as to which we have separately opined in the Companion Opinion) has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization, and has the requisite corporate, limited liability company, or other organizational power and authority to execute, deliver, and perform its obligations under the Opinion Documents to which it is a party. Each such party has duly authorized the execution, delivery, and performance of the Opinion Documents to which it is a party by all necessary corporate, limited liability company, or other organizational action, and each such party has duly executed and delivered the Opinion Documents to which it is a party. The execution, delivery, and performance by each such party of the Opinion Documents to which it is a party do not violate or conflict with any law, rule, regulation, order, judgment, decree, charter, bylaw, operating agreement, or other governing document applicable to such party, or result in a breach of or default under any agreement, indenture, or instrument to which such party is a party or by which its property is bound.
(c) Factual Accuracy of Certificates. All factual statements, certifications, representations, and warranties made by or on behalf of VHG, the Guarantors, their respective officers, directors, managers, and representatives in the certificates, documents, and other instruments reviewed by us are true, complete, and correct as of the date hereof and do not omit any material fact necessary to make such statements, certifications, representations, or warranties not misleading.
(d) No Mutual Mistake, Duress, Fraud, or Unconscionability. The Opinion Documents were negotiated, executed, and delivered by all parties thereto in good faith and in arm's-length transactions, for adequate and lawful consideration, and without fraud, mistake of fact or law, duress, undue influence, unconscionability, or any other defense to the formation or enforcement of a contract.
(e) New York Choice of Law Honored. A court of the State of New York or a federal court sitting in the State of New York and applying the choice-of-law principles of the State of New York would give effect to and honor the New York governing law provisions of the Opinion Documents, and would determine that the Opinion Documents are governed by and are to be construed in accordance with the laws of the State of New York. This opinion addresses enforceability only under the internal laws of the State of New York (without regard to conflict-of-laws principles, other than Section 5-1401 of the New York General Obligations Law), and we express no opinion as to whether any court other than a New York state court or a federal court sitting in New York would apply New York law to the Opinion Documents.
(f) No Subsequent Amendments or Modifications. The Opinion Documents have not been amended, modified, supplemented, restated, or terminated since the execution and delivery thereof on the date hereof, and no party thereto has waived any provision or right thereunder.
(g) Financial Accommodation. The credit extensions made or to be made under the Credit Agreement, including the advances under the Term Loan B Facility, constitute "financial accommodations" within the meaning of Section 9-109(d)(13) of the New York Uniform Commercial Code.
(h) Value Given. The Administrative Agent and the Lenders have given, or will give contemporaneously with the initial borrowing under the Credit Agreement, value (within the meaning of Section 1-204 of the New York Uniform Commercial Code) in exchange for the obligations of the Borrower and the Guarantors arising under the Opinion Documents.
4. Enforceability Opinions
Based upon the foregoing and subject to the assumptions set forth in Section 3, the qualifications, exceptions, and limitations set forth in Section 5, and the other limitations set forth in Section 6, we are of the following opinions:
4.1 Credit Agreement
The Credit Agreement constitutes the legal, valid, and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject to the qualifications and exceptions set forth in Section 5 below.
Without limiting the generality of the foregoing opinion, we have specifically considered and we are of the opinion that the following key economic and operative provisions of the Credit Agreement are enforceable against the Borrower in accordance with their respective terms, subject to the qualifications and exceptions set forth in Section 5 below:
(a) the obligation of the Borrower to repay the aggregate principal amount of Seven Hundred Million Dollars ($700,000,000) advanced under the Term Loan B Facility;
(b) the obligation of the Borrower to make quarterly amortization payments of One Million Seven Hundred Fifty Thousand Dollars ($1,750,000) per quarter, representing amortization at a rate of 1.00% per annum of the original principal amount of the Term Loan B Facility;
(c) the obligation of the Borrower to pay a balloon payment equal to the then-outstanding principal amount of the Term Loans (anticipated to be Six Hundred Fifty-One Million Dollars ($651,000,000), assuming no voluntary or mandatory prepayments other than scheduled amortization) on the maturity date of July 21, 2029;
(d) the obligation of the Borrower to pay interest on the outstanding principal balance of the Term Loans at a rate per annum equal to Adjusted Term SOFR (subject to a floor of 0.50%) plus 375 basis points, and, upon the occurrence and during the continuance of an Event of Default, at the default rate equal to the otherwise-applicable interest rate plus 200 basis points;
(e) the most favored nation provision set forth in Section 2.14 of the Credit Agreement, including the 50 basis point threshold and the 18-month sunset period expiring on January 21, 2024, pursuant to which the applicable margin under the Term Loan B Facility shall be subject to adjustment in the event that subsequent incremental term loan facilities are established at a higher effective yield, subject to the specified threshold and sunset period;
(f) the repricing protection provision set forth in Section 2.11(e) of the Credit Agreement, requiring the payment of a premium equal to 1.00% of the principal amount prepaid or repriced in connection with certain repricing transactions (as defined therein) occurring during the six-month period following the Closing Date (through January 21, 2023);
(g) the springing financial covenant set forth in Section 7.11 of the Credit Agreement, requiring the Borrower and its restricted subsidiaries to maintain a maximum total net leverage ratio not in excess of 4.50 to 1.00, tested as of the last day of each fiscal quarter (commencing with the first full fiscal quarter ending after the Closing Date) but only to the extent that the aggregate outstanding amount of revolving credit loans and letters of credit (net of cash-collateralized letters of credit and undrawn letters of credit in an amount not exceeding a specified threshold) exceeds 35% of the aggregate revolving credit commitments as of such test date;
(h) the mandatory prepayment provisions set forth in Section 2.11 of the Credit Agreement, including prepayments required from excess cash flow (subject to stepdowns based on the total net leverage ratio), net cash proceeds of asset sales and casualty events (subject to reinvestment rights), and net cash proceeds of certain debt issuances;
(i) the voluntary prepayment provisions set forth in Section 2.11(a) of the Credit Agreement, permitting the Borrower to prepay the Term Loans in whole or in part, without premium or penalty (except as provided in clause (f) above with respect to repricing transactions during the repricing protection period), subject to minimum prepayment amounts and notice requirements; and
(j) the incremental facility provisions set forth in Section 2.14 of the Credit Agreement, permitting the incurrence of additional term loan commitments and revolving credit commitments, subject to satisfaction of the conditions and limitations set forth therein, including applicable leverage ratio tests and, with respect to incremental term loan facilities, the most favored nation provision described in clause (e) above during the sunset period.
4.2 Guarantee Agreement
The Guarantee Agreement constitutes the legal, valid, and binding obligation of each Guarantor party thereto, enforceable against each such Guarantor in accordance with its terms, subject to the qualifications and exceptions set forth in Section 5 below.
The Guarantors as of the date hereof are:
(i) Verimark Resort Properties LLC, a limited liability company organized and existing under the laws of the State of Delaware;
(ii) VHG Management Services Inc., a corporation organized and existing under the laws of the State of Delaware;
(iii) Verimark Convention Holdings LLC, a limited liability company organized and existing under the laws of the State of Delaware;
(iv) Palmetto Beachfront Hotels LLC, a limited liability company organized and existing under the laws of the State of Florida; and
(v) Cascadia Hospitality Corp., a corporation organized and existing under the laws of the State of Delaware.
We note that the enforcement of the guarantee obligations of each Guarantor under the Guarantee Agreement is subject to the application of fraudulent transfer and fraudulent conveyance laws, including the Uniform Voidable Transactions Act as adopted in New York (New York Debtor and Creditor Law, Sections 270–281), Section 548 of the Bankruptcy Code, and analogous provisions under the laws of other applicable jurisdictions. Under such laws, the amount recoverable from any Guarantor may be limited to the extent that enforcement of the full amount of such Guarantor's guarantee obligations would render such Guarantor insolvent (as determined under applicable law) or would otherwise constitute a fraudulent conveyance or fraudulent transfer. The Guarantee Agreement contains a "savings clause" limiting each Guarantor's obligations to the maximum amount that would not render such guarantee a fraudulent transfer or fraudulent conveyance under applicable law; while such savings clauses are intended to preserve the enforceability of the guarantee to the greatest extent permissible, we express no opinion as to the effectiveness of such savings clause in any particular set of circumstances or under the laws of any particular jurisdiction. We further note that a court could, in certain circumstances, hold that a Guarantor's guarantee obligation is voidable in its entirety, notwithstanding such savings clause, if the court determines that the Guarantor did not receive reasonably equivalent value or fair consideration in exchange for providing such guarantee, and was insolvent at the time of, or was rendered insolvent by, the incurrence of such obligation.
4.3 Pledge and Security Agreement
The Pledge and Security Agreement constitutes the legal, valid, and binding obligation of the Borrower and each Guarantor party thereto, enforceable against the Borrower and each such Guarantor in accordance with its terms, subject to the qualifications and exceptions set forth in Section 5 below.
We note that this opinion does not address the creation, attachment, perfection, or priority of any security interest granted under the Pledge and Security Agreement or the validity or effectiveness of any lien, pledge, or security interest purported to be created thereby. Those matters are addressed separately in the Companion Opinion and are subject to the Uniform Commercial Code as adopted in the relevant jurisdictions (including the State of New York and the State of Delaware), the requirements of applicable filing offices (including the Delaware Secretary of State, the Florida Secured Transaction Registry, applicable county recording offices in the jurisdictions in which real property collateral, if any, is located, the United States Patent and Trademark Office, and the United States Copyright Office), and other applicable law considerations. Nothing in this opinion should be construed as an opinion regarding the creation, attachment, perfection, enforceability (as against third parties), or priority of any security interest or lien, and we expressly disclaim any such opinion.
We further note that the enforceability of remedies provisions contained in the Pledge and Security Agreement, including without limitation those provisions relating to the disposition of collateral following the occurrence and during the continuance of an Event of Default, may be limited by the requirement that such disposition be conducted in a commercially reasonable manner, as required by Section 9-610 and related provisions of Article 9 of the New York Uniform Commercial Code. Additionally, the right of the Collateral Agent to accept collateral in full or partial satisfaction of the secured obligations may be limited by the requirements of Section 9-620 of the New York Uniform Commercial Code. Courts may also decline to enforce provisions that purport to waive in advance rights or protections afforded to debtors under Article 9 to the extent such waivers are prohibited by Section 9-602 of the New York Uniform Commercial Code.
4.4 Amended and Restated Intercreditor Agreement
The Amended and Restated Intercreditor Agreement constitutes the legal, valid, and binding obligation of each party thereto, enforceable against each such party in accordance with its terms, subject to the qualifications and exceptions set forth in Section 5 below.
The Intercreditor Agreement governs the pari passu first-lien sharing arrangements as between the secured parties under the $700,000,000 Term Loan B Facility and the secured parties under the $400,000,000 revolving credit facility. Crescent Harbor Bank, National Association serves as agent for both facilities and is a party to the Intercreditor Agreement in its capacities as TLB Agent and RCF Agent. The Intercreditor Agreement addresses, among other matters, the exercise of remedies with respect to shared collateral, the application of proceeds of collateral, the rights of the respective secured party groups in the event of an enforcement action, and the consent and cooperation obligations of the secured parties in connection with the shared collateral.
We note that certain provisions of the Intercreditor Agreement, including without limitation provisions relating to the standstill of remedies, subordination of claims, and turnover of proceeds, may be subject to modification, limitation, or avoidance in bankruptcy or insolvency proceedings, as more fully described in Section 5.1 below. In particular, the enforceability of contractual subordination provisions, lien-sharing arrangements, and standstill periods in a proceeding under Chapter 11 of the Bankruptcy Code is an evolving area of law, and courts may reach differing conclusions depending on the specific facts and circumstances of a given proceeding. We express no opinion as to the enforceability of any provision of the Intercreditor Agreement in any proceeding under the Bankruptcy Code or similar law beyond the general qualification set forth in Section 5.1 below.
5. Qualifications, Exceptions, and Limitations
The opinions expressed herein are subject to the following qualifications, exceptions, and limitations:
5.1 Bankruptcy, Insolvency, and Similar Laws
The enforceability opinions set forth in Section 4 above are subject to the effect of bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship, fraudulent transfer, fraudulent conveyance, preferential transfer, and other similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect, including without limitation:
(a) Title 11 of the United States Code (the "Bankruptcy Code"), including all provisions thereof relating to the commencement and administration of cases under Chapters 7, 11, 12, and 13 thereof;
(b) Applicable state fraudulent transfer and fraudulent conveyance statutes, including the Uniform Voidable Transactions Act as adopted in New York (New York Debtor and Creditor Law, Sections 270–281), and comparable statutes in other jurisdictions that may be applicable to VHG, the Guarantors, or their respective assets;
(c) The automatic stay imposed by Section 362 of the Bankruptcy Code upon the filing of a petition in bankruptcy, which would limit or preclude entirely the ability of the Administrative Agent, the Collateral Agent, the Lenders, and the other Secured Parties to enforce any of the Opinion Documents against the Borrower, any Guarantor, or any of their respective assets while such automatic stay is in effect, including without limitation the ability to exercise setoff rights, commence or continue litigation, enforce judgments, or exercise remedies with respect to collateral;
(d) The potential avoidance of preferential transfers under Section 547 of the Bankruptcy Code, including transfers made by VHG or any Guarantor on account of antecedent debt within the 90-day period (or one-year period, in the case of transfers to insiders) preceding the filing of a bankruptcy petition;
(e) The potential avoidance of fraudulent transfers under Section 548 of the Bankruptcy Code (and, in the case of transfers avoidable under applicable state law, under Section 544(b) of the Bankruptcy Code), including transfers made by VHG or any Guarantor within two years (or, in the case of state law claims, within the applicable limitations period) preceding the filing of a bankruptcy petition, where the debtor received less than reasonably equivalent value in exchange for such transfer and was insolvent at the time thereof, or was rendered insolvent thereby, or was engaged in business for which its remaining property was unreasonably small, or intended to incur debts beyond its ability to pay as such debts matured;
(f) The potential for modification of the contractual terms of the Opinion Documents pursuant to a plan of reorganization confirmed under Section 1129 of the Bankruptcy Code, including the modification of interest rates, extension of maturity dates, reduction of principal amounts, and other modifications of the rights of creditors, subject to the requirements of the Bankruptcy Code (including the best-interests-of-creditors test and the absolute priority rule, to the extent applicable);
(g) The power of a bankruptcy court to limit or enjoin the enforcement of ipso facto clauses (including provisions that terminate, modify, or accelerate obligations upon the filing of a bankruptcy petition or the insolvency of a party) under Sections 365(e)(1) and 541(c)(1) of the Bankruptcy Code;
(h) The provisions of Section 506 of the Bankruptcy Code, which may limit a secured creditor's claim to the value of its collateral and treat any excess as an unsecured claim; and
(i) Other applicable federal, state, and local laws, regulations, and judicial and administrative decisions affecting the rights of creditors generally.
5.2 General Principles of Equity
The enforceability opinions set forth in Section 4 above are subject to general principles of equity, regardless of whether enforcement is sought in a proceeding at law or in equity, including without limitation the following:
(a) The concepts of materiality, reasonableness, good faith, and fair dealing that may be applied by a court in interpreting and enforcing the terms of the Opinion Documents, including the implied covenant of good faith and fair dealing under New York law;
(b) The possible unavailability of the remedy of specific performance or injunctive relief, which remedies are equitable in nature and subject to the discretion of the court, and may not be available in all circumstances even where the Opinion Documents purport to provide for such remedies;
(c) The general discretion of the court in awarding equitable remedies, including the court's authority to deny, condition, or limit the enforcement of contractual provisions that, in the court's judgment, produce results that are inequitable, unconscionable, or contrary to public policy;
(d) Equitable defenses to enforcement, including but not limited to the defenses of laches, estoppel (including equitable estoppel and promissory estoppel), waiver, election of remedies, and unclean hands; and
(e) The equitable power of a court to refuse enforcement of contractual provisions that impose penalties or forfeitures, or that purport to provide for liquidated damages in amounts that the court determines to be disproportionate to the actual damages suffered.
5.3 Specific Enforceability Limitations
We note that certain provisions of the Opinion Documents may be unenforceable in whole or in part under applicable law, but that the unenforceability of any such provision would not, in our opinion, render the remaining provisions of the relevant Opinion Document unenforceable. The inclusion of severability provisions in the Opinion Documents supports this conclusion, and we have assumed that a court applying New York law would give effect to such severability provisions. Without limiting the generality of the foregoing, the following specific limitations apply:
(a) Jury Trial Waiver. The mutual waiver of the right to trial by jury contained in the Opinion Documents is enforceable under New York law as applied by the courts of the State of New York. We note, however, that the Seventh Amendment to the United States Constitution preserves the right to trial by jury in suits at common law in federal courts, and there can be no assurance that a federal court would enforce such a waiver in all circumstances. The enforceability of a contractual jury trial waiver in a federal court proceeding may depend upon the specific factual circumstances and the court's assessment of whether the waiver was knowing, voluntary, and intelligent.
(b) Indemnification and Contribution. The provisions of the Opinion Documents requiring indemnification or contribution may be limited by applicable public policy considerations. In particular, indemnification provisions may be unenforceable to the extent they purport to indemnify a party for losses, liabilities, or expenses arising from (i) such party's own gross negligence, willful misconduct, bad faith, or fraud, or (ii) violations of federal or state securities laws (including the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended), with respect to which indemnification may be held unenforceable as against public policy. Similarly, contribution provisions may be subject to limitation or adjustment by a court in accordance with applicable principles of equity and the relative fault of the parties.
(c) Interest and Late Charges. The enforceability of the default rate of interest (applicable rate plus 200 basis points) and any late charges or penalty provisions contained in the Opinion Documents is subject to applicable usury laws, penalty laws, and other limitations on the collection of interest or charges. New York General Obligations Law Sections 5-501 and 5-521 and New York Banking Law Section 14-a impose limitations on the rate of interest that may be charged or collected in certain transactions. However, we note that the Credit Agreement involves a principal amount in excess of $2,500,000, and accordingly, we would expect the Credit Agreement to be exempt from the civil usury limitations of New York law pursuant to New York General Obligations Law Section 5-501(6)(b), which exempts obligations in a principal amount of $2,500,000 or more from the civil usury rate. We express no opinion, however, as to the application of criminal usury limitations under New York Penal Law Section 190.40, which prohibits the charging or collection of interest at an annual rate exceeding 25%. A court may also decline to enforce a default rate of interest or late charge provision to the extent it determines that such provision constitutes an unenforceable penalty rather than a reasonable estimate of the damages resulting from the applicable default.
(d) Waiver of Rights. Blanket or advance waivers of rights, defenses, or protections contained in the Opinion Documents may be unenforceable to the extent that the rights, defenses, or protections purportedly waived cannot, as a matter of applicable law, be waived in advance. Examples include, without limitation, advance waivers of the right to a jury trial in federal court proceedings (as discussed in clause (a) above), advance waivers of debtor protections under Article 9 of the New York Uniform Commercial Code that are non-waivable under Section 9-602 thereof, and advance waivers of statutory rights or protections that by their terms cannot be waived.
(e) Forum Selection. The provisions of the Opinion Documents submitting to the exclusive jurisdiction of the Supreme Court of the State of New York, County of New York, and the United States District Court for the Southern District of New York are enforceable under New York law. We note, however, that such forum selection provisions are subject to the discretion of the designated court to decline jurisdiction on grounds of forum non conveniens or other applicable principles. Additionally, the enforceability of an exclusive forum selection clause in a federal court proceeding is subject to the standards set forth by the United States Supreme Court in Atlantic Marine Construction Co. v. United States District Court, 571 U.S. 49 (2013), and the court retains discretion to transfer or dismiss the proceeding under applicable law.
(f) Setoff and Similar Rights. The right to setoff set forth in the Opinion Documents may be limited, modified, or suspended in a bankruptcy or insolvency proceeding. In particular, the automatic stay imposed by Section 362 of the Bankruptcy Code would prevent the exercise of setoff rights absent an order of the bankruptcy court, and the exercise of setoff rights in bankruptcy is subject to the requirements and limitations of Section 553 of the Bankruptcy Code, including the requirement that the debt owed to the debtor and the claim against the debtor be mutual prepetition obligations.
(g) Acceleration and Cure. A court may, in the exercise of its equitable discretion, limit the right of the Administrative Agent or the Lenders to accelerate the obligations under the Credit Agreement or to exercise other remedies upon certain defaults, particularly in the case of non-monetary defaults, technical defaults, or defaults that a court determines to be immaterial. Additionally, under applicable equitable principles, a court may permit a defaulting party to cure a default after acceleration, notwithstanding provisions in the Opinion Documents that purport to preclude such cure. In a bankruptcy proceeding under Chapter 11 of the Bankruptcy Code, a debtor may have the right to cure defaults and reinstate pre-acceleration terms pursuant to Section 1124 of the Bankruptcy Code.
(h) Attorney's Fees. Provisions of the Opinion Documents requiring the payment of attorney's fees and expenses, including provisions providing for the recovery of attorney's fees incurred in connection with the enforcement of rights under the Opinion Documents, may be subject to a reasonableness standard as applied by the court. A court may reduce or disallow claims for attorney's fees to the extent the court determines that such fees are unreasonable in amount or were incurred in connection with unsuccessful claims or positions.
5.4 UCC Qualification
The opinions expressed herein do not address, and no opinion is expressed or implied with respect to, the creation, attachment, perfection, enforceability (as against third parties), or priority of any security interest, lien, or encumbrance under the Uniform Commercial Code as adopted in any jurisdiction, including without limitation Article 8 (Investment Securities) and Article 9 (Secured Transactions) of the Uniform Commercial Code as in effect in the State of New York, the State of Delaware, the State of Florida, or any other jurisdiction. Such matters are addressed separately in the Companion Opinion, and we refer the addressees hereof to such opinion for all matters relating to the UCC and the creation, perfection, and priority of security interests.
6. Reliance, Benefit, and Other Limitations
6.1 Governing Law Limitation
This opinion is limited in all respects to the internal laws of the State of New York as currently in effect, without regard to principles of conflict of laws (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law). We express no opinion as to the laws of any other jurisdiction, including without limitation:
(a) the laws of the State of Delaware, which is the jurisdiction of incorporation of VHG, VHG Management Services Inc., and Cascadia Hospitality Corp., and the jurisdiction of formation of Verimark Resort Properties LLC and Verimark Convention Holdings LLC;
(b) the laws of the State of Florida, which is the jurisdiction of formation of Palmetto Beachfront Hotels LLC and the state in which VHG maintains its principal executive offices; and
(c) federal law, except to the extent expressly referenced in Section 5 above (including references to the Bankruptcy Code and the federal securities laws).
We note that the organizational matters pertaining to VHG and the Guarantors, including due formation, valid existence, good standing, corporate or organizational power and authority, and due authorization of the transactions contemplated by the Opinion Documents under the laws of their respective jurisdictions of organization, are addressed in the Companion Opinion and are not the subject of this opinion.
6.2 Reliance.  This opinion is furnished solely for the benefit of the Administrative Agent and the Lenders in connection with the Credit Agreement and the transactions contemplated thereby, and may not be relied upon by any other person or entity or for any other purpose without our prior written consent. This opinion may not be quoted, filed with any governmental authority, or otherwise disclosed to any person or entity (other than the addressees hereof and their respective legal counsel and financial advisors, in each case on a confidential basis) without our prior written consent, except as may be required by applicable law, regulation, or legal or administrative process.
Notwithstanding the foregoing, this opinion may be relied upon by any person or entity that becomes a Lender under the Credit Agreement after the date hereof pursuant to a duly executed Assignment and Assumption Agreement in the form attached as Exhibit B to the Credit Agreement (and incorporating the standard terms and conditions for par/near-par term loan trades published by the Loan Syndications and Trading Association), as if this opinion were addressed and delivered to such person or entity on the date hereof, subject in all respects to the same assumptions, qualifications, limitations, and exceptions set forth herein. Each such assignee Lender shall, by its acceptance of its assignment, be deemed to have acknowledged and agreed that (i) this opinion speaks only as of the date hereof, (ii) we assume no obligation to update or supplement this opinion for any reason, and (iii) such assignee Lender's reliance on this opinion is subject to all of the terms and conditions set forth herein.
6.3 Date Limitation
This opinion is rendered as of the date hereof, July 21, 2022, and is based solely upon the laws, regulations, and judicial and administrative decisions in effect and the facts and circumstances existing as of such date. We assume no obligation to update, supplement, or revise this opinion to reflect any changes in applicable law (whether by legislative action, judicial decision, administrative ruling, or otherwise) or any changes in fact or circumstance occurring after the date hereof, regardless of whether such changes would affect the opinions expressed herein.
6.4 No Implied Opinions
No opinion is expressed as to any matter not explicitly addressed herein. No opinion is implied or should be inferred beyond the enforceability opinions expressly stated in Section 4 above, as qualified by the assumptions, qualifications, exceptions, and limitations set forth in Sections 3, 5, and 6 hereof. Without limiting the generality of the foregoing, we express no opinion as to (a) the business or financial terms of the Opinion Documents or the fairness, advisability, or suitability of the transactions contemplated thereby, (b) the tax consequences of the transactions contemplated by the Opinion Documents, (c) the compliance of VHG, the Guarantors, or any other party with applicable regulatory requirements (including without limitation those of the Securities and Exchange Commission, the Federal Reserve Board, or any state regulatory authority), (d) the effect of any pending or threatened litigation involving VHG, the Guarantors, or any other party, or (e) the adequacy of the collateral securing the obligations under the Credit Agreement or the value thereof.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Ian Blackwood
Title: Partner

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

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