1021-00001 · Verimark Hospitality Group · Term Sheet & Commitment Letter

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CONFIDENTIAL

COMMITMENT LETTER

May 27, 2022

Crescent Harbor Bank, National Association 600 Lexington Avenue, 34th Floor New York, NY 10022

Verimark Hospitality Group Inc. 8200 West Palmetto Park Road, Suite 1500 Boca Raton, FL 33433

Attention: Renata Haines, Chief Financial Officer Glenn Fischbach, Treasurer

Re: $700,000,000 Senior Secured Term Loan B Facility

Ladies and Gentlemen:

Verimark Hospitality Group Inc., a Delaware corporation (the "Borrower," "VHG," or "you"), has advised Crescent Harbor Bank, National Association ("Crescent Harbor Bank, N.A.," and together with its affiliates and successors, the "Commitment Party," and, in its various capacities described herein, the "Administrative Agent," "Collateral Agent," "Lead Arranger," and "Bookrunner") that VHG intends to refinance its existing $625,000,000 senior secured Term Loan B credit facility (the "Existing Facility"), for which Greystone Federal Credit Corp. serves as administrative agent, originally closed on February 14, 2020. The refinancing will be effected through a new $700,000,000 senior secured Term Loan B credit facility (the "Facility" or the "Term Loan B"). The incremental $75,000,000 in proceeds (representing the difference between the $700,000,000 aggregate principal amount of the Facility and the approximately $621,875,000 in outstanding principal under the Existing Facility) will be used by VHG to fund its acquisition pipeline and for general corporate purposes.

The terms and conditions of the Facility are more fully described in the Summary of Terms and Conditions attached hereto as Exhibit A (the "Term Sheet"), which is incorporated herein by reference and made a part hereof. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Term Sheet.

This Commitment Letter, when executed and delivered by the parties hereto, shall constitute the legally binding agreement of the parties with respect to the matters set forth herein, subject to the terms and conditions specified herein and in the Term Sheet.

1. Commitments

Crescent Harbor Bank, N.A. hereby commits to provide one hundred percent (100%) of the $700,000,000 Term Loan B Facility, on the terms and subject to the conditions set forth herein and in the Term Sheet. Crescent Harbor Bank, N.A.'s commitment hereunder is to underwrite the entire $700,000,000 aggregate principal amount of the Facility, with the understanding and expectation that Crescent Harbor Bank, N.A. intends to syndicate the Facility to a group of institutional lenders in accordance with Section 3 hereof and, following the completion of such syndication, will retain $50,000,000 on its own book as a Lender under the Facility.

The commitment of Crescent Harbor Bank, N.A. hereunder is subject in all respects to: (a) the satisfaction (or waiver by Crescent Harbor Bank, N.A.) of each of the conditions precedent set forth in Section 5 of this Commitment Letter; (b) the satisfaction (or waiver by Crescent Harbor Bank, N.A.) of the conditions set forth in the Term Sheet; and (c) the negotiation, execution, and delivery of a definitive credit agreement and related loan documentation consistent with the Term Sheet and otherwise in form and substance reasonably satisfactory to Crescent Harbor Bank, N.A. and its counsel (the "Definitive Documentation"). It is understood and agreed that the commitment of Crescent Harbor Bank, N.A. hereunder shall not be conditioned upon the successful completion of syndication, and Crescent Harbor Bank, N.A. shall be obligated to fund the entire $700,000,000 on the Closing Date (as defined in the Term Sheet) if the conditions set forth herein and in the Term Sheet have been satisfied (or waived), regardless of whether syndication has been completed.

2. Titles and Roles

Crescent Harbor Bank, N.A. will act as sole Administrative Agent for the Facility, performing all duties and exercising all rights customarily associated with such role under credit facilities of this type and nature, including the administration of the credit agreement, the coordination of borrowings, the calculation and distribution of interest and principal payments, the maintenance of the register of Lenders, and the exercise of remedies upon the occurrence and during the continuance of an event of default.

Crescent Harbor Bank, N.A. will act as sole Collateral Agent for the Facility, responsible for holding, perfecting, and administering the liens and security interests granted by VHG and the Guarantors for the benefit of the Lenders, and for coordinating all matters relating to collateral, including the filing of UCC financing statements, the recording of mortgages and deeds of trust, and the administration of the intercreditor arrangements described in the Term Sheet.

Crescent Harbor Bank, N.A. will act as sole Lead Arranger and sole Bookrunner for the Facility, with responsibility for structuring, marketing, and syndicating the Facility to a group of institutional lenders.

No other titles shall be awarded, and no additional agents, co-agents, arrangers, bookrunners, managers, or similar titles shall be appointed or conferred in connection with the Facility without the prior written consent of Crescent Harbor Bank, N.A. VHG agrees that it shall not confer any such titles or roles without such prior written consent.

The following individuals shall serve as the primary contacts for Crescent Harbor Bank, N.A. in connection with the Facility:

Lead Banker: Theodore "Ted" Marchetti, Managing Director, Leveraged Finance, Crescent Harbor Bank, N.A.

Syndication Contact: Anika Holm, Director, Loan Syndications, Crescent Harbor Bank, N.A.

3. Syndication

Crescent Harbor Bank, N.A. reserves the right, at any time prior to or after the Closing Date, to syndicate all or a portion of its commitment under the Facility to a group of institutional lenders (each, a "Lender" and, collectively, the "Lenders") identified and selected by Crescent Harbor Bank, N.A. in consultation with VHG. VHG shall have the right to approve or disapprove any proposed Lender, such approval not to be unreasonably withheld, conditioned, or delayed; provided that VHG shall be deemed to have consented to any proposed Lender if VHG has not objected in writing within five (5) business days after receiving notice of such proposed Lender from Crescent Harbor Bank, N.A.

VHG agrees to actively assist and cooperate with Crescent Harbor Bank, N.A. in achieving a timely and successful syndication of the Facility that is satisfactory to Crescent Harbor Bank, N.A. Such assistance and cooperation shall include, without limitation, the following:

(a) providing to Crescent Harbor Bank, N.A. all financial and other information reasonably requested by Crescent Harbor Bank, N.A. in connection with the syndication, including audited consolidated financial statements of VHG for fiscal year 2021 (audited by Clearmont & Wharton LLP, engagement partner Ronald Ashby, CPA), unaudited interim financial statements, and such other financial data and supplemental materials as Crescent Harbor Bank, N.A. may reasonably request;

(b) assisting Crescent Harbor Bank, N.A. in the preparation of a confidential information memorandum (the "CIM") and other marketing materials, including lender presentations, term sheets, and such other documentation as Crescent Harbor Bank, N.A. may reasonably request for distribution to prospective Lenders, and reviewing and commenting on drafts of the CIM in a timely manner;

(c) making senior management of VHG, including Marcus Delvecchio (Chief Executive Officer) and Renata Haines (Chief Financial Officer), and VHG's advisors, available for lender presentations, conference calls, and one-on-one meetings with prospective Lenders during the syndication period at such times and locations as Crescent Harbor Bank, N.A. may reasonably request;

(d) using commercially reasonable efforts to obtain ratings for the Facility from each of Kellaway Ratings Group ("KRG") and Pinnacle Credit Services ("PCS") (VHG's current corporate family ratings being BB- (KRG) and Ba3 (PCS)), and cooperating with such rating agencies in connection with the rating process; and

(e) taking such other actions as Crescent Harbor Bank, N.A. may reasonably request to assist in the syndication of the Facility.

VHG acknowledges that Crescent Harbor Bank, N.A. has engaged Whitfield Gage & Partridge LLP as its outside legal counsel in connection with the Facility, the syndication thereof, and the negotiation and preparation of the Definitive Documentation. VHG further acknowledges that Meridian Strauss Advisory LLC (Managing Director: Elise Cavanaugh) is serving as VHG's financial advisor in connection with the Facility and the transactions contemplated hereby.

Crescent Harbor Bank, N.A. intends to launch the syndication of the Facility promptly following execution of this Commitment Letter, with a target syndication launch date of on or about June 6, 2022, lender presentations during the week of June 13, 2022, and a target allocation date of June 30, 2022. Notwithstanding the foregoing, the timing and manner of the syndication shall be determined by Crescent Harbor Bank, N.A. in its sole discretion, in consultation with VHG.

It is understood and agreed that the commitment of Crescent Harbor Bank, N.A. hereunder shall not be reduced or otherwise affected by any syndication, and the failure to complete syndication shall not relieve Crescent Harbor Bank, N.A. of its obligation to fund the Facility on the Closing Date (subject to the satisfaction or waiver of the conditions precedent set forth herein and in the Term Sheet).

The parties hereto acknowledge that certain matters relating to the structure and pricing of the Facility are set forth in the separate Fee Letter dated as of the date hereof between Crescent Harbor Bank, N.A. and VHG (the "Fee Letter") and the separate Letter Agreement re: Syndication Flex Provisions dated as of the date hereof between Crescent Harbor Bank, N.A. and VHG (the "Flex Letter"), each of which is incorporated herein by reference and forms an integral part of the commitment and arrangements contemplated by this Commitment Letter.

4. Information

VHG hereby represents and warrants to Crescent Harbor Bank, N.A. that:

(a) all written information (other than projections, estimates, and forward-looking statements) that has been or will be provided by or on behalf of VHG to Crescent Harbor Bank, N.A. in connection with the Facility and the transactions contemplated hereby, including the VHG KYC Package dated April 15, 2022, financial statements, and all other materials and data furnished by VHG (collectively, the "Information"), is and will be, when furnished, complete and correct in all material respects and does not and will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which such statements were made, not materially misleading;

(b) all projections, estimates, and forward-looking statements that have been or will be provided by or on behalf of VHG to Crescent Harbor Bank, N.A. in connection with the Facility (the "Projections") have been and will be prepared in good faith based upon assumptions believed by VHG to be reasonable at the time such Projections are furnished (it being understood and acknowledged by Crescent Harbor Bank, N.A. that such Projections are subject to significant uncertainties and contingencies, many of which are beyond VHG's control, and that actual results may differ materially from such Projections and that no assurance can be given that any particular projected results will be realized); and

(c) VHG agrees to supplement and update the Information and the Projections from time to time until the Closing Date as necessary so that the representations and warranties set forth in clauses (a) and (b) of this Section 4 remain accurate in all material respects. VHG shall promptly notify Crescent Harbor Bank, N.A. in writing of any material change in the Information or the Projections, and of any event or condition that would cause any representation or warranty made by VHG in this Section 4 to be untrue or misleading in any material respect.

VHG acknowledges that Crescent Harbor Bank, N.A. and its affiliates will be using and relying on the Information and the Projections without independent verification in connection with the syndication and the transactions contemplated hereby, including the preparation of the CIM and other marketing materials for distribution to prospective Lenders.

Without limiting the generality of the foregoing, the following key financial information has been provided by VHG and is being relied upon by Crescent Harbor Bank, N.A. in connection with the Facility:

• Fiscal Year 2021 Revenue: $1,420,000,000

• Fiscal Year 2021 EBITDA: $318,000,000

• Fiscal Year 2021 Adjusted EBITDA: $341,000,000

• Portfolio: 74 full-service and select-service hotels across 18 states

• Aggregate Appraised Value (portfolio): approximately $3.1 billion

5. Conditions Precedent

The commitments of Crescent Harbor Bank, N.A. hereunder, and the obligation of Crescent Harbor Bank, N.A. to fund the Facility on the Closing Date, are subject to the satisfaction (or waiver by Crescent Harbor Bank, N.A.) of each of the following conditions precedent:

(a) Definitive Documentation. The negotiation, execution, and delivery of the Definitive Documentation, including the Credit Agreement, guarantee agreements, pledge and security agreements, intercreditor agreement, and all related loan documents, in each case in form and substance consistent with the Term Sheet and otherwise reasonably satisfactory to Crescent Harbor Bank, N.A. and its counsel, Whitfield Gage & Partridge LLP (Lead Partner: Harrison Whitfield III; Lead Associate: Megan Yeung). VHG has engaged Calderwood & Harkness LLP (Responsible Partner: Ian Blackwood; Lead Associate: Sophie Tremblay) as Borrower's counsel in connection with the Facility and the preparation and negotiation of the Definitive Documentation.

(b) Corporate Authorization. Receipt by Crescent Harbor Bank, N.A. of evidence satisfactory to it of all necessary corporate authorizations by VHG's Board of Directors and by the governing body of each Guarantor (it being understood that VHG Board authorization is expected to have been obtained on or about May 12, 2022). Such evidence shall include delivery of an omnibus secretary's certificate, incumbency certificate, and certificates of good standing from the Delaware Secretary of State and the Florida Department of State for VHG and each Guarantor, as applicable, each dated not more than five (5) business days prior to the Closing Date.

(c) Payoff of Existing Facility. The Existing Facility — the $625,000,000 senior secured Term Loan B credit facility with Greystone Federal Credit Corp. (as administrative agent), originally closed on February 14, 2020 — shall be repaid in full simultaneously with the funding of the Facility, and all liens, security interests, and encumbrances relating to the Existing Facility shall be released and terminated. The aggregate payoff amount in respect of the Existing Facility is estimated to be approximately $627,916,667, comprising the following:

(i) $621,875,000 in outstanding principal (reflecting $3,125,000 in scheduled amortization since the origination of the Existing Facility);

(ii) approximately $2,916,667 in accrued and unpaid interest through the expected Closing Date; and

(iii) a prepayment premium of $3,125,000 (representing 0.50% of the original $625,000,000 principal amount of the Existing Facility).

Crescent Harbor Bank, N.A. shall have received a payoff letter from Greystone Federal Credit Corp. (contact: Marion Stillwell, Vice President, Agency Services) in form and substance reasonably satisfactory to Crescent Harbor Bank, N.A. and its counsel, together with authorization to file UCC-3 termination statements and mortgage releases with respect to all liens securing the Existing Facility.

(d) Ratings. VHG shall have obtained ratings for the Term Loan B Facility from each of Kellaway Ratings Group and Pinnacle Credit Services; provided that it is understood and agreed that such ratings need not be at any particular level and that the receipt of any particular rating or rating level shall not be a condition to Crescent Harbor Bank, N.A.'s obligation to fund the Facility.

(e) Solvency. Delivery to Crescent Harbor Bank, N.A. of a solvency certificate from Renata Haines, the Chief Financial Officer of VHG, substantially in the form attached to the Term Sheet, certifying the solvency of VHG and its subsidiaries on a consolidated basis after giving pro forma effect to the funding of the Facility, the repayment of the Existing Facility, and the other transactions contemplated hereby, including that (i) the fair value of the assets of VHG and its subsidiaries on a consolidated basis exceeds their debts and liabilities, (ii) VHG and its subsidiaries on a consolidated basis are able to pay their debts and liabilities as they become due, and (iii) VHG and its subsidiaries on a consolidated basis do not have unreasonably small capital with which to conduct the business in which they are engaged.

(f) Financial Statements. Receipt by Crescent Harbor Bank, N.A. of (i) VHG's audited consolidated financial statements for fiscal year 2021, including balance sheet, income statement, statement of cash flows, and statement of stockholders' equity, together with the unqualified audit opinion of Clearmont & Wharton LLP, and (ii) unaudited interim consolidated financial statements for the most recent fiscal quarter ended at least forty-five (45) days prior to the Closing Date, certified by the Chief Financial Officer of VHG as fairly presenting, in all material respects, the financial condition and results of operations of VHG and its subsidiaries on a consolidated basis as of the dates and for the periods indicated (subject to the absence of footnotes and normal year-end audit adjustments).

(g) Legal Opinions. Delivery to Crescent Harbor Bank, N.A. of customary legal opinions from Calderwood & Harkness LLP, as counsel to VHG and the Guarantors, addressed to Crescent Harbor Bank, N.A. (in its capacities as Administrative Agent, Collateral Agent, Lead Arranger, and Bookrunner) and to each Lender, covering, among other things: (i) due organization, valid existence, and good standing of VHG and each Guarantor in their respective jurisdictions of organization; (ii) corporate or limited liability company power and authority to execute, deliver, and perform the Definitive Documentation; (iii) due authorization, execution, and delivery of the Definitive Documentation; (iv) enforceability of the Definitive Documentation against VHG and each Guarantor in accordance with their respective terms, subject to customary qualifications and exceptions (including bankruptcy, insolvency, and equitable principles); (v) no conflicts with organizational documents, applicable law, or material agreements; and (vi) no required governmental approvals or consents other than those already obtained, in each case with respect to VHG and each Guarantor.

(h) Collateral and Security. Crescent Harbor Bank, N.A. shall have received evidence satisfactory to it that the Facility will be secured by a valid and perfected first-priority lien (subject to permitted liens and pari passu with the liens securing VHG's existing $400,000,000 revolving credit facility) on substantially all assets of VHG and the Guarantors, including:

(i) fee simple and leasehold interests in forty-two (42) hotel properties owned by Verimark Resort Properties LLC, with an aggregate appraised value of approximately $2.18 billion;

(ii) one hundred percent (100%) of the equity interests held by VHG or any Guarantor in each direct domestic subsidiary;

(iii) sixty-five percent (65%) of the equity interests held by VHG or any Guarantor in any first-tier foreign subsidiaries; and

(iv) all personal property of VHG and the Guarantors, including accounts, inventory, equipment, intellectual property, and general intangibles.

In connection therewith, the following shall have been delivered to or for the benefit of Crescent Harbor Bank, N.A. (as Collateral Agent):

(i) a perfection certificate executed by VHG and each Guarantor;

(ii) UCC-1 financing statements in form suitable for filing with the Delaware Secretary of State and the Florida Secured Transaction Registry;

(iii) intellectual property security agreement filings with the United States Patent and Trademark Office and the United States Copyright Office;

(iv) subject to a post-closing period of up to fifteen (15) days following the Closing Date, mortgages and/or deeds of trust encumbering the forty-two (42) hotel properties located in twelve (12) states (Florida (12), New York (6), California (5), Texas (4), Georgia (3), Colorado (3), Arizona (2), Illinois (2), Washington (2), Oregon (1), Nevada (1), Virginia (1)), together with lender's title insurance policies from Continental Fidelity Title Company; and

(v) an executed amended and restated intercreditor agreement governing the pari passu sharing of first-lien collateral between the Term Loan B Facility and VHG's existing $400,000,000 revolving credit facility (for which Crescent Harbor Bank, N.A. also serves as administrative agent and collateral agent).

(i) KYC / AML. Receipt by Crescent Harbor Bank, N.A. of all documentation and information required under applicable "know your customer" and anti-money laundering rules and regulations, including the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Bank Secrecy Act, and the rules and regulations promulgated by the Financial Crimes Enforcement Network, including a beneficial ownership certification in compliance with 31 C.F.R. § 1010.230 (the "Beneficial Ownership Regulation"). VHG has previously delivered the VHG KYC Package dated April 15, 2022 to Crescent Harbor Bank, N.A., and VHG shall promptly provide any supplemental information reasonably requested by Crescent Harbor Bank, N.A. in connection therewith.

(j) No Material Adverse Change. Since December 31, 2021, there shall not have occurred any event, circumstance, development, change, or effect that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse change in the business, assets, financial condition, or results of operations of VHG and its subsidiaries, taken as a whole (a "Material Adverse Change").

(k) Fees and Expenses. Payment by VHG of all fees and expenses due and payable on the Closing Date, including:

(i) the arrangement fee of 0.50% of the aggregate principal amount of the Facility ($3,500,000), as set forth in the Fee Letter;

(ii) the original issue discount ("OID") of 1.00% of par ($7,000,000), resulting in a net funding amount of $693,000,000;

(iii) the first annual administrative agent fee of $150,000, payable to Crescent Harbor Bank, N.A. in its capacity as Administrative Agent; and

(iv) all reasonable and documented out-of-pocket expenses of Crescent Harbor Bank, N.A. and Whitfield Gage & Partridge LLP incurred in connection with the Facility and the transactions contemplated hereby.

(l) Officer's Closing Certificate and Compliance Certificate. Delivery to Crescent Harbor Bank, N.A. of (i) an officer's closing certificate executed by an authorized officer of VHG, certifying the satisfaction (or waiver) of each of the conditions precedent to funding set forth in this Section 5, and (ii) a compliance certificate demonstrating pro forma compliance with the maximum total net leverage ratio of 4.5x as of the Closing Date. VHG's pro forma total net leverage ratio at closing is expected to be 2.52x, calculated as approximately $858,000,000 in net debt (comprising $700,000,000 under the Term Loan B Facility, plus $245,000,000 in senior unsecured notes due 2028 (Atlantic Standard Trust Company, as indenture trustee), minus approximately $87,000,000 in unrestricted cash, with the revolving credit facility undrawn at closing) divided by $341,000,000 in LTM Adjusted EBITDA.

(m) Insurance. Receipt by Crescent Harbor Bank, N.A. of evidence of insurance coverage in compliance with the requirements of the Definitive Documentation, including property, casualty, liability, and business interruption insurance, with Crescent Harbor Bank, N.A. (in its capacity as Collateral Agent for the benefit of the Lenders) named as additional insured and/or loss payee, as applicable, in form and substance reasonably satisfactory to Crescent Harbor Bank, N.A.

6. Indemnification and Expenses

VHG agrees to indemnify and hold harmless Crescent Harbor Bank, N.A. and each of its affiliates, and the respective directors, officers, employees, agents, advisors, and other representatives of each of the foregoing (each, an "Indemnified Person"), from and against any and all losses, claims, damages, liabilities, and expenses (including, without limitation, the reasonable and documented fees, charges, and disbursements of counsel) that may be incurred by or asserted against any Indemnified Person arising out of, in connection with, or as a result of (i) the Facility, this Commitment Letter, the Fee Letter, or the Flex Letter, (ii) the execution, delivery, or performance of the Definitive Documentation, (iii) the use or proposed use of the proceeds of the Facility, or (iv) any related transaction, claim, litigation, investigation, or proceeding (including any inquiry or investigation), whether or not any Indemnified Person is a party thereto and whether or not such claim, litigation, investigation, or proceeding is brought by VHG, any of its subsidiaries, any of their respective equity holders, creditors, or affiliates, or by any other person.

Provided, however, that the foregoing indemnity shall not, as to any Indemnified Person, apply to losses, claims, damages, liabilities, or expenses to the extent they are found by a final, non-appealable judgment of a court of competent jurisdiction to have resulted from the gross negligence, bad faith, or willful misconduct of such Indemnified Person, or any material breach by such Indemnified Person of its obligations under this Commitment Letter.

VHG further agrees to reimburse Crescent Harbor Bank, N.A. and its affiliates promptly upon demand for all reasonable and documented out-of-pocket expenses incurred in connection with the Facility, including the reasonable and documented fees, charges, and disbursements of Whitfield Gage & Partridge LLP, as counsel to Crescent Harbor Bank, N.A., and any other advisors retained by Crescent Harbor Bank, N.A. with the prior written consent of VHG (such consent not to be unreasonably withheld).

The indemnification and expense reimbursement obligations of VHG set forth in this Section 6 shall survive the termination of this Commitment Letter (whether by expiration, closing of the Facility, or otherwise) and shall remain in full force and effect regardless of whether the Definitive Documentation is executed and delivered or the Facility is funded.

7. Confidentiality

This Commitment Letter, the Fee Letter, the Flex Letter, and the contents thereof (collectively, the "Confidential Information") are confidential and, except as otherwise provided herein, shall not be disclosed by VHG or any of its affiliates to any person or entity without the prior written consent of Crescent Harbor Bank, N.A.

Notwithstanding the foregoing, VHG may disclose the Confidential Information:

(a) to VHG's officers, directors, employees, legal counsel (Calderwood & Harkness LLP), financial advisors (Meridian Strauss Advisory LLC), and accountants (Clearmont & Wharton LLP), in each case on a need-to-know basis and subject to their agreement to treat such information as confidential;

(b) as required by applicable law, regulation, compulsory legal process, or the order of any court or governmental authority of competent jurisdiction; provided that, to the extent practicable and permitted by law, VHG shall provide Crescent Harbor Bank, N.A. with prompt prior written notice of any such required disclosure so as to enable Crescent Harbor Bank, N.A. to seek a protective order or other appropriate remedy;

(c) as required in connection with the exercise of any remedy under this Commitment Letter or any dispute between the parties hereto;

(d) to prospective Lenders in connection with the syndication of the Facility, in each case subject to such prospective Lenders' execution and delivery of customary confidentiality agreements or "click-through" agreements; and

(e) in connection with any filing with the Securities and Exchange Commission or as otherwise required by the rules and regulations of the New York Stock Exchange applicable to VHG (NYSE ticker: VMRK).

Provided, however, that the Fee Letter, the Flex Letter, and the specific fee amounts and economic terms contained therein may be redacted in any public filing made pursuant to clause (e) above, in a manner reasonably acceptable to Crescent Harbor Bank, N.A.

8. Limitation of Liability

In no event shall Crescent Harbor Bank, N.A. or any of its affiliates, or the respective directors, officers, employees, agents, advisors, or other representatives of any of the foregoing, be liable to VHG or any of its affiliates for any indirect, special, incidental, consequential, or punitive damages (including, without limitation, any loss of profits, business, or anticipated savings) arising out of, in connection with, or as a result of this Commitment Letter, the Fee Letter, the Flex Letter, the Facility, or any of the transactions contemplated hereby or thereby, regardless of whether such damages are based on contract, tort (including negligence), strict liability, or any other theory, and regardless of whether Crescent Harbor Bank, N.A. has been advised of the possibility of such damages.

The aggregate liability of Crescent Harbor Bank, N.A. and its affiliates under this Commitment Letter, the Fee Letter, the Flex Letter, and in connection with the Facility and the transactions contemplated hereby shall not, in any event, exceed the aggregate amount of fees actually received by Crescent Harbor Bank, N.A. in connection with the Facility.

9. Absence of Fiduciary Relationship

VHG acknowledges and agrees that:

(a) Crescent Harbor Bank, N.A. is acting solely in the capacity of an arm's-length contractual counterparty to VHG with respect to the Facility and the transactions contemplated hereby, and not as a financial advisor, agent, or fiduciary of VHG or any of its affiliates, stockholders, creditors, or any other person. Crescent Harbor Bank, N.A. has no obligation to VHG with respect to the Facility or the transactions contemplated hereby except those obligations expressly set forth herein and in the Fee Letter, the Flex Letter, and the Definitive Documentation;

(b) VHG has engaged its own financial advisor, Meridian Strauss Advisory LLC (Managing Director: Elise Cavanaugh; advisory fee: 0.20% of $700,000,000, or $1,400,000), and its own legal counsel, Calderwood & Harkness LLP, in connection with the Facility and the transactions contemplated hereby, and VHG is capable of evaluating, and has independently evaluated, the terms, risks, and conditions of the Facility without reliance on Crescent Harbor Bank, N.A.; and

(c) no advisory, fiduciary, or agency relationship exists, or shall be deemed to exist, between Crescent Harbor Bank, N.A. and VHG in connection with the Facility or the transactions contemplated hereby, and VHG agrees that it will not assert any claim based upon any alleged advisory, fiduciary, or agency relationship between Crescent Harbor Bank, N.A. and VHG.

10. Termination

The commitments of Crescent Harbor Bank, N.A. hereunder shall terminate automatically, without further action by any party, upon the earliest to occur of:

(a) 11:59 p.m. (New York City time) on September 30, 2022, if the Closing Date shall not have occurred by such date (the "Commitment Termination Date");

(b) the closing and funding of the Facility (at which point the commitments of Crescent Harbor Bank, N.A. hereunder shall be superseded by, and shall merge into, the Definitive Documentation); and

(c) VHG's delivery to Crescent Harbor Bank, N.A. of written notice of VHG's election to terminate this Commitment Letter.

Upon any termination of this Commitment Letter, the obligations of VHG under Section 6 (Indemnification and Expenses), Section 7 (Confidentiality), Section 8 (Limitation of Liability), and Section 9 (Absence of Fiduciary Relationship) shall survive and remain in full force and effect in accordance with their respective terms, and such survival shall not be affected by the termination, expiration, or closing of the Facility.

11. Governing Law and Jurisdiction

This Commitment Letter shall be governed by, and construed in accordance with, the laws of the State of New York without regard to the conflicts of law principles thereof (other than Section 5-1401 of the New York General Obligations Law).

Each of the parties hereto irrevocably and unconditionally submits 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, and any appellate court from any thereof, in any action or proceeding arising out of, in connection with, or relating to this Commitment Letter, the Fee Letter, the Flex Letter, or any of the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment. Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter, or the Flex Letter in any such court, and the defense of an inconvenient forum to the maintenance of any such action or proceeding in any such court.

EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF, IN CONNECTION WITH, OR RELATING TO THIS COMMITMENT LETTER, THE FEE LETTER, THE FLEX LETTER, THE FACILITY, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. This mutual waiver of jury trial is a material inducement for each party's agreement to enter into this Commitment Letter.

12. Miscellaneous

This Commitment Letter may not be assigned by VHG without the prior written consent of Crescent Harbor Bank, N.A. (and any purported assignment without such consent shall be null and void). Crescent Harbor Bank, N.A. may assign all or a portion of its commitments hereunder in connection with the syndication of the Facility in accordance with Section 3 hereof without the consent of VHG; provided that no such assignment shall relieve Crescent Harbor Bank, N.A. of its obligations hereunder unless and until such assignment is effective and the assignee has assumed such obligations.

This Commitment Letter may be executed in one or more counterparts (including by means of electronic signature and delivery by PDF or other electronic transmission), each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Commitment Letter by electronic mail in "portable document format" (".pdf") shall be effective as delivery of a manually executed original counterpart of this Commitment Letter.

This Commitment Letter, together with the Fee Letter dated May 27, 2022, and the Letter Agreement re: Syndication Flex Provisions dated May 27, 2022, constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior discussions, negotiations, correspondence, proposals, and agreements (written or oral) between the parties with respect to such subject matter.

The headings and captions in this Commitment Letter are for convenience of reference only and shall not define, limit, or otherwise affect the meaning or interpretation of any provision hereof.

All notices, requests, demands, and other communications hereunder shall be in writing and shall be delivered personally, by nationally recognized overnight courier service (with proof of delivery), by registered or certified mail (return receipt requested), or by electronic mail (with confirmation of receipt) to the following addresses (or to such other address as a party may from time to time specify by notice hereunder):

If to VHG:

Verimark Hospitality Group Inc. 8200 West Palmetto Park Road, Suite 1500 Boca Raton, FL 33433

Attention: Renata Haines, Chief Financial Officer

Glenn Fischbach, Treasurer

with a copy (which shall not constitute notice) to:

Priya Narayanan, General Counsel Verimark Hospitality Group Inc. 8200 West Palmetto Park Road, Suite 1500 Boca Raton, FL 33433

If to Crescent Harbor Bank, N.A.:

Crescent Harbor Bank, National Association 600 Lexington Avenue, 34th Floor New York, NY 10022

Attention: Theodore Marchetti, Managing Director, Leveraged Finance

We are pleased to have the opportunity to work with you on this important transaction and look forward to a successful syndication and closing of the Facility. If you are in agreement with the foregoing, please indicate your acceptance of the terms and conditions of this Commitment Letter by signing and returning to us the enclosed counterpart of this Commitment Letter no later than 5:00 p.m. (New York City time) on May 31, 2022.

Very truly yours,

CRESCENT HARBOR BANK, NATIONAL ASSOCIATION

By: ________

Name: Theodore "Ted" Marchetti

Title: Managing Director, Leveraged Finance

Date: May 27, 2022

[Signature Page to Commitment Letter — Crescent Harbor Bank, N.A.]

Accepted and Agreed to as of the date first written above:

VERIMARK HOSPITALITY GROUP INC.

By: ________

Name: Renata Haines

Title: Chief Financial Officer

Date: May 27, 2022

By: ________

Name: Glenn Fischbach

Title: Treasurer

Date: May 27, 2022

[Signature Page to Commitment Letter — Verimark Hospitality Group Inc.]

EXHIBIT A

SUMMARY OF TERMS AND CONDITIONS

$700,000,000 Senior Secured Term Loan B Facility

Verimark Hospitality Group Inc.

May 27, 2022

This Summary of Terms and Conditions (this "Term Sheet") is attached to and forms a part of the Commitment Letter dated May 27, 2022 (the "Commitment Letter") between Crescent Harbor Bank, National Association ("Crescent Harbor Bank, N.A.") and Verimark Hospitality Group Inc. ("VHG"). Capitalized terms used but not defined in this Term Sheet shall have the meanings assigned to them in the Commitment Letter.

I. PARTIES. Borrower: Verimark Hospitality Group Inc., a corporation organized and existing under the laws of the State of Delaware; listed on the New York Stock Exchange under the ticker symbol "VMRK"; Employer Identification Number: 82-3741956; Delaware File Number: 7291843; principal offices located at 8200 West Palmetto Park Road, Suite 1500, Boca Raton, FL 33433.

Guarantors: Each of the following material domestic subsidiaries of VHG (collectively, the "Guarantors"):

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

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

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

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

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

Each Guarantor shall unconditionally guarantee all obligations of VHG under the Credit Agreement and the other Definitive Documentation.

Administrative Agent / Collateral Agent: Crescent Harbor Bank, N.A.

Lead Arranger / Bookrunner: Crescent Harbor Bank, N.A.

Lenders: A syndicate of institutional lenders arranged by Crescent Harbor Bank, N.A. in its capacity as sole Lead Arranger and sole Bookrunner.

II. FACILITY. Type: Senior Secured Term Loan B.

Amount: $700,000,000.

CUSIP: 92347LAB8.

Crescent Harbor Internal Loan Number: CHB-LF-2022-07814.

III. PURPOSE. The proceeds of the Facility will be used as follows:

(i) to refinance in full the Existing Facility — the $625,000,000 senior secured Term Loan B credit facility (CUSIP: 92347LAA0) with Greystone Federal Credit Corp. as administrative agent, originally closed on February 14, 2020, with outstanding principal at payoff of approximately $621,875,000;

(ii) to fund up to $75,000,000 for permitted acquisitions and general corporate purposes of VHG and its subsidiaries; and

(iii) to pay all related fees, premiums, and transaction expenses in connection with the foregoing.

IV. INTEREST RATE

Applicable Margin: Adjusted Term SOFR plus 375 basis points (3.75%) per annum.

Benchmark: Adjusted Term SOFR, calculated as CME Term SOFR (as published by CME Group Benchmark Administration Limited, or a successor administrator, on the applicable screen page designated by the Administrative Agent) plus a credit spread adjustment as follows:

SOFR Floor: 0.50%. In no event shall Adjusted Term SOFR (including the credit spread adjustment) be deemed to be less than 0.50% per annum.

Illustrative All-In Rate: Based on 1-month Term SOFR of 2.29% as of July 21, 2022 (the expected Closing Date), plus a credit spread adjustment of 0.10%, plus the applicable margin of 3.75%, the illustrative all-in interest rate would be approximately 6.14% per annum. The actual interest rate on any date will be determined in accordance with the Credit Agreement based on the then-applicable Term SOFR rate.

Benchmark Replacement: The Credit Agreement will contain hardwired fallback language consistent with the Alternative Reference Rates Committee ("ARRC") recommendations, with Term SOFR as the primary benchmark and Daily Simple SOFR as the first fallback, followed by such other benchmark rate as may be determined by the Administrative Agent in consultation with the Borrower.

Default Rate: Upon the occurrence and during the continuance of an event of default under the Credit Agreement, interest shall accrue on all outstanding obligations at a rate per annum equal to the otherwise applicable interest rate plus 200 basis points (2.00%).

Comparison to Existing Facility: The Existing Facility is currently priced at LIBOR plus 425 basis points (4.25%). The new Facility, priced at Adjusted Term SOFR plus 375 basis points (3.75%), achieves a reduction in spread of approximately 50 basis points, resulting in estimated annual interest savings of approximately $3,500,000 (based on the outstanding principal amount of the Existing Facility).

V. ORIGINAL ISSUE DISCOUNT

OID: 1.00% of par, representing a 99.00 issue price.

Dollar OID: $7,000,000.

Net Funding Amount: $693,000,000 (representing $700,000,000 in aggregate principal amount less $7,000,000 in OID).

VI. MATURITY. Maturity Date: July 21, 2029, being the date that is seven (7) years from the expected Closing Date of July 21, 2022. All outstanding principal, together with all accrued and unpaid interest and all other amounts owing under the Facility, shall be due and payable in full on the Maturity Date.

VII. AMORTIZATION. The Facility shall amortize at a rate of 1.00% per annum of the original principal amount, payable in equal quarterly installments.

Quarterly Amortization Payment: $1,750,000 ($700,000,000 × 1.00% ÷ 4), payable on the last business day of each fiscal quarter, commencing with the first full fiscal quarter ending after the Closing Date.

Balloon Payment at Maturity: $651,000,000, representing the original $700,000,000 principal amount less $49,000,000 in total scheduled amortization over twenty-eight (28) quarters during the seven-year term of the Facility.

VIII. REPRICING PROTECTION (SOFT CALL)

Period: Six (6) months from the Closing Date (July 21, 2022 through January 21, 2023).

Premium: 1.00% of the principal amount prepaid or repriced, if the Term Loan B Facility is voluntarily prepaid, refinanced, or repriced (including by way of amendment) at a lower effective yield within six (6) months of the Closing Date, in each case in connection with a repricing transaction.

Maximum Dollar Amount: $7,000,000 (in the event of a full prepayment of the entire $700,000,000 during the soft call period).

After January 21, 2023, voluntary prepayment or repricing of the Facility shall be permitted without any prepayment premium or penalty (other than customary breakage costs).

IX. VOLUNTARY PREPAYMENT

VHG may, at its option, prepay the Term Loan B in whole or in part at par (after the expiration of the repricing protection period described in Section VIII above), without premium or penalty, subject to: (a) customary breakage costs, if any, resulting from prepayment on a date other than the last day of an applicable interest period; and (b) minimum prepayment amounts and notice periods to be specified in the Credit Agreement.

X. MANDATORY PREPAYMENT

The Credit Agreement shall contain customary mandatory prepayment provisions, including the following:

(a) Asset Sales: 100% of net cash proceeds from asset sales (subject to customary reinvestment rights and a threshold to be agreed in the Definitive Documentation);

(b) Debt Issuances: 100% of net cash proceeds from the issuance of debt (other than permitted debt) by VHG or any of its subsidiaries; and

(c) Excess Cash Flow: An annual excess cash flow sweep, with the percentage of excess cash flow required to be applied to prepayment subject to step-downs based on the total net leverage ratio of VHG, as follows (percentages and leverage thresholds to be agreed in the Definitive Documentation).

XI. MOST FAVORED NATION (MFN) PROVISION

Applicability: The MFN provision shall apply to any incremental term loans incurred under the Credit Agreement within eighteen (18) months following the Closing Date (i.e., from July 21, 2022 through January 21, 2024, the "MFN Sunset Date").

CONFIDENTIAL
COMMITMENT LETTER
May 27, 2022
Crescent Harbor Bank, National Association 600 Lexington Avenue, 34th Floor New York, NY 10022
Verimark Hospitality Group Inc. 8200 West Palmetto Park Road, Suite 1500 Boca Raton, FL 33433
Attention: Renata Haines, Chief Financial Officer Glenn Fischbach, Treasurer
Re: $700,000,000 Senior Secured Term Loan B Facility
Ladies and Gentlemen:
Verimark Hospitality Group Inc., a Delaware corporation (the "Borrower," "VHG," or "you"), has advised Crescent Harbor Bank, National Association ("Crescent Harbor Bank, N.A.," and together with its affiliates and successors, the "Commitment Party," and, in its various capacities described herein, the "Administrative Agent," "Collateral Agent," "Lead Arranger," and "Bookrunner") that VHG intends to refinance its existing $625,000,000 senior secured Term Loan B credit facility (the "Existing Facility"), for which Greystone Federal Credit Corp. serves as administrative agent, originally closed on February 14, 2020. The refinancing will be effected through a new $700,000,000 senior secured Term Loan B credit facility (the "Facility" or the "Term Loan B"). The incremental $75,000,000 in proceeds (representing the difference between the $700,000,000 aggregate principal amount of the Facility and the approximately $621,875,000 in outstanding principal under the Existing Facility) will be used by VHG to fund its acquisition pipeline and for general corporate purposes.
The terms and conditions of the Facility are more fully described in the Summary of Terms and Conditions attached hereto as Exhibit A (the "Term Sheet"), which is incorporated herein by reference and made a part hereof. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Term Sheet.
This Commitment Letter, when executed and delivered by the parties hereto, shall constitute the legally binding agreement of the parties with respect to the matters set forth herein, subject to the terms and conditions specified herein and in the Term Sheet.
1. Commitments
Crescent Harbor Bank, N.A. hereby commits to provide one hundred percent (100%) of the $700,000,000 Term Loan B Facility, on the terms and subject to the conditions set forth herein and in the Term Sheet. Crescent Harbor Bank, N.A.'s commitment hereunder is to underwrite the entire $700,000,000 aggregate principal amount of the Facility, with the understanding and expectation that Crescent Harbor Bank, N.A. intends to syndicate the Facility to a group of institutional lenders in accordance with Section 3 hereof and, following the completion of such syndication, will retain $50,000,000 on its own book as a Lender under the Facility.
The commitment of Crescent Harbor Bank, N.A. hereunder is subject in all respects to: (a) the satisfaction (or waiver by Crescent Harbor Bank, N.A.) of each of the conditions precedent set forth in Section 5 of this Commitment Letter; (b) the satisfaction (or waiver by Crescent Harbor Bank, N.A.) of the conditions set forth in the Term Sheet; and (c) the negotiation, execution, and delivery of a definitive credit agreement and related loan documentation consistent with the Term Sheet and otherwise in form and substance reasonably satisfactory to Crescent Harbor Bank, N.A. and its counsel (the "Definitive Documentation"). It is understood and agreed that the commitment of Crescent Harbor Bank, N.A. hereunder shall not be conditioned upon the successful completion of syndication, and Crescent Harbor Bank, N.A. shall be obligated to fund the entire $700,000,000 on the Closing Date (as defined in the Term Sheet) if the conditions set forth herein and in the Term Sheet have been satisfied (or waived), regardless of whether syndication has been completed.
2. Titles and Roles
Crescent Harbor Bank, N.A. will act as sole Administrative Agent for the Facility, performing all duties and exercising all rights customarily associated with such role under credit facilities of this type and nature, including the administration of the credit agreement, the coordination of borrowings, the calculation and distribution of interest and principal payments, the maintenance of the register of Lenders, and the exercise of remedies upon the occurrence and during the continuance of an event of default.
Crescent Harbor Bank, N.A. will act as sole Collateral Agent for the Facility, responsible for holding, perfecting, and administering the liens and security interests granted by VHG and the Guarantors for the benefit of the Lenders, and for coordinating all matters relating to collateral, including the filing of UCC financing statements, the recording of mortgages and deeds of trust, and the administration of the intercreditor arrangements described in the Term Sheet.
Crescent Harbor Bank, N.A. will act as sole Lead Arranger and sole Bookrunner for the Facility, with responsibility for structuring, marketing, and syndicating the Facility to a group of institutional lenders.
No other titles shall be awarded, and no additional agents, co-agents, arrangers, bookrunners, managers, or similar titles shall be appointed or conferred in connection with the Facility without the prior written consent of Crescent Harbor Bank, N.A. VHG agrees that it shall not confer any such titles or roles without such prior written consent.
The following individuals shall serve as the primary contacts for Crescent Harbor Bank, N.A. in connection with the Facility:
Lead Banker: Theodore "Ted" Marchetti, Managing Director, Leveraged Finance, Crescent Harbor Bank, N.A.
Syndication Contact: Anika Holm, Director, Loan Syndications, Crescent Harbor Bank, N.A.
3. Syndication
Crescent Harbor Bank, N.A. reserves the right, at any time prior to or after the Closing Date, to syndicate all or a portion of its commitment under the Facility to a group of institutional lenders (each, a "Lender" and, collectively, the "Lenders") identified and selected by Crescent Harbor Bank, N.A. in consultation with VHG. VHG shall have the right to approve or disapprove any proposed Lender, such approval not to be unreasonably withheld, conditioned, or delayed; provided that VHG shall be deemed to have consented to any proposed Lender if VHG has not objected in writing within five (5) business days after receiving notice of such proposed Lender from Crescent Harbor Bank, N.A.
VHG agrees to actively assist and cooperate with Crescent Harbor Bank, N.A. in achieving a timely and successful syndication of the Facility that is satisfactory to Crescent Harbor Bank, N.A. Such assistance and cooperation shall include, without limitation, the following:
(a) providing to Crescent Harbor Bank, N.A. all financial and other information reasonably requested by Crescent Harbor Bank, N.A. in connection with the syndication, including audited consolidated financial statements of VHG for fiscal year 2021 (audited by Clearmont & Wharton LLP, engagement partner Ronald Ashby, CPA), unaudited interim financial statements, and such other financial data and supplemental materials as Crescent Harbor Bank, N.A. may reasonably request;
(b) assisting Crescent Harbor Bank, N.A. in the preparation of a confidential information memorandum (the "CIM") and other marketing materials, including lender presentations, term sheets, and such other documentation as Crescent Harbor Bank, N.A. may reasonably request for distribution to prospective Lenders, and reviewing and commenting on drafts of the CIM in a timely manner;
(c) making senior management of VHG, including Marcus Delvecchio (Chief Executive Officer) and Renata Haines (Chief Financial Officer), and VHG's advisors, available for lender presentations, conference calls, and one-on-one meetings with prospective Lenders during the syndication period at such times and locations as Crescent Harbor Bank, N.A. may reasonably request;
(d) using commercially reasonable efforts to obtain ratings for the Facility from each of Kellaway Ratings Group ("KRG") and Pinnacle Credit Services ("PCS") (VHG's current corporate family ratings being BB- (KRG) and Ba3 (PCS)), and cooperating with such rating agencies in connection with the rating process; and
(e) taking such other actions as Crescent Harbor Bank, N.A. may reasonably request to assist in the syndication of the Facility.
VHG acknowledges that Crescent Harbor Bank, N.A. has engaged Whitfield Gage & Partridge LLP as its outside legal counsel in connection with the Facility, the syndication thereof, and the negotiation and preparation of the Definitive Documentation. VHG further acknowledges that Meridian Strauss Advisory LLC (Managing Director: Elise Cavanaugh) is serving as VHG's financial advisor in connection with the Facility and the transactions contemplated hereby.
Crescent Harbor Bank, N.A. intends to launch the syndication of the Facility promptly following execution of this Commitment Letter, with a target syndication launch date of on or about June 6, 2022, lender presentations during the week of June 13, 2022, and a target allocation date of June 30, 2022. Notwithstanding the foregoing, the timing and manner of the syndication shall be determined by Crescent Harbor Bank, N.A. in its sole discretion, in consultation with VHG.
It is understood and agreed that the commitment of Crescent Harbor Bank, N.A. hereunder shall not be reduced or otherwise affected by any syndication, and the failure to complete syndication shall not relieve Crescent Harbor Bank, N.A. of its obligation to fund the Facility on the Closing Date (subject to the satisfaction or waiver of the conditions precedent set forth herein and in the Term Sheet).
The parties hereto acknowledge that certain matters relating to the structure and pricing of the Facility are set forth in the separate Fee Letter dated as of the date hereof between Crescent Harbor Bank, N.A. and VHG (the "Fee Letter") and the separate Letter Agreement re: Syndication Flex Provisions dated as of the date hereof between Crescent Harbor Bank, N.A. and VHG (the "Flex Letter"), each of which is incorporated herein by reference and forms an integral part of the commitment and arrangements contemplated by this Commitment Letter.
4. Information
VHG hereby represents and warrants to Crescent Harbor Bank, N.A. that:
(a) all written information (other than projections, estimates, and forward-looking statements) that has been or will be provided by or on behalf of VHG to Crescent Harbor Bank, N.A. in connection with the Facility and the transactions contemplated hereby, including the VHG KYC Package dated April 15, 2022, financial statements, and all other materials and data furnished by VHG (collectively, the "Information"), is and will be, when furnished, complete and correct in all material respects and does not and will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which such statements were made, not materially misleading;
(b) all projections, estimates, and forward-looking statements that have been or will be provided by or on behalf of VHG to Crescent Harbor Bank, N.A. in connection with the Facility (the "Projections") have been and will be prepared in good faith based upon assumptions believed by VHG to be reasonable at the time such Projections are furnished (it being understood and acknowledged by Crescent Harbor Bank, N.A. that such Projections are subject to significant uncertainties and contingencies, many of which are beyond VHG's control, and that actual results may differ materially from such Projections and that no assurance can be given that any particular projected results will be realized); and
(c) VHG agrees to supplement and update the Information and the Projections from time to time until the Closing Date as necessary so that the representations and warranties set forth in clauses (a) and (b) of this Section 4 remain accurate in all material respects. VHG shall promptly notify Crescent Harbor Bank, N.A. in writing of any material change in the Information or the Projections, and of any event or condition that would cause any representation or warranty made by VHG in this Section 4 to be untrue or misleading in any material respect.
VHG acknowledges that Crescent Harbor Bank, N.A. and its affiliates will be using and relying on the Information and the Projections without independent verification in connection with the syndication and the transactions contemplated hereby, including the preparation of the CIM and other marketing materials for distribution to prospective Lenders.
Without limiting the generality of the foregoing, the following key financial information has been provided by VHG and is being relied upon by Crescent Harbor Bank, N.A. in connection with the Facility:
•  Fiscal Year 2021 Revenue: $1,420,000,000
•  Fiscal Year 2021 EBITDA: $318,000,000
•  Fiscal Year 2021 Adjusted EBITDA: $341,000,000
•  Portfolio: 74 full-service and select-service hotels across 18 states
•  Aggregate Appraised Value (portfolio): approximately $3.1 billion
5. Conditions Precedent
The commitments of Crescent Harbor Bank, N.A. hereunder, and the obligation of Crescent Harbor Bank, N.A. to fund the Facility on the Closing Date, are subject to the satisfaction (or waiver by Crescent Harbor Bank, N.A.) of each of the following conditions precedent:
(a) Definitive Documentation. The negotiation, execution, and delivery of the Definitive Documentation, including the Credit Agreement, guarantee agreements, pledge and security agreements, intercreditor agreement, and all related loan documents, in each case in form and substance consistent with the Term Sheet and otherwise reasonably satisfactory to Crescent Harbor Bank, N.A. and its counsel, Whitfield Gage & Partridge LLP (Lead Partner: Harrison Whitfield III; Lead Associate: Megan Yeung). VHG has engaged Calderwood & Harkness LLP (Responsible Partner: Ian Blackwood; Lead Associate: Sophie Tremblay) as Borrower's counsel in connection with the Facility and the preparation and negotiation of the Definitive Documentation.
(b) Corporate Authorization. Receipt by Crescent Harbor Bank, N.A. of evidence satisfactory to it of all necessary corporate authorizations by VHG's Board of Directors and by the governing body of each Guarantor (it being understood that VHG Board authorization is expected to have been obtained on or about May 12, 2022). Such evidence shall include delivery of an omnibus secretary's certificate, incumbency certificate, and certificates of good standing from the Delaware Secretary of State and the Florida Department of State for VHG and each Guarantor, as applicable, each dated not more than five (5) business days prior to the Closing Date.
(c) Payoff of Existing Facility. The Existing Facility — the $625,000,000 senior secured Term Loan B credit facility with Greystone Federal Credit Corp. (as administrative agent), originally closed on February 14, 2020 — shall be repaid in full simultaneously with the funding of the Facility, and all liens, security interests, and encumbrances relating to the Existing Facility shall be released and terminated. The aggregate payoff amount in respect of the Existing Facility is estimated to be approximately $627,916,667, comprising the following:
(i) $621,875,000 in outstanding principal (reflecting $3,125,000 in scheduled amortization since the origination of the Existing Facility);
(ii) approximately $2,916,667 in accrued and unpaid interest through the expected Closing Date; and
(iii) a prepayment premium of $3,125,000 (representing 0.50% of the original $625,000,000 principal amount of the Existing Facility).
Crescent Harbor Bank, N.A. shall have received a payoff letter from Greystone Federal Credit Corp. (contact: Marion Stillwell, Vice President, Agency Services) in form and substance reasonably satisfactory to Crescent Harbor Bank, N.A. and its counsel, together with authorization to file UCC-3 termination statements and mortgage releases with respect to all liens securing the Existing Facility.
(d) Ratings. VHG shall have obtained ratings for the Term Loan B Facility from each of Kellaway Ratings Group and Pinnacle Credit Services; provided that it is understood and agreed that such ratings need not be at any particular level and that the receipt of any particular rating or rating level shall not be a condition to Crescent Harbor Bank, N.A.'s obligation to fund the Facility.
(e) Solvency. Delivery to Crescent Harbor Bank, N.A. of a solvency certificate from Renata Haines, the Chief Financial Officer of VHG, substantially in the form attached to the Term Sheet, certifying the solvency of VHG and its subsidiaries on a consolidated basis after giving pro forma effect to the funding of the Facility, the repayment of the Existing Facility, and the other transactions contemplated hereby, including that (i) the fair value of the assets of VHG and its subsidiaries on a consolidated basis exceeds their debts and liabilities, (ii) VHG and its subsidiaries on a consolidated basis are able to pay their debts and liabilities as they become due, and (iii) VHG and its subsidiaries on a consolidated basis do not have unreasonably small capital with which to conduct the business in which they are engaged.
(f) Financial Statements. Receipt by Crescent Harbor Bank, N.A. of (i) VHG's audited consolidated financial statements for fiscal year 2021, including balance sheet, income statement, statement of cash flows, and statement of stockholders' equity, together with the unqualified audit opinion of Clearmont & Wharton LLP, and (ii) unaudited interim consolidated financial statements for the most recent fiscal quarter ended at least forty-five (45) days prior to the Closing Date, certified by the Chief Financial Officer of VHG as fairly presenting, in all material respects, the financial condition and results of operations of VHG and its subsidiaries on a consolidated basis as of the dates and for the periods indicated (subject to the absence of footnotes and normal year-end audit adjustments).
(g) Legal Opinions. Delivery to Crescent Harbor Bank, N.A. of customary legal opinions from Calderwood & Harkness LLP, as counsel to VHG and the Guarantors, addressed to Crescent Harbor Bank, N.A. (in its capacities as Administrative Agent, Collateral Agent, Lead Arranger, and Bookrunner) and to each Lender, covering, among other things: (i) due organization, valid existence, and good standing of VHG and each Guarantor in their respective jurisdictions of organization; (ii) corporate or limited liability company power and authority to execute, deliver, and perform the Definitive Documentation; (iii) due authorization, execution, and delivery of the Definitive Documentation; (iv) enforceability of the Definitive Documentation against VHG and each Guarantor in accordance with their respective terms, subject to customary qualifications and exceptions (including bankruptcy, insolvency, and equitable principles); (v) no conflicts with organizational documents, applicable law, or material agreements; and (vi) no required governmental approvals or consents other than those already obtained, in each case with respect to VHG and each Guarantor.
(h) Collateral and Security. Crescent Harbor Bank, N.A. shall have received evidence satisfactory to it that the Facility will be secured by a valid and perfected first-priority lien (subject to permitted liens and pari passu with the liens securing VHG's existing $400,000,000 revolving credit facility) on substantially all assets of VHG and the Guarantors, including:
(i) fee simple and leasehold interests in forty-two (42) hotel properties owned by Verimark Resort Properties LLC, with an aggregate appraised value of approximately $2.18 billion;
(ii) one hundred percent (100%) of the equity interests held by VHG or any Guarantor in each direct domestic subsidiary;
(iii) sixty-five percent (65%) of the equity interests held by VHG or any Guarantor in any first-tier foreign subsidiaries; and
(iv) all personal property of VHG and the Guarantors, including accounts, inventory, equipment, intellectual property, and general intangibles.
In connection therewith, the following shall have been delivered to or for the benefit of Crescent Harbor Bank, N.A. (as Collateral Agent):
(i) a perfection certificate executed by VHG and each Guarantor;
(ii) UCC-1 financing statements in form suitable for filing with the Delaware Secretary of State and the Florida Secured Transaction Registry;
(iii) intellectual property security agreement filings with the United States Patent and Trademark Office and the United States Copyright Office;
(iv) subject to a post-closing period of up to fifteen (15) days following the Closing Date, mortgages and/or deeds of trust encumbering the forty-two (42) hotel properties located in twelve (12) states (Florida (12), New York (6), California (5), Texas (4), Georgia (3), Colorado (3), Arizona (2), Illinois (2), Washington (2), Oregon (1), Nevada (1), Virginia (1)), together with lender's title insurance policies from Continental Fidelity Title Company; and
(v) an executed amended and restated intercreditor agreement governing the pari passu sharing of first-lien collateral between the Term Loan B Facility and VHG's existing $400,000,000 revolving credit facility (for which Crescent Harbor Bank, N.A. also serves as administrative agent and collateral agent).
(i) KYC / AML. Receipt by Crescent Harbor Bank, N.A. of all documentation and information required under applicable "know your customer" and anti-money laundering rules and regulations, including the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Bank Secrecy Act, and the rules and regulations promulgated by the Financial Crimes Enforcement Network, including a beneficial ownership certification in compliance with 31 C.F.R. § 1010.230 (the "Beneficial Ownership Regulation"). VHG has previously delivered the VHG KYC Package dated April 15, 2022 to Crescent Harbor Bank, N.A., and VHG shall promptly provide any supplemental information reasonably requested by Crescent Harbor Bank, N.A. in connection therewith.
(j) No Material Adverse Change. Since December 31, 2021, there shall not have occurred any event, circumstance, development, change, or effect that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse change in the business, assets, financial condition, or results of operations of VHG and its subsidiaries, taken as a whole (a "Material Adverse Change").
(k) Fees and Expenses. Payment by VHG of all fees and expenses due and payable on the Closing Date, including:
(i) the arrangement fee of 0.50% of the aggregate principal amount of the Facility ($3,500,000), as set forth in the Fee Letter;
(ii) the original issue discount ("OID") of 1.00% of par ($7,000,000), resulting in a net funding amount of $693,000,000;
(iii) the first annual administrative agent fee of $150,000, payable to Crescent Harbor Bank, N.A. in its capacity as Administrative Agent; and
(iv) all reasonable and documented out-of-pocket expenses of Crescent Harbor Bank, N.A. and Whitfield Gage & Partridge LLP incurred in connection with the Facility and the transactions contemplated hereby.
(l) Officer's Closing Certificate and Compliance Certificate. Delivery to Crescent Harbor Bank, N.A. of (i) an officer's closing certificate executed by an authorized officer of VHG, certifying the satisfaction (or waiver) of each of the conditions precedent to funding set forth in this Section 5, and (ii) a compliance certificate demonstrating pro forma compliance with the maximum total net leverage ratio of 4.5x as of the Closing Date. VHG's pro forma total net leverage ratio at closing is expected to be 2.52x, calculated as approximately $858,000,000 in net debt (comprising $700,000,000 under the Term Loan B Facility, plus $245,000,000 in senior unsecured notes due 2028 (Atlantic Standard Trust Company, as indenture trustee), minus approximately $87,000,000 in unrestricted cash, with the revolving credit facility undrawn at closing) divided by $341,000,000 in LTM Adjusted EBITDA.
(m) Insurance. Receipt by Crescent Harbor Bank, N.A. of evidence of insurance coverage in compliance with the requirements of the Definitive Documentation, including property, casualty, liability, and business interruption insurance, with Crescent Harbor Bank, N.A. (in its capacity as Collateral Agent for the benefit of the Lenders) named as additional insured and/or loss payee, as applicable, in form and substance reasonably satisfactory to Crescent Harbor Bank, N.A.
6. Indemnification and Expenses
VHG agrees to indemnify and hold harmless Crescent Harbor Bank, N.A. and each of its affiliates, and the respective directors, officers, employees, agents, advisors, and other representatives of each of the foregoing (each, an "Indemnified Person"), from and against any and all losses, claims, damages, liabilities, and expenses (including, without limitation, the reasonable and documented fees, charges, and disbursements of counsel) that may be incurred by or asserted against any Indemnified Person arising out of, in connection with, or as a result of (i) the Facility, this Commitment Letter, the Fee Letter, or the Flex Letter, (ii) the execution, delivery, or performance of the Definitive Documentation, (iii) the use or proposed use of the proceeds of the Facility, or (iv) any related transaction, claim, litigation, investigation, or proceeding (including any inquiry or investigation), whether or not any Indemnified Person is a party thereto and whether or not such claim, litigation, investigation, or proceeding is brought by VHG, any of its subsidiaries, any of their respective equity holders, creditors, or affiliates, or by any other person.
Provided, however, that the foregoing indemnity shall not, as to any Indemnified Person, apply to losses, claims, damages, liabilities, or expenses to the extent they are found by a final, non-appealable judgment of a court of competent jurisdiction to have resulted from the gross negligence, bad faith, or willful misconduct of such Indemnified Person, or any material breach by such Indemnified Person of its obligations under this Commitment Letter.
VHG further agrees to reimburse Crescent Harbor Bank, N.A. and its affiliates promptly upon demand for all reasonable and documented out-of-pocket expenses incurred in connection with the Facility, including the reasonable and documented fees, charges, and disbursements of Whitfield Gage & Partridge LLP, as counsel to Crescent Harbor Bank, N.A., and any other advisors retained by Crescent Harbor Bank, N.A. with the prior written consent of VHG (such consent not to be unreasonably withheld).
The indemnification and expense reimbursement obligations of VHG set forth in this Section 6 shall survive the termination of this Commitment Letter (whether by expiration, closing of the Facility, or otherwise) and shall remain in full force and effect regardless of whether the Definitive Documentation is executed and delivered or the Facility is funded.
7. Confidentiality
This Commitment Letter, the Fee Letter, the Flex Letter, and the contents thereof (collectively, the "Confidential Information") are confidential and, except as otherwise provided herein, shall not be disclosed by VHG or any of its affiliates to any person or entity without the prior written consent of Crescent Harbor Bank, N.A.
Notwithstanding the foregoing, VHG may disclose the Confidential Information:
(a) to VHG's officers, directors, employees, legal counsel (Calderwood & Harkness LLP), financial advisors (Meridian Strauss Advisory LLC), and accountants (Clearmont & Wharton LLP), in each case on a need-to-know basis and subject to their agreement to treat such information as confidential;
(b) as required by applicable law, regulation, compulsory legal process, or the order of any court or governmental authority of competent jurisdiction; provided that, to the extent practicable and permitted by law, VHG shall provide Crescent Harbor Bank, N.A. with prompt prior written notice of any such required disclosure so as to enable Crescent Harbor Bank, N.A. to seek a protective order or other appropriate remedy;
(c) as required in connection with the exercise of any remedy under this Commitment Letter or any dispute between the parties hereto;
(d) to prospective Lenders in connection with the syndication of the Facility, in each case subject to such prospective Lenders' execution and delivery of customary confidentiality agreements or "click-through" agreements; and
(e) in connection with any filing with the Securities and Exchange Commission or as otherwise required by the rules and regulations of the New York Stock Exchange applicable to VHG (NYSE ticker: VMRK).
Provided, however, that the Fee Letter, the Flex Letter, and the specific fee amounts and economic terms contained therein may be redacted in any public filing made pursuant to clause (e) above, in a manner reasonably acceptable to Crescent Harbor Bank, N.A.
8. Limitation of Liability
In no event shall Crescent Harbor Bank, N.A. or any of its affiliates, or the respective directors, officers, employees, agents, advisors, or other representatives of any of the foregoing, be liable to VHG or any of its affiliates for any indirect, special, incidental, consequential, or punitive damages (including, without limitation, any loss of profits, business, or anticipated savings) arising out of, in connection with, or as a result of this Commitment Letter, the Fee Letter, the Flex Letter, the Facility, or any of the transactions contemplated hereby or thereby, regardless of whether such damages are based on contract, tort (including negligence), strict liability, or any other theory, and regardless of whether Crescent Harbor Bank, N.A. has been advised of the possibility of such damages.
The aggregate liability of Crescent Harbor Bank, N.A. and its affiliates under this Commitment Letter, the Fee Letter, the Flex Letter, and in connection with the Facility and the transactions contemplated hereby shall not, in any event, exceed the aggregate amount of fees actually received by Crescent Harbor Bank, N.A. in connection with the Facility.
9. Absence of Fiduciary Relationship
VHG acknowledges and agrees that:
(a) Crescent Harbor Bank, N.A. is acting solely in the capacity of an arm's-length contractual counterparty to VHG with respect to the Facility and the transactions contemplated hereby, and not as a financial advisor, agent, or fiduciary of VHG or any of its affiliates, stockholders, creditors, or any other person. Crescent Harbor Bank, N.A. has no obligation to VHG with respect to the Facility or the transactions contemplated hereby except those obligations expressly set forth herein and in the Fee Letter, the Flex Letter, and the Definitive Documentation;
(b) VHG has engaged its own financial advisor, Meridian Strauss Advisory LLC (Managing Director: Elise Cavanaugh; advisory fee: 0.20% of $700,000,000, or $1,400,000), and its own legal counsel, Calderwood & Harkness LLP, in connection with the Facility and the transactions contemplated hereby, and VHG is capable of evaluating, and has independently evaluated, the terms, risks, and conditions of the Facility without reliance on Crescent Harbor Bank, N.A.; and
(c) no advisory, fiduciary, or agency relationship exists, or shall be deemed to exist, between Crescent Harbor Bank, N.A. and VHG in connection with the Facility or the transactions contemplated hereby, and VHG agrees that it will not assert any claim based upon any alleged advisory, fiduciary, or agency relationship between Crescent Harbor Bank, N.A. and VHG.
10. Termination
The commitments of Crescent Harbor Bank, N.A. hereunder shall terminate automatically, without further action by any party, upon the earliest to occur of:
(a) 11:59 p.m. (New York City time) on September 30, 2022, if the Closing Date shall not have occurred by such date (the "Commitment Termination Date");
(b) the closing and funding of the Facility (at which point the commitments of Crescent Harbor Bank, N.A. hereunder shall be superseded by, and shall merge into, the Definitive Documentation); and
(c) VHG's delivery to Crescent Harbor Bank, N.A. of written notice of VHG's election to terminate this Commitment Letter.
Upon any termination of this Commitment Letter, the obligations of VHG under Section 6 (Indemnification and Expenses), Section 7 (Confidentiality), Section 8 (Limitation of Liability), and Section 9 (Absence of Fiduciary Relationship) shall survive and remain in full force and effect in accordance with their respective terms, and such survival shall not be affected by the termination, expiration, or closing of the Facility.
11. Governing Law and Jurisdiction
This Commitment Letter shall be governed by, and construed in accordance with, the laws of the State of New York without regard to the conflicts of law principles thereof (other than Section 5-1401 of the New York General Obligations Law).
Each of the parties hereto irrevocably and unconditionally submits 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, and any appellate court from any thereof, in any action or proceeding arising out of, in connection with, or relating to this Commitment Letter, the Fee Letter, the Flex Letter, or any of the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment. Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter, or the Flex Letter in any such court, and the defense of an inconvenient forum to the maintenance of any such action or proceeding in any such court.
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF, IN CONNECTION WITH, OR RELATING TO THIS COMMITMENT LETTER, THE FEE LETTER, THE FLEX LETTER, THE FACILITY, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. This mutual waiver of jury trial is a material inducement for each party's agreement to enter into this Commitment Letter.
12. Miscellaneous
This Commitment Letter may not be assigned by VHG without the prior written consent of Crescent Harbor Bank, N.A. (and any purported assignment without such consent shall be null and void). Crescent Harbor Bank, N.A. may assign all or a portion of its commitments hereunder in connection with the syndication of the Facility in accordance with Section 3 hereof without the consent of VHG; provided that no such assignment shall relieve Crescent Harbor Bank, N.A. of its obligations hereunder unless and until such assignment is effective and the assignee has assumed such obligations.
This Commitment Letter may be executed in one or more counterparts (including by means of electronic signature and delivery by PDF or other electronic transmission), each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Commitment Letter by electronic mail in "portable document format" (".pdf") shall be effective as delivery of a manually executed original counterpart of this Commitment Letter.
This Commitment Letter, together with the Fee Letter dated May 27, 2022, and the Letter Agreement re: Syndication Flex Provisions dated May 27, 2022, constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior discussions, negotiations, correspondence, proposals, and agreements (written or oral) between the parties with respect to such subject matter.
The headings and captions in this Commitment Letter are for convenience of reference only and shall not define, limit, or otherwise affect the meaning or interpretation of any provision hereof.
All notices, requests, demands, and other communications hereunder shall be in writing and shall be delivered personally, by nationally recognized overnight courier service (with proof of delivery), by registered or certified mail (return receipt requested), or by electronic mail (with confirmation of receipt) to the following addresses (or to such other address as a party may from time to time specify by notice hereunder):
If to VHG:
Verimark Hospitality Group Inc. 8200 West Palmetto Park Road, Suite 1500 Boca Raton, FL 33433
Attention: Renata Haines, Chief Financial Officer
Glenn Fischbach, Treasurer
with a copy (which shall not constitute notice) to:
Priya Narayanan, General Counsel Verimark Hospitality Group Inc. 8200 West Palmetto Park Road, Suite 1500 Boca Raton, FL 33433
If to Crescent Harbor Bank, N.A.:
Crescent Harbor Bank, National Association 600 Lexington Avenue, 34th Floor New York, NY 10022
Attention: Theodore Marchetti, Managing Director, Leveraged Finance
We are pleased to have the opportunity to work with you on this important transaction and look forward to a successful syndication and closing of the Facility. If you are in agreement with the foregoing, please indicate your acceptance of the terms and conditions of this Commitment Letter by signing and returning to us the enclosed counterpart of this Commitment Letter no later than 5:00 p.m. (New York City time) on May 31, 2022.
Very truly yours,
CRESCENT HARBOR BANK, NATIONAL ASSOCIATION
By: ________
Name: Theodore "Ted" Marchetti
Title: Managing Director, Leveraged Finance
Date: May 27, 2022
[Signature Page to Commitment Letter — Crescent Harbor Bank, N.A.]
Accepted and Agreed to as of the date first written above:
VERIMARK HOSPITALITY GROUP INC.
By: ________
Name: Renata Haines
Title: Chief Financial Officer
Date: May 27, 2022
By: ________
Name: Glenn Fischbach
Title: Treasurer
Date: May 27, 2022
[Signature Page to Commitment Letter — Verimark Hospitality Group Inc.]
EXHIBIT A
SUMMARY OF TERMS AND CONDITIONS
$700,000,000 Senior Secured Term Loan B Facility
Verimark Hospitality Group Inc.
May 27, 2022
This Summary of Terms and Conditions (this "Term Sheet") is attached to and forms a part of the Commitment Letter dated May 27, 2022 (the "Commitment Letter") between Crescent Harbor Bank, National Association ("Crescent Harbor Bank, N.A.") and Verimark Hospitality Group Inc. ("VHG"). Capitalized terms used but not defined in this Term Sheet shall have the meanings assigned to them in the Commitment Letter.
I. PARTIES.  Borrower: Verimark Hospitality Group Inc., a corporation organized and existing under the laws of the State of Delaware; listed on the New York Stock Exchange under the ticker symbol "VMRK"; Employer Identification Number: 82-3741956; Delaware File Number: 7291843; principal offices located at 8200 West Palmetto Park Road, Suite 1500, Boca Raton, FL 33433.
Guarantors: Each of the following material domestic subsidiaries of VHG (collectively, the "Guarantors"):
(i) Verimark Resort Properties LLC, a limited liability company organized under the laws of the State of Delaware;
(ii) VHG Management Services Inc., a corporation organized under the laws of the State of Delaware;
(iii) Verimark Convention Holdings LLC, a limited liability company organized under the laws of the State of Delaware;
(iv) Palmetto Beachfront Hotels LLC, a limited liability company organized under the laws of the State of Florida; and
(v) Cascadia Hospitality Corp., a corporation organized under the laws of the State of Delaware.
Each Guarantor shall unconditionally guarantee all obligations of VHG under the Credit Agreement and the other Definitive Documentation.
Administrative Agent / Collateral Agent: Crescent Harbor Bank, N.A.
Lead Arranger / Bookrunner: Crescent Harbor Bank, N.A.
Lenders: A syndicate of institutional lenders arranged by Crescent Harbor Bank, N.A. in its capacity as sole Lead Arranger and sole Bookrunner.
II. FACILITY.  Type: Senior Secured Term Loan B.
Amount: $700,000,000.
CUSIP: 92347LAB8.
Crescent Harbor Internal Loan Number: CHB-LF-2022-07814.
III. PURPOSE.  The proceeds of the Facility will be used as follows:
(i) to refinance in full the Existing Facility — the $625,000,000 senior secured Term Loan B credit facility (CUSIP: 92347LAA0) with Greystone Federal Credit Corp. as administrative agent, originally closed on February 14, 2020, with outstanding principal at payoff of approximately $621,875,000;
(ii) to fund up to $75,000,000 for permitted acquisitions and general corporate purposes of VHG and its subsidiaries; and
(iii) to pay all related fees, premiums, and transaction expenses in connection with the foregoing.
IV. INTEREST RATE
Applicable Margin: Adjusted Term SOFR plus 375 basis points (3.75%) per annum.
Benchmark: Adjusted Term SOFR, calculated as CME Term SOFR (as published by CME Group Benchmark Administration Limited, or a successor administrator, on the applicable screen page designated by the Administrative Agent) plus a credit spread adjustment as follows:
SOFR Floor: 0.50%. In no event shall Adjusted Term SOFR (including the credit spread adjustment) be deemed to be less than 0.50% per annum.
Illustrative All-In Rate: Based on 1-month Term SOFR of 2.29% as of July 21, 2022 (the expected Closing Date), plus a credit spread adjustment of 0.10%, plus the applicable margin of 3.75%, the illustrative all-in interest rate would be approximately 6.14% per annum. The actual interest rate on any date will be determined in accordance with the Credit Agreement based on the then-applicable Term SOFR rate.
Benchmark Replacement: The Credit Agreement will contain hardwired fallback language consistent with the Alternative Reference Rates Committee ("ARRC") recommendations, with Term SOFR as the primary benchmark and Daily Simple SOFR as the first fallback, followed by such other benchmark rate as may be determined by the Administrative Agent in consultation with the Borrower.
Default Rate: Upon the occurrence and during the continuance of an event of default under the Credit Agreement, interest shall accrue on all outstanding obligations at a rate per annum equal to the otherwise applicable interest rate plus 200 basis points (2.00%).
Comparison to Existing Facility: The Existing Facility is currently priced at LIBOR plus 425 basis points (4.25%). The new Facility, priced at Adjusted Term SOFR plus 375 basis points (3.75%), achieves a reduction in spread of approximately 50 basis points, resulting in estimated annual interest savings of approximately $3,500,000 (based on the outstanding principal amount of the Existing Facility).
V. ORIGINAL ISSUE DISCOUNT
OID: 1.00% of par, representing a 99.00 issue price.
Dollar OID: $7,000,000.
Net Funding Amount: $693,000,000 (representing $700,000,000 in aggregate principal amount less $7,000,000 in OID).
VI. MATURITY.  Maturity Date: July 21, 2029, being the date that is seven (7) years from the expected Closing Date of July 21, 2022. All outstanding principal, together with all accrued and unpaid interest and all other amounts owing under the Facility, shall be due and payable in full on the Maturity Date.
VII. AMORTIZATION.  The Facility shall amortize at a rate of 1.00% per annum of the original principal amount, payable in equal quarterly installments.
Quarterly Amortization Payment: $1,750,000 ($700,000,000 × 1.00% ÷ 4), payable on the last business day of each fiscal quarter, commencing with the first full fiscal quarter ending after the Closing Date.
Balloon Payment at Maturity: $651,000,000, representing the original $700,000,000 principal amount less $49,000,000 in total scheduled amortization over twenty-eight (28) quarters during the seven-year term of the Facility.
VIII. REPRICING PROTECTION (SOFT CALL)
Period: Six (6) months from the Closing Date (July 21, 2022 through January 21, 2023).
Premium: 1.00% of the principal amount prepaid or repriced, if the Term Loan B Facility is voluntarily prepaid, refinanced, or repriced (including by way of amendment) at a lower effective yield within six (6) months of the Closing Date, in each case in connection with a repricing transaction.
Maximum Dollar Amount: $7,000,000 (in the event of a full prepayment of the entire $700,000,000 during the soft call period).
After January 21, 2023, voluntary prepayment or repricing of the Facility shall be permitted without any prepayment premium or penalty (other than customary breakage costs).
IX. VOLUNTARY PREPAYMENT
VHG may, at its option, prepay the Term Loan B in whole or in part at par (after the expiration of the repricing protection period described in Section VIII above), without premium or penalty, subject to: (a) customary breakage costs, if any, resulting from prepayment on a date other than the last day of an applicable interest period; and (b) minimum prepayment amounts and notice periods to be specified in the Credit Agreement.
X. MANDATORY PREPAYMENT
The Credit Agreement shall contain customary mandatory prepayment provisions, including the following:
(a) Asset Sales: 100% of net cash proceeds from asset sales (subject to customary reinvestment rights and a threshold to be agreed in the Definitive Documentation);
(b) Debt Issuances: 100% of net cash proceeds from the issuance of debt (other than permitted debt) by VHG or any of its subsidiaries; and
(c) Excess Cash Flow: An annual excess cash flow sweep, with the percentage of excess cash flow required to be applied to prepayment subject to step-downs based on the total net leverage ratio of VHG, as follows (percentages and leverage thresholds to be agreed in the Definitive Documentation).
XI. MOST FAVORED NATION (MFN) PROVISION
Applicability: The MFN provision shall apply to any incremental term loans incurred under the Credit Agreement within eighteen (18) months following the Closing Date (i.e., from July 21, 2022 through January 21, 2024, the "MFN Sunset Date").
MFN Threshold: If any incremental term loan is incurred during the MFN period with an effective yield (taking into account the applicable margin, any interest rate floor, any OID or upfront fees, and any other yield-related terms) that exceeds the effective yield on the initial Term Loan B Facility by more than 50 basis points (the "MFN Threshold"), then the applicable margin on the initial Term Loan B Facility shall be automatically increased to bring the effective yield on the initial Term Loan B Facility to within 50 basis points of the effective yield on such incremental term loan.
After the MFN Sunset Date of January 21, 2024, VHG may incur incremental term loans at any yield without triggering an adjustment to the applicable margin on the initial Term Loan B Facility.
XII. INCREMENTAL FACILITIES
The Credit Agreement will permit VHG to incur incremental term loans and/or increase revolving commitments in an aggregate principal amount subject to a combined capacity consisting of a fixed dollar basket and a leverage-based grower basket, in each case on terms and subject to conditions to be agreed in the Definitive Documentation.
Any incremental term loans incurred during the MFN period shall be subject to the MFN provision described in Section XI above.
XIII. SECURITY / COLLATERAL
The Facility shall be secured by a valid and perfected first-priority lien (pari passu with the liens securing VHG's existing $400,000,000 revolving credit facility, for which Crescent Harbor Bank, N.A. also serves as administrative agent and collateral agent) on substantially all assets of VHG and the Guarantors, including:
(a) Real Property: Fee simple and leasehold interests in forty-two (42) hotel properties owned by Verimark Resort Properties LLC, with an aggregate appraised value of approximately $2.18 billion;
(b) Equity Interests: 100% of the equity interests held by VHG or any Guarantor in each direct domestic subsidiary, and 65% of the equity interests held by VHG or any Guarantor in any first-tier foreign subsidiaries;
(c) Personal Property: All personal property of VHG and the Guarantors, including accounts, inventory, equipment, intellectual property (including trademarks, service marks, patents, and copyrights), general intangibles, chattel paper, instruments, deposit accounts, securities accounts, commercial tort claims, letter-of-credit rights, and proceeds of any of the foregoing.
Perfection and Filing: UCC-1 financing statements shall be filed with the Delaware Secretary of State and the Florida Secured Transaction Registry. Intellectual property security agreements shall be filed with the United States Patent and Trademark Office and the United States Copyright Office.
Mortgages: Mortgages and/or deeds of trust encumbering the forty-two (42) hotel properties shall be recorded in the applicable land records offices in the following twelve (12) states, subject to a post-closing period of up to fifteen (15) days after the Closing Date for delivery:
Title Insurance: Lender's title insurance policies shall be obtained from Continental Fidelity Title Company with respect to each mortgaged property.
XIV. INTERCREDITOR ARRANGEMENT
VHG, Crescent Harbor Bank, N.A. (as agent under the Term Loan B Facility), and Crescent Harbor Bank, N.A. (as agent under the $400,000,000 revolving credit facility) shall enter into an Amended and Restated Intercreditor Agreement governing the pari passu sharing of first-lien collateral between the Term Loan B Facility and the revolving credit facility, including provisions relating to the exercise of remedies, the application of proceeds, and related matters.
XV. FINANCIAL COVENANTS
Maximum Total Net Leverage Ratio: 4.5x, tested quarterly on a trailing four-quarter basis.
Springing Nature: The financial covenant shall only be tested on any quarterly test date when the aggregate revolving credit exposure (consisting of revolving loans and letters of credit outstanding) exceeds 35% of the total revolving commitments under VHG's existing $400,000,000 revolving credit facility.
Pro Forma Leverage at Closing: 2.52x, calculated as follows:
The revolving credit facility is expected to be undrawn at closing.
XVI. REPRESENTATIONS AND WARRANTIES
The Credit Agreement shall contain representations and warranties customary for facilities of this type and nature, including representations as to: organization and authority; due authorization, execution, and delivery; enforceability; financial statements; no material adverse change; litigation; compliance with laws; payment of taxes; ERISA compliance; environmental matters; intellectual property; collateral matters; accuracy of information; solvency; anti-corruption and anti-bribery compliance (including compliance with the U.S. Foreign Corrupt Practices Act); and sanctions (including compliance with OFAC, the EU, and the United Nations sanctions programs).
XVII. AFFIRMATIVE COVENANTS
The Credit Agreement shall contain affirmative covenants customary for facilities of this type, including requirements to: deliver annual audited financial statements (audited by Clearmont & Wharton LLP) within 90 days of fiscal year end and quarterly unaudited financial statements within 45 days of each fiscal quarter end; deliver compliance certificates concurrently with annual and quarterly financial statements; maintain all properties and insurance in good condition and working order; pay all taxes and other material obligations; permit inspections by the Administrative Agent and the Lenders; comply with applicable laws and regulations; provide further assurances with respect to collateral; and deliver such other information as the Administrative Agent may reasonably request.
XVIII. NEGATIVE COVENANTS
The Credit Agreement shall contain negative covenants customary for facilities of this type, including limitations on: incurrence of indebtedness; creation or existence of liens; fundamental changes (including mergers, consolidations, and dissolutions); asset dispositions; restricted payments (including dividends and share repurchases); investments; transactions with affiliates; amendments to material agreements; entering into restrictive agreements; and changes to lines of business.
Each of the foregoing negative covenants shall be subject to customary exceptions, baskets, and carve-outs to be agreed upon in the Definitive Documentation.
XIX. EVENTS OF DEFAULT
The Credit Agreement shall contain events of default customary for facilities of this type, including: failure to make payments of principal, interest, or other amounts when due; breach of representations and warranties; failure to comply with covenants (with customary cure periods applicable to certain affirmative covenants); cross-default and cross-acceleration to other material indebtedness (with a threshold to be agreed); bankruptcy and insolvency events; ERISA events; entry of material judgments (with a threshold to be agreed); change of control; and invalidity or impairment of any material loan document or lien.
XX. ASSIGNMENTS AND PARTICIPATIONS
Lenders may assign all or a portion of their commitments and loans under the Facility with the consent of the Administrative Agent (not to be unreasonably withheld or delayed) and, so long as no event of default has occurred and is continuing, with the consent of the Borrower (not to be unreasonably withheld or delayed). The Borrower shall be deemed to have consented to any proposed assignment if the Borrower fails to respond to a written request for consent within ten (10) business days after receipt of such request.
Minimum Assignment Amount: $1,000,000 (or the entire remaining commitment or loan amount of the assigning Lender, if less than $1,000,000).
All assignments shall be subject to the standard terms and conditions of the Loan Syndications and Trading Association ("LSTA") for par/near-par term loan trades, and shall be effected by delivery of an assignment and assumption agreement in a form to be attached to the Credit Agreement.
Lenders may grant participations in their commitments and loans to any person without the consent of any other party, subject to customary restrictions on voting and other rights of participants.
XXI. FEES.  All fees payable in connection with the Facility shall be as set forth in the Fee Letter dated May 27, 2022, between Crescent Harbor Bank, N.A. and VHG, including the following:
XXII. EXPENSES.  VHG shall pay all reasonable and documented out-of-pocket expenses of the Administrative Agent and its counsel, Whitfield Gage & Partridge LLP, incurred in connection with the negotiation, preparation, execution, delivery, and administration of the Definitive Documentation and the syndication of the Facility, including filing fees, search fees, recording charges, and similar costs.
XXIII. GOVERNING LAW
The Credit Agreement and the other Definitive Documentation shall be governed by, and construed in accordance with, the laws of the State of New York without regard to the conflicts of law principles thereof (other than Section 5-1401 of the New York General Obligations Law).
XXIV. JURISDICTION.  Each party to the Credit Agreement shall irrevocably and unconditionally submit 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, and any appellate court from any thereof, in any action or proceeding arising out of or relating to the Credit Agreement or the other Definitive Documentation.
XXV. JURY WAIVER
Each party to the Credit Agreement shall irrevocably waive, to the fullest extent permitted by applicable law, any right to trial by jury in any action or proceeding arising out of or relating to the Credit Agreement or the other Definitive Documentation.
XXVI. COUNSEL.  Borrower's Counsel:
Calderwood & Harkness LLP Ian Blackwood, Responsible Partner Stephanie Okafor, Billing Partner Sophie Tremblay, Lead Associate Daniel Obi, Working Associate Leonard Cross, Tax Specialist Partner
Agent's / Lender's Counsel:
Whitfield Gage & Partridge LLP Harrison Whitfield III, Lead Partner Megan Yeung, Lead Associate
XXVII. TARGET TIMELINE
The foregoing timeline is indicative only and is subject to change based on market conditions, the progress of negotiations, and other factors. The Commitment Termination Date of September 30, 2022 is a hard outside date, and the commitments of Crescent Harbor Bank, N.A. shall terminate automatically if the Closing Date has not occurred by such date.
[End of Exhibit A — Summary of Terms and Conditions]
Interest Period | Credit Spread Adjustment
1-month | 0.10% (10 basis points)
3-month | 0.15% (15 basis points)
6-month | 0.25% (25 basis points)
State | Number of Properties
Florida | 12
New York | 6
California | 5
Texas | 4
Georgia | 3
Colorado | 3
Arizona | 2
Illinois | 2
Washington | 2
Oregon | 1
Nevada | 1
Virginia | 1
Total | 42
Component | Amount
Term Loan B Facility | $700,000,000
Senior Unsecured Notes (due 2028; Atlantic Standard Trust Company, as indenture trustee) | $245,000,000
Less: Unrestricted Cash | ($87,000,000)
Total Net Debt | $858,000,000
LTM Adjusted EBITDA (FY2021) | $341,000,000
Pro Forma Total Net Leverage Ratio | 2.52x
Fee | Amount
Arrangement Fee | 0.50% of $700,000,000 = $3,500,000
Original Issue discount (OID) | 1.00% of $700,000,000 = $7,000,000
Administrative Agent Fee | $150,000 per annum
Upfront Fee to Syndicate Lenders | 0.25% of each Lender's commitment (embedded in OID)
Milestone | Target Date
VHG Board Authorization | May 12, 2022
First Draft Credit Agreement | May 16, 2022 (already circulated)
Commitment Letter Execution | May 27, 2022
Syndication Launch | On or about June 6, 2022
Lender Presentations | June 13–17, 2022
Syndication Allocation | June 30, 2022
Final Credit Agreement | Mid-July 2022
Signing / Closing / Funding | July 21, 2022 (simultaneous sign-and-close)
Existing TLB Payoff | July 21, 2022
Post-Closing Mortgage Deliverables | Within 15 days of Closing (August 5, 2022)
Commitment Termination Date (Outside Date) | September 30, 2022

CONFIDENTIAL

COMMITMENT LETTER

CRESCENT HARBOR BANK, NATIONAL ASSOCIATION

VERIMARK HOSPITALITY GROUP INC.

EXHIBIT A

SUMMARY OF TERMS AND CONDITIONS

CUSIP: 92347LAB8.

IV. INTEREST RATE

V. ORIGINAL ISSUE DISCOUNT

VIII. REPRICING PROTECTION (SOFT CALL)

IX. VOLUNTARY PREPAYMENT

X. MANDATORY PREPAYMENT

XI. MOST FAVORED NATION (MFN) PROVISION

Record

Parties

Dates

Amounts