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

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CONFIDENTIAL

CRESCENT HARBOR BANK, N.A. 600 Lexington Avenue, 34th Floor New York, NY 10022

May 27, 2022

EXECUTION VERSION

CONFIDENTIAL

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

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

Copy to: Priya Narayanan, General Counsel & Corporate Secretary (same address)

Re: Fee Letter in connection with $700,000,000 Senior Secured Term Loan B Facility

Dear Ms. Haines and Mr. Fischbach:

This fee letter (this "Fee Letter") sets forth certain fee arrangements in connection with that certain Commitment Letter dated as of May 27, 2022 (the "Commitment Letter"), between Verimark Hospitality Group Inc., a Delaware corporation ("VHG" or the "Borrower"), and Crescent Harbor Bank, National Association ("Crescent Harbor," and in its various capacities described herein, the "Arranger" or "Administrative Agent," as applicable), relating to the proposed $700,000,000 senior secured Term Loan B credit facility (the "Facility") more particularly described in the Commitment Letter and the term sheet attached thereto as Exhibit A (the "Term Sheet").

Section 1. Reference and Definitions

This Fee Letter is entered into in connection with, and forms an integral part of, the Commitment Letter dated as of May 27, 2022 between VHG and Crescent Harbor Bank, N.A. The Commitment Letter sets forth, among other things, the commitment of Crescent Harbor to provide, arrange, and syndicate the Facility on the terms and subject to the conditions set forth in the Commitment Letter and the Term Sheet.

Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Commitment Letter or the Term Sheet attached thereto as Exhibit A. In addition, the following terms shall have the meanings set forth below when used in this Fee Letter:

"Facility" means the $700,000,000 senior secured Term Loan B credit facility described in the Commitment Letter and the Term Sheet.

"Credit Agreement" means the credit agreement to be entered into among VHG (as Borrower), the Guarantors party thereto from time to time, Crescent Harbor Bank, N.A. (as Administrative Agent and Collateral Agent), and the Lenders from time to time party thereto, which credit agreement shall set forth the definitive terms and conditions of the Facility consistent with the Commitment Letter and the Term Sheet.

"Closing Date" means the date on which the conditions precedent to the initial funding under the Credit Agreement are satisfied or waived in accordance with the terms thereof and the initial borrowing under the Facility occurs.

For purposes of this Fee Letter, references to Crescent Harbor's "roles" or "capacities" refer to Crescent Harbor Bank, N.A. acting in one or more of the following capacities, as the context may require: (a) Administrative Agent under the Credit Agreement, (b) Collateral Agent under the Credit Agreement and related security documents, (c) sole Lead Arranger with respect to the syndication and arrangement of the Facility, and (d) sole Bookrunner with respect to the Facility. Crescent Harbor's internal loan reference number for the Facility is CHB-LF-2022-07814, and all correspondence and payments relating to this Fee Letter should reference such number.

Section 2. Arrangement Fee

(a) Amount. VHG shall pay to Crescent Harbor Bank, N.A., in its capacity as Lead Arranger and Bookrunner for the Facility, an arrangement fee (the "Arrangement Fee") in an amount equal to 0.50% of the aggregate principal amount of the Facility. Based on the aggregate principal amount of $700,000,000, the Arrangement Fee shall be $3,500,000. The Arrangement Fee is a fee payable solely to Crescent Harbor in consideration for its services as Lead Arranger and Bookrunner in structuring, arranging, and syndicating the Facility, and is non-refundable and non-creditable once paid. For the avoidance of doubt, the Arrangement Fee is payable exclusively to Crescent Harbor and shall not be shared with, or allocated to, any syndicate Lender.

(b) Payment Timing and Method. The Arrangement Fee shall be due and payable in full in immediately available funds on the Closing Date. At the election of VHG and with the prior written consent of Crescent Harbor (which consent shall not be unreasonably withheld, conditioned, or delayed), the Arrangement Fee may be netted from the gross proceeds of the initial borrowing under the Facility, as reflected in the funds flow memorandum to be mutually agreed upon by VHG and Crescent Harbor prior to the Closing Date. In the event that the Arrangement Fee is not netted from the proceeds of the initial borrowing, VHG shall remit payment of the Arrangement Fee by wire transfer to such account as Crescent Harbor shall designate in writing. Wire transfer instructions for payment to Crescent Harbor shall be provided separately in writing by Crescent Harbor to VHG no later than three (3) business days prior to the anticipated Closing Date.

(c) Earning and Non-Refundability. The Arrangement Fee shall be deemed fully earned upon execution and delivery of this Fee Letter and the Commitment Letter by both parties hereto. Notwithstanding the foregoing, payment of the Arrangement Fee shall not become due and payable until the Closing Date as set forth in Section 2(b) above. Once the Closing Date has occurred and the Arrangement Fee has been paid, the Arrangement Fee shall be non-refundable for any reason whatsoever, including without limitation any subsequent prepayment or repayment of the loans under the Facility, any amendment, modification, or waiver of the Credit Agreement, or any termination of the Credit Agreement. If the Closing Date does not occur and the Commitment Letter is terminated in accordance with its terms for any reason, VHG shall not be obligated to pay the Arrangement Fee, except as may otherwise be specifically provided in the Commitment Letter with respect to termination fees or break-up fees, if any.

Section 3. Administrative Agent Fee

(a) Amount. VHG shall pay to Crescent Harbor Bank, N.A., in its capacity as Administrative Agent under the Credit Agreement, an annual administrative agent fee (the "Administrative Agent Fee") in the amount of $150,000 per annum. The Administrative Agent Fee is payable in consideration for the performance by Crescent Harbor of its duties and obligations as Administrative Agent under the Credit Agreement, including without limitation the administration of the credit facility, maintenance of the register of Lenders, processing of borrowing requests, distribution of payments to Lenders, and such other customary administrative agent functions as may be set forth in the Credit Agreement.

(b) Payment Timing. The Administrative Agent Fee shall be payable in advance on the Closing Date (for the first year of the Credit Agreement) and on each anniversary of the Closing Date thereafter for so long as the Credit Agreement remains in effect and any obligations thereunder remain outstanding or any commitments remain available. Accordingly, the first annual payment of $150,000 shall be due and payable on the Closing Date. Each subsequent annual installment of $150,000 shall be due and payable on the applicable anniversary of the Closing Date. The Administrative Agent Fee, once paid, is non-refundable and shall not be subject to proration for any partial year during which the Credit Agreement remains in effect; provided, however, that if the Credit Agreement is terminated and all obligations thereunder have been paid in full prior to the occurrence of a particular anniversary of the Closing Date, no further Administrative Agent Fees shall accrue or become payable with respect to any period following such termination date.

(c) Separate from Other Fees. The Administrative Agent Fee is in addition to, and not in lieu of, (i) the Arrangement Fee described in Section 2 hereof, (ii) the OID described in Section 4 hereof, (iii) any expense reimbursements due and owing to Crescent Harbor under the Commitment Letter, this Fee Letter, or the Credit Agreement, and (iv) any indemnification obligations of VHG under the Commitment Letter or the Credit Agreement. The Administrative Agent Fee is payable to Crescent Harbor solely in its capacity as Administrative Agent and is not subject to reduction, setoff, or counterclaim by VHG. Crescent Harbor's right to receive the Administrative Agent Fee shall survive any assignment by Crescent Harbor of all or any portion of its lending commitments or loans under the Facility to other Lenders or assignees, and such right shall continue for so long as Crescent Harbor serves as Administrative Agent under the Credit Agreement.

Section 4. Original Issue discount (OID)

(a) Amount and Application. The Term Loan B under the Facility shall be issued at a price of 99.00% of par value, reflecting an original issue discount of 1.00% of the aggregate principal amount of the Facility (the "OID"). Based on the aggregate principal amount of $700,000,000, the dollar amount of the OID shall be $7,000,000. As a result of the OID, the net funding amount to be received by VHG on the Closing Date in respect of the Term Loan B (before deduction of the Arrangement Fee, the first year's Administrative Agent Fee, and any other amounts payable on the Closing Date) shall be $700,000,000 minus $7,000,000, or $693,000,000. The OID constitutes consideration for the respective commitments of the Lenders to fund their pro rata shares of the Term Loan B and is embedded in the purchase price paid by each Lender for its respective portion of the Term Loan B on the Closing Date. The OID will be reflected in the funds flow memorandum as a reduction of the gross funding amount and shall not require a separate cash payment by VHG.

(b) Allocation Among Lenders. The OID shall be allocated among the Lenders participating in the Facility (including Crescent Harbor Bank, N.A. on its retained commitment of $50,000,000) on a pro rata basis based on their respective commitments as set forth in the final syndication allocation to be determined by Crescent Harbor in its capacity as Lead Arranger in consultation with VHG. By way of illustration, Crescent Harbor's pro rata share of the OID on its retained $50,000,000 commitment shall be $500,000 (i.e., 1.00% × $50,000,000). Each Lender's upfront fee of 0.25% of its respective commitment, as referenced in the Term Sheet, is embedded within and subsumed by the OID; accordingly, no separate upfront fee is payable by VHG to any Lender in addition to the OID. The upfront fee component within the OID is intended to serve as the primary economic incentive for syndicate Lenders to commit to the Facility. For the avoidance of doubt, the Arrangement Fee payable to Crescent Harbor under Section 2 of this Fee Letter is separate from, and in addition to, Crescent Harbor's pro rata share of the OID on its retained $50,000,000 commitment, and the Arrangement Fee shall not be reduced or offset by Crescent Harbor's receipt of OID.

(c) Tax Treatment. The parties hereto acknowledge and agree that the OID is intended to be treated as "original issue discount" for United States federal income tax purposes under the applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"), including without limitation Sections 1271 through 1275 thereof and the Treasury Regulations promulgated thereunder. VHG and the Lenders shall report the OID consistently for United States federal, state, and local income tax purposes and shall not take any position on any tax return or in any tax proceeding that is inconsistent with such treatment, unless otherwise required by a final determination (as defined in Section 1313(a) of the Code) or a change in applicable law. The parties further acknowledge that VHG's tax advisors have determined, and VHG represents, that the Facility does not constitute an "applicable high yield discount obligation" (an "AHYDO") within the meaning of Section 163(i) of the Code, taking into account the stated maturity, yield to maturity, and other relevant characteristics of the Term Loan B, and accordingly the limitations on deductibility set forth in Section 163(e)(5) of the Code are not applicable to the Facility. Nothing in this Section 4(c) shall constitute tax advice from Crescent Harbor to VHG, and VHG acknowledges that it has relied solely on its own tax advisors with respect to the tax treatment of the OID and the Facility.

Section 5. No Other Fees or Compensation

Except for (a) the Arrangement Fee described in Section 2 of this Fee Letter, (b) the Administrative Agent Fee described in Section 3 of this Fee Letter, (c) the OID described in Section 4 of this Fee Letter, and (d) expenses and indemnification obligations of VHG as set forth in the Commitment Letter and in the Credit Agreement (including without limitation reimbursement of reasonable and documented out-of-pocket expenses of Crescent Harbor and its counsel), no other fees, commissions, compensation, or other amounts shall be payable by VHG to Crescent Harbor Bank, N.A. in any of its capacities in connection with the Facility, the Commitment Letter, or this Fee Letter. The parties acknowledge and agree that this Section 5 is intended to provide certainty as to the complete fee and compensation arrangements between VHG and Crescent Harbor and to ensure that no additional or hidden fees exist outside of those expressly set forth herein.

For the further avoidance of doubt, the advisory fee of 0.20% of the aggregate principal amount of the Facility (equal to $1,400,000) payable by VHG to Meridian Strauss Advisory LLC, in its capacity as VHG's independent financial advisor for the Facility, is a separate contractual obligation of VHG arising under its engagement letter with Meridian Strauss Advisory LLC and is not a fee payable to Crescent Harbor Bank, N.A. Crescent Harbor shall have no responsibility for, and shall not be deemed to have any interest in, the advisory fee payable to Meridian Strauss Advisory LLC.

Section 6. Confidentiality

(a) General Obligation. This Fee Letter, its terms, and the contents hereof (including without limitation the amounts of the Arrangement Fee, the Administrative Agent Fee, the OID, and all other financial and economic terms set forth herein) are strictly confidential and proprietary to the parties hereto and shall not be disclosed by either party to any person other than as expressly set forth in this Section 6. The parties acknowledge that the fee arrangements described in this Fee Letter are the product of arms'-length negotiation and that disclosure of such arrangements to unauthorized parties could cause competitive harm. The existence of this Fee Letter may be disclosed in connection with the Facility (including references to the fact that a fee letter has been entered into between VHG and Crescent Harbor), but the specific fee amounts, percentages, and other economic terms contained herein may not be disclosed except as expressly permitted below.

(b) Permitted Disclosures. Notwithstanding the foregoing, the following disclosures of the terms of this Fee Letter are permitted:

(i) Disclosures by VHG. VHG may disclose the terms of this Fee Letter to:

(A) its officers, directors, employees, accountants (including Clearmont & Wharton LLP), and legal counsel (including Calderwood & Harkness LLP) who have a reasonable need to know the terms hereof in connection with the Facility and who have been informed of the confidential nature of such information and have agreed (or are otherwise obligated by professional duty) to maintain the confidentiality thereof;

(B) Meridian Strauss Advisory LLC, in its capacity as VHG's financial advisor for the Facility, subject to the confidentiality obligations set forth in VHG's engagement letter with Meridian Strauss Advisory LLC or such other confidentiality obligations as may be reasonably satisfactory to Crescent Harbor;

(C) to the extent required by applicable law, regulation, or legal process (including, without limitation, VHG's disclosure obligations under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the U.S. Securities and Exchange Commission promulgated thereunder, to the extent the terms of this Fee Letter are required to be disclosed in VHG's public filings); provided, that VHG shall use commercially reasonable efforts to request confidential treatment of the specific fee amounts and economic terms of this Fee Letter to the extent such confidential treatment is available under applicable rules and regulations; and provided, further, that VHG shall provide Crescent Harbor with prompt written notice of any such required disclosure (to the extent legally permissible) and shall cooperate with Crescent Harbor in seeking to limit the scope of such disclosure; and

(D) as required by any governmental authority or regulatory body having jurisdiction over VHG or any of its subsidiaries, including any banking regulator, securities regulator, or tax authority, in connection with any examination, inquiry, audit, or investigation.

(ii) Disclosures by Crescent Harbor. Crescent Harbor may disclose the terms of this Fee Letter to:

(A) its officers, employees, affiliates, and legal counsel (including Whitfield Gage & Partridge LLP) who have a reasonable need to know the terms hereof in connection with the Facility and who have been informed of the confidential nature of such information;

(B) prospective and actual syndicate Lenders and their respective counsel, to the extent reasonably necessary in connection with the syndication, marketing, and distribution of the Facility; provided, that the specific amount of the Arrangement Fee payable solely to Crescent Harbor under Section 2 hereof shall not be disclosed to any syndicate Lender or prospective syndicate Lender without the prior written consent of VHG, it being understood that Crescent Harbor may disclose the OID and the upfront fee component embedded therein to syndicate Lenders in connection with syndication; and

(C) to the extent required by applicable law, regulation, or regulatory examination, including any examination, inquiry, or request by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, or any other banking or financial regulatory authority.

(c) Survival. The confidentiality obligations set forth in this Section 6 shall survive the Closing Date, the execution and delivery of the Credit Agreement, and the termination of the Commitment Letter, and shall remain in full force and effect for a period of two (2) years following the earlier of (x) the Closing Date and (y) the date of termination of the Commitment Letter in accordance with its terms.

Section 7. Amendments and Waivers

This Fee Letter may not be amended, modified, supplemented, or restated, and no provision hereof may be waived, except by a written instrument signed by each of VHG and Crescent Harbor Bank, N.A. Any such amendment, modification, supplement, restatement, or waiver shall be effective only in the specific instance and for the specific purpose for which it was given. No failure or delay by any party hereto in exercising any right, power, or privilege under this Fee Letter shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, power, or privilege hereunder.

Section 8. Governing Law; Jurisdiction; Waiver of Jury Trial

This Fee Letter shall be governed by, and construed in accordance with, the laws of the State of New York without regard to conflicts of law principles thereof that would require the application of the laws of any other jurisdiction (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law, which shall apply).

Each of the parties hereto hereby irrevocably and unconditionally submits to the exclusive jurisdiction of (a) the Supreme Court of the State of New York, County of New York, and (b) 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 this Fee Letter. Each of the parties hereto irrevocably 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 such action or proceeding in any such court and any claim that any such action or proceeding brought in any such court has been brought in an inconvenient forum. Each of the parties hereto agrees that service of process in any such action or proceeding may be made by delivery of such process in accordance with the notice provisions of the Commitment Letter.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT, OR PROCEEDING ARISING OUT OF OR RELATING TO THIS FEE LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS FEE LETTER BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH IN THIS SECTION 8.

Section 9. Relationship to Commitment Letter and Credit Agreement

This Fee Letter is a part of, and subject to, the terms and conditions of the Commitment Letter. The terms of the Commitment Letter (including without limitation the conditions precedent, representations, covenants, and termination provisions set forth therein) are incorporated herein by reference to the extent applicable to the fee arrangements described herein.

In the event of any conflict or inconsistency between the terms of this Fee Letter and the terms of the Commitment Letter, the terms of this Fee Letter shall govern and control with respect to fee matters (including the amount, timing, and conditions of payment of the Arrangement Fee, the Administrative Agent Fee, and the OID), and the terms of the Commitment Letter shall govern and control with respect to all other matters.

Upon execution and delivery of the Credit Agreement, any provisions of this Fee Letter relating to fees, OID, and payments that are specifically addressed in, and governed by, the Credit Agreement shall be superseded by the corresponding provisions of the Credit Agreement to the extent of any inconsistency between such provisions; provided, that the confidentiality obligations set forth in Section 6 of this Fee Letter shall survive independently and shall not be superseded or affected by the execution, delivery, or termination of the Credit Agreement.

The Arrangement Fee and OID provisions set forth in this Fee Letter shall be incorporated by reference into the funds flow memorandum to be prepared in connection with the Closing Date, and the parties shall cooperate in good faith to ensure that the funds flow memorandum accurately reflects the fee and discount arrangements set forth herein.

Section 10. Counterparts; Electronic Execution

This Fee Letter may be executed in one or more counterparts, each of which when so executed and delivered shall be deemed to be an original, and all of which counterparts, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Fee Letter by facsimile transmission or by electronic mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Fee Letter. The words "execution," "signed," "signature," and words of like import in this Fee Letter shall be deemed to include electronic signatures and the keeping of records in electronic form, each of which shall be of the same legal effect, validity, and enforceability as manually executed signatures and physical delivery thereof, to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, and any other applicable law.

Section 11. Entire Agreement

This Fee Letter, together with the Commitment Letter and the Term Sheet attached thereto as Exhibit A, constitutes the entire agreement between VHG and Crescent Harbor Bank, N.A. with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, discussions, correspondence, proposals, agreements, understandings, and other communications, whether oral or written, between the parties relating to the fees, discount, and other economic terms described herein. No party has relied on any statement, representation, warranty, or agreement of any other party except for those expressly set forth in this Fee Letter, the Commitment Letter, and the Term Sheet.

[Remainder of this page intentionally left blank; signature pages follow.]

If you are in agreement with the foregoing, please indicate your acceptance by signing and returning to us a counterpart of this Fee Letter.

Very truly yours,

CRESCENT HARBOR BANK, NATIONAL ASSOCIATION

By: ________

Name: Theodore "Ted" Marchetti

Title: Managing Director, Leveraged Finance

Date: May 27, 2022

ACCEPTED AND AGREED 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

SCHEDULE A

Fee Summary Table

Notes to Schedule A:

1. The OID of $7,000,000 is reflected as a reduction in the net funding amount received by VHG on the Closing Date. Accordingly, VHG will receive net proceeds of $693,000,000 (i.e., $700,000,000 gross proceeds less $7,000,000 OID), before deduction of any Arrangement Fee netted from proceeds. The OID does not constitute a separate cash payment by VHG but rather is deducted from the aggregate principal amount funded by the Lenders.

2. The advisory fee payable by VHG to Meridian Strauss Advisory LLC in the amount of 0.20% of $700,000,000 ($1,400,000) is a separate contractual obligation of VHG arising under its engagement letter with Meridian Strauss Advisory LLC. Such advisory fee is not a fee payable to Crescent Harbor Bank, N.A. and is not reflected in this Fee Letter or in the fee totals set forth in this Schedule A.

3. The Total Fees (Closing Date) line item of $10,650,000 represents the sum of the Arrangement Fee ($3,500,000), the first year's Administrative Agent Fee ($150,000), and the OID ($7,000,000). This amount reflects the aggregate economic cost to VHG attributable to Closing Date fees and discount in connection with the Facility.

[End of Schedule A]

Fee / Item	Recipient	Rate / Amount	Dollar Amount	Payment Date
Arrangement Fee	Crescent Harbor Bank, N.A. (as Lead Arranger / Bookrunner)	0.50% of $700,000,000	$3,500,000	Closing Date
Administrative Agent Fee	Crescent Harbor Bank, N.A. (as Administrative Agent)	$150,000 per annum	$150,000 (first year)	Closing Date and each anniversary thereafter
Original Issue discount (OID)	Lenders (pro rata based on commitments)	1.00% of $700,000,000	$7,000,000	Netted from funding proceeds on Closing Date
Total Fees (Closing Date)	$10,650,000

CONFIDENTIAL
CRESCENT HARBOR BANK, N.A. 600 Lexington Avenue, 34th Floor New York, NY 10022
May 27, 2022
EXECUTION VERSION
CONFIDENTIAL
Verimark Hospitality Group Inc. 8200 West Palmetto Park Road, Suite 1500 Boca Raton, FL 33433
Attention: Renata Haines, Chief Financial Officer; and Glenn Fischbach, Treasurer
Copy to: Priya Narayanan, General Counsel & Corporate Secretary (same address)
Re: Fee Letter in connection with $700,000,000 Senior Secured Term Loan B Facility
Dear Ms. Haines and Mr. Fischbach:
This fee letter (this "Fee Letter") sets forth certain fee arrangements in connection with that certain Commitment Letter dated as of May 27, 2022 (the "Commitment Letter"), between Verimark Hospitality Group Inc., a Delaware corporation ("VHG" or the "Borrower"), and Crescent Harbor Bank, National Association ("Crescent Harbor," and in its various capacities described herein, the "Arranger" or "Administrative Agent," as applicable), relating to the proposed $700,000,000 senior secured Term Loan B credit facility (the "Facility") more particularly described in the Commitment Letter and the term sheet attached thereto as Exhibit A (the "Term Sheet").
Section 1. Reference and Definitions
This Fee Letter is entered into in connection with, and forms an integral part of, the Commitment Letter dated as of May 27, 2022 between VHG and Crescent Harbor Bank, N.A. The Commitment Letter sets forth, among other things, the commitment of Crescent Harbor to provide, arrange, and syndicate the Facility on the terms and subject to the conditions set forth in the Commitment Letter and the Term Sheet.
Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Commitment Letter or the Term Sheet attached thereto as Exhibit A. In addition, the following terms shall have the meanings set forth below when used in this Fee Letter:
"Facility" means the $700,000,000 senior secured Term Loan B credit facility described in the Commitment Letter and the Term Sheet.
"Credit Agreement" means the credit agreement to be entered into among VHG (as Borrower), the Guarantors party thereto from time to time, Crescent Harbor Bank, N.A. (as Administrative Agent and Collateral Agent), and the Lenders from time to time party thereto, which credit agreement shall set forth the definitive terms and conditions of the Facility consistent with the Commitment Letter and the Term Sheet.
"Closing Date" means the date on which the conditions precedent to the initial funding under the Credit Agreement are satisfied or waived in accordance with the terms thereof and the initial borrowing under the Facility occurs.
For purposes of this Fee Letter, references to Crescent Harbor's "roles" or "capacities" refer to Crescent Harbor Bank, N.A. acting in one or more of the following capacities, as the context may require: (a) Administrative Agent under the Credit Agreement, (b) Collateral Agent under the Credit Agreement and related security documents, (c) sole Lead Arranger with respect to the syndication and arrangement of the Facility, and (d) sole Bookrunner with respect to the Facility. Crescent Harbor's internal loan reference number for the Facility is CHB-LF-2022-07814, and all correspondence and payments relating to this Fee Letter should reference such number.
Section 2. Arrangement Fee
(a) Amount. VHG shall pay to Crescent Harbor Bank, N.A., in its capacity as Lead Arranger and Bookrunner for the Facility, an arrangement fee (the "Arrangement Fee") in an amount equal to 0.50% of the aggregate principal amount of the Facility. Based on the aggregate principal amount of $700,000,000, the Arrangement Fee shall be $3,500,000. The Arrangement Fee is a fee payable solely to Crescent Harbor in consideration for its services as Lead Arranger and Bookrunner in structuring, arranging, and syndicating the Facility, and is non-refundable and non-creditable once paid. For the avoidance of doubt, the Arrangement Fee is payable exclusively to Crescent Harbor and shall not be shared with, or allocated to, any syndicate Lender.
(b) Payment Timing and Method. The Arrangement Fee shall be due and payable in full in immediately available funds on the Closing Date. At the election of VHG and with the prior written consent of Crescent Harbor (which consent shall not be unreasonably withheld, conditioned, or delayed), the Arrangement Fee may be netted from the gross proceeds of the initial borrowing under the Facility, as reflected in the funds flow memorandum to be mutually agreed upon by VHG and Crescent Harbor prior to the Closing Date. In the event that the Arrangement Fee is not netted from the proceeds of the initial borrowing, VHG shall remit payment of the Arrangement Fee by wire transfer to such account as Crescent Harbor shall designate in writing. Wire transfer instructions for payment to Crescent Harbor shall be provided separately in writing by Crescent Harbor to VHG no later than three (3) business days prior to the anticipated Closing Date.
(c) Earning and Non-Refundability. The Arrangement Fee shall be deemed fully earned upon execution and delivery of this Fee Letter and the Commitment Letter by both parties hereto. Notwithstanding the foregoing, payment of the Arrangement Fee shall not become due and payable until the Closing Date as set forth in Section 2(b) above. Once the Closing Date has occurred and the Arrangement Fee has been paid, the Arrangement Fee shall be non-refundable for any reason whatsoever, including without limitation any subsequent prepayment or repayment of the loans under the Facility, any amendment, modification, or waiver of the Credit Agreement, or any termination of the Credit Agreement. If the Closing Date does not occur and the Commitment Letter is terminated in accordance with its terms for any reason, VHG shall not be obligated to pay the Arrangement Fee, except as may otherwise be specifically provided in the Commitment Letter with respect to termination fees or break-up fees, if any.
Section 3. Administrative Agent Fee
(a) Amount. VHG shall pay to Crescent Harbor Bank, N.A., in its capacity as Administrative Agent under the Credit Agreement, an annual administrative agent fee (the "Administrative Agent Fee") in the amount of $150,000 per annum. The Administrative Agent Fee is payable in consideration for the performance by Crescent Harbor of its duties and obligations as Administrative Agent under the Credit Agreement, including without limitation the administration of the credit facility, maintenance of the register of Lenders, processing of borrowing requests, distribution of payments to Lenders, and such other customary administrative agent functions as may be set forth in the Credit Agreement.
(b) Payment Timing. The Administrative Agent Fee shall be payable in advance on the Closing Date (for the first year of the Credit Agreement) and on each anniversary of the Closing Date thereafter for so long as the Credit Agreement remains in effect and any obligations thereunder remain outstanding or any commitments remain available. Accordingly, the first annual payment of $150,000 shall be due and payable on the Closing Date. Each subsequent annual installment of $150,000 shall be due and payable on the applicable anniversary of the Closing Date. The Administrative Agent Fee, once paid, is non-refundable and shall not be subject to proration for any partial year during which the Credit Agreement remains in effect; provided, however, that if the Credit Agreement is terminated and all obligations thereunder have been paid in full prior to the occurrence of a particular anniversary of the Closing Date, no further Administrative Agent Fees shall accrue or become payable with respect to any period following such termination date.
(c) Separate from Other Fees. The Administrative Agent Fee is in addition to, and not in lieu of, (i) the Arrangement Fee described in Section 2 hereof, (ii) the OID described in Section 4 hereof, (iii) any expense reimbursements due and owing to Crescent Harbor under the Commitment Letter, this Fee Letter, or the Credit Agreement, and (iv) any indemnification obligations of VHG under the Commitment Letter or the Credit Agreement. The Administrative Agent Fee is payable to Crescent Harbor solely in its capacity as Administrative Agent and is not subject to reduction, setoff, or counterclaim by VHG. Crescent Harbor's right to receive the Administrative Agent Fee shall survive any assignment by Crescent Harbor of all or any portion of its lending commitments or loans under the Facility to other Lenders or assignees, and such right shall continue for so long as Crescent Harbor serves as Administrative Agent under the Credit Agreement.
Section 4. Original Issue discount (OID)
(a) Amount and Application. The Term Loan B under the Facility shall be issued at a price of 99.00% of par value, reflecting an original issue discount of 1.00% of the aggregate principal amount of the Facility (the "OID"). Based on the aggregate principal amount of $700,000,000, the dollar amount of the OID shall be $7,000,000. As a result of the OID, the net funding amount to be received by VHG on the Closing Date in respect of the Term Loan B (before deduction of the Arrangement Fee, the first year's Administrative Agent Fee, and any other amounts payable on the Closing Date) shall be $700,000,000 minus $7,000,000, or $693,000,000. The OID constitutes consideration for the respective commitments of the Lenders to fund their pro rata shares of the Term Loan B and is embedded in the purchase price paid by each Lender for its respective portion of the Term Loan B on the Closing Date. The OID will be reflected in the funds flow memorandum as a reduction of the gross funding amount and shall not require a separate cash payment by VHG.
(b) Allocation Among Lenders. The OID shall be allocated among the Lenders participating in the Facility (including Crescent Harbor Bank, N.A. on its retained commitment of $50,000,000) on a pro rata basis based on their respective commitments as set forth in the final syndication allocation to be determined by Crescent Harbor in its capacity as Lead Arranger in consultation with VHG. By way of illustration, Crescent Harbor's pro rata share of the OID on its retained $50,000,000 commitment shall be $500,000 (i.e., 1.00% × $50,000,000). Each Lender's upfront fee of 0.25% of its respective commitment, as referenced in the Term Sheet, is embedded within and subsumed by the OID; accordingly, no separate upfront fee is payable by VHG to any Lender in addition to the OID. The upfront fee component within the OID is intended to serve as the primary economic incentive for syndicate Lenders to commit to the Facility. For the avoidance of doubt, the Arrangement Fee payable to Crescent Harbor under Section 2 of this Fee Letter is separate from, and in addition to, Crescent Harbor's pro rata share of the OID on its retained $50,000,000 commitment, and the Arrangement Fee shall not be reduced or offset by Crescent Harbor's receipt of OID.
(c) Tax Treatment. The parties hereto acknowledge and agree that the OID is intended to be treated as "original issue discount" for United States federal income tax purposes under the applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"), including without limitation Sections 1271 through 1275 thereof and the Treasury Regulations promulgated thereunder. VHG and the Lenders shall report the OID consistently for United States federal, state, and local income tax purposes and shall not take any position on any tax return or in any tax proceeding that is inconsistent with such treatment, unless otherwise required by a final determination (as defined in Section 1313(a) of the Code) or a change in applicable law. The parties further acknowledge that VHG's tax advisors have determined, and VHG represents, that the Facility does not constitute an "applicable high yield discount obligation" (an "AHYDO") within the meaning of Section 163(i) of the Code, taking into account the stated maturity, yield to maturity, and other relevant characteristics of the Term Loan B, and accordingly the limitations on deductibility set forth in Section 163(e)(5) of the Code are not applicable to the Facility. Nothing in this Section 4(c) shall constitute tax advice from Crescent Harbor to VHG, and VHG acknowledges that it has relied solely on its own tax advisors with respect to the tax treatment of the OID and the Facility.
Section 5. No Other Fees or Compensation
Except for (a) the Arrangement Fee described in Section 2 of this Fee Letter, (b) the Administrative Agent Fee described in Section 3 of this Fee Letter, (c) the OID described in Section 4 of this Fee Letter, and (d) expenses and indemnification obligations of VHG as set forth in the Commitment Letter and in the Credit Agreement (including without limitation reimbursement of reasonable and documented out-of-pocket expenses of Crescent Harbor and its counsel), no other fees, commissions, compensation, or other amounts shall be payable by VHG to Crescent Harbor Bank, N.A. in any of its capacities in connection with the Facility, the Commitment Letter, or this Fee Letter. The parties acknowledge and agree that this Section 5 is intended to provide certainty as to the complete fee and compensation arrangements between VHG and Crescent Harbor and to ensure that no additional or hidden fees exist outside of those expressly set forth herein.
For the further avoidance of doubt, the advisory fee of 0.20% of the aggregate principal amount of the Facility (equal to $1,400,000) payable by VHG to Meridian Strauss Advisory LLC, in its capacity as VHG's independent financial advisor for the Facility, is a separate contractual obligation of VHG arising under its engagement letter with Meridian Strauss Advisory LLC and is not a fee payable to Crescent Harbor Bank, N.A. Crescent Harbor shall have no responsibility for, and shall not be deemed to have any interest in, the advisory fee payable to Meridian Strauss Advisory LLC.
Section 6. Confidentiality
(a) General Obligation. This Fee Letter, its terms, and the contents hereof (including without limitation the amounts of the Arrangement Fee, the Administrative Agent Fee, the OID, and all other financial and economic terms set forth herein) are strictly confidential and proprietary to the parties hereto and shall not be disclosed by either party to any person other than as expressly set forth in this Section 6. The parties acknowledge that the fee arrangements described in this Fee Letter are the product of arms'-length negotiation and that disclosure of such arrangements to unauthorized parties could cause competitive harm. The existence of this Fee Letter may be disclosed in connection with the Facility (including references to the fact that a fee letter has been entered into between VHG and Crescent Harbor), but the specific fee amounts, percentages, and other economic terms contained herein may not be disclosed except as expressly permitted below.
(b) Permitted Disclosures. Notwithstanding the foregoing, the following disclosures of the terms of this Fee Letter are permitted:
(i) Disclosures by VHG. VHG may disclose the terms of this Fee Letter to:
(A) its officers, directors, employees, accountants (including Clearmont & Wharton LLP), and legal counsel (including Calderwood & Harkness LLP) who have a reasonable need to know the terms hereof in connection with the Facility and who have been informed of the confidential nature of such information and have agreed (or are otherwise obligated by professional duty) to maintain the confidentiality thereof;
(B) Meridian Strauss Advisory LLC, in its capacity as VHG's financial advisor for the Facility, subject to the confidentiality obligations set forth in VHG's engagement letter with Meridian Strauss Advisory LLC or such other confidentiality obligations as may be reasonably satisfactory to Crescent Harbor;
(C) to the extent required by applicable law, regulation, or legal process (including, without limitation, VHG's disclosure obligations under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the U.S. Securities and Exchange Commission promulgated thereunder, to the extent the terms of this Fee Letter are required to be disclosed in VHG's public filings); provided, that VHG shall use commercially reasonable efforts to request confidential treatment of the specific fee amounts and economic terms of this Fee Letter to the extent such confidential treatment is available under applicable rules and regulations; and provided, further, that VHG shall provide Crescent Harbor with prompt written notice of any such required disclosure (to the extent legally permissible) and shall cooperate with Crescent Harbor in seeking to limit the scope of such disclosure; and
(D) as required by any governmental authority or regulatory body having jurisdiction over VHG or any of its subsidiaries, including any banking regulator, securities regulator, or tax authority, in connection with any examination, inquiry, audit, or investigation.
(ii) Disclosures by Crescent Harbor. Crescent Harbor may disclose the terms of this Fee Letter to:
(A) its officers, employees, affiliates, and legal counsel (including Whitfield Gage & Partridge LLP) who have a reasonable need to know the terms hereof in connection with the Facility and who have been informed of the confidential nature of such information;
(B) prospective and actual syndicate Lenders and their respective counsel, to the extent reasonably necessary in connection with the syndication, marketing, and distribution of the Facility; provided, that the specific amount of the Arrangement Fee payable solely to Crescent Harbor under Section 2 hereof shall not be disclosed to any syndicate Lender or prospective syndicate Lender without the prior written consent of VHG, it being understood that Crescent Harbor may disclose the OID and the upfront fee component embedded therein to syndicate Lenders in connection with syndication; and
(C) to the extent required by applicable law, regulation, or regulatory examination, including any examination, inquiry, or request by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, or any other banking or financial regulatory authority.
(c) Survival. The confidentiality obligations set forth in this Section 6 shall survive the Closing Date, the execution and delivery of the Credit Agreement, and the termination of the Commitment Letter, and shall remain in full force and effect for a period of two (2) years following the earlier of (x) the Closing Date and (y) the date of termination of the Commitment Letter in accordance with its terms.
Section 7. Amendments and Waivers
This Fee Letter may not be amended, modified, supplemented, or restated, and no provision hereof may be waived, except by a written instrument signed by each of VHG and Crescent Harbor Bank, N.A. Any such amendment, modification, supplement, restatement, or waiver shall be effective only in the specific instance and for the specific purpose for which it was given. No failure or delay by any party hereto in exercising any right, power, or privilege under this Fee Letter shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, power, or privilege hereunder.
Section 8. Governing Law; Jurisdiction; Waiver of Jury Trial
This Fee Letter shall be governed by, and construed in accordance with, the laws of the State of New York without regard to conflicts of law principles thereof that would require the application of the laws of any other jurisdiction (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law, which shall apply).
Each of the parties hereto hereby irrevocably and unconditionally submits to the exclusive jurisdiction of (a) the Supreme Court of the State of New York, County of New York, and (b) 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 this Fee Letter. Each of the parties hereto irrevocably 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 such action or proceeding in any such court and any claim that any such action or proceeding brought in any such court has been brought in an inconvenient forum. Each of the parties hereto agrees that service of process in any such action or proceeding may be made by delivery of such process in accordance with the notice provisions of the Commitment Letter.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT, OR PROCEEDING ARISING OUT OF OR RELATING TO THIS FEE LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS FEE LETTER BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH IN THIS SECTION 8.
Section 9. Relationship to Commitment Letter and Credit Agreement
This Fee Letter is a part of, and subject to, the terms and conditions of the Commitment Letter. The terms of the Commitment Letter (including without limitation the conditions precedent, representations, covenants, and termination provisions set forth therein) are incorporated herein by reference to the extent applicable to the fee arrangements described herein.
In the event of any conflict or inconsistency between the terms of this Fee Letter and the terms of the Commitment Letter, the terms of this Fee Letter shall govern and control with respect to fee matters (including the amount, timing, and conditions of payment of the Arrangement Fee, the Administrative Agent Fee, and the OID), and the terms of the Commitment Letter shall govern and control with respect to all other matters.
Upon execution and delivery of the Credit Agreement, any provisions of this Fee Letter relating to fees, OID, and payments that are specifically addressed in, and governed by, the Credit Agreement shall be superseded by the corresponding provisions of the Credit Agreement to the extent of any inconsistency between such provisions; provided, that the confidentiality obligations set forth in Section 6 of this Fee Letter shall survive independently and shall not be superseded or affected by the execution, delivery, or termination of the Credit Agreement.
The Arrangement Fee and OID provisions set forth in this Fee Letter shall be incorporated by reference into the funds flow memorandum to be prepared in connection with the Closing Date, and the parties shall cooperate in good faith to ensure that the funds flow memorandum accurately reflects the fee and discount arrangements set forth herein.
Section 10. Counterparts; Electronic Execution
This Fee Letter may be executed in one or more counterparts, each of which when so executed and delivered shall be deemed to be an original, and all of which counterparts, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Fee Letter by facsimile transmission or by electronic mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Fee Letter. The words "execution," "signed," "signature," and words of like import in this Fee Letter shall be deemed to include electronic signatures and the keeping of records in electronic form, each of which shall be of the same legal effect, validity, and enforceability as manually executed signatures and physical delivery thereof, to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, and any other applicable law.
Section 11. Entire Agreement
This Fee Letter, together with the Commitment Letter and the Term Sheet attached thereto as Exhibit A, constitutes the entire agreement between VHG and Crescent Harbor Bank, N.A. with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, discussions, correspondence, proposals, agreements, understandings, and other communications, whether oral or written, between the parties relating to the fees, discount, and other economic terms described herein. No party has relied on any statement, representation, warranty, or agreement of any other party except for those expressly set forth in this Fee Letter, the Commitment Letter, and the Term Sheet.
[Remainder of this page intentionally left blank; signature pages follow.]
If you are in agreement with the foregoing, please indicate your acceptance by signing and returning to us a counterpart of this Fee Letter.
Very truly yours,
CRESCENT HARBOR BANK, NATIONAL ASSOCIATION
By: ________
Name: Theodore "Ted" Marchetti
Title: Managing Director, Leveraged Finance
Date: May 27, 2022
ACCEPTED AND AGREED 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
SCHEDULE A
Fee Summary Table
Notes to Schedule A:
1.  The OID of $7,000,000 is reflected as a reduction in the net funding amount received by VHG on the Closing Date. Accordingly, VHG will receive net proceeds of $693,000,000 (i.e., $700,000,000 gross proceeds less $7,000,000 OID), before deduction of any Arrangement Fee netted from proceeds. The OID does not constitute a separate cash payment by VHG but rather is deducted from the aggregate principal amount funded by the Lenders.
2.  The advisory fee payable by VHG to Meridian Strauss Advisory LLC in the amount of 0.20% of $700,000,000 ($1,400,000) is a separate contractual obligation of VHG arising under its engagement letter with Meridian Strauss Advisory LLC. Such advisory fee is not a fee payable to Crescent Harbor Bank, N.A. and is not reflected in this Fee Letter or in the fee totals set forth in this Schedule A.
3.  The Total Fees (Closing Date) line item of $10,650,000 represents the sum of the Arrangement Fee ($3,500,000), the first year's Administrative Agent Fee ($150,000), and the OID ($7,000,000). This amount reflects the aggregate economic cost to VHG attributable to Closing Date fees and discount in connection with the Facility.
[End of Schedule A]
Fee / Item | Recipient | Rate / Amount | Dollar Amount | Payment Date
Arrangement Fee | Crescent Harbor Bank, N.A. (as Lead Arranger / Bookrunner) | 0.50% of $700,000,000 | $3,500,000 | Closing Date
Administrative Agent Fee | Crescent Harbor Bank, N.A. (as Administrative Agent) | $150,000 per annum | $150,000 (first year) | Closing Date and each anniversary thereafter
Original Issue discount (OID) | Lenders (pro rata based on commitments) | 1.00% of $700,000,000 | $7,000,000 | Netted from funding proceeds on Closing Date
Total Fees (Closing Date) | $10,650,000

CONFIDENTIAL

EXECUTION VERSION

CONFIDENTIAL

CRESCENT HARBOR BANK, NATIONAL ASSOCIATION

VERIMARK HOSPITALITY GROUP INC.

SCHEDULE A

Record

Parties

Dates

Amounts