REVISED TERM SHEET — SECOND DRAFT

REVISED TERM SHEET — SECOND DRAFT
Marked Up by Borrower's Counsel
May 6, 2022
CONFIDENTIAL — SUBJECT TO FED. R. EVID. 408
This Second Draft reflects Verimark Hospitality Group Inc.'s positions as marked up by Calderwood & Harkness LLP. Changes from the Initial Term Sheet dated April 22, 2022 are shown in bold/bracketed text. This term sheet is for discussion purposes only and does not constitute a binding commitment by Crescent Harbor Bank, N.A., Verimark Hospitality Group Inc., or any other party. All terms and conditions set forth herein remain subject to the negotiation, execution, and delivery of definitive documentation satisfactory to all parties and their respective counsel.
Prepared by: Sophie Tremblay, Calderwood & Harkness LLP, One Liberty Plaza, 52nd Floor, New York, NY 10006
Distributed to:
•  Theodore "Ted" Marchetti, Managing Director, Leveraged Finance, Crescent Harbor Bank, N.A.
•  Harrison Whitfield III, Whitfield Gage & Partridge LLP
•  Priya Narayanan, General Counsel, Verimark Hospitality Group Inc.
•  Ian Blackwood, Calderwood & Harkness LLP
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I. TRANSACTION OVERVIEW
The proposed transaction contemplates a full refinancing of VHG's existing Term Loan B facility, which was initially originated in February 2020 under market conditions prevailing at that time and which currently bears interest at a margin of LIBOR plus 425 basis points. The proposed refinancing will transition the borrower's benchmark interest rate from LIBOR to Adjusted Term SOFR, consistent with the broader market transition away from LIBOR-based pricing. In addition to the refinancing proceeds, the new facility provides incremental funding capacity of $75,000,000 above the existing facility size, which the Borrower intends to deploy for permitted acquisitions within its hospitality portfolio and for general corporate purposes, including working capital needs.
II. PARTIES
A. Borrower.  Verimark Hospitality Group Inc.
•  Employer Identification Number (EIN): 82-3741956
•  Delaware File Number: 7291843
•  State of Incorporation: Delaware
•  Stock Exchange Listing: New York Stock Exchange (NYSE: VMRK)
•  Principal Place of Business: 8200 West Palmetto Park Road, Suite 1500, Boca Raton, FL 33433
Verimark Hospitality Group Inc. is a publicly traded owner-operator of full-service and select-service hotels across the United States. The Borrower's portfolio currently comprises 74 hotel properties located in 18 states, with an aggregate portfolio appraised value of approximately $3.1 billion as of the most recent appraisal cycle. Key financial metrics for the most recently completed fiscal year are as follows:
•  FY2021 Revenue: $1.42 billion
•  FY2021 EBITDA: $318 million
•  FY2021 Adjusted EBITDA: $341 million (reflecting standard addbacks for non-cash stock-based compensation, acquisition-related expenses, restructuring charges, and other customary adjustments as described in the Confidential Information Memorandum)
B. Guarantors.  The following entities shall guarantee the obligations of the Borrower under the Credit Agreement on a joint and several basis:
1.  Verimark Resort Properties LLC — a Delaware limited liability company and the direct owner of 42 hotel properties constituting the core of VHG's owned real estate portfolio.
2.  VHG Management Services Inc. — a Delaware corporation that serves as VHG's hotel management subsidiary, operating management contracts for both owned and third-party hotel properties.
3.  Verimark Convention Holdings LLC — a Delaware limited liability company that owns and operates convention center and event space assets associated with VHG's hotel properties.
4.  Palmetto Beachfront Hotels LLC — a Florida limited liability company holding VHG's Florida coastal resort portfolio, consisting of 12 properties along the Atlantic and Gulf coasts.
5.  Cascadia Hospitality Corp. — a Delaware corporation holding VHG's Pacific Northwest hotel portfolio, consisting of 8 properties in Washington and Oregon.
All material domestic subsidiaries of the Borrower (whether now existing or hereafter acquired or formed) shall be required to guarantee the obligations under the Credit Agreement on a joint and several basis. Materiality thresholds and the definition of "Material Domestic Subsidiary" shall be determined in the definitive documentation.
C. Administrative Agent
Crescent Harbor Bank, National Association, 600 Lexington Avenue, 34th Floor, New York, NY 10022, shall serve as Administrative Agent, Collateral Agent, Lead Arranger, and Sole Bookrunner for the proposed facility.
D. Lenders.  The identity and composition of the lending syndicate shall be determined through a syndication process to be conducted following execution of the Commitment Letter. Crescent Harbor Bank, N.A. shall initially underwrite the full $700,000,000 facility amount and shall have the right to syndicate the facility to a group of institutional lenders in accordance with customary syndication practices and the terms of the commitment letter and fee letter.
III. FACILITY TERMS
A. Principal Amount
The aggregate principal amount of the Senior Secured Term Loan B facility shall be Seven Hundred Million Dollars ($700,000,000). This amount represents an incremental increase of $75,000,000 above the principal amount of the existing Greystone Term Loan B facility ($700,000,000 minus $625,000,000), with such incremental amount to be available for permitted acquisitions and general corporate purposes.
B. Maturity Date
The Term Loan B shall mature on the date that is seven (7) years following the Closing Date. Based on a targeted Closing Date in late July 2022, the anticipated Maturity Date is July 21, 2029. All outstanding principal, together with accrued and unpaid interest and any other amounts due under the Credit Agreement, shall be due and payable in full on the Maturity Date.
C. Amortization.  [VHG Position — Revised from Initial Proposal]:
Scheduled amortization shall be payable at a rate of 1.00% per annum of the original principal amount of $700,000,000, payable in equal quarterly installments.
•  Quarterly Amortization Payment: $1,750,000 ($700,000,000 × 1.00% ÷ 4 quarters)
•  Annual Amortization: $7,000,000
•  Total Scheduled Amortization over the 7-year term (28 quarters): $49,000,000
•  Balloon Payment at Maturity: $651,000,000 ($700,000,000 minus $49,000,000 in aggregate scheduled amortization payments)
[C&H Comment: The initial Crescent Harbor proposal of 1.00% per annum amortization is acceptable to VHG; confirmed at 1.00% per annum. Borrower resisted any higher amortization rate, and this level is consistent with prevailing market standards for institutional Term Loan B facilities in the hospitality sector.]
Amortization payments shall be due on the last business day of each fiscal quarter, commencing with the first full fiscal quarter following the Closing Date.
D. Interest Rate
Benchmark: Adjusted Term SOFR, defined as the CME Term SOFR Reference Rate for the applicable interest period plus the applicable credit spread adjustment.
Credit Spread Adjustments (CSA):
Applicable Margin: 375 basis points (3.75%) per annum over Adjusted Term SOFR.
SOFR Floor: 0.50% (50 basis points). In the event that Term SOFR for any interest period is less than 0.50%, Term SOFR shall be deemed to be 0.50% for purposes of calculating the interest rate.
Illustrative All-In Rate Calculation: Based on the 1-month Term SOFR rate of approximately 1.50% as of early May 2022:
•  Term SOFR (1-month): 1.50%
•  Credit Spread Adjustment (1-month): 0.10%
•  Adjusted Term SOFR: 1.60%
•  Applicable Margin: 3.75%
•  All-In Rate: approximately 5.35% per annum
Note on Savings Relative to Existing Facility: The applicable margin of 375 basis points represents a reduction of 50 basis points from the existing Greystone TLB margin of LIBOR plus 425 basis points. On a principal amount of $700,000,000, this margin reduction yields estimated annual interest savings of approximately $3,500,000 ($700,000,000 × 0.50%), before giving effect to any differences attributable to the LIBOR-to-SOFR transition.
Default Rate: In the event of the occurrence and continuance of an Event of Default, the interest rate on all outstanding obligations shall automatically increase to the otherwise applicable rate plus 200 basis points (2.00%) per annum.
Interest Periods: At the election of the Borrower, interest periods of 1-month, 3-month, or 6-month duration shall be available, subject to customary provisions regarding unavailability and broken funding.
E. Benchmark Replacement / SOFR Fallback
The Credit Agreement shall include hardwired benchmark replacement fallback language consistent with the recommendations of the Alternative Reference Rates Committee (ARRC) and current market conventions for SOFR-based credit agreements. The benchmark replacement waterfall shall be as follows:
1.  Primary Benchmark: Term SOFR (CME Term SOFR Reference Rate) plus the applicable credit spread adjustment.
2.  First Fallback: In the event that Term SOFR becomes permanently unavailable or is determined to be unrepresentative, the benchmark shall transition to Daily Simple SOFR, plus a spread adjustment to be determined in accordance with ARRC recommendations.
3.  Conforming Changes: The Administrative Agent shall have the right to make technical, administrative, or operational changes to the Credit Agreement as reasonably necessary to reflect the adoption and implementation of any benchmark replacement, subject to the Borrower's consent (not to be unreasonably withheld, conditioned, or delayed).
[C&H Comment: Borrower requests an explicit Borrower consent right for any benchmark replacement or transition, not merely a "consultation" right as proposed in the Initial Term Sheet. This is consistent with the trend in recent Credit Agreement documentation and is necessary to protect the Borrower from unilateral benchmark changes that could adversely affect the economic terms of the facility. VHG's position is that any benchmark transition should require affirmative Borrower consent, with a standard of reasonableness applied to such consent. This item remains open for discussion.]
F. Original Issue discount (OID)
The Term Loan B shall be issued at a price of 99.00% of par (i.e., a 1.00% original issue discount).
•  Face Amount: $700,000,000
•  OID: 1.00%
•  Dollar OID Amount: $7,000,000 ($700,000,000 × 1.00%)
•  Net Funding Amount to Borrower: $693,000,000
The OID shall be treated as an upfront fee embedded in the purchase price paid by the lenders for the Term Loan B and shall be amortized over the term of the facility for purposes of yield calculations under the MFN provision described in Section VI below.
IV. FEES
A. Arrangement Fee
An arrangement fee equal to 0.50% of the aggregate principal amount of the facility shall be payable to Crescent Harbor Bank, N.A. in its capacity as Lead Arranger and Sole Bookrunner, in immediately available funds on the Closing Date.
•  Arrangement Fee: $700,000,000 × 0.50% = $3,500,000
B. Upfront Fee (Syndicate Lenders)
An upfront fee equal to 0.25% of each syndicate lender's final commitment amount shall be payable on the Closing Date. For purposes of yield calculations under the MFN provision, this upfront fee is embedded in the OID and is not separately payable.
C. Administrative Agent Fee
An annual administrative agent fee of $150,000 shall be payable to Crescent Harbor Bank, N.A. in its capacity as Administrative Agent, in quarterly installments of $37,500 each, payable in arrears on the last business day of each fiscal quarter, commencing on the last business day of the first full fiscal quarter following the Closing Date.
D. Financial Advisory Fee
The Borrower has separately engaged Meridian Strauss Advisory LLC as its financial advisor in connection with the refinancing transaction. The financial advisory fee of 0.20% of the aggregate principal amount of the facility shall be payable to Meridian Strauss Advisory LLC from the proceeds of the Term Loan B at closing.
•  Financial Advisory Fee: $700,000,000 × 0.20% = $1,400,000
This fee is a Borrower expense and is not a facility fee or arrangement fee payable to Crescent Harbor Bank, N.A. or any lender under the facility. It is noted here for informational purposes and to account for the use of proceeds at closing.
V. PREPAYMENT AND REPRICING PROTECTION
A. Voluntary Prepayments
The Borrower may voluntarily prepay the Term Loan B, in whole or in part, at any time after the expiration of the Repricing Protection Period (as defined below), in minimum aggregate principal amounts of $1,000,000 (or, if less, the entire outstanding principal balance), without premium, penalty, or make-whole payment.
During the Repricing Protection Period, voluntary prepayments in connection with a Repricing Transaction (as defined below) shall be subject to the Repricing Premium described in Section V.B below. Voluntary prepayments made during the Repricing Protection Period that are not in connection with a Repricing Transaction (e.g., prepayments from internally generated cash flow or from asset disposition proceeds) shall be permitted at par without premium.
All voluntary prepayments shall be applied to the remaining scheduled amortization installments in forward chronological order (or, at Borrower's election, on a pro rata basis across all remaining installments), with the balance to reduce the balloon payment due at maturity.
B. Repricing Protection (Soft Call)
[VHG Position — Revised from Initial Proposal]:
The Repricing Protection Period shall be the period commencing on the Closing Date and ending on the date that is six (6) months following the Closing Date (anticipated sunset date: January 21, 2023).
[C&H Comment: Crescent Harbor's initial proposal specified a Repricing Protection Period of 12 months from the Closing Date. VHG has negotiated this down to 6 months. This reduction is within the market range for BB-/Ba3 rated hospitality issuers and reflects the Borrower's strong desire to preserve optionality for further repricing if market conditions improve during the second half of 2022 or early 2023. A 6-month soft call period provides adequate protection for the initial syndicate while balancing the Borrower's interest in maintaining financial flexibility. Recent comparable transactions in the leveraged hospitality sector (including the InterCoastal Resorts refinancing in March 2022 and the Keystone Hotel Partners transaction in January 2022) have featured soft call periods in the range of 6 to 12 months.]
Repricing Premium: During the Repricing Protection Period, if the Term Loan B is repriced, refinanced, or prepaid in connection with a Repricing Transaction (defined as any prepayment, refinancing, or amendment of the Term Loan B the primary purpose of which is to achieve a lower effective interest rate or weighted average yield), a premium of 1.00% of the principal amount so prepaid, repriced, or refinanced shall be payable.
•  If full prepayment within the Repricing Protection Period: $700,000,000 × 1.00% = $7,000,000
After January 21, 2023, the Term Loan B may be prepaid, repriced, or refinanced at par without any premium or penalty.
C. Mandatory Prepayments
The Credit Agreement shall include the following mandatory prepayment provisions:
(i) Excess Cash Flow Sweep:
[VHG Position — Open Item]: VHG proposes an annual excess cash flow sweep of 50% of Excess Cash Flow (as defined in the Credit Agreement), with step-downs at leverage-based milestones to be negotiated. Crescent Harbor's initial proposal was 75% with step-downs. The parties continue to negotiate the applicable percentages and step-down thresholds. This item remains open.
(ii) Asset Sale Proceeds:
100% of Net Cash Proceeds (as defined in the Credit Agreement) from any asset sale or other disposition of property (other than dispositions below a de minimis threshold to be agreed), subject to a 365-day reinvestment period during which the Borrower may reinvest such proceeds in assets useful in the Borrower's business. If the Borrower has entered into a binding commitment to reinvest such proceeds within the initial 365-day period, the reinvestment period shall be extended by an additional 180 days (for a total reinvestment period of up to 545 days from the date of receipt of Net Cash Proceeds).
(iii) Casualty and Condemnation Proceeds:
100% of Net Cash Proceeds received from casualty events or condemnation proceedings, subject to the same reinvestment rights and periods applicable to asset sale proceeds described in clause (ii) above.
(iv) Debt Incurrence Sweep:
100% of Net Cash Proceeds from the issuance or incurrence of indebtedness that is not otherwise permitted under the Credit Agreement shall be applied as a mandatory prepayment of the Term Loan B.
Mandatory prepayments shall be applied first to accrued and unpaid interest on the amount prepaid, and then to principal, applied to scheduled amortization installments in inverse order of maturity (or as otherwise specified in the definitive Credit Agreement).
D. Existing Facility Prepayment Premium
The refinancing of the existing Greystone TLB requires the payment of a prepayment premium to the existing lenders. The anticipated payoff amounts are as follows:
•  Original principal amount of existing TLB: $625,000,000
•  Less: Scheduled amortization paid to date (approximately $3,125,000 in quarterly installments from origination through the anticipated payoff date)
•  Outstanding principal at payoff: $621,875,000
•  Existing facility prepayment premium: $625,000,000 × 0.50% = $3,125,000
•  Accrued and unpaid interest through the anticipated payoff date: approximately $2,916,667 (estimated based on current LIBOR plus 425 basis points on the outstanding principal balance)
•  Total Estimated Payoff Amount: approximately $627,916,667
The payoff amount is subject to final confirmation from Greystone Federal Credit Corp. in a payoff letter to be delivered as a condition precedent to closing.
VI. MOST FAVORED NATION (MFN) PROVISION
A. Applicability.  [VHG Position — Key Negotiated Term]:
The Most Favored Nation provision shall apply to any incremental term loans incurred under the Credit Agreement within the first eighteen (18) months following the Closing Date. The MFN Sunset Date shall be January 21, 2024 (i.e., 18 months from the anticipated Closing Date of July 21, 2022).
[C&H Comment: Crescent Harbor's initial proposal specified an MFN applicability period of 24 months from the Closing Date. VHG successfully negotiated a reduction to 18 months, which is in line with current market standards for hospitality-sector TLB facilities. This provides the syndicate with adequate protection during the initial period following syndication while preserving VHG's flexibility to access incremental term loan capacity on competitive terms after the sunset period. Recent market data indicates that the median MFN sunset period for BB-/Ba3 rated term loan B facilities closed in Q1 2022 was approximately 12 to 18 months, supporting VHG's position.]
B. MFN Threshold
[VHG Position — Revised from Initial Proposal]:
The MFN threshold shall be 50 basis points.
[C&H Comment: Crescent Harbor initially proposed an MFN threshold of 25 basis points. VHG's position is 50 basis points, consistent with the majority of recent precedent transactions in the BB-/Ba3 leveraged loan market. A wider threshold gives the Borrower meaningful room to price incremental term loans at yields that may differ slightly from the initial TLB without triggering an automatic margin increase on the initial Term Loan B. This is a significant economic point for VHG and one on which the Borrower feels strongly.]
Mechanics: If VHG incurs incremental term loans during the MFN Sunset Period with an effective yield (as calculated in accordance with Section VI.D below) exceeding the effective yield on the initial Term Loan B by more than 50 basis points, the applicable margin on the initial Term Loan B shall be automatically increased to the level necessary to cause the effective yield on the initial Term Loan B to be no more than 50 basis points below the effective yield on such incremental term loans. In no event shall the applicable margin on the initial Term Loan B be reduced as a result of the MFN provision.
C. MFN Sunset
After January 21, 2024 (18 months following the Closing Date), VHG may incur incremental term loans at any yield without triggering any adjustment to the applicable margin on the initial Term Loan B.
[C&H Comment: For the avoidance of doubt, incremental term loans incurred after the MFN Sunset Date remain subject to all applicable incurrence tests (including leverage ratio tests and basket capacity requirements) set forth in the Credit Agreement, but shall not be subject to the MFN yield adjustment mechanism described in this Section VI. The MFN provision protects the initial TLB syndicate only during the initial 18-month period when secondary market liquidity for the initial TLB is most sensitive to incremental issuance pricing.]
D. Yield Calculation Methodology
For purposes of the MFN provision, the "effective yield" on the initial Term Loan B and on any incremental term loans shall be calculated as follows:
(i) Included in Yield Calculation:
•  The applicable margin (spread over Adjusted Term SOFR)
•  Any original issue discount (OID) or upfront fees, amortized over the shorter of (a) the expected life of the applicable term loan and (b) four (4) years
•  The value of any SOFR floor on the incremental term loan to the extent such floor exceeds the SOFR floor on the initial Term Loan B (currently 0.50%)
(ii) Excluded from Yield Calculation:
•  Arrangement fees payable solely to the arranger(s) of the incremental facility
•  Commitment fees
•  Administrative agent fees
•  Any other fees that are not shared ratably with all lenders in the applicable tranche
VII. INCREMENTAL FACILITY PROVISIONS
A. Incremental Term Loan Capacity
The Credit Agreement shall permit the Borrower to incur incremental term loans (and/or increase the commitments under the revolving credit facility) in an aggregate amount not to exceed:
(i) Free and Clear Basket: The greater of (a) $175,000,000 and (b) 50% of the Borrower's LTM Adjusted EBITDA as of the most recently ended fiscal quarter for which financial statements are available (based on FY2021 Adjusted EBITDA of $341 million, this would currently equal approximately $170,500,000, so the $175,000,000 fixed dollar amount would control). Incremental term loans incurred under the Free and Clear Basket are not subject to any leverage incurrence test.
(ii) Ratio-Based Capacity: Additional incremental term loans may be incurred in an unlimited amount, subject to pro forma compliance (after giving effect to the incurrence of such incremental term loans and the application of the proceeds thereof) with:
•  A total net leverage ratio not exceeding 4.00 to 1.00 (i.e., 0.50x inside the financial maintenance covenant level of 4.50x); or
•  If the incremental term loans are secured on a pari passu basis with the initial TLB, a first-lien net leverage ratio to be agreed in the definitive documentation.
Incremental term loans incurred during the MFN Sunset Period (i.e., the first 18 months following the Closing Date, through January 21, 2024) shall be subject to the MFN provision described in Section VI above. Incremental term loans incurred after the MFN Sunset Date are not subject to the MFN provision.
B. Incremental Equivalent Debt
The Borrower shall have the right to incur "incremental equivalent debt" — that is, additional indebtedness incurred outside the four corners of the Credit Agreement but subject to substantially the same incurrence tests, collateral sharing arrangements, and guarantee requirements as incremental term loans incurred under the Credit Agreement. Incremental equivalent debt may be incurred in the form of additional term loans, notes, or other debt instruments, and shall be governed by separate documentation that includes provisions for pari passu collateral sharing under the Amended and Restated Intercreditor Agreement.
C. Maturity / Weighted Average Life
Any incremental term loans incurred under the Credit Agreement (whether under the Free and Clear Basket or the Ratio-Based Capacity) must satisfy the following maturity requirements:
(i) The final stated maturity date of any incremental term loan must be no earlier than the Maturity Date of the initial Term Loan B (July 21, 2029).
(ii) The weighted average life to maturity of any incremental term loan, determined as of the date of incurrence, must be no shorter than the remaining weighted average life to maturity of the initial Term Loan B as of such date of incurrence.
These requirements ensure that incremental term loans do not create structural seniority over the initial TLB by requiring repayment on an accelerated timeline relative to the initial facility.
VIII. FINANCIAL COVENANTS
A. Maximum Total Net Leverage Ratio
The Credit Agreement shall include a maximum total net leverage ratio covenant of 4.50 to 1.00, tested on a quarterly basis as of the last day of each fiscal quarter, calculated on a trailing four-quarter (last twelve months) basis.
Springing Mechanism: The total net leverage ratio covenant shall be tested only when the aggregate revolving credit exposure under the Borrower's $400,000,000 Senior Secured Revolving Credit Facility (with Crescent Harbor Bank, N.A. as revolving credit facility agent) exceeds 35% of total revolving commitments. The threshold for testing shall therefore be triggered when the sum of drawn revolving loans and the face amount of undrawn letters of credit exceeds $140,000,000 (35% × $400,000,000).
For the avoidance of doubt, if revolving credit exposure is at or below the 35% threshold as of the last day of any fiscal quarter, the total net leverage ratio covenant shall not be tested for such quarter, regardless of the Borrower's actual leverage level.
[C&H Comment: VHG's pro forma total net leverage at closing of 2.52x ($858 million net debt ÷ $341 million LTM Adjusted EBITDA) provides approximately 2.0 turns of cushion against the 4.50x maximum covenant level. Given the Borrower's current financial profile and the expectation that the revolving facility will remain undrawn at closing, the springing mechanism is expected to result in the financial covenant not being tested at closing or in the near term.]
B. Pro Forma Leverage Calculation at Closing
The following table sets forth the anticipated pro forma capital structure and leverage calculation as of the Closing Date:
The existing $625,000,000 Greystone TLB will be fully repaid from the proceeds of the new facility on the Closing Date and is not included in the pro forma debt calculation above.
C. Minimum Interest Coverage Ratio
[VHG Position]: No minimum interest coverage ratio covenant shall be included in the Term Loan B facility.
[C&H Comment: The absence of a minimum interest coverage ratio covenant is consistent with prevailing market practice for institutional Term Loan B facilities, which are covenant-lite in nature and typically include only a single springing leverage covenant. The revolving credit facility may contain its own separate financial maintenance covenants (including an interest coverage ratio), which would be tested independently of the Term Loan B facility.]
IX. COLLATERAL
A. Security Package
The obligations under the Term Loan B facility shall be secured by a first-priority lien on substantially all assets of the Borrower and each of the Guarantors, including the following:
(i) Real Property: Fee simple and leasehold interests in 42 hotel properties owned by Verimark Resort Properties LLC, with an aggregate appraised value of approximately $2.18 billion as of the most recent third-party appraisal.
(ii) Equity Interests:
•  100% of the equity interests in each direct domestic subsidiary of the Borrower and each Guarantor.
•  65% of the voting equity interests in any first-tier foreign subsidiaries of the Borrower or any Guarantor (limited to 65% to avoid adverse tax consequences under Section 956 of the Internal Revenue Code).
(iii) Personal Property: All personal property of the Borrower and each Guarantor, including:
•  Accounts and accounts receivable
•  Inventory
•  Equipment (including furniture, fixtures, and equipment at all hotel properties)
•  intellectual property, including all trademarks, service marks, patents, copyrights, trade names, and domain names registered with the United States Patent and Trademark Office (USPTO) and the United States Copyright Office, together with all associated goodwill
•  General intangibles, including management contracts, franchise agreements, and hotel license agreements
B. Pari Passu Treatment
The collateral securing the Term Loan B facility shall be shared on a pari passu basis with the Borrower's existing $400,000,000 Senior Secured Revolving Credit Facility, pursuant to an Amended and Restated Intercreditor Agreement to be executed on or before the Closing Date. The intercreditor agreement shall govern the relative priorities and rights of the Term Loan B lenders and the revolving credit facility lenders with respect to the shared collateral, including provisions regarding the exercise of remedies, application of proceeds, and release of collateral.
Crescent Harbor Bank, N.A. serves as both the Collateral Agent under the Term Loan B facility and the Administrative Agent under the revolving credit facility, which is expected to streamline intercreditor coordination.
C. Mortgage Requirements
New or amended mortgage instruments, deeds of trust, and/or assignments of rents and leases shall be required in connection with the 42 hotel properties owned by Verimark Resort Properties LLC, located in 12 states as follows:
Title Insurance: Lender's title insurance policies shall be obtained from Continental Fidelity Title Company, 1221 Brickell Avenue, Suite 900, Miami, FL 33131, insuring the first-priority lien of the mortgages and deeds of trust on each mortgaged property, in amounts satisfactory to the Administrative Agent.
Surveys and Flood Certifications: Current ALTA/NSPS surveys and FEMA Standard Flood Hazard Determination forms shall be obtained for all mortgaged properties.
[C&H Comment: VHG requests that mortgage deliverables — including the execution, delivery, and recording of mortgage instruments, the issuance of title insurance policies, the completion of updated surveys, and the delivery of flood certifications — be subject to a post-closing period of up to 15 days following the Closing Date, to allow for the orderly recording of mortgage instruments and issuance of title insurance across multiple jurisdictions. This is a practical necessity given the geographic breadth of the collateral portfolio spanning 12 states, each with its own recording requirements, documentary stamp taxes, and title insurance underwriting procedures. This item remains open for discussion, as discussed further in Section X.I below.]
X. CONDITIONS PRECEDENT TO CLOSING
The obligation of the Lenders to fund the Term Loan B on the Closing Date shall be subject to the satisfaction (or waiver by the Administrative Agent and the Required Lenders) of the following conditions precedent:
A. Documentation.  
(i) Execution and delivery of the Credit Agreement, in form and substance satisfactory to the Administrative Agent, the Required Lenders, and the Borrower.
(ii) Execution and delivery of the Guarantee Agreement by the Borrower and each Guarantor.
(iii) Execution and delivery of the Pledge and Security Agreement by the Borrower and each Guarantor, together with all necessary UCC-1 financing statements, stock certificates, stock powers, and intellectual property security agreements.
(iv) Execution and delivery of the Amended and Restated Intercreditor Agreement among the Administrative Agent (in its capacity as TLB Collateral Agent), Crescent Harbor Bank, N.A. (in its capacity as RCF Agent), and the Borrower.
(v) Execution and delivery of all ancillary loan documents, including officer's certificates, bring-down certificates, and such other documents as the Administrative Agent may reasonably request.
(vi) Delivery of a duly executed borrowing request for the initial drawdown under the Term Loan B on the Closing Date.
B. Corporate Authorizations
(i) Resolutions of the Board of Directors of VHG and each corporate Guarantor, and resolutions of the managing members or managers of each LLC Guarantor, authorizing the refinancing transaction, the execution and delivery of the loan documents, and the performance of the obligations thereunder.
(ii) Omnibus Secretary's Certificate (or equivalent officer's certificate) for the Borrower and each Guarantor, certifying as to: (a) the organizational documents (certificate of incorporation or formation, bylaws or operating agreement) of each entity, (b) the authorizing resolutions described in clause (i) above, and (c) the incumbency and specimen signatures of all officers or authorized signatories executing the loan documents.
(iii) Certificates of Good Standing (or equivalent status certificates) for the Borrower issued by the Delaware Secretary of State and the Florida Department of State, Division of Corporations, each dated no more than 30 days prior to the Closing Date. Similar certificates for each Guarantor from its state of formation.
C. Opinions.  
Delivery of a legal opinion from Calderwood & Harkness LLP, as Borrower's counsel, addressed to the Administrative Agent and the Lenders, covering customary matters including: (a) due organization and valid existence of the Borrower and each Guarantor, (b) due authorization of the loan documents, (c) enforceability of the loan documents against the Borrower and each Guarantor (subject to customary qualifications and exceptions), (d) no conflicts with applicable law, organizational documents, or material agreements, and (e) no governmental approvals required (other than those that have been obtained and are in full force and effect).
D. Financial / Solvency
(i) Solvency certificate from Renata Haines, Chief Financial Officer of VHG, certifying, after giving effect to the transactions contemplated hereby, that the Borrower and its subsidiaries, taken as a whole, are Solvent (as defined in the Credit Agreement, generally meaning that the fair value of assets exceeds liabilities, the Borrower is able to pay debts as they become due, and the Borrower has adequate capital for the conduct of its business).
(ii) Pro forma compliance certificate demonstrating compliance with the maximum total net leverage ratio of 4.50 to 1.00 as of the Closing Date, after giving effect to the refinancing and the application of proceeds.
(iii) Audited consolidated financial statements of VHG for the fiscal year ended December 31, 2021 (FY2021), audited by Clearmont & Wharton LLP (Ronald Ashby, CPA, Engagement Partner), together with an unqualified audit opinion.
E. Payoff and Discharge
(i) A payoff letter from Greystone Federal Credit Corp. (Marion Stillwell, Vice President, Agency Services), in form and substance satisfactory to the Administrative Agent, confirming the total payoff amount of the existing Term Loan B facility of approximately $627,916,667 (inclusive of outstanding principal, accrued interest, and the 0.50% prepayment premium), together with wire transfer instructions and an undertaking by Greystone to deliver UCC-3 termination statements and mortgage releases promptly following receipt of the payoff amount.
(ii) Evidence reasonably satisfactory to the Administrative Agent of the termination (or arrangement for the termination) of all liens in favor of Greystone Federal Credit Corp. and/or any related secured parties, including UCC-3 termination statements, mortgage releases, and intellectual property lien releases.
F. KYC / AML
(i) Delivery of the VHG KYC Package (dated April 15, 2022), including all documentation and information required by the Administrative Agent and the Lenders under applicable "know your customer" regulations, the USA PATRIOT Act (Title III of Pub. L. 107-56), and the Bank Secrecy Act.
(ii) A beneficial ownership certification in compliance with 31 C.F.R. § 1010.230 (the "Beneficial Ownership Rule"), identifying each natural person who, directly or indirectly, owns 25% or more of the equity interests of the Borrower or who exercises significant control over the Borrower.
G. Ratings.  
Confirmation of credit ratings from at least two nationally recognized rating agencies:
•  Kellaway Ratings Group: Corporate family rating of BB-; Facility rating of B+ (for the proposed Term Loan B)
•  Pinnacle Credit Services: Corporate family rating of Ba3; Facility rating of B1 (for the proposed Term Loan B)
For the avoidance of doubt, the receipt of the foregoing ratings shall be a condition to closing, but maintenance of any specific rating level shall not be a condition to closing or an ongoing covenant (other than the affirmative covenant to maintain rating agency coverage as described in Section XII).
H. Insurance.  
Certificates of insurance evidencing property, casualty, commercial general liability, and such other insurance coverage as may be required under the Credit Agreement for all 74 hotel properties in the Borrower's portfolio, with Crescent Harbor Bank, N.A. (in its capacity as Collateral Agent for the benefit of the Lenders) named as additional insured and loss payee (or mortgagee, as applicable) on all policies relating to the mortgaged properties. Such insurance shall be in form, substance, amounts, and from carriers reasonably satisfactory to the Administrative Agent.
I. Post-Closing Items
The following items shall be delivered within 15 days following the Closing Date (anticipated deadline: August 5, 2022):
(i) Recorded mortgage instruments, deeds of trust, and assignments of rents and leases for all 42 mortgaged hotel properties, stamped or certified by the applicable county recorder or register of deeds in each jurisdiction.
(ii) Lender's title insurance policies issued by Continental Fidelity Title Company for all 42 mortgaged properties.
(iii) Updated ALTA/NSPS surveys for all mortgaged properties (to the extent not already delivered at closing).
(iv) FEMA Standard Flood Hazard Determination forms and, where applicable, evidence of flood insurance for all mortgaged properties located in Special Flood Hazard Areas.
[C&H Comment: VHG's position is that a post-closing period of 15 days is necessary and appropriate for the orderly completion of mortgage recordings and title insurance deliverables across 12 states. Crescent Harbor's initial proposal contemplated a 10-day post-closing period. VHG believes 15 days is more realistic given the number of jurisdictions involved and the potential for recording office delays. This item remains open.]
XI. REPRESENTATIONS AND WARRANTIES
The Credit Agreement shall contain representations and warranties by the Borrower and the Guarantors customary for transactions of this type and size, including the following:
•  Organization and good standing in the jurisdiction of formation and each jurisdiction where the conduct of business or ownership of property requires qualification
•  Corporate power and authority to execute and deliver the loan documents and to perform the obligations thereunder
•  Due authorization by all necessary corporate or other organizational action
•  No conflicts with applicable law, organizational documents, material agreements, or governmental orders
•  Binding obligations enforceable in accordance with their terms (subject to customary bankruptcy, insolvency, and equitable limitations)
•  Accuracy and completeness of financial statements (including the FY2021 audited financial statements and the most recent interim financial statements)
•  No material adverse change since December 31, 2021
•  Absence of material litigation not disclosed in the Confidential Information Memorandum
•  Compliance with all applicable laws, rules, and regulations in all material respects
•  ERISA compliance and absence of ERISA events that could reasonably be expected to result in a Material Adverse Effect
•  Environmental compliance and absence of material environmental liabilities
•  Payment of taxes, except where contested in good faith by appropriate proceedings
•  Ownership and validity of intellectual property necessary for the conduct of the business
•  Maintenance of insurance in amounts and types required by the Credit Agreement
•  Compliance with anti-corruption laws (including the U.S. Foreign Corrupt Practices Act) and applicable sanctions laws and regulations (including those administered by OFAC, the U.S. Department of State, and the European Union)
•  Solvency (on a consolidated basis, after giving effect to the transactions)
•  Accuracy of information contained in the Confidential Information Memorandum (subject to customary qualifications)
The representations and warranties shall be made as of the Closing Date and, as to certain specified representations (the "Specified Representations," to be agreed), as of each subsequent borrowing date (if any incremental draws are available).
[C&H Comment: VHG will request "SunGard" / "certain funds" conditionality with respect to the closing conditions — that is, the representations and warranties required to be true as a condition to funding on the Closing Date shall be limited to specified fundamental representations (including organization, authority, enforceability, no conflicts, solvency, FCPA/sanctions, and use of proceeds) and the absence of a Material Adverse Change, consistent with the terms of the commitment letter. Non-fundamental representations that are found to be inaccurate as of the Closing Date shall not provide a basis for the Lenders to refuse to fund, although they may give rise to a post-closing Event of Default under the Credit Agreement.]
XII. AFFIRMATIVE COVENANTS
The Credit Agreement shall contain affirmative covenants by the Borrower and the Guarantors customary for transactions of this type, including the following:
•  Delivery of annual audited consolidated financial statements, certified by an independent registered public accounting firm of nationally recognized standing, within 90 days after the end of each fiscal year
•  Delivery of quarterly unaudited consolidated financial statements within 45 days after the end of each of the first three fiscal quarters of each fiscal year
•  Delivery of quarterly compliance certificates, signed by the Chief Financial Officer of the Borrower, certifying compliance with the financial covenant (if applicable) and the absence of any Event of Default
•  Prompt written notice of any Event of Default or Default, any material litigation or governmental proceeding, any ERISA event, any material environmental matter, and any other event or condition that has had or could reasonably be expected to have a Material Adverse Effect
•  Maintenance of insurance as required by the Credit Agreement and the mortgage documents
•  Preservation of corporate existence, rights, franchises, permits, and licenses necessary for the conduct of business
•  Compliance with all applicable laws, rules, and regulations in all material respects
•  Payment of taxes, assessments, and governmental charges, except where contested in good faith by appropriate proceedings with adequate reserves established
•  Maintenance and preservation of properties in good working order and condition (ordinary wear and tear excepted)
•  Maintenance of proper books of account and records
•  Inspection rights — the Administrative Agent and its representatives shall have the right to visit and inspect the properties and examine the books and records of the Borrower and its subsidiaries, subject to frequency limitations (not more than once per fiscal year in the absence of a continuing Event of Default, during normal business hours, and upon reasonable prior notice)
•  Use of proceeds solely for the purposes described in the Transaction Overview
•  Delivery of an annual operating budget within 60 days after the commencement of each fiscal year
•  Maintenance of credit ratings from at least two nationally recognized rating agencies (currently Kellaway Ratings Group and Pinnacle Credit Services)
XIII. NEGATIVE COVENANTS
The Credit Agreement shall contain negative covenants customary for transactions of this type, with exceptions, carve-outs, and baskets to be negotiated in the definitive documentation. The negative covenants are expected to include the following:
•  Limitation on Indebtedness: The Borrower and its subsidiaries shall not incur, create, assume, or guarantee any indebtedness, except as expressly permitted under specified exceptions (including the incremental facility provisions described in Section VII, permitted refinancing indebtedness, capital lease obligations below a threshold to be agreed, intercompany indebtedness, and general baskets).
•  Limitation on Liens: The Borrower and its subsidiaries shall not create, incur, or permit to exist any lien on any of their properties or assets, except for permitted liens (including liens securing the obligations under the Credit Agreement, purchase money liens, existing liens, and general baskets).
•  Limitation on Fundamental Changes: The Borrower and its subsidiaries shall not merge with or into, consolidate with, or sell, transfer, or dispose of all or substantially all of their assets, except as expressly permitted.
•  Limitation on Asset Sales: Dispositions of assets shall be subject to limitations, including minimum consideration requirements (fair market value), cash consideration requirements, and mandatory prepayment obligations as described in Section V.C.
•  Limitation on Investments: The Borrower and its subsidiaries shall not make or hold any investments, except for permitted investments (including investments in subsidiaries, short-term liquid investments, permitted acquisitions, and general baskets).
•  Limitation on Restricted Payments: The Borrower shall not declare or pay any dividends or distributions on its equity interests, or repurchase or redeem its equity interests, except as expressly permitted under specified exceptions (including a builder basket, a general basket, and customary exceptions for tax distributions, overhead payments, and similar items).
•  Limitation on Transactions with Affiliates: The Borrower and its subsidiaries shall not enter into any transaction with any affiliate, except on terms no less favorable to the Borrower or such subsidiary than would be obtainable in a comparable arm's-length transaction with a non-affiliate, subject to customary exceptions for employment arrangements, equity-based compensation plans, and intercompany transactions in the ordinary course of business.
•  Limitation on Negative Pledge Clauses: The Borrower and its subsidiaries shall not enter into any agreement that restricts the ability of any subsidiary to grant liens on its assets to secure the obligations, subject to customary exceptions.
•  Limitation on Amendments to Material Agreements: The Borrower and its subsidiaries shall not amend, modify, or waive any provision of any material agreement (including the indenture governing the Senior Unsecured Notes due 2028) in a manner that is materially adverse to the Lenders, without the prior written consent of the Administrative Agent.
•  Limitation on Sale-Leasebacks: The Borrower and its subsidiaries shall not enter into any sale-leaseback transaction, except as expressly permitted.
•  Limitation on Changes in Fiscal Year: The Borrower shall not change its fiscal year-end from December 31 without the prior consent of the Administrative Agent.
[C&H Comment: VHG will seek builder baskets, general baskets, and grower components (i.e., baskets defined as the greater of a fixed dollar amount and a percentage of Adjusted EBITDA) consistent with current market standards for BB-rated hospitality borrowers. The inclusion of grower baskets is important to ensure that VHG's permitted investment, restricted payment, and debt capacity scales appropriately with the growth of the business over the seven-year term of the facility. Specific basket sizes, threshold amounts, and step-down or step-up mechanics will be negotiated in the context of the definitive Credit Agreement documentation.]
XIV. EVENTS OF DEFAULT
The Credit Agreement shall contain events of default customary for transactions of this type, including the following:
•  Payment Default: Failure to pay (i) any principal when due, or (ii) any interest or other amounts within five (5) business days after the date when due.
•  Breach of Representations: Any representation or warranty made in the Credit Agreement or any other loan document proves to have been incorrect in any material respect when made or deemed made (subject to customary materiality qualifiers where the underlying representation is not already qualified by materiality).
•  Covenant Default: Failure to perform or observe any affirmative covenant (other than financial reporting obligations, which shall have no cure period), subject to a cure period of thirty (30) days after notice from the Administrative Agent. Breach of any negative covenant or the financial covenant shall constitute an immediate Event of Default without any cure period.
•  Cross-Default / Cross-Acceleration: The occurrence of a default or event of default under, or the acceleration of the maturity of, any other indebtedness of the Borrower or any subsidiary in an aggregate principal amount exceeding a threshold to be agreed.
•  Bankruptcy / Insolvency: The commencement of any bankruptcy, insolvency, receivership, or similar proceeding by or against the Borrower or any material subsidiary (with a 60-day dismissal period for involuntary proceedings).
•  ERISA Events: The occurrence of one or more ERISA events that, individually or in the aggregate, could reasonably be expected to result in liability to the Borrower and its subsidiaries in excess of a threshold to be agreed.
•  Judgment Default: The entry of one or more final, non-appealable judgments against the Borrower or any subsidiary in an aggregate amount exceeding a threshold to be agreed (net of insurance and indemnification coverage), to the extent not discharged, stayed, or bonded within a specified grace period.
•  Change of Control: The occurrence of a Change of Control (as defined in the Credit Agreement).
•  Invalidity of Security Documents: Any security document shall cease to be in full force and effect or shall be declared null and void, or the Collateral Agent shall not have or shall cease to have a valid and perfected lien on the collateral with the priority purported to be created thereby, in each case other than as a result of the actions or inactions of the Administrative Agent or Collateral Agent.
•  Invalidity of Guarantees: Any guarantee shall cease to be in full force and effect or shall be declared null and void, or any Guarantor shall deny or disaffirm its obligations under its guarantee.
[C&H Comment: VHG will negotiate for the following modifications to the events of default provisions:
(i) Cross-Acceleration vs. Cross-Default: VHG's position is that the Credit Agreement should contain a cross-acceleration trigger (rather than a cross-default trigger). Under a cross-acceleration formulation, an Event of Default under the Credit Agreement would be triggered only upon the actual acceleration of other indebtedness following a default thereunder, rather than upon the mere occurrence of a default under such other indebtedness. This provides the Borrower with an opportunity to cure defaults under other facilities before they cascade into an Event of Default under the Term Loan B.
(ii) Materiality Qualifiers: VHG will seek materiality qualifiers on certain events of default (including the covenant default, ERISA event, and invalidity of security document provisions) to ensure that immaterial or technical breaches do not give rise to a full Event of Default under the Credit Agreement.
These items remain open for discussion and will be addressed in the definitive documentation.]
XV. ASSIGNMENTS AND PARTICIPATIONS
Assignments: Lenders may assign all or a portion of their rights and obligations under the Credit Agreement to eligible assignees, subject to the following conditions:
(i) Borrower Consent: Each assignment shall require the prior written consent of the Borrower (such consent not to be unreasonably withheld, conditioned, or delayed). The Borrower shall be deemed to have consented to any proposed assignment if it has not responded to a written request for consent within ten (10) business days of receipt thereof. No Borrower consent shall be required (a) during the continuance of an Event of Default, or (b) for assignments to other Lenders, affiliates of Lenders, or approved funds.
(ii) Administrative Agent Consent: Each assignment shall require the prior written consent of the Administrative Agent (such consent not to be unreasonably withheld), unless the assignment is to an existing Lender or an affiliate thereof.
(iii) Minimum Assignment Amount: Each assignment (other than an assignment of the entirety of a Lender's commitment and loans) shall be in a minimum principal amount of $1,000,000.
(iv) Assignment Fee: An assignment processing fee of $3,500 shall be payable to the Administrative Agent in connection with each assignment.
Participations: Lenders may sell participations in their rights and obligations under the Credit Agreement without the consent of the Borrower or the Administrative Agent. Participants shall not have any direct voting rights under the Credit Agreement; provided, however, that no Lender shall agree to any amendment, modification, or waiver that would (a) reduce the principal of or rate of interest on the Term Loan B, (b) extend the Maturity Date, or (c) reduce the pro rata share of any mandatory prepayment, in each case without the consent of any participant affected thereby.
LSTA Standard Terms: Assignments and participations shall be documented using LSTA standard form documentation for par/near-par term loan trades, and the Credit Agreement shall incorporate the LSTA standard terms by reference to the extent consistent with the terms of the Credit Agreement.
[C&H Comment: VHG will maintain a "Disqualified Lender" list to prevent assignments or participations to competitors, distressed debt funds, vulture investors, and other specified entities that VHG reasonably determines would be adverse to its interests. The Disqualified Lender list will be provided to the Administrative Agent at or prior to closing and may be updated from time to time by the Borrower (provided that no existing Lender shall be retroactively designated as a Disqualified Lender). Any assignment to a Disqualified Lender shall be void ab initio. This item is not yet agreed and remains open.]
XVI. GOVERNING LAW AND JURISDICTION
Governing Law: The Credit Agreement and all other loan documents shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to conflicts of law principles that would require the application of the laws of any other jurisdiction (other than Section 5-1401 of the New York General Obligations Law).
Jurisdiction: Each party shall irrevocably 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 either thereof, in any action or proceeding arising out of or relating to the loan documents.
Waiver of Jury Trial: Each party shall irrevocably and unconditionally waive, to the fullest extent permitted by applicable law, any right to trial by jury in any legal proceeding arising out of or relating to the Credit Agreement, any other loan document, or the transactions contemplated thereby.
XVII. CUSIP / IDENTIFIERS
The CUSIP number set forth above has been assigned by CUSIP Global Services and is included solely for the convenience of the Lenders. Neither the Administrative Agent nor the Borrower shall be responsible for the selection or accuracy of such CUSIP number.
XVIII. EXISTING CAPITAL STRUCTURE SUMMARY
The following table summarizes VHG's existing capital structure as of the date of this Term Sheet, for reference purposes:
Upon closing of the proposed refinancing transaction, the existing Greystone TLB will be repaid in full and discharged, and the New Term Loan B in the principal amount of $700,000,000 will replace it in VHG's capital structure. The Senior Secured Revolving Credit Facility and Senior Unsecured Notes will remain outstanding and are not affected by this transaction, except that the intercreditor arrangements governing the shared collateral will be amended and restated to reflect the replacement of the Greystone TLB with the new Crescent Harbor TLB.
XIX. SUMMARY OF KEY CHANGES FROM INITIAL TERM SHEET (APRIL 22, 2022)
The following table summarizes the principal negotiated changes between the Crescent Harbor initial proposal (dated April 22, 2022) and this Second Draft (dated May 6, 2022), as marked up by Calderwood & Harkness LLP on behalf of VHG:
Items marked "Agreed" reflect terms on which the parties have reached alignment. Items marked "VHG position reflected" indicate terms where VHG's negotiated position has been incorporated into this Second Draft, subject to Crescent Harbor's confirmation. Items marked "Open" remain subject to ongoing negotiation and will be resolved in connection with the definitive Credit Agreement documentation.
XX. NEXT STEPS AND TIMELINE
The parties anticipate the following timeline for the completion of the refinancing transaction:
The foregoing timeline is indicative only and is subject to change based on the pace of documentation negotiations, market conditions, and the syndication process. All parties will use commercially reasonable efforts to adhere to the anticipated timeline.
XXI. DISCLAIMER / NON-BINDING NATURE OF THIS TERM SHEET
This Revised Term Sheet — Second Draft is indicative and for discussion purposes only. It does not constitute a binding commitment, agreement, or obligation by Crescent Harbor Bank, N.A., Verimark Hospitality Group Inc., or any other party to consummate the transactions described herein or to negotiate or enter into definitive documentation on the terms set forth herein or on any other terms.
The consummation of the proposed refinancing transaction is subject to, among other things: (i) the completion of due diligence satisfactory to Crescent Harbor Bank, N.A. and the Lenders in their sole discretion; (ii) the negotiation, execution, and delivery of definitive loan documentation in form and substance satisfactory to all parties and their respective counsel; (iii) the receipt of all necessary corporate, regulatory, and third-party approvals and consents; and (iv) the satisfaction or waiver of all conditions precedent set forth in the definitive Credit Agreement.
Upon the execution and delivery of the definitive Credit Agreement, this Term Sheet shall be superseded in its entirety by the Credit Agreement and shall have no further force or effect. In the event of any inconsistency between this Term Sheet and the definitive Credit Agreement, the terms of the Credit Agreement shall control.
Nothing in this Term Sheet shall be construed as a commitment or obligation to lend, and Crescent Harbor Bank, N.A. reserves the right to withdraw this Term Sheet or to modify any of the terms set forth herein at any time prior to the execution of the definitive Credit Agreement.
XXII. CONTACT INFORMATION
Verimark Hospitality Group Inc.:
Priya Narayanan, Gene