1021-00001 · Verimark Hospitality Group · Transaction Documents/Credit Agreement

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CONFIDENTIAL — DRAFT — FOR DISCUSSION PURPOSES ONLY — SUBJECT TO FURTHER REVISION

CALDERWOOD & HARKNESS LLP One Liberty Plaza, 52nd Floor New York, New York 10006

Engagement No. 1016-00009

June 8, 2022

CREDIT AGREEMENT

SECOND REVISED DRAFT

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

among

VERIMARK HOSPITALITY GROUP INC. a Delaware corporation, as Borrower,

THE GUARANTORS PARTY HERETO,

THE LENDERS PARTY HERETO,

and

CRESCENT HARBOR BANK, NATIONAL ASSOCIATION, as Administrative Agent and Collateral Agent

Prepared by Calderwood & Harkness LLP (Borrower's Counsel)

DISTRIBUTION LIST:

Whitfield Gage & Partridge LLP — Harrison Whitfield III / Megan Yeung (Agent's Counsel) Calderwood & Harkness LLP — Ian Blackwood / Sophie Tremblay / Daniel Obi (Borrower's Counsel) Crescent Harbor Bank, N.A. — Theodore Marchetti / Anika Holm (Administrative Agent) Verimark Hospitality Group Inc. — Priya Narayanan / Glenn Fischbach (Borrower)

THIS DRAFT IS PROVIDED FOR DISCUSSION PURPOSES ONLY AND DOES NOT CONSTITUTE A COMMITMENT, OFFER, OR BINDING AGREEMENT BY ANY PARTY. THIS DRAFT IS SUBJECT TO FURTHER REVISION AND NEGOTIATION BY ALL PARTIES AND THEIR RESPECTIVE COUNSEL.

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CREDIT AGREEMENT

This CREDIT AGREEMENT (this "Agreement"), dated as of [●], 2022 (the "Closing Date"), is entered into among:

(1) VERIMARK HOSPITALITY GROUP INC., a Delaware corporation (the "Borrower");

(2) THE GUARANTORS from time to time party hereto (collectively, the "Guarantors");

(3) THE LENDERS from time to time party hereto (collectively, the "Lenders"); and

(4) CRESCENT HARBOR BANK, NATIONAL ASSOCIATION, a national banking association, in its capacity as administrative agent for the Lenders (in such capacity, the "Administrative Agent") and as collateral agent for the Secured Parties (in such capacity, the "Collateral Agent").

RECITALS

WHEREAS, the Borrower has requested that the Lenders make term loans to the Borrower on the Closing Date in an aggregate principal amount of $700,000,000 (the "Term Loans");

WHEREAS, the proceeds of the Term Loans will be used by the Borrower (a) to repay in full all outstanding obligations under the Existing Credit Agreement with Greystone Federal Credit Corp. (as defined herein), (b) to pay fees and expenses incurred in connection with the Transactions, and (c) for permitted acquisitions and general corporate purposes;

WHEREAS, each Guarantor has agreed to guarantee the Obligations of the Borrower under this Agreement and the other Loan Documents, and to grant security interests in substantially all of its assets to secure such Obligations;

WHEREAS, the Term Loans will be secured on a first-priority basis by Liens on substantially all assets of the Borrower and the Guarantors, sharing such Liens on a pari passu basis with the Existing RCF (as defined herein) pursuant to the Intercreditor Agreement; and

WHEREAS, the parties hereto desire to set forth the terms and conditions upon which the Lenders will make the Term Loans to the Borrower;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I — DEFINITIONS AND ACCOUNTING TERMS

Section 1.01 — Defined Terms

As used in this Agreement, the following terms shall have the meanings set forth below:

"Adjusted EBITDA" means, for any period, Consolidated Net Income of the Borrower and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP, plus the following charges and expenses to the extent deducted in determining Consolidated Net Income for such period: (a) interest expense (including amortization of original issue discount and non-cash interest expense, but excluding amortization of deferred financing fees), (b) income tax expense (including deferred tax expense), (c) depreciation and amortization expense, (d) non-cash charges and losses (including stock-based compensation expense, impairment charges, and non-cash write-downs), (e) one-time restructuring charges, acquisition costs, integration expenses, severance costs, and business optimization expenses, in each case actually incurred, provided that the aggregate amount added back pursuant to this clause (e) for any trailing four-quarter period shall not exceed 15% of Adjusted EBITDA for such period (calculated before giving effect to such add-backs), (f) pro forma cost savings, operating expense reductions, and synergies projected by the Borrower in good faith to result from actions that have been taken or are reasonably expected to be taken within 18 months of the applicable calculation date, provided that such cost savings, reductions, and synergies are reasonably identifiable and factually supportable in the good faith judgment of a Responsible Officer and are set forth in reasonable detail in a certificate delivered to the Administrative Agent (which certificate shall include the basis for such cost savings, reductions, and synergies and confirmation that such cost savings, reductions, and synergies are reasonably expected to be realized within such 18-month period), minus (g) non-cash gains to the extent increasing Consolidated Net Income for such period (excluding non-cash gains that represent the reversal of an accrual or reserve for a potential cash item in any prior period). Adjusted EBITDA shall also include "run-rate" adjustments for recently completed acquisitions, calculated on a pro forma basis as if such acquisitions had occurred on the first day of the applicable measurement period. For the avoidance of doubt, the Borrower's Adjusted EBITDA for fiscal year ended December 31, 2021 was $341,000,000, as set forth in the Confidential Information Memorandum.

"Adjusted Term SOFR" means, for any Interest Period, an interest rate per annum equal to (a) Term SOFR for such Interest Period plus (b) the SOFR Adjustment applicable to such Interest Period; provided that if Adjusted Term SOFR as so determined shall be less than the Floor, Adjusted Term SOFR shall be deemed to be the Floor. For the avoidance of doubt, the SOFR Adjustments applicable to each Interest Period are as follows: 0.10% for a 1-month Interest Period; 0.15% for a 3-month Interest Period; and 0.25% for a 6-month Interest Period. This definition has been updated to reflect the ARRC recommended hardwired approach and the negotiations among the parties since the circulation of the first draft of this Agreement dated May 16, 2022.

"Administrative Agent" means Crescent Harbor Bank, National Association, a national banking association, acting in its capacity as administrative agent for the Lenders under this Agreement, or any successor administrative agent appointed pursuant to Section 10.08. The Administrative Agent's address for notices and other communications shall be: 600 Lexington Avenue, 34th Floor, New York, New York 10022, Attention: Theodore Marchetti, Managing Director, Loan Syndications / Anika Holm, Vice President, Agency Services; Email: tmarchetti@crescentharbor.com / aholm@crescentharbor.com.

"Affiliate" means, with respect to any Person, another Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract, or otherwise. "Controlling" and "Controlled" have meanings correlative thereto.

"Applicable Margin" means, with respect to the Term Loans, 3.75% (375 basis points) per annum. The Applicable Margin shall be subject to adjustment pursuant to the Most Favored Nation Provision set forth in Section 2.15. For the avoidance of doubt, any increase in the Applicable Margin resulting from the operation of Section 2.15 shall be effective as of the date of incurrence of the applicable Incremental Term Loan that triggers such adjustment and shall remain in effect for so long as such Incremental Term Loan remains outstanding.

"Applicable Rate" means, at any time, the sum of (a) Adjusted Term SOFR for the applicable Interest Period plus (b) the Applicable Margin.

"Assignment and Assumption" means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 11.04), in substantially the form of Exhibit B attached hereto or any other form (including an electronic form generated by an electronic platform) approved by the Administrative Agent, incorporating the LSTA standard terms for par/near-par term loan trades.

"Bankruptcy Event" means, with respect to any Person, such Person becomes the subject of a voluntary or involuntary bankruptcy, insolvency, reorganization, or liquidation proceeding, or has a receiver, trustee, custodian, or similar official appointed for it or for any substantial portion of its property, or makes a general assignment for the benefit of its creditors, or is generally unable to pay its debts as they become due, or takes any corporate or organizational action to authorize any of the foregoing.

"Benchmark" means, initially, Term SOFR; provided that if a Benchmark Transition Event has occurred with respect to Term SOFR or the then-current Benchmark, then "Benchmark" means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 3.02.

"Benchmark Replacement" means, with respect to any Benchmark Transition Event, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:

(1) the sum of (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment; or

(2) the sum of (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for Dollar-denominated syndicated credit facilities at such time, and (b) the related Benchmark Replacement Adjustment.

If the Benchmark Replacement as determined pursuant to clause (1) or (2) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for purposes of this Agreement and the other Loan Documents. This definition is consistent with the ARRC recommended hardwired fallback language.

"Benchmark Replacement Adjustment" means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body, or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities.

"Benchmark Replacement Conforming Changes" means, with respect to any Benchmark Replacement, any technical, administrative, or operational changes (including changes to the definition of "Business Day," the definition of "Interest Period," timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage provisions, and other technical, administrative, or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

"Benchmark Replacement Date" means, with respect to any Benchmark, the earliest to occur of the following events with respect to such then-current Benchmark: (a) in the case of clause (a) or (b) of the definition of "Benchmark Transition Event," the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or (b) in the case of clause (c) of the definition of "Benchmark Transition Event," the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.

"Benchmark Transition Event" means the occurrence of one or more of the following events with respect to the then-current Benchmark: (a) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); (b) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component), or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), in each case, which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or (c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative.

"Borrower" means Verimark Hospitality Group Inc., a Delaware corporation, with Employer Identification Number 82-3741956, Delaware File Number 7291843, and its successors and assigns. The Borrower's common stock is traded on the New York Stock Exchange under the ticker symbol "VMRK." The Borrower's principal office is located at 8200 West Palmetto Park Road, Suite 1500, Boca Raton, Florida 33433. The Borrower's registered agent in the State of Delaware is located at 1209 Orange Street, Wilmington, Delaware 19801.

"Business Day" means any day other than a Saturday, a Sunday, or a day on which banking institutions in New York City are authorized or required by law, regulation, or executive order to close; provided that, when used in connection with a Term SOFR-based borrowing, "Business Day" shall also exclude any day that is not a U.S. Government Securities Business Day.

"Capital Expenditures" means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as a liability) by the Borrower and its Restricted Subsidiaries during such period that, in conformity with GAAP, are or are required to be included as capital expenditures on the consolidated statement of cash flows of the Borrower and its Restricted Subsidiaries.

"Cash Equivalents" means (a) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or instrumentality thereof maturing within one year from the date of acquisition thereof, (b) commercial paper maturing no more than 270 days from the date of creation thereof and having a credit rating of at least A-1 from Kellaway Ratings Group or P-1 from Pinnacle Credit Services, (c) certificates of deposit maturing no more than one year from the date of acquisition issued by any Lender or by any commercial bank organized under the laws of the United States of America or any State thereof having combined capital and surplus of not less than $500,000,000, (d) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (c) of this definition, having a term of not more than 30 days, with respect to securities issued or fully guaranteed or insured by the United States of America, and (e) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (d) of this definition.

"Change of Control" means the occurrence of any of the following: (a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of more than 35% of the total voting power of the then-outstanding Equity Interests of the Borrower entitled to vote generally in the election of directors; (b) the Borrower ceases to own and control, directly or indirectly, 100% of the Equity Interests of each Guarantor (other than directors' qualifying shares and other nominal amounts of Equity Interests required to be held by persons other than the Borrower under applicable law); (c) the Board of Directors of the Borrower shall cease to consist of a majority of Continuing Directors; or (d) a "change of control" (or similar event, however denominated) occurs under the indenture governing the Senior Unsecured Notes or under the Existing RCF requiring a mandatory offer to repurchase or redeem, or resulting in an acceleration of, the applicable indebtedness.

"Closing Date" means [●], 2022.

"Collateral" means all assets of the Borrower and the Guarantors, whether now owned or hereafter acquired, that are subject to the Liens created by the Security Documents, as more particularly described in the Pledge and Security Agreement and the Mortgages, including all personal property, real property, intellectual property, Equity Interests in Subsidiaries, accounts, inventory, equipment, instruments, chattel paper, deposit accounts, securities accounts, commercial tort claims, general intangibles, letter-of-credit rights, and proceeds of the foregoing.

"Collateral Agent" means Crescent Harbor Bank, National Association, a national banking association, acting in its capacity as collateral agent for the Secured Parties under this Agreement and the other Loan Documents, or any successor collateral agent appointed pursuant to Section 10.08.

"Commitment" means, with respect to each Lender, the aggregate principal amount of Term Loans such Lender has committed to fund on the Closing Date, as set forth opposite such Lender's name on Schedule 2.01, as such amount may be adjusted from time to time in accordance with this Agreement. The aggregate amount of the Commitments on the date hereof is $700,000,000.

"Compliance Certificate" means a certificate delivered pursuant to Section 6.02(a), in substantially the form of Exhibit D attached hereto, certifying compliance with the financial covenant and other provisions of this Agreement, executed by a Responsible Officer of the Borrower.

"Consolidated Net Income" means, for any period, the net income (or loss) of the Borrower and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP for such period; provided that there shall be excluded from Consolidated Net Income: (a) the income (or loss) of any Person that is not a Restricted Subsidiary, except to the extent of the amount of dividends or distributions actually paid to the Borrower or any Restricted Subsidiary by such Person during such period; (b) the income (or loss) of any Person accrued prior to the date such Person becomes a Restricted Subsidiary or is merged with or into the Borrower or any Restricted Subsidiary, or such Person's assets are acquired by the Borrower or any Restricted Subsidiary; (c) the income of any Restricted Subsidiary to the extent the declaration or payment of dividends or similar distributions by such Restricted Subsidiary is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its Organization Documents or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to such Restricted Subsidiary, except to the extent of the amount of dividends or distributions actually paid to the Borrower or another Restricted Subsidiary; (d) any extraordinary gain or loss; (e) any gain or loss from non-cash mark-to-market adjustments to the extent not indicative of the operating performance of the Borrower and its Restricted Subsidiaries; and (f) the cumulative effect of any changes in accounting principles.

"Consolidated Total Debt" means, as of any date of determination, the aggregate principal amount of all Indebtedness of the Borrower and its Restricted Subsidiaries on a consolidated basis outstanding as of such date, determined in accordance with GAAP, consisting of Indebtedness for borrowed money, capital lease obligations, purchase money obligations, and the principal component of synthetic lease obligations, but excluding (a) undrawn letters of credit, (b) obligations in respect of Swap Agreements, and (c) intercompany Indebtedness.

"Credit Rating" means, at any time, the corporate credit rating or corporate family rating, as applicable, assigned to the Borrower by Kellaway Ratings Group and/or Pinnacle Credit Services. As of the date hereof, the Borrower's Credit Rating is BB- (Kellaway Ratings Group) and Ba3 (Pinnacle Credit Services).

"CUSIP Number" means the CUSIP number assigned to the Term Loans: 92347LAB8.

"Daily Simple SOFR" means, for any day, SOFR, with the conventions for this rate (which shall include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate recommended by the Relevant Governmental Body for determining "Daily Simple SOFR" for syndicated business loans; provided that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion.

"Debtor Relief Laws" means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States of America or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

"Default" means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

"Default Rate" means a rate per annum equal to the Applicable Rate then in effect plus 2.00% (200 basis points).

"Disposition" or "Dispose" means the sale, transfer, license, lease, or other disposition (including any sale-leaseback transaction and any sale and issuance by a Restricted Subsidiary of its Equity Interests) of any property by any Person, including any sale, assignment, transfer, or other disposition, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

"Dollar" and "$" mean lawful money of the United States of America.

"Domestic Subsidiary" means any Subsidiary that is organized or formed under the laws of the United States of America, any state thereof, or the District of Columbia.

"Effective Yield" means, with respect to any Indebtedness, the yield to maturity or weighted average yield to maturity (in each case, taking into account the applicable interest rate margin, any interest rate floor (to the extent the floor exceeds the then-prevailing benchmark rate at the time of incurrence), and the effect of original issue discount or upfront fees amortized over an assumed four-year life (or the actual stated life of the applicable Indebtedness, if shorter)), as reasonably determined by the Administrative Agent in a manner consistent with generally accepted financial practice. For the avoidance of doubt, Effective Yield shall exclude arrangement fees, commitment fees, structuring fees, underwriting fees, and other similar customary fees paid to arrangers, agents, or underwriters (and not shared with all lenders generally).

"Environmental Laws" means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices, or binding agreements issued, promulgated, or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release, or threatened release of any Hazardous Material, or to health and safety matters, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act of 1976, the Clean Water Act, the Clean Air Act, the Toxic Substances Control Act, and all analogous state and local statutes.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder.

"ERISA Event" means (a) a "reportable event" within the meaning of Section 4043 of ERISA, (b) the withdrawal of the Borrower, any Restricted Subsidiary, or any ERISA Affiliate from a Plan during a plan year in which it was a "substantial employer" (as defined in Section 4001(a)(2) of ERISA), (c) the complete or partial withdrawal of the Borrower, any Restricted Subsidiary, or any ERISA Affiliate from a Multiemployer Plan, (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 of ERISA, or the commencement of proceedings by the PBGC to terminate a Plan, (e) the failure to make required contributions to any Plan that could result in the imposition of a Lien under Section 303(k) of ERISA, or (f) the occurrence of any other event or condition with respect to a Plan that could reasonably be expected to result in liability of the Borrower or any Restricted Subsidiary under Title IV of ERISA.

"Event of Default" has the meaning specified in Section 9.01.

"Excluded Subsidiary" means (a) any Foreign Subsidiary, (b) any Domestic Subsidiary that is a direct or indirect Subsidiary of a Foreign Subsidiary, (c) any Unrestricted Subsidiary, (d) any Subsidiary with respect to which the provision of a guarantee or grant of a security interest would result in material adverse tax consequences to the Borrower or its Subsidiaries (as reasonably determined by the Borrower in consultation with its tax advisors), (e) any immaterial Subsidiary, and (f) any other Subsidiary mutually agreed upon by the Borrower and the Administrative Agent.

"Existing Credit Agreement" means that certain Credit Agreement dated as of February 14, 2020, among the Borrower, the lenders party thereto, and Greystone Federal Credit Corp., as administrative agent, as amended, restated, supplemented, or otherwise modified from time to time prior to the Closing Date, providing for a $625,000,000 term loan facility (CUSIP: 92347LAA0).

"Existing RCF" means that certain Revolving Credit Agreement dated as of February 14, 2020, among the Borrower, the lenders party thereto, and Crescent Harbor Bank, National Association, as administrative agent, as amended, restated, supplemented, or otherwise modified from time to time, providing for a $400,000,000 senior secured revolving credit facility.

"Fee Letter" means that certain Fee Letter dated as of May 3, 2022, among the Borrower, Crescent Harbor Bank, N.A. (as Administrative Agent), and Crescent Harbor Bank, N.A. (as Lead Arranger), as amended, restated, supplemented, or otherwise modified from time to time.

"First Lien" means a first-priority Lien on the Collateral (subject only to Permitted Liens), granted in favor of the Collateral Agent for the benefit of the Secured Parties, pari passu with the Liens securing the Existing RCF as set forth in the Intercreditor Agreement.

"Floor" means 0.50% (50 basis points) per annum, which is the minimum rate applicable to Term SOFR.

"Foreign Subsidiary" means any Subsidiary that is not a Domestic Subsidiary.

"GAAP" means generally accepted accounting principles in the United States of America as in effect from time to time, applied on a consistent basis, subject to Section 1.03.

"Governmental Authority" means the government of the United States of America or any other nation, or any political subdivision thereof, whether state, provincial, or local, and any agency, authority, instrumentality, regulatory body, court, central bank, or other entity exercising executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of or pertaining to government (including any supra-national body such as the European Union or the European Central Bank).

"Guarantee Agreement" means that certain Guarantee Agreement dated as of the Closing Date, among the Guarantors in favor of the Collateral Agent for the benefit of the Secured Parties.

"Guarantors" means, collectively, (a) Verimark Resort Properties LLC, a Delaware limited liability company, (b) VHG Management Services Inc., a Delaware corporation, (c) Verimark Convention Holdings LLC, a Delaware limited liability company, (d) Palmetto Beachfront Hotels LLC, a Florida limited liability company, (e) Cascadia Hospitality Corp., a Delaware corporation, and (f) each other Subsidiary of the Borrower that becomes a Guarantor pursuant to Section 6.12. Each of the foregoing is sometimes referred to herein as a "Guarantor."

"Hazardous Materials" means all explosive, radioactive, or hazardous materials or substances, hazardous wastes, toxic substances, pollutants, contaminants, and all other materials and substances regulated pursuant to Environmental Laws.

"Incremental Term Loan" means any additional term loan facility incurred pursuant to Section 2.14, which shall be pari passu in right of payment and security with the Term Loans, subject to the terms and conditions of Section 2.14, including the Most Favored Nation Provision set forth in Section 2.15 during the MFN Period.

"intellectual Property" means all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, copyright applications, trade secrets, know-how, technology, software, domain names, and all other intellectual property rights, in each case, whether registered or unregistered.

"Intercreditor Agreement" means the Amended and Restated Intercreditor Agreement dated as of the Closing Date, among Crescent Harbor Bank, National Association (in its capacity as administrative agent and collateral agent under this Agreement and in its capacity as administrative agent and collateral agent under the Existing RCF), and the other parties thereto from time to time, governing the pari passu sharing of first-lien Collateral between the Term Loans and the $400,000,000 revolving credit facility, as such agreement may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.

"Interest Period" means, with respect to any Term SOFR Loan, the period commencing on the date such Term SOFR Loan is made or on the last day of the immediately preceding Interest Period applicable to such Term SOFR Loan, and ending on the numerically corresponding day in the calendar month that is 1, 3, or 6 months thereafter (in each case, subject to the availability of Term SOFR for such tenor), as selected by the Borrower in its Borrowing Request or notice of conversion/continuation; provided that (a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in the next calendar month, in which case such Interest Period shall end on the immediately preceding Business Day, (b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period, and (c) no Interest Period shall extend beyond the Maturity Date.

"Investment" means, with respect to any Person, all direct or indirect acquisitions or investments by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests or debt or other securities of another Person, (b) a loan, advance, or capital contribution to, guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) an Acquisition.

"Laws" means, collectively, all international, foreign, federal, state, and local statutes, treaties, rules, guidelines, regulations, ordinances, codes, and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation, or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations, and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

"Lenders" means the financial institutions listed on Schedule 2.01 and each other Person that shall have become a party hereto as a Lender pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge, or preference, priority, or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way, or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

"Loan Documents" means, collectively, this Agreement, the Guarantee Agreement, the Pledge and Security Agreement, the Intercreditor Agreement, the Mortgages, the Fee Letter, any Term Loan Notes, any Incremental Term Loan Amendment, each Compliance Certificate, each Borrowing Request, each Assignment and Assumption, and each other instrument, agreement, or document executed and delivered in connection herewith from time to time.

"Loan Number" means the Administrative Agent's internal reference number for this credit facility: CHB-LF-2022-07814.

"LSTA" means the Loan Syndications and Trading Association.

"Material Adverse Effect" means (a) a material adverse change in, or material adverse effect on, the business, assets, liabilities (actual or contingent), results of operations, or financial condition of the Borrower and its Restricted Subsidiaries, taken as a whole, (b) a material adverse effect on the ability of the Borrower and the Guarantors, taken as a whole, to perform their payment obligations under the Loan Documents, or (c) a material adverse effect on the rights and remedies of the Administrative Agent and the Lenders under the Loan Documents, taken as a whole.

"Material Subsidiary" means, at any date of determination, any Subsidiary of the Borrower that, together with its Subsidiaries, (a) accounts for more than 5% of the consolidated total assets of the Borrower and its Restricted Subsidiaries as of the last day of the most recently ended fiscal quarter for which financial statements have been delivered pursuant to Section 6.01, or (b) accounts for more than 5% of the consolidated revenues of the Borrower and its Restricted Subsidiaries for the most recently ended four consecutive fiscal quarter period for which financial statements have been delivered pursuant to Section 6.01.

"Maturity Date" means [●], 2029, being the date that is seven (7) years from the Closing Date; provided that if such date is not a Business Day, the Maturity Date shall be the immediately preceding Business Day.

"MFN Period" means the period commencing on the Closing Date and ending on (and including) the date that is 18 months after the Closing Date. [NTD: The MFN Period of 18 months reflects the negotiated position. Crescent Harbor / WGP initially proposed 12 months; VHG initially requested 24 months. The parties agreed on 18 months as the applicable sunset period.]

"MFN Threshold" means 50 basis points (0.50%).

"Mortgage" means a mortgage, deed of trust, assignment of leases and rents, or other security instrument executed and delivered by the Borrower or any Guarantor in favor of the Collateral Agent for the benefit of the Secured Parties, in form suitable for recording in the applicable recording office, covering the Mortgaged Properties.

"Mortgaged Properties" means the real properties described on Schedule 5.08(b), comprising 42 hotel properties in 12 states (Florida (12), New York (6), California (5), Texas (4), Georgia (3), Colorado (3), Arizona (2), Illinois (2), Washington (2), Oregon (1), Nevada (1), and Virginia (1)) owned by Verimark Resort Properties LLC and Palmetto Beachfront Hotels LLC, with an aggregate appraised value of approximately $2,180,000,000, as such schedule may be updated from time to time in accordance with this Agreement.

"Net Proceeds" means the gross cash proceeds received by the Borrower or any Restricted Subsidiary from any Asset Sale, Casualty Event, or Debt Incurrence, net of (a) reasonable and customary brokerage commissions, underwriting fees, discounts, and other fees and commissions, (b) the amount of taxes estimated to be payable in connection therewith (including any tax distributions attributable thereto), (c) amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset sold that is senior to the Lien of the Collateral Agent, and (d) reasonable and customary out-of-pocket costs and expenses actually incurred in connection therewith (including legal, accounting, and investment banking fees and sales commissions).

"Obligations" means all advances to, and debts, liabilities, obligations, covenants, and duties of, any Loan Party arising under any Loan Document, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising, and including interest and fees that accrue after the commencement of any proceeding under any Debtor Relief Law by or against any Loan Party, regardless of whether the claim for such interest or fees is allowed in such proceeding.

"Organization Documents" means (a) with respect to any corporation, the articles or certificate of incorporation and bylaws (or equivalent or comparable constitutive documents), (b) with respect to any limited liability company, the certificate of formation and limited liability company agreement (or equivalent or comparable constitutive documents), and (c) with respect to any partnership, joint venture, trust, or other form of business entity, the partnership, joint venture, or other applicable agreement of organization or formation and any agreement, instrument, filing, or notice with respect thereto filed with any Governmental Authority, and any certificate of formation, articles of organization, or certificate of limited partnership.

"Original Issue discount" means the discount of 1.00% at which the Term Loans are funded, being $7,000,000 in the aggregate on the total Commitment amount of $700,000,000 (resulting in net funding of $693,000,000, or 99.00% of par).

"Participant" has the meaning specified in Section 11.04(d).

"Permitted Acquisition" means any acquisition by the Borrower or any Restricted Subsidiary of all or substantially all of the assets of, or all of the Equity Interests in, a Person or division or line of business of a Person, so long as (a) no Default or Event of Default exists or would result therefrom, (b) the business or Person to be acquired is in a line of business that is the same as or reasonably related or complementary to the business of the Borrower and its Restricted Subsidiaries as of the Closing Date, (c) the representations and warranties set forth in the Loan Documents are true and correct in all material respects on the date of such acquisition (or, in the case of representations and warranties qualified by materiality, in all respects), (d) pro forma compliance with all financial covenants is demonstrated, and (e) the Administrative Agent shall have received such documents as it may reasonably request.

"Permitted Indebtedness" means Indebtedness permitted to be outstanding under Section 8.01, including (a) the Existing RCF (in an aggregate principal amount not to exceed $400,000,000), (b) the Senior Unsecured Notes (in an aggregate principal amount not to exceed $245,000,000), (c) Incremental Term Loans incurred in accordance with Section 2.14, (d) capital lease obligations not to exceed $50,000,000 in the aggregate at any time outstanding, (e) purchase money Indebtedness not to exceed $25,000,000 in the aggregate at any time outstanding, (f) intercompany Indebtedness (subordinated to the Obligations), (g) refinancing Indebtedness, and (h) a general basket not to exceed $35,000,000.

"Permitted Liens" means Liens permitted under Section 8.02, including (a) Liens securing the Obligations and the Existing RCF on a pari passu first-priority basis pursuant to the Intercreditor Agreement, (b) Liens for taxes, assessments, and governmental charges not yet due or being contested in good faith, (c) mechanics', materialmen's, carriers', warehousemen's, and landlords' Liens and similar Liens imposed by law arising in the ordinary course of business, (d) Liens existing on the Closing Date and set forth on Schedule 8.02, (e) purchase money Liens and capital lease Liens, (f) judgment Liens not constituting an Event of Default, (g) easements, zoning restrictions, rights of way, and similar encumbrances on real property that do not materially impair the value or use of such property, and (h) other Liens as set forth in Section 8.02.

"Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority, or other entity.

"Pledge and Security Agreement" means that certain Pledge and Security Agreement dated as of the Closing Date, among the Borrower, the Guarantors, and the Collateral Agent, pursuant to which the Borrower and the Guarantors grant a first-priority security interest in substantially all of their assets (subject to Permitted Liens and the Intercreditor Agreement) to secure the Obligations.

"Pro Forma Basis" means, with respect to compliance with any test or covenant hereunder, or for purposes of calculating any financial ratio, that all Specified Transactions (and the following transactions in connection therewith) that have been made during the applicable measurement period or subsequent to such measurement period and on or prior to the date of calculation shall be deemed to have occurred as of the first day of the applicable measurement period. Such pro forma calculations shall be made in good faith by a Responsible Officer of the Borrower and may include adjustments to the extent consistent with the definition of Adjusted EBITDA.

"Register" has the meaning specified in Section 2.12.

"Related Parties" means, with respect to any Person, such Person's Affiliates and the directors, officers, employees, partners, agents, trustees, administrators, managers, advisors, and representatives of such Person and of such Person's Affiliates.

"Repricing Protection Period" means the period commencing on the Closing Date and ending on (and including) the date that is 6 months after the Closing Date (i.e., January 21, 2023, assuming a Closing Date of July 21, 2022).

"Repricing Transaction" means (a) any prepayment or repayment of all or any portion of the Term Loans with the proceeds of, or any conversion of Term Loans into, any new or replacement tranche of term loans bearing interest at an Effective Yield less than the Effective Yield applicable to such Term Loans (as such Effective Yield is determined by the Administrative Agent in its reasonable judgment), and (b) any amendment to this Agreement that directly or indirectly reduces the Effective Yield applicable to the Term Loans (other than any amendment (i) in connection with a Permitted Acquisition or other Investment permitted hereunder or (ii) that is effected to the extent required under Section 2.15 (Most Favored Nation Provision)).

"Required Lenders" means, at any time, Lenders having outstanding Term Loans representing more than 50% of the aggregate outstanding principal amount of all Term Loans at such time.

"Responsible Officer" means the chief executive officer, the president, the chief financial officer, the treasurer, the assistant treasurer, the secretary, or any senior vice president (or any equivalent officer) of a Loan Party and, solely for purposes of the delivery of incumbency certificates pursuant to Section 4.01(f), the secretary or any assistant secretary of a Loan Party.

"Restricted Payment" means any dividend or other distribution (whether in cash, securities, or other property) with respect to any Equity Interests in the Borrower or any Restricted Subsidiary, or any payment (whether in cash, securities, or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation, or termination of any such Equity Interests, or on account of any return of capital to the Borrower's stockholders, partners, or members (or the equivalent Persons thereof).

"Restricted Subsidiary" means any Subsidiary of the Borrower that is not an Unrestricted Subsidiary.

"S&P Equivalent" means, with respect to any rating assigned by Pinnacle Credit Services, the equivalent rating category used by Kellaway Ratings Group.

"Scheduled Amortization Payment" means each quarterly installment of principal of the Term Loans to be paid by the Borrower pursuant to Section 2.08, each in the amount of $1,750,000.

"Secured Parties" means, collectively, the Administrative Agent, the Collateral Agent, the Lenders, and each other Person that is a holder of Obligations.

"Security Documents" means, collectively, the Pledge and Security Agreement, the Mortgages, the Intercreditor Agreement, and any other security agreement, pledge agreement, mortgage, deed of trust, intellectual property security agreement, or other instrument or document executed and delivered pursuant to this Agreement or any of the foregoing to secure the Obligations.

"Senior Unsecured Notes" means the Borrower's $245,000,000 aggregate principal amount of senior unsecured notes due 2028, issued pursuant to that certain Indenture dated as of February 14, 2020, between the Borrower (as issuer) and Atlantic Standard Trust Company (as trustee), as supplemented by the First Supplemental Indenture dated as of September 30, 2020, the Second Supplemental Indenture dated as of March 15, 2021, and as may be further amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof and in compliance with Section 8.09 of this Agreement.

"SOFR" means a rate per annum equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

"SOFR Adjustment" means, with respect to Adjusted Term SOFR, (a) 0.10% (10 basis points) for an Interest Period of 1 month, (b) 0.15% (15 basis points) for an Interest Period of 3 months, and (c) 0.25% (25 basis points) for an Interest Period of 6 months.

"Solvent" means, with respect to any Person on any date of determination, that on such date (a) the fair value of the property (on a going concern basis) of such Person is greater than the total amount of liabilities (including contingent liabilities) of such Person, (b) the present fair salable value of the assets (on a going concern basis) of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts and other liabilities (including contingent liabilities) as they become absolute and matured, (c) such Person is able to pay its debts and other liabilities, contingent obligations, and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay such debts and liabilities as they mature, and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital.

"Subsidiary" means, with respect to any Person (the "parent") at any date, any corporation, limited liability company, partnership, association, or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association, or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power (or, in the case of a partnership, more than 50% of the general partnership interests) are, as of such date, directly or indirectly owned, Controlled, or held by the parent or one or more Subsidiaries of the parent.

"Swap Agreement" means any agreement with respect to any swap, forward, future, or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial, or pricing indices or measures of economic, financial, or pricing risk or value or any similar transaction or any combination of these transactions.

"Taxes" means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees, or other charges imposed by any Governmental Authority, including any interest, additions to tax, or penalties applicable thereto.

"Term Loan" means a term loan made by a Lender to the Borrower pursuant to Section 2.01.

"Term Loan Note" means a promissory note made by the Borrower in favor of a Lender evidencing the Term Loan made by such Lender, in substantially the form of Exhibit A.

"Term SOFR" means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected by the Administrative Agent and is published by CME Group Benchmark Administration Limited (or a successor administrator satisfactory to the Administrative Agent); provided that if Term SOFR as so determined shall be less than the Floor (0.50%), Term SOFR shall be deemed to be the Floor for purposes of this Agreement.

"Threshold Amount" means $30,000,000. [NTD: Under review — WGP proposed $25,000,000.]

"Total Net Leverage Ratio" means, as of the last day of any fiscal quarter, the ratio of (a) Consolidated Total Debt as of such date minus Unrestricted Cash and Cash Equivalents as of such date (not to exceed $100,000,000) to (b) Adjusted EBITDA for the four consecutive fiscal quarters ending on such date. For the avoidance of doubt, Total Net Leverage Ratio is calculated on a Pro Forma Basis. Pro forma at Closing: net debt of approximately $858,000,000 (comprising $700,000,000 of Term Loans plus $245,000,000 of Senior Unsecured Notes, minus approximately $87,000,000 of unrestricted cash; with the Existing RCF undrawn) divided by Adjusted EBITDA of $341,000,000, equals approximately 2.52x.

"Transactions" means, collectively, (a) the execution, delivery, and performance of this Agreement and the other Loan Documents, (b) the making of the Term Loans hereunder, (c) the repayment in full of all obligations under the Existing Credit Agreement, (d) the payment of all fees and expenses in connection with the foregoing, and (e) all other transactions contemplated hereby and by the other Loan Documents to be consummated on or prior to the Closing Date.

"Unrestricted Cash" means, as of any date of determination, the aggregate amount of unrestricted cash and Cash Equivalents of the Borrower and its Restricted Subsidiaries that are held in deposit accounts or securities accounts subject to a control agreement in favor of the Collateral Agent (or otherwise reasonably acceptable to the Administrative Agent), as determined in accordance with GAAP on a consolidated basis.

"Unrestricted Subsidiary" means any Subsidiary of the Borrower designated by the Board of Directors of the Borrower as an Unrestricted Subsidiary pursuant to the terms of this Agreement. As of the Closing Date, there are no Unrestricted Subsidiaries.

"Yield Differential" means, with respect to any Incremental Term Loan, the amount (if any) by which the Effective Yield on such Incremental Term Loan exceeds the Effective Yield applicable to the Initial Term Loans at the time of incurrence of such Incremental Term Loan.

Section 1.02 — Other Interpretive Provisions

For purposes of this Agreement, unless otherwise specified herein:

(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine, and neuter forms. The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation." The word "will" shall be construed to have the same meaning and effect as the word "shall." Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument, or other document shall be construed as referring to such agreement, instrument, or other document as from time to time amended, restated, supplemented, or otherwise modified (subject to any restrictions on such amendments, restatements, supplements, or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person's successors and assigns, (iii) the words "hereto," "herein," "hereof," and "hereunder," and words of similar import when used in this Agreement, shall be construed to refer to this Agreement as a whole and not to any particular provision hereof, (iv) all references in this Agreement to Articles, Sections, Exhibits, and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (v) all references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations, and (vi) all references to any instruments or agreements, including references to any of the Loan Documents, shall include any and all modifications or amendments thereto and any and all extensions or renewals thereof.

(b) The table of contents and Article and Section headings herein are included for convenience of reference only and shall not affect the interpretation of this Agreement.

(c) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including," the word "to" means "to but excluding," and the word "through" means "through and including."

(d) Section references herein to "Sections" are to Sections of this Agreement unless otherwise specified, and references to "Exhibits" and "Schedules" are to Exhibits and Schedules to this Agreement unless otherwise specified.

Section 1.03 — Accounting Terms

(a) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time.

(b) Notwithstanding anything to the contrary herein, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, (i) Indebtedness of the Borrower and its Restricted Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 on financial liabilities shall be disregarded, and (ii) all leases of the Borrower and its Restricted Subsidiaries shall be classified in accordance with GAAP as in effect on the Closing Date (i.e., prior to giving effect to Accounting Standards Codification 842 or any modification or successor thereof).

(c) References to financial statements of the Borrower herein mean the consolidated financial statements of the Borrower and its Restricted Subsidiaries, as audited by Clearmont & Wharton LLP (or such other independent registered public accounting firm of national standing as may be selected by the Borrower and reasonably acceptable to the Administrative Agent).

Section 1.04 — Rounding

Any financial ratios required to be maintained by the Borro

CONFIDENTIAL — DRAFT — FOR DISCUSSION PURPOSES ONLY — SUBJECT TO FURTHER REVISION
CALDERWOOD & HARKNESS LLP One Liberty Plaza, 52nd Floor New York, New York 10006
Engagement No. 1016-00009
June 8, 2022
CREDIT AGREEMENT
SECOND REVISED DRAFT
$700,000,000 Senior Secured Term Loan B Facility
among
VERIMARK HOSPITALITY GROUP INC. a Delaware corporation, as Borrower,
THE GUARANTORS PARTY HERETO,
THE LENDERS PARTY HERETO,
and
CRESCENT HARBOR BANK, NATIONAL ASSOCIATION, as Administrative Agent and Collateral Agent
Prepared by Calderwood & Harkness LLP (Borrower's Counsel)
DISTRIBUTION LIST:
Whitfield Gage & Partridge LLP — Harrison Whitfield III / Megan Yeung (Agent's Counsel) Calderwood & Harkness LLP — Ian Blackwood / Sophie Tremblay / Daniel Obi (Borrower's Counsel) Crescent Harbor Bank, N.A. — Theodore Marchetti / Anika Holm (Administrative Agent) Verimark Hospitality Group Inc. — Priya Narayanan / Glenn Fischbach (Borrower)
THIS DRAFT IS PROVIDED FOR DISCUSSION PURPOSES ONLY AND DOES NOT CONSTITUTE A COMMITMENT, OFFER, OR BINDING AGREEMENT BY ANY PARTY. THIS DRAFT IS SUBJECT TO FURTHER REVISION AND NEGOTIATION BY ALL PARTIES AND THEIR RESPECTIVE COUNSEL.
Right-click to update Table of Contents
CREDIT AGREEMENT
This CREDIT AGREEMENT (this "Agreement"), dated as of [●], 2022 (the "Closing Date"), is entered into among:
(1) VERIMARK HOSPITALITY GROUP INC., a Delaware corporation (the "Borrower");
(2) THE GUARANTORS from time to time party hereto (collectively, the "Guarantors");
(3) THE LENDERS from time to time party hereto (collectively, the "Lenders"); and
(4) CRESCENT HARBOR BANK, NATIONAL ASSOCIATION, a national banking association, in its capacity as administrative agent for the Lenders (in such capacity, the "Administrative Agent") and as collateral agent for the Secured Parties (in such capacity, the "Collateral Agent").
RECITALS
WHEREAS, the Borrower has requested that the Lenders make term loans to the Borrower on the Closing Date in an aggregate principal amount of $700,000,000 (the "Term Loans");
WHEREAS, the proceeds of the Term Loans will be used by the Borrower (a) to repay in full all outstanding obligations under the Existing Credit Agreement with Greystone Federal Credit Corp. (as defined herein), (b) to pay fees and expenses incurred in connection with the Transactions, and (c) for permitted acquisitions and general corporate purposes;
WHEREAS, each Guarantor has agreed to guarantee the Obligations of the Borrower under this Agreement and the other Loan Documents, and to grant security interests in substantially all of its assets to secure such Obligations;
WHEREAS, the Term Loans will be secured on a first-priority basis by Liens on substantially all assets of the Borrower and the Guarantors, sharing such Liens on a pari passu basis with the Existing RCF (as defined herein) pursuant to the Intercreditor Agreement; and
WHEREAS, the parties hereto desire to set forth the terms and conditions upon which the Lenders will make the Term Loans to the Borrower;
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I — DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
"Adjusted EBITDA" means, for any period, Consolidated Net Income of the Borrower and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP, plus the following charges and expenses to the extent deducted in determining Consolidated Net Income for such period: (a) interest expense (including amortization of original issue discount and non-cash interest expense, but excluding amortization of deferred financing fees), (b) income tax expense (including deferred tax expense), (c) depreciation and amortization expense, (d) non-cash charges and losses (including stock-based compensation expense, impairment charges, and non-cash write-downs), (e) one-time restructuring charges, acquisition costs, integration expenses, severance costs, and business optimization expenses, in each case actually incurred, provided that the aggregate amount added back pursuant to this clause (e) for any trailing four-quarter period shall not exceed 15% of Adjusted EBITDA for such period (calculated before giving effect to such add-backs), (f) pro forma cost savings, operating expense reductions, and synergies projected by the Borrower in good faith to result from actions that have been taken or are reasonably expected to be taken within 18 months of the applicable calculation date, provided that such cost savings, reductions, and synergies are reasonably identifiable and factually supportable in the good faith judgment of a Responsible Officer and are set forth in reasonable detail in a certificate delivered to the Administrative Agent (which certificate shall include the basis for such cost savings, reductions, and synergies and confirmation that such cost savings, reductions, and synergies are reasonably expected to be realized within such 18-month period), minus (g) non-cash gains to the extent increasing Consolidated Net Income for such period (excluding non-cash gains that represent the reversal of an accrual or reserve for a potential cash item in any prior period). Adjusted EBITDA shall also include "run-rate" adjustments for recently completed acquisitions, calculated on a pro forma basis as if such acquisitions had occurred on the first day of the applicable measurement period. For the avoidance of doubt, the Borrower's Adjusted EBITDA for fiscal year ended December 31, 2021 was $341,000,000, as set forth in the Confidential Information Memorandum.
"Adjusted Term SOFR" means, for any Interest Period, an interest rate per annum equal to (a) Term SOFR for such Interest Period plus (b) the SOFR Adjustment applicable to such Interest Period; provided that if Adjusted Term SOFR as so determined shall be less than the Floor, Adjusted Term SOFR shall be deemed to be the Floor. For the avoidance of doubt, the SOFR Adjustments applicable to each Interest Period are as follows: 0.10% for a 1-month Interest Period; 0.15% for a 3-month Interest Period; and 0.25% for a 6-month Interest Period. This definition has been updated to reflect the ARRC recommended hardwired approach and the negotiations among the parties since the circulation of the first draft of this Agreement dated May 16, 2022.
"Administrative Agent" means Crescent Harbor Bank, National Association, a national banking association, acting in its capacity as administrative agent for the Lenders under this Agreement, or any successor administrative agent appointed pursuant to Section 10.08. The Administrative Agent's address for notices and other communications shall be: 600 Lexington Avenue, 34th Floor, New York, New York 10022, Attention: Theodore Marchetti, Managing Director, Loan Syndications / Anika Holm, Vice President, Agency Services; Email: tmarchetti@crescentharbor.com / aholm@crescentharbor.com.
"Affiliate" means, with respect to any Person, another Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract, or otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Applicable Margin" means, with respect to the Term Loans, 3.75% (375 basis points) per annum. The Applicable Margin shall be subject to adjustment pursuant to the Most Favored Nation Provision set forth in Section 2.15. For the avoidance of doubt, any increase in the Applicable Margin resulting from the operation of Section 2.15 shall be effective as of the date of incurrence of the applicable Incremental Term Loan that triggers such adjustment and shall remain in effect for so long as such Incremental Term Loan remains outstanding.
"Applicable Rate" means, at any time, the sum of (a) Adjusted Term SOFR for the applicable Interest Period plus (b) the Applicable Margin.
"Assignment and Assumption" means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 11.04), in substantially the form of Exhibit B attached hereto or any other form (including an electronic form generated by an electronic platform) approved by the Administrative Agent, incorporating the LSTA standard terms for par/near-par term loan trades.
"Bankruptcy Event" means, with respect to any Person, such Person becomes the subject of a voluntary or involuntary bankruptcy, insolvency, reorganization, or liquidation proceeding, or has a receiver, trustee, custodian, or similar official appointed for it or for any substantial portion of its property, or makes a general assignment for the benefit of its creditors, or is generally unable to pay its debts as they become due, or takes any corporate or organizational action to authorize any of the foregoing.
"Benchmark" means, initially, Term SOFR; provided that if a Benchmark Transition Event has occurred with respect to Term SOFR or the then-current Benchmark, then "Benchmark" means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 3.02.
"Benchmark Replacement" means, with respect to any Benchmark Transition Event, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:
(1) the sum of (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment; or
(2) the sum of (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for Dollar-denominated syndicated credit facilities at such time, and (b) the related Benchmark Replacement Adjustment.
If the Benchmark Replacement as determined pursuant to clause (1) or (2) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for purposes of this Agreement and the other Loan Documents. This definition is consistent with the ARRC recommended hardwired fallback language.
"Benchmark Replacement Adjustment" means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body, or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities.
"Benchmark Replacement Conforming Changes" means, with respect to any Benchmark Replacement, any technical, administrative, or operational changes (including changes to the definition of "Business Day," the definition of "Interest Period," timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage provisions, and other technical, administrative, or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
"Benchmark Replacement Date" means, with respect to any Benchmark, the earliest to occur of the following events with respect to such then-current Benchmark: (a) in the case of clause (a) or (b) of the definition of "Benchmark Transition Event," the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or (b) in the case of clause (c) of the definition of "Benchmark Transition Event," the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.
"Benchmark Transition Event" means the occurrence of one or more of the following events with respect to the then-current Benchmark: (a) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); (b) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component), or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), in each case, which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or (c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative.
"Borrower" means Verimark Hospitality Group Inc., a Delaware corporation, with Employer Identification Number 82-3741956, Delaware File Number 7291843, and its successors and assigns. The Borrower's common stock is traded on the New York Stock Exchange under the ticker symbol "VMRK." The Borrower's principal office is located at 8200 West Palmetto Park Road, Suite 1500, Boca Raton, Florida 33433. The Borrower's registered agent in the State of Delaware is located at 1209 Orange Street, Wilmington, Delaware 19801.
"Business Day" means any day other than a Saturday, a Sunday, or a day on which banking institutions in New York City are authorized or required by law, regulation, or executive order to close; provided that, when used in connection with a Term SOFR-based borrowing, "Business Day" shall also exclude any day that is not a U.S. Government Securities Business Day.
"Capital Expenditures" means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as a liability) by the Borrower and its Restricted Subsidiaries during such period that, in conformity with GAAP, are or are required to be included as capital expenditures on the consolidated statement of cash flows of the Borrower and its Restricted Subsidiaries.
"Cash Equivalents" means (a) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or instrumentality thereof maturing within one year from the date of acquisition thereof, (b) commercial paper maturing no more than 270 days from the date of creation thereof and having a credit rating of at least A-1 from Kellaway Ratings Group or P-1 from Pinnacle Credit Services, (c) certificates of deposit maturing no more than one year from the date of acquisition issued by any Lender or by any commercial bank organized under the laws of the United States of America or any State thereof having combined capital and surplus of not less than $500,000,000, (d) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (c) of this definition, having a term of not more than 30 days, with respect to securities issued or fully guaranteed or insured by the United States of America, and (e) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (d) of this definition.
"Change of Control" means the occurrence of any of the following: (a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of more than 35% of the total voting power of the then-outstanding Equity Interests of the Borrower entitled to vote generally in the election of directors; (b) the Borrower ceases to own and control, directly or indirectly, 100% of the Equity Interests of each Guarantor (other than directors' qualifying shares and other nominal amounts of Equity Interests required to be held by persons other than the Borrower under applicable law); (c) the Board of Directors of the Borrower shall cease to consist of a majority of Continuing Directors; or (d) a "change of control" (or similar event, however denominated) occurs under the indenture governing the Senior Unsecured Notes or under the Existing RCF requiring a mandatory offer to repurchase or redeem, or resulting in an acceleration of, the applicable indebtedness.
"Closing Date" means [●], 2022.
"Collateral" means all assets of the Borrower and the Guarantors, whether now owned or hereafter acquired, that are subject to the Liens created by the Security Documents, as more particularly described in the Pledge and Security Agreement and the Mortgages, including all personal property, real property, intellectual property, Equity Interests in Subsidiaries, accounts, inventory, equipment, instruments, chattel paper, deposit accounts, securities accounts, commercial tort claims, general intangibles, letter-of-credit rights, and proceeds of the foregoing.
"Collateral Agent" means Crescent Harbor Bank, National Association, a national banking association, acting in its capacity as collateral agent for the Secured Parties under this Agreement and the other Loan Documents, or any successor collateral agent appointed pursuant to Section 10.08.
"Commitment" means, with respect to each Lender, the aggregate principal amount of Term Loans such Lender has committed to fund on the Closing Date, as set forth opposite such Lender's name on Schedule 2.01, as such amount may be adjusted from time to time in accordance with this Agreement. The aggregate amount of the Commitments on the date hereof is $700,000,000.
"Compliance Certificate" means a certificate delivered pursuant to Section 6.02(a), in substantially the form of Exhibit D attached hereto, certifying compliance with the financial covenant and other provisions of this Agreement, executed by a Responsible Officer of the Borrower.
"Consolidated Net Income" means, for any period, the net income (or loss) of the Borrower and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP for such period; provided that there shall be excluded from Consolidated Net Income: (a) the income (or loss) of any Person that is not a Restricted Subsidiary, except to the extent of the amount of dividends or distributions actually paid to the Borrower or any Restricted Subsidiary by such Person during such period; (b) the income (or loss) of any Person accrued prior to the date such Person becomes a Restricted Subsidiary or is merged with or into the Borrower or any Restricted Subsidiary, or such Person's assets are acquired by the Borrower or any Restricted Subsidiary; (c) the income of any Restricted Subsidiary to the extent the declaration or payment of dividends or similar distributions by such Restricted Subsidiary is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its Organization Documents or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to such Restricted Subsidiary, except to the extent of the amount of dividends or distributions actually paid to the Borrower or another Restricted Subsidiary; (d) any extraordinary gain or loss; (e) any gain or loss from non-cash mark-to-market adjustments to the extent not indicative of the operating performance of the Borrower and its Restricted Subsidiaries; and (f) the cumulative effect of any changes in accounting principles.
"Consolidated Total Debt" means, as of any date of determination, the aggregate principal amount of all Indebtedness of the Borrower and its Restricted Subsidiaries on a consolidated basis outstanding as of such date, determined in accordance with GAAP, consisting of Indebtedness for borrowed money, capital lease obligations, purchase money obligations, and the principal component of synthetic lease obligations, but excluding (a) undrawn letters of credit, (b) obligations in respect of Swap Agreements, and (c) intercompany Indebtedness.
"Credit Rating" means, at any time, the corporate credit rating or corporate family rating, as applicable, assigned to the Borrower by Kellaway Ratings Group and/or Pinnacle Credit Services. As of the date hereof, the Borrower's Credit Rating is BB- (Kellaway Ratings Group) and Ba3 (Pinnacle Credit Services).
"CUSIP Number" means the CUSIP number assigned to the Term Loans: 92347LAB8.
"Daily Simple SOFR" means, for any day, SOFR, with the conventions for this rate (which shall include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate recommended by the Relevant Governmental Body for determining "Daily Simple SOFR" for syndicated business loans; provided that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States of America or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
"Default" means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
"Default Rate" means a rate per annum equal to the Applicable Rate then in effect plus 2.00% (200 basis points).
"Disposition" or "Dispose" means the sale, transfer, license, lease, or other disposition (including any sale-leaseback transaction and any sale and issuance by a Restricted Subsidiary of its Equity Interests) of any property by any Person, including any sale, assignment, transfer, or other disposition, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
"Dollar" and "$" mean lawful money of the United States of America.
"Domestic Subsidiary" means any Subsidiary that is organized or formed under the laws of the United States of America, any state thereof, or the District of Columbia.
"Effective Yield" means, with respect to any Indebtedness, the yield to maturity or weighted average yield to maturity (in each case, taking into account the applicable interest rate margin, any interest rate floor (to the extent the floor exceeds the then-prevailing benchmark rate at the time of incurrence), and the effect of original issue discount or upfront fees amortized over an assumed four-year life (or the actual stated life of the applicable Indebtedness, if shorter)), as reasonably determined by the Administrative Agent in a manner consistent with generally accepted financial practice. For the avoidance of doubt, Effective Yield shall exclude arrangement fees, commitment fees, structuring fees, underwriting fees, and other similar customary fees paid to arrangers, agents, or underwriters (and not shared with all lenders generally).
"Environmental Laws" means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices, or binding agreements issued, promulgated, or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release, or threatened release of any Hazardous Material, or to health and safety matters, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act of 1976, the Clean Water Act, the Clean Air Act, the Toxic Substances Control Act, and all analogous state and local statutes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder.
"ERISA Event" means (a) a "reportable event" within the meaning of Section 4043 of ERISA, (b) the withdrawal of the Borrower, any Restricted Subsidiary, or any ERISA Affiliate from a Plan during a plan year in which it was a "substantial employer" (as defined in Section 4001(a)(2) of ERISA), (c) the complete or partial withdrawal of the Borrower, any Restricted Subsidiary, or any ERISA Affiliate from a Multiemployer Plan, (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 of ERISA, or the commencement of proceedings by the PBGC to terminate a Plan, (e) the failure to make required contributions to any Plan that could result in the imposition of a Lien under Section 303(k) of ERISA, or (f) the occurrence of any other event or condition with respect to a Plan that could reasonably be expected to result in liability of the Borrower or any Restricted Subsidiary under Title IV of ERISA.
"Event of Default" has the meaning specified in Section 9.01.
"Excluded Subsidiary" means (a) any Foreign Subsidiary, (b) any Domestic Subsidiary that is a direct or indirect Subsidiary of a Foreign Subsidiary, (c) any Unrestricted Subsidiary, (d) any Subsidiary with respect to which the provision of a guarantee or grant of a security interest would result in material adverse tax consequences to the Borrower or its Subsidiaries (as reasonably determined by the Borrower in consultation with its tax advisors), (e) any immaterial Subsidiary, and (f) any other Subsidiary mutually agreed upon by the Borrower and the Administrative Agent.
"Existing Credit Agreement" means that certain Credit Agreement dated as of February 14, 2020, among the Borrower, the lenders party thereto, and Greystone Federal Credit Corp., as administrative agent, as amended, restated, supplemented, or otherwise modified from time to time prior to the Closing Date, providing for a $625,000,000 term loan facility (CUSIP: 92347LAA0).
"Existing RCF" means that certain Revolving Credit Agreement dated as of February 14, 2020, among the Borrower, the lenders party thereto, and Crescent Harbor Bank, National Association, as administrative agent, as amended, restated, supplemented, or otherwise modified from time to time, providing for a $400,000,000 senior secured revolving credit facility.
"Fee Letter" means that certain Fee Letter dated as of May 3, 2022, among the Borrower, Crescent Harbor Bank, N.A. (as Administrative Agent), and Crescent Harbor Bank, N.A. (as Lead Arranger), as amended, restated, supplemented, or otherwise modified from time to time.
"First Lien" means a first-priority Lien on the Collateral (subject only to Permitted Liens), granted in favor of the Collateral Agent for the benefit of the Secured Parties, pari passu with the Liens securing the Existing RCF as set forth in the Intercreditor Agreement.
"Floor" means 0.50% (50 basis points) per annum, which is the minimum rate applicable to Term SOFR.
"Foreign Subsidiary" means any Subsidiary that is not a Domestic Subsidiary.
"GAAP" means generally accepted accounting principles in the United States of America as in effect from time to time, applied on a consistent basis, subject to Section 1.03.
"Governmental Authority" means the government of the United States of America or any other nation, or any political subdivision thereof, whether state, provincial, or local, and any agency, authority, instrumentality, regulatory body, court, central bank, or other entity exercising executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of or pertaining to government (including any supra-national body such as the European Union or the European Central Bank).
"Guarantee Agreement" means that certain Guarantee Agreement dated as of the Closing Date, among the Guarantors in favor of the Collateral Agent for the benefit of the Secured Parties.
"Guarantors" means, collectively, (a) Verimark Resort Properties LLC, a Delaware limited liability company, (b) VHG Management Services Inc., a Delaware corporation, (c) Verimark Convention Holdings LLC, a Delaware limited liability company, (d) Palmetto Beachfront Hotels LLC, a Florida limited liability company, (e) Cascadia Hospitality Corp., a Delaware corporation, and (f) each other Subsidiary of the Borrower that becomes a Guarantor pursuant to Section 6.12. Each of the foregoing is sometimes referred to herein as a "Guarantor."
"Hazardous Materials" means all explosive, radioactive, or hazardous materials or substances, hazardous wastes, toxic substances, pollutants, contaminants, and all other materials and substances regulated pursuant to Environmental Laws.
"Incremental Term Loan" means any additional term loan facility incurred pursuant to Section 2.14, which shall be pari passu in right of payment and security with the Term Loans, subject to the terms and conditions of Section 2.14, including the Most Favored Nation Provision set forth in Section 2.15 during the MFN Period.
"intellectual Property" means all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, copyright applications, trade secrets, know-how, technology, software, domain names, and all other intellectual property rights, in each case, whether registered or unregistered.
"Intercreditor Agreement" means the Amended and Restated Intercreditor Agreement dated as of the Closing Date, among Crescent Harbor Bank, National Association (in its capacity as administrative agent and collateral agent under this Agreement and in its capacity as administrative agent and collateral agent under the Existing RCF), and the other parties thereto from time to time, governing the pari passu sharing of first-lien Collateral between the Term Loans and the $400,000,000 revolving credit facility, as such agreement may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.
"Interest Period" means, with respect to any Term SOFR Loan, the period commencing on the date such Term SOFR Loan is made or on the last day of the immediately preceding Interest Period applicable to such Term SOFR Loan, and ending on the numerically corresponding day in the calendar month that is 1, 3, or 6 months thereafter (in each case, subject to the availability of Term SOFR for such tenor), as selected by the Borrower in its Borrowing Request or notice of conversion/continuation; provided that (a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in the next calendar month, in which case such Interest Period shall end on the immediately preceding Business Day, (b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period, and (c) no Interest Period shall extend beyond the Maturity Date.
"Investment" means, with respect to any Person, all direct or indirect acquisitions or investments by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests or debt or other securities of another Person, (b) a loan, advance, or capital contribution to, guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) an Acquisition.
"Laws" means, collectively, all international, foreign, federal, state, and local statutes, treaties, rules, guidelines, regulations, ordinances, codes, and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation, or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations, and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
"Lenders" means the financial institutions listed on Schedule 2.01 and each other Person that shall have become a party hereto as a Lender pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge, or preference, priority, or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way, or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).
"Loan Documents" means, collectively, this Agreement, the Guarantee Agreement, the Pledge and Security Agreement, the Intercreditor Agreement, the Mortgages, the Fee Letter, any Term Loan Notes, any Incremental Term Loan Amendment, each Compliance Certificate, each Borrowing Request, each Assignment and Assumption, and each other instrument, agreement, or document executed and delivered in connection herewith from time to time.
"Loan Number" means the Administrative Agent's internal reference number for this credit facility: CHB-LF-2022-07814.
"LSTA" means the Loan Syndications and Trading Association.
"Material Adverse Effect" means (a) a material adverse change in, or material adverse effect on, the business, assets, liabilities (actual or contingent), results of operations, or financial condition of the Borrower and its Restricted Subsidiaries, taken as a whole, (b) a material adverse effect on the ability of the Borrower and the Guarantors, taken as a whole, to perform their payment obligations under the Loan Documents, or (c) a material adverse effect on the rights and remedies of the Administrative Agent and the Lenders under the Loan Documents, taken as a whole.
"Material Subsidiary" means, at any date of determination, any Subsidiary of the Borrower that, together with its Subsidiaries, (a) accounts for more than 5% of the consolidated total assets of the Borrower and its Restricted Subsidiaries as of the last day of the most recently ended fiscal quarter for which financial statements have been delivered pursuant to Section 6.01, or (b) accounts for more than 5% of the consolidated revenues of the Borrower and its Restricted Subsidiaries for the most recently ended four consecutive fiscal quarter period for which financial statements have been delivered pursuant to Section 6.01.
"Maturity Date" means [●], 2029, being the date that is seven (7) years from the Closing Date; provided that if such date is not a Business Day, the Maturity Date shall be the immediately preceding Business Day.
"MFN Period" means the period commencing on the Closing Date and ending on (and including) the date that is 18 months after the Closing Date. [NTD: The MFN Period of 18 months reflects the negotiated position. Crescent Harbor / WGP initially proposed 12 months; VHG initially requested 24 months. The parties agreed on 18 months as the applicable sunset period.]
"MFN Threshold" means 50 basis points (0.50%).
"Mortgage" means a mortgage, deed of trust, assignment of leases and rents, or other security instrument executed and delivered by the Borrower or any Guarantor in favor of the Collateral Agent for the benefit of the Secured Parties, in form suitable for recording in the applicable recording office, covering the Mortgaged Properties.
"Mortgaged Properties" means the real properties described on Schedule 5.08(b), comprising 42 hotel properties in 12 states (Florida (12), New York (6), California (5), Texas (4), Georgia (3), Colorado (3), Arizona (2), Illinois (2), Washington (2), Oregon (1), Nevada (1), and Virginia (1)) owned by Verimark Resort Properties LLC and Palmetto Beachfront Hotels LLC, with an aggregate appraised value of approximately $2,180,000,000, as such schedule may be updated from time to time in accordance with this Agreement.
"Net Proceeds" means the gross cash proceeds received by the Borrower or any Restricted Subsidiary from any Asset Sale, Casualty Event, or Debt Incurrence, net of (a) reasonable and customary brokerage commissions, underwriting fees, discounts, and other fees and commissions, (b) the amount of taxes estimated to be payable in connection therewith (including any tax distributions attributable thereto), (c) amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset sold that is senior to the Lien of the Collateral Agent, and (d) reasonable and customary out-of-pocket costs and expenses actually incurred in connection therewith (including legal, accounting, and investment banking fees and sales commissions).
"Obligations" means all advances to, and debts, liabilities, obligations, covenants, and duties of, any Loan Party arising under any Loan Document, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising, and including interest and fees that accrue after the commencement of any proceeding under any Debtor Relief Law by or against any Loan Party, regardless of whether the claim for such interest or fees is allowed in such proceeding.
"Organization Documents" means (a) with respect to any corporation, the articles or certificate of incorporation and bylaws (or equivalent or comparable constitutive documents), (b) with respect to any limited liability company, the certificate of formation and limited liability company agreement (or equivalent or comparable constitutive documents), and (c) with respect to any partnership, joint venture, trust, or other form of business entity, the partnership, joint venture, or other applicable agreement of organization or formation and any agreement, instrument, filing, or notice with respect thereto filed with any Governmental Authority, and any certificate of formation, articles of organization, or certificate of limited partnership.
"Original Issue discount" means the discount of 1.00% at which the Term Loans are funded, being $7,000,000 in the aggregate on the total Commitment amount of $700,000,000 (resulting in net funding of $693,000,000, or 99.00% of par).
"Participant" has the meaning specified in Section 11.04(d).
"Permitted Acquisition" means any acquisition by the Borrower or any Restricted Subsidiary of all or substantially all of the assets of, or all of the Equity Interests in, a Person or division or line of business of a Person, so long as (a) no Default or Event of Default exists or would result therefrom, (b) the business or Person to be acquired is in a line of business that is the same as or reasonably related or complementary to the business of the Borrower and its Restricted Subsidiaries as of the Closing Date, (c) the representations and warranties set forth in the Loan Documents are true and correct in all material respects on the date of such acquisition (or, in the case of representations and warranties qualified by materiality, in all respects), (d) pro forma compliance with all financial covenants is demonstrated, and (e) the Administrative Agent shall have received such documents as it may reasonably request.
"Permitted Indebtedness" means Indebtedness permitted to be outstanding under Section 8.01, including (a) the Existing RCF (in an aggregate principal amount not to exceed $400,000,000), (b) the Senior Unsecured Notes (in an aggregate principal amount not to exceed $245,000,000), (c) Incremental Term Loans incurred in accordance with Section 2.14, (d) capital lease obligations not to exceed $50,000,000 in the aggregate at any time outstanding, (e) purchase money Indebtedness not to exceed $25,000,000 in the aggregate at any time outstanding, (f) intercompany Indebtedness (subordinated to the Obligations), (g) refinancing Indebtedness, and (h) a general basket not to exceed $35,000,000.
"Permitted Liens" means Liens permitted under Section 8.02, including (a) Liens securing the Obligations and the Existing RCF on a pari passu first-priority basis pursuant to the Intercreditor Agreement, (b) Liens for taxes, assessments, and governmental charges not yet due or being contested in good faith, (c) mechanics', materialmen's, carriers', warehousemen's, and landlords' Liens and similar Liens imposed by law arising in the ordinary course of business, (d) Liens existing on the Closing Date and set forth on Schedule 8.02, (e) purchase money Liens and capital lease Liens, (f) judgment Liens not constituting an Event of Default, (g) easements, zoning restrictions, rights of way, and similar encumbrances on real property that do not materially impair the value or use of such property, and (h) other Liens as set forth in Section 8.02.
"Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority, or other entity.
"Pledge and Security Agreement" means that certain Pledge and Security Agreement dated as of the Closing Date, among the Borrower, the Guarantors, and the Collateral Agent, pursuant to which the Borrower and the Guarantors grant a first-priority security interest in substantially all of their assets (subject to Permitted Liens and the Intercreditor Agreement) to secure the Obligations.
"Pro Forma Basis" means, with respect to compliance with any test or covenant hereunder, or for purposes of calculating any financial ratio, that all Specified Transactions (and the following transactions in connection therewith) that have been made during the applicable measurement period or subsequent to such measurement period and on or prior to the date of calculation shall be deemed to have occurred as of the first day of the applicable measurement period. Such pro forma calculations shall be made in good faith by a Responsible Officer of the Borrower and may include adjustments to the extent consistent with the definition of Adjusted EBITDA.
"Register" has the meaning specified in Section 2.12.
"Related Parties" means, with respect to any Person, such Person's Affiliates and the directors, officers, employees, partners, agents, trustees, administrators, managers, advisors, and representatives of such Person and of such Person's Affiliates.
"Repricing Protection Period" means the period commencing on the Closing Date and ending on (and including) the date that is 6 months after the Closing Date (i.e., January 21, 2023, assuming a Closing Date of July 21, 2022).
"Repricing Transaction" means (a) any prepayment or repayment of all or any portion of the Term Loans with the proceeds of, or any conversion of Term Loans into, any new or replacement tranche of term loans bearing interest at an Effective Yield less than the Effective Yield applicable to such Term Loans (as such Effective Yield is determined by the Administrative Agent in its reasonable judgment), and (b) any amendment to this Agreement that directly or indirectly reduces the Effective Yield applicable to the Term Loans (other than any amendment (i) in connection with a Permitted Acquisition or other Investment permitted hereunder or (ii) that is effected to the extent required under Section 2.15 (Most Favored Nation Provision)).
"Required Lenders" means, at any time, Lenders having outstanding Term Loans representing more than 50% of the aggregate outstanding principal amount of all Term Loans at such time.
"Responsible Officer" means the chief executive officer, the president, the chief financial officer, the treasurer, the assistant treasurer, the secretary, or any senior vice president (or any equivalent officer) of a Loan Party and, solely for purposes of the delivery of incumbency certificates pursuant to Section 4.01(f), the secretary or any assistant secretary of a Loan Party.
"Restricted Payment" means any dividend or other distribution (whether in cash, securities, or other property) with respect to any Equity Interests in the Borrower or any Restricted Subsidiary, or any payment (whether in cash, securities, or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation, or termination of any such Equity Interests, or on account of any return of capital to the Borrower's stockholders, partners, or members (or the equivalent Persons thereof).
"Restricted Subsidiary" means any Subsidiary of the Borrower that is not an Unrestricted Subsidiary.
"S&P Equivalent" means, with respect to any rating assigned by Pinnacle Credit Services, the equivalent rating category used by Kellaway Ratings Group.
"Scheduled Amortization Payment" means each quarterly installment of principal of the Term Loans to be paid by the Borrower pursuant to Section 2.08, each in the amount of $1,750,000.
"Secured Parties" means, collectively, the Administrative Agent, the Collateral Agent, the Lenders, and each other Person that is a holder of Obligations.
"Security Documents" means, collectively, the Pledge and Security Agreement, the Mortgages, the Intercreditor Agreement, and any other security agreement, pledge agreement, mortgage, deed of trust, intellectual property security agreement, or other instrument or document executed and delivered pursuant to this Agreement or any of the foregoing to secure the Obligations.
"Senior Unsecured Notes" means the Borrower's $245,000,000 aggregate principal amount of senior unsecured notes due 2028, issued pursuant to that certain Indenture dated as of February 14, 2020, between the Borrower (as issuer) and Atlantic Standard Trust Company (as trustee), as supplemented by the First Supplemental Indenture dated as of September 30, 2020, the Second Supplemental Indenture dated as of March 15, 2021, and as may be further amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof and in compliance with Section 8.09 of this Agreement.
"SOFR" means a rate per annum equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
"SOFR Adjustment" means, with respect to Adjusted Term SOFR, (a) 0.10% (10 basis points) for an Interest Period of 1 month, (b) 0.15% (15 basis points) for an Interest Period of 3 months, and (c) 0.25% (25 basis points) for an Interest Period of 6 months.
"Solvent" means, with respect to any Person on any date of determination, that on such date (a) the fair value of the property (on a going concern basis) of such Person is greater than the total amount of liabilities (including contingent liabilities) of such Person, (b) the present fair salable value of the assets (on a going concern basis) of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts and other liabilities (including contingent liabilities) as they become absolute and matured, (c) such Person is able to pay its debts and other liabilities, contingent obligations, and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay such debts and liabilities as they mature, and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital.
"Subsidiary" means, with respect to any Person (the "parent") at any date, any corporation, limited liability company, partnership, association, or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association, or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power (or, in the case of a partnership, more than 50% of the general partnership interests) are, as of such date, directly or indirectly owned, Controlled, or held by the parent or one or more Subsidiaries of the parent.
"Swap Agreement" means any agreement with respect to any swap, forward, future, or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial, or pricing indices or measures of economic, financial, or pricing risk or value or any similar transaction or any combination of these transactions.
"Taxes" means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees, or other charges imposed by any Governmental Authority, including any interest, additions to tax, or penalties applicable thereto.
"Term Loan" means a term loan made by a Lender to the Borrower pursuant to Section 2.01.
"Term Loan Note" means a promissory note made by the Borrower in favor of a Lender evidencing the Term Loan made by such Lender, in substantially the form of Exhibit A.
"Term SOFR" means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected by the Administrative Agent and is published by CME Group Benchmark Administration Limited (or a successor administrator satisfactory to the Administrative Agent); provided that if Term SOFR as so determined shall be less than the Floor (0.50%), Term SOFR shall be deemed to be the Floor for purposes of this Agreement.
"Threshold Amount" means $30,000,000. [NTD: Under review — WGP proposed $25,000,000.]
"Total Net Leverage Ratio" means, as of the last day of any fiscal quarter, the ratio of (a) Consolidated Total Debt as of such date minus Unrestricted Cash and Cash Equivalents as of such date (not to exceed $100,000,000) to (b) Adjusted EBITDA for the four consecutive fiscal quarters ending on such date. For the avoidance of doubt, Total Net Leverage Ratio is calculated on a Pro Forma Basis. Pro forma at Closing: net debt of approximately $858,000,000 (comprising $700,000,000 of Term Loans plus $245,000,000 of Senior Unsecured Notes, minus approximately $87,000,000 of unrestricted cash; with the Existing RCF undrawn) divided by Adjusted EBITDA of $341,000,000, equals approximately 2.52x.
"Transactions" means, collectively, (a) the execution, delivery, and performance of this Agreement and the other Loan Documents, (b) the making of the Term Loans hereunder, (c) the repayment in full of all obligations under the Existing Credit Agreement, (d) the payment of all fees and expenses in connection with the foregoing, and (e) all other transactions contemplated hereby and by the other Loan Documents to be consummated on or prior to the Closing Date.
"Unrestricted Cash" means, as of any date of determination, the aggregate amount of unrestricted cash and Cash Equivalents of the Borrower and its Restricted Subsidiaries that are held in deposit accounts or securities accounts subject to a control agreement in favor of the Collateral Agent (or otherwise reasonably acceptable to the Administrative Agent), as determined in accordance with GAAP on a consolidated basis.
"Unrestricted Subsidiary" means any Subsidiary of the Borrower designated by the Board of Directors of the Borrower as an Unrestricted Subsidiary pursuant to the terms of this Agreement. As of the Closing Date, there are no Unrestricted Subsidiaries.
"Yield Differential" means, with respect to any Incremental Term Loan, the amount (if any) by which the Effective Yield on such Incremental Term Loan exceeds the Effective Yield applicable to the Initial Term Loans at the time of incurrence of such Incremental Term Loan.
Section 1.02 — Other Interpretive Provisions
For purposes of this Agreement, unless otherwise specified herein:
(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine, and neuter forms. The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation." The word "will" shall be construed to have the same meaning and effect as the word "shall." Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument, or other document shall be construed as referring to such agreement, instrument, or other document as from time to time amended, restated, supplemented, or otherwise modified (subject to any restrictions on such amendments, restatements, supplements, or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person's successors and assigns, (iii) the words "hereto," "herein," "hereof," and "hereunder," and words of similar import when used in this Agreement, shall be construed to refer to this Agreement as a whole and not to any particular provision hereof, (iv) all references in this Agreement to Articles, Sections, Exhibits, and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (v) all references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations, and (vi) all references to any instruments or agreements, including references to any of the Loan Documents, shall include any and all modifications or amendments thereto and any and all extensions or renewals thereof.
(b) The table of contents and Article and Section headings herein are included for convenience of reference only and shall not affect the interpretation of this Agreement.
(c) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including," the word "to" means "to but excluding," and the word "through" means "through and including."
(d) Section references herein to "Sections" are to Sections of this Agreement unless otherwise specified, and references to "Exhibits" and "Schedules" are to Exhibits and Schedules to this Agreement unless otherwise specified.
Section 1.03 — Accounting Terms
(a) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time.
(b) Notwithstanding anything to the contrary herein, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, (i) Indebtedness of the Borrower and its Restricted Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 on financial liabilities shall be disregarded, and (ii) all leases of the Borrower and its Restricted Subsidiaries shall be classified in accordance with GAAP as in effect on the Closing Date (i.e., prior to giving effect to Accounting Standards Codification 842 or any modification or successor thereof).
(c) References to financial statements of the Borrower herein mean the consolidated financial statements of the Borrower and its Restricted Subsidiaries, as audited by Clearmont & Wharton LLP (or such other independent registered public accounting firm of national standing as may be selected by the Borrower and reasonably acceptable to the Administrative Agent).
Section 1.04 — Rounding
Any financial ratios required to be maintained by the Borro

CONFIDENTIAL — DRAFT — FOR DISCUSSION PURPOSES ONLY — SUBJECT TO FURTHER REVISION

CREDIT AGREEMENT

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THE GUARANTORS PARTY HERETO,

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