CREDIT AGREEMENT

CREDIT AGREEMENT
THIRD REVISED DRAFT — NEAR-FINAL
June 28, 2022
C&H Draft — reflecting negotiations through June 28, 2022; prior drafts: May 16, 2022 (First Draft), June 8, 2022 (Second C&H Revised Draft)
by and among
VERIMARK HOSPITALITY GROUP INC., a Delaware corporation, as Borrower
THE GUARANTORS PARTY HERETO
THE LENDERS FROM TIME TO TIME PARTY HERETO
and
CRESCENT HARBOR BANK, NATIONAL ASSOCIATION, as Administrative Agent and Collateral Agent
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$700,000,000
SENIOR SECURED TERM LOAN B FACILITY
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Dated as of [●], 2022 (Anticipated Closing Date: July 21, 2022)
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Arranged By:
CRESCENT HARBOR BANK, N.A., as Sole Lead Arranger and Sole Bookrunner
Prepared by: Calderwood & Harkness LLP One Liberty Plaza, 52nd Floor New York, NY 10006
Counsel to Administrative Agent: Whitfield Gage & Partridge LLP 383 Madison Avenue, 28th Floor New York, NY 10179
TABLE OF CONTENTS
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[Page references to be inserted in the execution version.]
ARTICLE I — DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 — Defined Terms Section 1.02 — Other Interpretive Provisions Section 1.03 — Accounting Terms Section 1.04 — Rounding Section 1.05 — Times of Day Section 1.06 — SOFR Benchmark Replacement Setting Section 1.07 — Pro Forma Calculations Section 1.08 — Classification of Loans and Borrowings
ARTICLE II — THE TERM LOAN FACILITY
Section 2.01 — Term Loan Commitments Section 2.02 — Borrowing of Term Loans Section 2.03 — Use of Proceeds Section 2.04 — Evidence of Debt; Promissory Notes Section 2.05 — Interest Section 2.06 — Repayment of Term Loans; Amortization Section 2.07 — Voluntary Prepayment Section 2.08 — Mandatory Prepayment Section 2.09 — Fees Section 2.10 — Payments Generally Section 2.11 — Taxes Section 2.12 — Increased Costs; Illegality Section 2.13 — Break Funding Payments Section 2.14 — Incremental Term Loan Facility Section 2.15 — Benchmark Replacement
ARTICLE III — INTEREST RATE PROVISIONS
Section 3.01 — Interest Rate Elections Section 3.02 — Inability to Determine Rates Section 3.03 — SOFR Conforming Changes
ARTICLE IV — CONDITIONS PRECEDENT
Section 4.01 — Conditions to the Closing Date Section 4.02 — Post-Closing Conditions
ARTICLE V — REPRESENTATIONS AND WARRANTIES
Sections 5.01 through 5.22
ARTICLE VI — AFFIRMATIVE COVENANTS
Sections 6.01 through 6.13
ARTICLE VII — NEGATIVE COVENANTS
Sections 7.01 through 7.09
ARTICLE VIII — EVENTS OF DEFAULT
Section 8.01 — Events of Default Section 8.02 — Remedies Upon Event of Default Section 8.03 — Application of Proceeds After Event of Default
ARTICLE IX — THE ADMINISTRATIVE AGENT AND COLLATERAL AGENT
Sections 9.01 through 9.10
ARTICLE X — MISCELLANEOUS
Sections 10.01 through 10.19
SCHEDULES
Schedule 2.01 — Lender Commitments Schedule 4.02 — Post-Closing Items Schedule 5.05 — Existing Indebtedness Schedule 5.11 — Mortgaged Properties Schedule 5.12 — Subsidiaries Schedule 7.01 — Permitted Indebtedness Schedule 7.02 — Permitted Liens Schedule 10.02 — Administrative Agent Notice Information and Lender Contact Details
EXHIBITS
Exhibit A — Form of Borrowing Request Exhibit B — Form of Term Loan Note Exhibit C — Form of Assignment and Assumption Agreement Exhibit D — Form of Compliance Certificate Exhibit E — Form of Solvency Certificate Exhibit F — Form of Perfection Certificate
CREDIT AGREEMENT
This CREDIT AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this "Credit Agreement" or this "Agreement"), dated as of [●], 2022, is entered into by and among VERIMARK HOSPITALITY GROUP INC., a Delaware corporation (the "Borrower"), the Guarantors party hereto, the Lenders from time to time party hereto, and CRESCENT HARBOR BANK, NATIONAL ASSOCIATION, as Administrative Agent and as Collateral Agent for the Secured Parties.
RECITALS
WHEREAS, the Borrower has requested, and the Lenders have agreed to make, a senior secured term loan B facility in the aggregate principal amount of $700,000,000 (the "Facility"), the proceeds of which shall be used (i) to refinance in full the Borrower's Existing Term Loan B originated on February 14, 2020 with Greystone Federal Credit Corp., (ii) to pay related fees, costs and expenses of the Transactions, and (iii) for Permitted Acquisitions and general corporate purposes;
WHEREAS, Crescent Harbor Bank, National Association has agreed to act as Sole Lead Arranger, Sole Bookrunner, Administrative Agent, and Collateral Agent in connection with the Facility;
WHEREAS, the obligations of the Borrower hereunder will be guaranteed by the Guarantors and secured on a first-priority basis (on a pari passu basis with the Existing Revolving Credit Facility pursuant to the Intercreditor Agreement) by substantially all assets of the Loan Parties, including 42 hotel properties located across twelve (12) states with an aggregate appraised value of approximately $2,180,000,000; and
WHEREAS, the Existing Revolving Credit Facility with Crescent Harbor Bank, N.A. as administrative agent shall remain outstanding after the Closing Date and shall share in the Collateral on a pari passu basis pursuant to the Amended and Restated Intercreditor Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, 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 following meanings:
"Adjusted EBITDA" means, for any period, Consolidated Net Income for such period, plus, without duplication and to the extent deducted in determining Consolidated Net Income, (i) interest expense (including capitalized interest and amortization of debt issuance costs), (ii) income tax expense, (iii) depreciation and amortization, (iv) non-cash charges and losses (including stock-based compensation, mark-to-market adjustments, and impairment charges), (v) transaction costs, fees and expenses incurred in connection with this Credit Agreement, the Existing Credit Facilities, and Permitted Acquisitions (whether or not consummated), (vi) restructuring charges, integration costs, severance costs, and business optimization expenses, provided that the aggregate amount added back pursuant to this clause (vi) shall not exceed 20% of Adjusted EBITDA (calculated prior to such add-back) in any four-quarter period, and (vii) proceeds from business interruption insurance, minus, without duplication and to the extent included in determining Consolidated Net Income, (a) non-cash gains, and (b) extraordinary gains. Adjusted EBITDA shall be tested on a trailing four-quarter basis, and pro forma adjustments shall be permitted for Permitted Acquisitions and dispositions consummated during the applicable measurement period, calculated on a Pro Forma Basis in accordance with Section 1.07. For the avoidance of doubt, the parties acknowledge that Adjusted EBITDA of the Borrower for the fiscal year ended December 31, 2021 was $341,000,000.
"Adjusted Term SOFR" means, for any Interest Period, an interest rate per annum equal to Term SOFR for such Interest Period, plus the SOFR Adjustment applicable to such Interest Period; provided that Adjusted Term SOFR shall in no event be less than the SOFR Floor.
"Administrative Agent" means Crescent Harbor Bank, National Association, in its capacity as administrative agent for the Lenders under this Agreement and the other Loan Documents, having its principal office at 600 Lexington Avenue, 34th Floor, New York, NY 10022, and its successors in such capacity.
"AHYDO" or "Applicable High Yield Discount Obligation" has the meaning specified in Section 163(i) of the Code. For the avoidance of doubt, the Facility is structured, and the OID has been calibrated, so as not to constitute an AHYDO.
"Applicable Margin" means 3.75% (375 basis points) per annum, subject to adjustment pursuant to the Most Favored Nation Provision set forth in Section 2.14(e).
"Applicable Rate" means, at any time, the sum of Adjusted Term SOFR for the then-current Interest Period plus the Applicable Margin.
"Asset Sale" means any sale, transfer, lease, license, or other disposition of property or assets by the Borrower or any Subsidiary, other than dispositions in the ordinary course of business, dispositions of obsolete or worn-out property, and other customary excluded dispositions.
"Borrower" means Verimark Hospitality Group Inc., a corporation organized under the laws of the State of Delaware, with its principal executive offices at 8200 West Palmetto Park Road, Suite 1500, Boca Raton, FL 33433; Employer Identification Number: 82-3741956; Delaware File Number: 7291843.
"Borrowing" means a borrowing consisting of the Term Loans made on the Closing Date.
"Borrowing Date" means the date on which a Borrowing is made, which in the case of the initial Borrowing shall be the Closing Date.
"Borrowing Request" means a request by the Borrower for a Borrowing, substantially in the form of Exhibit A.
"Business Day" means any day other than a Saturday, Sunday, or other day on which commercial banks in New York City are authorized or required by law to close; provided that, with respect to any determination of Term SOFR, SOFR-related calculations, or the making, funding, or continuation of any Term SOFR Loan, "Business Day" shall also exclude any day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
"Cash Equivalents" means investments customarily so classified for public company borrowers, including obligations of the United States, certificates of deposit issued by commercial banks meeting specified rating thresholds, and money market funds.
"Change of Control" means any transaction or series of related transactions resulting in (i) any Person or group (within the meaning of Section 13(d) of the Exchange Act) other than the Permitted Holders acquiring beneficial ownership of more than 35% of the voting equity of the Borrower, or (ii) the Borrower ceasing to own, directly or indirectly, 100% of the equity of each Material Subsidiary.
"Closing Date" means [●], 2022, the date on which the conditions precedent set forth in Section 4.01 are satisfied or waived and the initial Borrowing is made (anticipated to be July 21, 2022).
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all assets and property of any Loan Party subject to (or purported to be subject to) a Lien pursuant to any Security Document, including all Collateral as more fully described in the Pledge and Security Agreement and each of the Mortgages.
"Collateral Agent" means Crescent Harbor Bank, National Association, in its capacity as collateral agent for the Secured Parties.
"Commitment" means, as to each Lender, the amount set forth opposite such Lender's name on Schedule 2.01 hereto. The aggregate amount of the Commitments on the Closing Date is $700,000,000.
"Compliance Certificate" means the compliance certificate, substantially in the form of Exhibit D, delivered by the CFO or Treasurer of the Borrower pursuant to Section 6.01(d).
"Confidential Information" means all information delivered by the Borrower or any Subsidiary to the Administrative Agent or any Lender, subject to the customary exclusions set forth in Section 10.07.
"Consolidated Net Income" means, for any period, the consolidated net income (or loss) of the Borrower and its Subsidiaries determined in accordance with GAAP, with customary add-backs and exclusions for a public company borrower operating in the hospitality sector, including exclusion of (i) extraordinary or non-recurring gains and losses, (ii) net income or loss of any Person acquired in a Permitted Acquisition attributable to periods prior to the acquisition, (iii) the cumulative effect of changes in accounting principles, and (iv) gains or losses on early extinguishment of debt.
"Credit Agreement" means this Agreement, as amended, restated, supplemented, or otherwise modified from time to time.
"CUSIP" means CUSIP number 92347LAB8, being the number assigned to the Term Loans.
"Daily Simple SOFR" means, for any day, SOFR, with the conventions for such rate being those determined by the Administrative Agent in accordance with prevailing market convention.
"Default" means any event or condition that, upon notice, lapse of time, or both, would constitute an Event of Default.
"Default Rate" means the Applicable Rate plus 2.00% (200 basis points) per annum.
"Effective Yield" means, with respect to any Incremental Term Loans (or the initial Term Loans, as applicable), the yield thereon (expressed as a per annum rate) determined by the Administrative Agent by taking into account (i) the Applicable Margin (or the corresponding contractual margin), (ii) any OID or upfront fees paid to the Lenders (annualized over the shorter of (A) the remaining weighted average life to maturity of the applicable loans and (B) four (4) years), and (iii) any interest rate floor (with any excess of the floor over the then-current benchmark treated as OID); but excluding customary arrangement, structuring, underwriting, syndication, ticking, commitment, and administrative agency fees.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"Event of Default" has the meaning set forth in Section 8.01.
"Excess Cash Flow" means, for any fiscal year, Adjusted EBITDA, minus (i) cash interest expense, (ii) cash income taxes paid, (iii) scheduled amortization payments, (iv) permitted capital expenditures (up to a specified maintenance capex threshold), and (v) permitted Restricted Payments and Investments, all as further detailed in the Compliance Certificate.
"Existing Credit Facilities" means, collectively, (i) the Existing Term Loan B, (ii) the Existing Revolving Credit Facility, and (iii) the Existing Senior Unsecured Notes.
"Existing Revolving Credit Facility" means the $400,000,000 senior secured revolving credit facility with Crescent Harbor Bank, N.A. as administrative agent, which shall remain outstanding after the Closing Date and shall be secured by the Collateral on a pari passu basis with the Term Loans pursuant to the Intercreditor Agreement.
"Existing Senior Unsecured Notes" means the $245,000,000 aggregate principal amount of senior unsecured notes of the Borrower due 2028, issued pursuant to an indenture with Atlantic Standard Trust Company as indenture trustee.
"Existing Term Loan B" means the $625,000,000 senior secured term loan B facility originated on February 14, 2020 with Greystone Federal Credit Corp. as administrative agent (CUSIP 92347LAA0), which as of the anticipated Closing Date has an outstanding principal balance of $621,875,000 (reflecting $3,125,000 in scheduled amortization payments since origination), bearing interest at LIBOR plus 4.25% (425 basis points), and which shall be repaid in full simultaneously with the initial Borrowing hereunder.
"FATCA" means Sections 1471 through 1474 of the Code, together with the U.S. Treasury Regulations promulgated thereunder and any intergovernmental agreements entered into in connection therewith.
"Fee Letter" means the Fee Letter dated as of May 27, 2022, between the Borrower and the Sole Lead Arranger.
"Flood Insurance Laws" means, collectively, (i) the National Flood Insurance Act of 1968, (ii) the Flood Disaster Protection Act of 1973, (iii) the National Flood Insurance Reform Act of 1994, and (iv) the Biggert-Waters Flood Insurance Reform Act of 2012, in each case as from time to time in effect and any successor statutes.
"GAAP" means generally accepted accounting principles in the United States, as in effect from time to time, applied on a consistent basis.
"Governmental Authority" means any federal, state, local, or foreign court, governmental agency, authority, instrumentality, or regulatory body, including the U.S. Securities and Exchange Commission, the Office of the Comptroller of the Currency, any state banking or insurance regulator, and any state or local gaming, liquor, or hospitality licensing authority.
"Guarantee Agreement" means the Guarantee Agreement dated as of the Closing Date, among the Guarantors and the Administrative Agent.
"Guarantors" means, collectively, (i) Verimark Resort Properties LLC, (ii) VHG Management Services Inc., (iii) Verimark Convention Holdings LLC, (iv) Palmetto Beachfront Hotels LLC, and (v) Cascadia Hospitality Corp., together with any additional Subsidiary that becomes a Guarantor after the Closing Date pursuant to Section 6.12.
"Incremental Term Loans" means additional term loans incurred pursuant to Section 2.14.
"Indebtedness" means, without duplication, all obligations for borrowed money, evidenced by notes, bonds, or debentures, capitalized lease obligations, drawn letters of credit, and Guarantees of any of the foregoing, calculated in accordance with GAAP.
"Intercreditor Agreement" means the Amended and Restated Intercreditor Agreement dated as of the Closing Date, among the Administrative Agent (in its capacities as TLB Agent under this Agreement and as RCF Agent under the Existing Revolving Credit Facility) and the Lenders.
"Interest Period" means, with respect to any Term SOFR Loan, a period of one (1), three (3), or six (6) months, as selected by the Borrower in the applicable Borrowing Request (or, at the Borrower's election, such other period as may be available from time to time and offered by all Lenders), commencing on the date of such Borrowing or the last day of the immediately preceding Interest Period, as the case may be.
"IP Security Agreement" means the Intellectual Property Security Agreement dated as of the Closing Date, among the Loan Parties and the Collateral Agent, to be filed with the United States Patent and Trademark Office and the United States Copyright Office.
"KYC Package" means the "know your customer" and anti-money-laundering diligence package delivered by the Borrower to the Administrative Agent, dated April 15, 2022.
"Lenders" means the financial institutions from time to time party to this Agreement as lenders. As of the Closing Date, the Lenders and their respective Commitments are as set forth on Schedule 2.01, and consist of: Crescent Harbor Bank, N.A. ($50,000,000); Ridgeline Capital Partners, LP ($125,000,000); Beacon Atlantic Credit Fund III ($100,000,000); Tidewater Institutional Investors, Inc. ($75,000,000); Ironbridge Loan Management LLC ($100,000,000); Northway Savings Bank ($75,000,000); Copperleaf Asset Management, LP ($100,000,000); and Harborview Mutual Life Insurance Company ($75,000,000).
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), or security interest of any kind whatsoever.
"Loan Documents" means, collectively, this Credit Agreement, the Guarantee Agreement, the Security Documents, each Promissory Note, the Intercreditor Agreement, and any other document delivered in connection herewith or therewith.
"Loan Parties" means the Borrower and each Guarantor.
"LTM" means, in respect of any date, the twelve consecutive months ending on the last day of the fiscal quarter most recently ended prior to such date for which financial statements have been (or were required to be) delivered under Section 6.01.
"Material Adverse Effect" means any event, change, or condition that has had, or could reasonably be expected to have, a material adverse effect on (a) the business, operations, property, or financial condition of the Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform its material obligations under any Loan Document, or (c) the rights and remedies of the Administrative Agent, the Collateral Agent, and the Lenders under any Loan Document.
"Material Subsidiary" means each Subsidiary that (i) accounts for more than 5% of consolidated total assets or Adjusted EBITDA or (ii) is designated as a Material Subsidiary by the Borrower.
"Maturity Date" means July 21, 2029, the date that is seven (7) years after the Closing Date.
"MFN Sunset Date" means January 21, 2024, the date that is eighteen (18) months after the Closing Date.
"MFN Threshold" means 50 basis points (0.50%).
"Mortgaged Properties" means the 42 hotel properties owned by Verimark Resort Properties LLC and Palmetto Beachfront Hotels LLC, located in 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), with an aggregate appraised value of approximately $2,180,000,000, as more particularly described on Schedule 5.11.
"Mortgages" means, collectively, the mortgages, deeds of trust, assignments of leases and rents, and security agreements executed by VRP and Palmetto in favor of the Collateral Agent with respect to the Mortgaged Properties.
"Net Cash Proceeds" means the aggregate cash proceeds received in respect of an Asset Sale or other applicable transaction, net of (i) reasonable out-of-pocket transaction expenses, (ii) taxes paid or reasonably estimated to be payable as a result, (iii) amounts required to repay Indebtedness secured by liens on the assets disposed of, and (iv) customary reserves for indemnification obligations.
"Net Funded Debt" means, as of any date of determination, all funded Indebtedness for borrowed money of the Borrower and its Subsidiaries on a consolidated basis, minus unrestricted cash and Cash Equivalents.
"OID" or "Original Issue Discount" means 1.00% of the aggregate principal amount of the Term Loans ($7,000,000), such that the Net Funding Amount payable by the Lenders on the Closing Date shall be 99.00% of par ($693,000,000).
"Payoff Amount" means the aggregate amount required to be paid on the Closing Date to repay in full all Obligations under the Existing Term Loan B, being approximately $627,916,667, consisting of (i) $621,875,000 in outstanding principal, (ii) approximately $2,916,667 in accrued and unpaid interest through the Closing Date, and (iii) a prepayment premium of $3,125,000 (0.50% × $625,000,000).
"Payoff Letter" means the payoff letter to be executed by Greystone Federal Credit Corp. (as administrative agent for the Existing Term Loan B), specifying the Payoff Amount, wire instructions, and confirming release of all liens upon receipt.
"Permitted Acquisition" means any acquisition by the Borrower or any Subsidiary of a Person or a business or line of business in the hospitality, lodging, resort, or real estate industry (including related and ancillary businesses), subject to specified customary conditions including (i) pro forma compliance with the Maximum Total Net Leverage Ratio (irrespective of whether the springing covenant is then in effect), (ii) absence of a Default or Event of Default, and (iii) the acquired assets or Person becoming subject to the Guarantee Agreement and Security Documents.
"Permitted Holders" means Meridian Strauss Sponsor Fund V, LP, and its affiliated funds and co-investors.
"Permitted Liens" has the meaning set forth in Section 7.02 and Schedule 7.02.
"Permitted Indebtedness" has the meaning set forth in Section 7.01 and Schedule 7.01.
"Perfection Certificate" means the Perfection Certificate substantially in the form of Exhibit F, delivered by the Loan Parties to the Collateral Agent on the Closing Date.
"Pledge and Security Agreement" means the Pledge and Security Agreement dated as of the Closing Date, among the Loan Parties and the Collateral Agent.
"Pro Forma Basis" means, in connection with any calculation of the Total Net Leverage Ratio or other financial ratios or amounts, giving pro forma effect to any Specified Transaction (including any Permitted Acquisition, disposition, incurrence or repayment of Indebtedness, or other event specified herein) as if such Specified Transaction had occurred on the first day of the applicable measurement period, with such adjustments as are set forth in Section 1.07. As of the Closing Date and after giving effect to the Transactions, the Total Net Leverage Ratio calculated on a Pro Forma Basis is 2.52x ($858,000,000 Net Funded Debt ÷ $341,000,000 LTM Adjusted EBITDA).
"Repricing Protection Period" means the period commencing on the Closing Date and ending on and including January 21, 2023 (the date that is six (6) months after the Closing Date).
"Repricing Premium" means 1.00% of the aggregate principal amount of the Term Loans that are prepaid, repaid, refinanced, or repriced during the Repricing Protection Period in a Repricing Transaction ($7,000,000 in the case of a full prepayment).
"Repricing Transaction" has the meaning set forth in Section 2.07(b).
"Required Lenders" means, at any time, Lenders holding more than 50% of the aggregate outstanding principal amount of the Term Loans (or, if the Term Loans have not yet been funded, more than 50% of the Commitments).
"Restricted Payment" means (i) any dividend or other distribution on account of any equity interests of the Borrower, (ii) any redemption, retirement, sinking fund, or similar payment in respect of the equity interests of the Borrower, and (iii) any payment of principal, premium, or interest on any Indebtedness subordinated to the Obligations (except as expressly permitted herein).
"Secured Parties" means, collectively, the Administrative Agent, the Collateral Agent, and the Lenders.
"Security Documents" means, collectively, the Pledge and Security Agreement, the Mortgages, the IP Security Agreement, and each other security document, control agreement, or filing delivered pursuant to this Agreement.
"SOFR" means the Secured Overnight Financing Rate, as administered by the Federal Reserve Bank of New York (or a successor administrator).
"SOFR Adjustment" means (i) 0.10% for a one-month Interest Period, (ii) 0.15% for a three-month Interest Period, and (iii) 0.25% for a six-month Interest Period.
"SOFR Floor" means 0.50% (50 basis points).
"Solvency Certificate" means the certificate substantially in the form of Exhibit E.
"Specified Transaction" means any Permitted Acquisition, disposition, incurrence or repayment of Indebtedness (other than for working capital purposes), issuance of equity, or other transaction that by the terms of this Agreement requires a Pro Forma Basis calculation.
"Subsidiary" means any Person of which more than 50% of the outstanding voting equity is owned, directly or indirectly, by the Borrower.
"Term Loans" means the term loans made by the Lenders to the Borrower on the Closing Date in the aggregate principal amount of $700,000,000, and, if the context so requires, any Incremental Term Loans.
"Term SOFR" means the forward-looking term rate based on SOFR, for the applicable Interest Period, as published by CME Group Benchmark Administration Limited (or any successor administrator selected by the Administrative Agent); provided that in no event shall Term SOFR be less than the SOFR Floor.
"Term SOFR Loan" means a Term Loan bearing interest at a rate based on Adjusted Term SOFR.
"Total Net Leverage Ratio" means, as of any date of determination, the ratio of (a) Net Funded Debt as of the last day of the most recently ended fiscal quarter to (b) Adjusted EBITDA for the four consecutive fiscal quarters most recently ended, in each case calculated on a Pro Forma Basis.
"Transactions" means, collectively, (i) the execution, delivery, and performance by the Loan Parties of the Loan Documents, (ii) the initial Borrowing under this Agreement, (iii) the repayment in full of the Existing Term Loan B, and (iv) the payment of fees, costs, and expenses in connection therewith.
"UCC" means the Uniform Commercial Code, as in effect from time to time in any relevant jurisdiction.
"VHG" means Verimark Hospitality Group Inc.
"VRP" means Verimark Resort Properties LLC.
Section 1.02 — Other Interpretive Provisions
In this Agreement, unless the context otherwise requires: (a) the singular includes the plural and vice versa; (b) references to any agreement or instrument shall be deemed to refer to such agreement or instrument as amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms and the terms hereof; (c) references to any Person include such Person's successors and permitted assigns; (d) references to any statute shall include all rules and regulations promulgated thereunder and any successor statute; (e) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation"; (f) references to any time of day shall mean New York City time; and (g) headings and captions are for convenience of reference only and shall not affect construction.
Section 1.03 — Accounting Terms
Except as otherwise expressly provided herein, all accounting terms not otherwise defined shall be construed, and all financial computations shall be made, in accordance with GAAP as in effect from time to time. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, the Borrower and the Required Lenders shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof; provided that, until so amended, such ratio or requirement shall continue to be computed in accordance with GAAP as in effect prior to such change. The Borrower may elect, upon written notice to the Administrative Agent, to exclude the effects of ASC 842 (lease accounting) from all covenant calculations, in which case operating leases shall not be treated as Indebtedness or capital leases for purposes of this Agreement.
Section 1.04 — Rounding
All financial ratios and percentages required to be calculated under this Agreement shall be calculated to the nearest one one-hundredth (0.01) of a percentage point (or two decimal places, as applicable), with any amount ending in .005 rounded upward.
Section 1.05 — Times of Day
Unless otherwise expressly specified, all references herein to times of day shall be references to New York City time (either Eastern Standard Time or Eastern Daylight Time, as applicable).
Section 1.06 — SOFR Benchmark Replacement Setting
The benchmark replacement mechanics applicable to Term SOFR are set forth in Section 2.15.
Section 1.07 — Pro Forma Calculations
Whenever pro forma effect is to be given to any Specified Transaction, such pro forma calculations shall be made in accordance with the following principles: (a) if the Specified Transaction is a Permitted Acquisition, historical financial statements (or the best available financial information) of the acquired business shall be included in the calculation of Adjusted EBITDA as if the acquisition had occurred on the first day of the applicable measurement period, together with reasonably identifiable and factually supportable synergies and cost savings expected to be realized within 18 months of the closing of such acquisition (subject to a cap of 15% of Pro Forma Adjusted EBITDA, calculated prior to such synergy add-back); (b) if the Specified Transaction is a disposition, the financial results of the disposed business shall be excluded; and (c) if the Specified Transaction is an incurrence or repayment of Indebtedness, interest expense shall be recomputed to give effect to such incurrence or repayment as if it had occurred on the first day of the applicable measurement period.
Section 1.08 — Classification of Loans and Borrowings
All Term Loans shall be classified as Term SOFR Loans. No ABR loans shall be made or continued under this Agreement unless Term SOFR is unavailable and no Benchmark Replacement is then in effect, in which case ABR loans (as customarily defined) shall be permitted as an interim mechanic pursuant to Section 2.15.
ARTICLE II — THE TERM LOAN FACILITY
Section 2.01 — Term Loan Commitments
Subject to the terms and conditions set forth herein, each Lender severally, and not jointly, agrees to make a Term Loan to the Borrower on the Closing Date in an amount equal to such Lender's Commitment set forth opposite its name on Schedule 2.01. The aggregate amount of the Commitments on the Closing Date is $700,000,000. The Term Loan Commitments are non-revolving; amounts repaid or prepaid may not be reborrowed. The Commitments shall terminate immediately after the initial Borrowing on the Closing Date. Each Lender's obligation to make its Term Loan is several, and no Lender shall be responsible for any failure of another Lender to make its Term Loan.
The Commitments as of the Closing Date are as follows:
Section 2.02 — Borrowing of Term Loans
The initial Borrowing shall be made on the Closing Date in a single drawdown of $700,000,000 upon delivery by the Borrower of a Borrowing Request substantially in the form of Exhibit A, which Borrowing Request shall be delivered to the Administrative Agent no later than 11:00 a.m. (New York City time) three (3) Business Days prior to the anticipated Closing Date. The Borrower shall specify in the Borrowing Request the initial Interest Period (which shall be one, three, or six months). Upon receipt of the Borrowing Request, the Administrative Agent shall promptly notify each Lender of the amount of its pro rata share of the Borrowing and the applicable Interest Period. Each Lender shall make its Commitment amount available to the Administrative Agent for the account of the Borrower by wire transfer of immediately available funds not later than 12:00 noon (New York City time) on the Closing Date, and the Administrative Agent shall make such funds available to the Borrower by wire transfer to the account specified in the Funds Flow Memorandum (net of the OID applied against the Term Loans and net of amounts to be disbursed directly to Greystone Federal Credit Corp. and to fee recipients in accordance with the Funds Flow Memorandum).
Section 2.03 — Use of Proceeds
The proceeds of the Term Loans shall be applied on the Closing Date substantially as follows:
(i) approximately $627,916,667 shall be paid directly to Greystone Federal Credit Corp. (as administrative agent for the Existing Term Loan B) in accordance with the Payoff Letter, to repay in full all Obligations under the Existing Term Loan B;
(ii) approximately $8,100,000 shall be paid in respect of fees, costs, and expenses of the Transactions, comprising (A) an arrangement fee of $3,500,000 payable to Crescent Harbor Bank, N.A. as Sole Lead Arranger, (B) an advisory fee of $1,400,000 payable to Meridian Strauss Advisory LLC, and (C) estimated legal, closing, and other transaction costs of approximately $3,200,000 (including fees of Calderwood & Harkness LLP and Whitfield Gage & Partridge LLP); and
(iii) the remaining net proceeds of approximately $60,483,333 (after giving effect to OID of $7,000,000) shall be retained by the Borrower for Permitted Acquisitions and general corporate purposes.
No portion of the proceeds of the Term Loans shall be used, directly or indirectly, in violation of Regulations T, U, or X of the Board of Governors of the Federal Reserve System or for any purpose that would violate the FCPA, applicable anti-money laundering laws, or OFAC sanctions.
Section 2.04 — Evidence of Debt; Promissory Notes
The Administrative Agent shall maintain, in accordance with its usual practice, a register (the "Register") of each Lender's Term Loans, the outstanding principal amount thereof, the accrued interest thereon, and each payment received in respect thereof. The entries in the Register shall be conclusive absent manifest error. Upon written request by any Lender, the Borrower shall execute and deliver to such Lender a promissory note evidencing such Lender's Term Loan, substantially in the form of Exhibit B.
Section 2.05 — Interest
(a) Interest Rate. Each Term Loan shall bear interest at a rate per annum equal to Adjusted Term SOFR for the applicable Interest Period plus the Applicable Margin (3.75% per annum). For illustrative purposes only, based on one-month Term SOFR of 2.29% as of the anticipated Closing Date, the initial per annum interest rate would be: 2.29% (Term SOFR) + 0.10% (SOFR Adjustment) + 3.75% (Applicable Margin) = 6.14%.
(b) SOFR Floor. Notwithstanding anything herein to the contrary, in no event shall Term SOFR be less than 0.50% (50 basis points) per annum.
(c) Default Rate. Upon the occurrence and during the continuance of an Event of Default under Section 8.01(a) or (b), or, at the election of the Required Lenders, during the continuance of any other Event of Default, all outstanding Term Loans and other overdue Obligations shall bear interest at the Default Rate (being the Applicable Rate plus 2.00% per annum), payable on demand.
(d) Interest Payment Dates. Accrued interest shall be payable in arrears on the last day of each Interest Period; provided that for any Interest Period exceeding three (3) months, accrued interest shall also be payable on the date that is three (3) months after the first day of such Interest Period.
(e) Computation of Interest. Interest shall be computed on the basis of the actual number of days elapsed in a year of 360 days.
Section 2.06 — Repayment of Term Loans; Amortization
(a) Scheduled Amortization. The Borrower shall repay the outstanding Term Loans in consecutive quarterly installments on the last Business Day of each March, June, September, and December, commencing September 30, 2022, in an amount equal to $1,750,000 per installment (being 0.25% of the original aggregate principal amount of the Term Loans of $700,000,000, or 1.00% per annum in the aggregate).
(b) Balloon at Maturity. The entire unpaid principal balance of all Term Loans, together with all accrued and unpaid interest and all other outstanding Obligations, shall be due and payable in full on the Maturity Date (July 21, 2029). Assuming only scheduled quarterly amortization payments through the Maturity Date and no voluntary or mandatory prepayments, the balloon payment due at the Maturity Date shall be $651,000,000 (calculated as $700,000,000 minus (28 quarterly installments × $1,750,000 each), or $700,000,000 − $49,000,000 = $651,000,000).
(c) Application. All scheduled amortization payments shall be applied ratably among the Lenders in accordance with their respective outstanding Term Loans.
Section 2.07 — Voluntary Prepayment
(a) Right to Prepay. The Borrower may voluntarily prepay outstanding Term Loans, in whole or in part, at any time and from time to time without premium or penalty, except as provided in Section 2.07(b).
(b) Repricing Protection / Soft Call. Notwithstanding Section 2.07(a), if, on or prior to January 21, 2023 (the date that is six (6) months after the Closing Date), the Borrower (i) makes any voluntary prepayment of the Term Loans in connection with a Repricing Transaction, or (ii) effects any amendment, refinancing, or replacement of this Agreement that constitutes a Repricing Transaction, the Borrower shall pay to the Administrative Agent, for the ratable account of each Lender then holding Term Loans, a premium equal to 1.00% of the aggregate principal amount of Term Loans so prepaid, repaid, refinanced, or repriced (the "Repricing Premium"). On a full prepayment or refinancing during the Repricing Protection Period, the Repricing Premium would equal $7,000,000. For purposes hereof, a "Repricing Transaction" means (x) any prepayment, refinancing, or replacement of the Term Loans with the proceeds of, or any amendment or other modification of the Term Loans that results in, indebtedness having an Effective Yield less than the Effective Yield on the Term Loans then being prepaid, refinanced, replaced, or amended, and (y) the primary purpose of which is to reduce the effective interest rate or all-in yield applicable to the Term Loans. From and after January 21, 2023, no Repricing Premium shall be payable in connection with any prepayment, refinancing, or repricing.
(c) Notice. The Borrower shall deliver irrevocable written notice of any voluntary prepayment to the Administrative Agent not later than 11:00 a.m. (New York City time) at least three (3) Business Days prior to the date of prepayment, specifying the date and amount of such prepayment.
(d) Minimum Amounts. Each voluntary prepayment (other than a prepayment in full) shall be in an aggregate minimum amount of $1,000,000 and in integral multiples of $500,000 in excess thereof.
(e) Application. Voluntary prepayments shall be applied to remaining scheduled amortization payments in such order as the Borrower may direct (and absent such direction, in direct order of maturity), and shall be applied ratably among the Lenders.
Section 2.08 — Mandatory Prepayment
(a) Asset Sales. Within five (5) Business Days after the receipt of Net Cash Proceeds from any Asset Sale, to the extent that the aggregate Net Cash Proceeds from all Asset Sales in any fiscal year exceed $25,000,000, the Borrower shall prepay the Term Loans in an amount equal to 100% of such excess Net Cash Proceeds; provided that no prepayment shall be required to the extent that the Borrower reinvests such Net Cash Proceeds in the business within three hundred sixty-five (365) days after receipt (or, if reinvestment is committed by written contract within such 365-day period, within five hundred forty-five (545) days after receipt).
(b) Debt Issuances. Within one (1) Business Day after the receipt of Net Cash Proceeds from the incurrence of Indebtedness not permitted under Article VII, the Borrower shall prepay the Term Loans in an amount equal to 100% of such Net Cash Proceeds.
(c) Excess Cash Flow. Within ten (10) Business Days after delivery of the annual audited financial statements required under Section 6.01(a), the Borrower shall prepay the Term Loans in an amount equal to the following percentage of Excess Cash Flow for the fiscal year covered by such financial statements: (i) 50% if the Total Net Leverage Ratio (calculated on a Pro Forma Basis after giving effect to such prepayment) exceeds 3.50 to 1.00; (ii) 25% if the Total Net Leverage Ratio is greater than 2.50 to 1.00 but less than or equal to 3.50 to 1.00; and (iii) 0% if the Total Net Leverage Ratio is less than or equal to 2.50 to 1.00.
(d) Insurance and Condemnation Proceeds. Within five (5) Business Days after receipt of Net Cash Proceeds from insurance recoveries or condemnation awards in respect of Collateral (other than business interruption insurance), the Borrower shall prepay the Term Loans in an amount equal to 100% of such Net Cash Proceeds, subject to reinvestment rights on terms substantially identical to those set forth in Section 2.08(a).
(e) Application. Mandatory prepayments under this Section 2.08 shall be applied to remaining scheduled amortization payments in direct order of maturity and shall be applied ratably among the Lenders.
Section 2.09 — Fees
(a) Administrative Agent Fee. The Borrower shall pay to the Administrative Agent, for its own account, an annual administrative agent fee of $150,000, payable in arrears on each anniversary of the Closing Date.
(b) Fees Under Fee Letter. The Borrower shall pay to the Sole Lead Arranger the arrangement fee (0.50% of $700,000,000, or $3,500,000) and shall issue the Term Loans at OID of 1.00% ($7,000,000), in each case as set forth in the Fee Letter, on the Closing Date.
Section 2.10 — Payments Generally
All payments to be made by the Borrower under any Loan Document shall be made in U.S. Dollars in immediately available funds, without set-off, counterclaim, or deduction, to the account of the Administrative Agent at Crescent Harbor Bank, N.A., 600 Lexington Avenue, 34th Floor, New York, NY 10022 (or as otherwise specified in Schedule 10.02), not later than 2:00 p.m. (New York City time) on the date such payment is due. The Administrative Agent shall distribute each payment received in respect of the Term Loans pro rata to the Lenders in accordance with their respective outstanding amounts. If any payment falls on a day that is not a Business Day, it shall be payable on the next succeeding Business Day; provided that in respect of Interest Period end dates, the modified following convention shall apply.
Section 2.11 — Taxes
(a) Payments Free of Withholding. All payments made by the Borrower under any Loan Document shall be made free and clear of, and without deduction or withholding for, any taxes, except as required by applicable law. If the Borrower is required by law to deduct or withhold any tax, the amount payable by the Borrower shall be increased so that, after all required deductions and withholdings have been made, each Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(b) Tax Forms; FATCA. Each Lender shall deliver to the Borrower and the Administrative Agent, prior to becoming a Lender and thereafter as reasonably requested, IRS Form W-8BEN-E, W-8ECI, W-8IMY, W-9, or such other tax forms or certifications as may be applicable, together with such additional documentation as is necessary to comply with FATCA.
(c) Indemnification. The Borrower shall indemnify each Lender and the Administrative Agent for the full amount of any Indemnified Taxes paid by such Lender or the Administrative Agent within thirty (30) days after written demand therefor, together with reasonable supporting documentation.
Section 2.12 — Increased Costs; Illegality
If any change in applicable law after the Closing Date subjects any Lender to any tax on its loans (other than Indemnified Taxes and Excluded Taxes), increases the cost to any Lender of making or maintaining any Term Loan, or reduces the amount of any sum received by any Lender, the Borrower shall pay such Lender such additional amounts as will compensate it for such increased cost or reduction, upon receipt of a certificate from such Lender setting forth in reasonable detail the calculation. If it becomes unlawful for any Lender to make or maintain any Term SOFR Loan, such Lender shall so notify the Administrative Agent and the Borrower, and the affected Term Loans shall be prepaid, or converted to a rate not affected by such illegality, in accordance with customary procedures.
Section 2.13 — Break Funding Payments
The Borrower shall compensate each Lender, upon written demand accompanied by a reasonable computation, for any loss, cost, or expense (excluding lost profits or margin) that such Lender may sustain as a result of (i) any prepayment (whether voluntary or mandatory) of a Term SOFR Loan on a date other than the last day of the Interest Period applicable thereto, (ii) any failure by the Borrower to borrow, convert, or continue a Term SOFR Loan on the date specified in the applicable notice, or (iii) any assignment of a Term SOFR Loan on a day other than the last day of the Interest Period as a result of a request by the Borrower.
Section 2.14 — Incremental Term Loan Facility
(a) Right to Request. The Borrower may, at any time and from time to time after the Closing Date, request additional term loans hereunder (the "Incremental Term Loans") in an aggregate principal amount (together with any Incremental Revolving Commitments) not to exceed:
(i) the greater of (A) $175,000,000 and (B) 100% of LTM Adjusted EBITDA (the "Fixed Basket"); plus
(ii) an unlimited additional amount, so long as the Pro Forma Total Net Leverage Ratio (calculated as of the last day of the fiscal quarter most recently ended, and after giving pro forma effect to the incurrence of such Incremental Term Loans and the application of the proceeds thereof) does not exceed 3.50 to 1.00 (the "Ratio Basket").
For the avoidance of doubt, the Borrower may elect to incur Incremental Term Loans under the Ratio Basket first, and Incremental Term Loans thereunder shall not be counted against the Fixed Basket.
(b) Terms of Incremental Term Loans. Each tranche of Incremental Term Loans shall:
(i) have a scheduled maturity date no earlier than the Maturity Date of the initial Term Loans;
(ii) have a weighted average life to maturity no shorter than the remaining weighted average life to maturity of the initial Term Loans;
(iii) have such interest rate, OID, upfront fees, and prepayment premiums as the Borrower and the Incremental Lenders may agree; and
(iv) rank pari passu in right of payment and security with the initial Term Loans.
(c) Lender Participation. No existing Lender shall be obligated to provide any Incremental Term Loans, and any decision by an existing Lender to participate in Incremental Term Loans shall be in its sole discretion. Additional lenders may be added, subject to the consent of the Administrative Agent and the Borrower (in each case, such consent not to be unreasonably withheld or delayed).
(d) Documentation. Each incurrence of Incremental Term Loans shall be documented through an amendment to this Credit Agreement (or a joinder agreement) executed by the Borrower, the Administrative Agent, and the Incremental Lenders. No consent of any existing Lender (other than the Administrative Agent) shall be required to incur Incremental Term Loans, other than for matters that would constitute "sacred rights" as to such existing Lender under Section 10.01.
(e) Most Favored Nation Provision. If any Incremental Term Loans are incurred on or prior to the MFN Sunset Date (January 21, 2024, being the date that is eighteen (18) months after the Closing Date), and the Effective Yield of such Incremental Term Loans exceeds the Effective Yield of the initial Term Loans (as in effect immediately prior to such incurrence) by more than the MFN Threshold (50 basis points), then, effective as of the closing date of such Incremental Term Loans, the Applicable Margin on the initial Term Loans shall automatically be increased by such number of basis points as is required to cause the Effective Yield of the initial Term Loans to be equal to the Effective Yield of such Incremental Term Loans minus 50 basis points.
The Most Favored Nation Provision set forth in this Section 2.14(e) shall not apply to:
(i) any Incremental Term Loans incurred after the MFN Sunset Date;
(ii) any Incremental Term Loans, the proceeds of which are used to finance one or more Permitted Acquisitions having an aggregate purchase price of at least $75,000,000 (the "acquisition carve-out"); or
(iii) any Incremental Term Loans denominated in a currency other than U.S. Dollars.
From and after the MFN Sunset Date, the Borrower may incur Incremental Term Loans at any Effective Yield without triggering any adjustment to the Applicable Margin on the initial Term Loans, and the Lenders shall have no recourse under this Section 2.14(e) with respect thereto.
(f) Fungibility. At the Borrower's election, and if the terms of the Incremental Term Loans (including interest rate, OID, maturity date, and amortization schedule) are identical to those of the initial Term Loans, the Incremental Term Loans may be fungible with the initial Term Loans (including sharing the same CUSIP).
Section 2.15 — Benchmark Replacement
(a) Benchmark Transition Event. If the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) Term SOFR is no longer available or ceases to be published, or (ii) the administrator of Term SOFR or a Governmental Authority having jurisdiction over such administrator has made a public statement that Term SOFR is or will no longer be representative or will no longer be provided (a "Benchmark Transition Event"), the Administrative Agent shall determine a benchmark replacement (the "Benchmark Replacement") in accordance with the following waterfall:
(i) first, Daily Simple SOFR, plus the applicable SOFR Adjustment; and
(ii) second, if Daily Simple SOFR is unavailable, the sum of (A) the alternate benchmark rate selected by the Administrative Agent and the Borrower, giving due consideration to industry-accepted rates then in effect, and (B) the corresponding spread adjustment recommended or selected by the Relevant Governmental Body or, if none, agreed by the Administrative Agent and the Borrower.
(b) Hardwired Fallback. The benchmark waterfall set forth in this Section 2.15 is intended to be consistent with the recommendations of the Alternative Reference Rates Committee (ARRC) as in effect on the date hereof, with Term SOFR as the primary benchmark and Daily Simple SOFR as the first fallback.
(c) Conforming Changes. In connection with the implementation of any Benchmark Replacement, the Administrative Agent shall have the right to make Conforming Changes (being technical, administrative, or operational changes necessary or advisable to give effect to such Benchmark Replacement) from time to time. Any such Conforming Changes shall be effective without any further action or consent of the Borrower or any Lender.
(d) Notices. The Administrative Agent shall promptly notify the Borrower and the Lenders of (i) the occurrence of any Benchmark Transition Event, (ii) the effectiveness of any Benchmark Replacement, and (iii) any Conforming Changes.
ARTICLE III — INTEREST RATE PROVISIONS
Section 3.01 — Interest Rate Elections
The Borrower shall have the right to select an Interest Period of one (1), three (3), or six (6) months for each Term SOFR Loan, by specifying such Interest Period in the applicable Borrowing Request or Interest Election Request. If the Borrower fails to make an election as to any Interest Period, the applicable Interest Period shall be one (1) month.
Section 3.02 — Inability to Determine Rates
If, prior to the commencement of any Interest Period, the Administrative Agent determines that adequate and reasonable means do not exist for ascertaining Term SOFR for such Interest Period, or if Term SOFR is otherwise unavailable, the provisions of Section 2.15 (Benchmark Replacement) shall apply.
Section 3.03 — SOFR Conforming Changes
Any Conforming Changes made by the Administrative Agent pursuant to Section 2.15(c) shall be binding on all parties hereto.
ARTICLE IV — CONDITIONS PRECEDENT
Section 4.01 — Conditions to the Closing Date
The obligations of the Lenders to make their Term Loans on the Closing Date shall be subject to the satisfaction (or waiver by the Administrative Agent, acting at the direction of the Required Lenders) of each of the following conditions on or prior to the Closing Date:
(a) Execution and delivery of this Credit Agreement by the Borrower, each Guarantor, the Administrative Agent, and each Lender.
(b) Execution and delivery of the Guarantee Agreement by each Guarantor.
(c) Execution and delivery of the Pledge and Security Agreement by each Loan Party.
(d) Execution and delivery of the Amended and Restated Intercreditor Agreement.
(e) Delivery of the Borrowing Request for the initial Borrowing, specifying the full principal amount of $700,000,000 and the selected initial Interest Period.
(f) Delivery of certified copies of the organizational documents (certificates of incorporation or formation, bylaws or limited liability company agreements) for the Borrower and each Guarantor.
(g) Delivery of an Omnibus Secretary's Certificate certifying (i) the organizational documents delivered pursuant to clause (f), (ii) resolutions of the board of directors (or equivalent governing body) of the Borrower and each Guarantor authorizing the execution, delivery, and performance of the Loan Documents to which it is a party, and (iii) the incumbency and signatures of the officers of the Borrower and each Guarantor executing the Loan Documents, in respect of VHG and each of Verimark Resort Properties LLC, VHG Management Services Inc., Verimark Convention Holdings LLC, Palmetto Beachfront Hotels LLC, and Cascadia Hospitality Corp.
(h) Delivery of an Incumbency Certificate for VHG's officers executing the Loan Documents, being Marcus Delvecchio (Chief Executive Officer), Renata Haines (Chief Financial Officer), Priya Narayanan (General Counsel), and Glenn Fischbach (Treasurer).
(i) Delivery of certificates of good standing (or equivalent) for the Borrower and each Guarantor from the Secretary of State of Delaware and the Florida Department of State, as applicable, in each case dated within ten (10) days prior to the Closing Date.
(j) Delivery of a Solvency Certificate substantially in the form of Exhibit E, executed by the Chief Financial Officer of VHG (Renata Haines), certifying that, immediately after giving effect to the Transactions, the Borrower and its Subsidiaries, taken as a whole, are solvent.
(k) Delivery of an Officer's Closing Certificate executed by Renata Haines (Chief Financial Officer) and Priya Narayanan (General Counsel) of the Borrower, certifying (i) the accuracy of the representations and warranties set forth in Article V in all material respects, (ii) the absence of any Default or Event of Default, and (iii) that no Material Adverse Effect has occurred since December 31, 2021.
(l) Delivery of an initial Compliance Certificate demonstrating pro forma compliance with the Maximum Total Net Leverage Ratio under Section 7.09, reflecting a closing Total Net Leverage Ratio of 2.52x against the maximum of 4.50x.
(m) Delivery of legal opinions from (i) Calderwood & Harkness LLP, as counsel to the Borrower and the Guarantors, and (ii) Whitfield Gage & Partridge LLP, as counsel to the Administrative Agent, in each case addressing customary matters including due organization, corporate power and authority, due authorization, execution and delivery, enforceability, no conflicts with organizational documents, applicable law or material agreements, and no requirement of governmental approvals (other than customary post-closing filings).
(n) Delivery of the executed Perfection Certificate substantially in the form of Exhibit F, together with evidence of filing of UCC-1 financing statements with the Delaware Secretary of State (for VHG, Verimark Resort Properties LLC, VHG Management Services Inc., Verimark Convention Holdings LLC, and Cascadia Hospitality Corp.) and the Florida Secured Transaction Registry (for Palmetto Beachfront Hotels LLC), in each case naming Crescent Harbor Bank, N.A., in its capacity as Collateral Agent, as secured party.
(o) Delivery of results of UCC, tax lien, judgment, and litigation searches with respect to each Loan Party in each applicable jurisdiction, showing no adverse Liens other than Permitted Liens and Liens in favor of Greystone Federal Credit Corp. to be released on the Closing Date.
(p) Delivery of executed UCC-3 termination statements, mortgage releases, and other release documents required to terminate all Liens on the Collateral in favor of Greystone Federal Credit Corp., ready for filing simultaneously with the Closing.
(q) Receipt by the Administrative Agent of an executed Payoff Letter from Greystone Federal Credit Corp. (attention: Marion Stillwell, Vice President, Agency Services), confirming (i) the Payoff Amount of approximately $627,916,667, (ii) wire instructions for the payoff, (iii) termination of the credit agreement governing the Existing Term Loan B upon receipt, and (iv) authorization to file all necessary termination and release documentation.
(r) Delivery of evidence that VHG has received (i) corporate family credit ratings from Kellaway Ratings Group (BB−) and Pinnacle Credit Services (Ba3), and (ii) facility ratings on the Term Loan B (B+ from KRG and B1 from PCS).
(s) Delivery of evidence of insurance satisfying the requirements of Section 6.06, together with certificates and endorsements naming Crescent Harbor Bank, N.A. (in its capacity as Collateral Agent) as additional insured and loss payee.
(t) Delivery of environmental reports and Phase I environmental site assessments for the Mortga