1021-00002 · Verimark Hospitality Group · Engagement

engagement-letter.docx DOCUMENT Capital Markets

17 / 36 ← → ✕

CALDERWOOD & HARKNESS LLP Attorneys at Law

One Liberty Plaza, 45th Floor New York, NY 10006

Telephone: (212) 455-7800 Facsimile: (212) 455-7801 www.calderwoodharkness.com

April 15, 2024

Mr. David K. Moretti General Counsel & Secretary Verimark Hospitality Group Inc. 2400 Brickell Bay Drive, Suite 3100 Miami, FL 33129

Dear Mr. Moretti:

Calderwood & Harkness LLP ("C&H" or the "Firm") is pleased to confirm its engagement by Verimark Hospitality Group Inc., a Delaware corporation ("VHG," the "Company," or the "Client"), to serve as issuer's counsel in connection with the Company's proposed private offering of senior notes (the "Engagement"). Specifically, the Firm will represent VHG in connection with the proposed offering of up to $500,000,000 in aggregate principal amount of Senior Notes due 2031 (the "Notes") to be offered and sold pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the "Securities Act"). We understand that the offering is intended to refinance the Company's existing indebtedness outstanding under the Amended and Restated Credit Agreement, dated as of March 15, 2021, among VHG, the lenders party thereto from time to time, and Greystone National Bank, N.A., as administrative agent (the "Existing Credit Facility").

This letter sets forth the scope of our representation, the staffing of the engagement, the fee arrangements applicable thereto, and the other terms governing C&H's representation of the Client in connection with the Engagement. We ask that you review this letter carefully and, if the terms set forth herein are acceptable to the Company, countersign and return an executed copy to us in accordance with Section 8 below.

1. Scope of Engagement

C&H will act as issuer's counsel to VHG in connection with all aspects of the proposed offering of the Notes. Our representation will include, but will not be limited to, the matters described in Sections 1.1 through 1.8 below.

1.1 Offering Documentation

C&H will prepare, draft, review, and negotiate the Preliminary Offering Memorandum and the Final Offering Memorandum to be used in connection with the offering of the Notes. C&H will have primary drafting responsibility for the following sections of the offering memoranda: Description of Notes, Description of Other Indebtedness, Certain U.S. Federal Income Tax Considerations, Plan of Distribution, Legal Matters, and Notice to Investors (including legends and transfer restrictions applicable to the Rule 144A and Regulation S tranches).

In connection with the preparation of the offering memoranda, C&H will coordinate with VHG management, including Chief Executive Officer Marcus J. Delano, Chief Financial Officer Patricia R. Henning, and General Counsel David K. Moretti, with respect to the business and financial disclosure sections of the offering memoranda, including the sections entitled Summary, Risk Factors, Use of Proceeds, Capitalization, Selected Financial Data, Management's Discussion and Analysis of Financial Condition and Results of Operations, Business, Management, and related sections. While VHG management and the initial purchasers' counsel will have primary drafting responsibility for certain of these sections, C&H will review and comment on all such sections and will assist in ensuring the overall consistency and accuracy of the disclosure.

C&H will also coordinate with the Company's independent registered public accounting firm, Palladian & Howe LLP (Kenneth W. Sturgis, Engagement Partner), regarding financial statement presentation within the offering memoranda, the scope and content of the comfort letter to be delivered by Palladian & Howe at the time of pricing and at closing, and related audit and review matters. C&H will assist VHG in preparing and transmitting the comfort letter request to Palladian & Howe and will review drafts of the comfort letter in consultation with VHG management and the initial purchasers' counsel.

1.2 Transaction Agreements

C&H will prepare, draft, review, and negotiate the principal transaction agreements in connection with the offering, including the following:

(a) Purchase Agreement. C&H will draft and negotiate the Purchase Agreement among VHG, the subsidiary guarantors listed therein, and the initial purchasers (Kensington Barrow & Co., as representative of the several initial purchasers, together with Ridgeline Capital Markets LLC and Stonebridge Marvelo Securities Inc.). The Purchase Agreement will set forth the terms and conditions upon which the initial purchasers will purchase the Notes from VHG, including representations and warranties of VHG and the guarantors, conditions to closing, indemnification provisions, and related matters.

(b) Indenture. C&H will draft and negotiate the Indenture governing the Notes, to be entered into among VHG, as issuer, the subsidiary guarantors named therein, and Fidelitas Trust Company, N.A., as trustee (the "Trustee"). The Indenture will set forth the terms of the Notes, including interest rate, maturity, redemption provisions, covenants (including, as applicable, limitations on indebtedness, restricted payments, asset sales, affiliate transactions, and mergers and consolidations), events of default, and related provisions customary for high yield senior note offerings of this type.

(c) Forms of Global Notes. C&H will draft the Forms of Global Notes for each of the Rule 144A tranche and the Regulation S tranche, including all required legends and CUSIP/ISIN identifiers.

(d) Registration Rights Agreement. C&H will draft and negotiate the Registration Rights Agreement among VHG, the subsidiary guarantors, and the initial purchasers, setting forth the Company's obligations with respect to the filing and effectiveness of an exchange offer registration statement or, in certain circumstances, a shelf registration statement, and providing for the payment of additional interest in the event of a registration default.

(e) Escrow Agreement. C&H will draft the Escrow Agreement among VHG, the initial purchasers, and Fidelitas Trust Company, N.A. (in its capacity as escrow agent), governing the escrow of the net proceeds of the offering pending satisfaction of certain conditions to the release thereof, including the payoff and discharge of the Existing Credit Facility.

1.3 Subsidiary Guarantees and Entity Work

C&H will prepare the Guarantor Joinder Agreements and related documentation for each of the following subsidiary guarantors of VHG:

(i) Verimark Resort Holdings LLC, a Delaware limited liability company;

(ii) VHG Properties Inc., a Delaware corporation;

(iii) Bayshore Hotel Management LLC, a Florida limited liability company;

(iv) Verimark Capital Holdings LLC, a Delaware limited liability company; and

(v) Pinnacle Lodging Enterprises Inc., a Nevada corporation.

In connection with the foregoing, C&H will conduct organizational and entity diligence for VHG and each guarantor subsidiary, including review of organizational documents (certificates of incorporation, certificates of formation, operating agreements, bylaws, and amendments thereto), review of existing contractual restrictions on the incurrence of indebtedness or the granting of guarantees, and preparation of a summary entity chart reflecting the corporate structure of VHG and its subsidiaries.

C&H will also prepare board resolutions (or manager resolutions, as applicable) for VHG and each guarantor subsidiary authorizing the offering of the Notes, the execution and delivery of the Indenture, the Purchase Agreement, the Registration Rights Agreement, the Escrow Agreement, and all related transaction documents, and the granting of the subsidiary guarantees.

1.4 Payoff and Discharge of Existing Credit Facility

In connection with the intended application of the net proceeds of the offering to refinance the Company's existing indebtedness under the Existing Credit Facility, C&H will undertake the following:

(a) Payoff Letter. C&H will prepare a draft Payoff Letter for execution by Greystone National Bank, N.A., as administrative agent under the Existing Credit Facility, setting forth the aggregate payoff amount, per diem interest accrual, wire transfer instructions, and the conditions upon which Greystone will release all liens securing the obligations under the Existing Credit Facility.

(b) Lien Release and Termination Request Letters. C&H will prepare Lien Release and Termination Request Letters to be delivered to Greystone National Bank, N.A., requesting the execution and filing of UCC-3 termination statements and the release and discharge of all mortgages, deeds of trust, security agreements, and other collateral documents securing the Existing Credit Facility.

(c) Notice of Termination. C&H will prepare the formal Notice of Termination of the Existing Credit Facility, to be delivered by VHG to Greystone National Bank, N.A., and the syndicate lenders, in accordance with the terms of the Existing Credit Facility.

(d) Coordination with Lenders. C&H will coordinate with Greystone National Bank, N.A., and the syndicate lenders party to the Existing Credit Facility, including Harborview Lending Group, Cascade Federal Bank, and Meriden Commercial Finance LLC, regarding the preparation, execution, and filing of UCC-3 termination statements and the preparation and recording of mortgage and deed of trust releases in all applicable jurisdictions.

1.5 Closing Deliverables

C&H will prepare or coordinate the preparation and delivery of the following closing deliverables in connection with the offering:

(a) Officer's Certificate of VHG, certifying as to the accuracy of the representations and warranties of the Company and the satisfaction of the closing conditions set forth in the Purchase Agreement;

(b) Secretary's Certificate of VHG, certifying as to the Company's organizational documents, incumbency of officers, and the adoption of authorizing resolutions;

(c) Board Resolutions of VHG and each guarantor subsidiary, in form and substance satisfactory to the initial purchasers and their counsel;

(d) Good Standing Certificates from the Delaware Secretary of State (for VHG and each Delaware-organized guarantor subsidiary) and the Florida Department of State (for VHG, as a foreign corporation qualified to do business in Florida, and for Bayshore Hotel Management LLC, as a Florida limited liability company), and such other jurisdictions as may be required;

(e) Legal Opinion of Issuer's Counsel, addressed to the initial purchasers and the Trustee, covering the due authorization, execution, and delivery of the Notes, the Indenture, the subsidiary guarantees, and the other transaction documents, the valid issuance of the Notes, the enforceability of the Indenture and the guarantees (subject to customary exceptions and qualifications), and such other matters as are customary for offerings of this type;

(f) Tax Opinion of Issuer's Counsel, addressed to VHG, covering the U.S. federal income tax treatment of the Notes and the offering, including original issue discount analysis and such other tax matters as may be appropriate;

(g) 10b-5 Negative Assurance Letter, addressed to the initial purchasers, stating that, based on C&H's participation in the preparation of the Preliminary Offering Memorandum and the Final Offering Memorandum and our discussions with Company management and other parties, nothing has come to our attention that causes us to believe that the offering memoranda, as of their respective dates and as of the date of the closing, contained or contain an untrue statement of a material fact or omitted or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (subject to customary exceptions, limitations, and qualifications);

(h) Funds Flow Memorandum, detailing wire transfer instructions, sources and uses of funds, and the sequencing of closing-day fund flows, including the disbursement of net proceeds to Greystone National Bank, N.A., in satisfaction of the Existing Credit Facility and the payment of transaction fees and expenses;

(i) DTC Letter of Representations, for submission to The Depository Trust Company in connection with the eligibility of the Notes for book-entry transfer through DTC's facilities; and

(j) Closing Checklist, Closing Index, and compilation of executed Signature Pages for all transaction documents, to be assembled and distributed to all parties following the closing.

1.6 Post-Closing Matters

Following the closing of the offering, C&H will undertake the following post-closing tasks:

(a) Tracking and completion of all post-closing deliverables, including the filing of UCC-3 termination statements, the recording of mortgage and deed of trust releases, and the assembly and distribution of closing binders (in both physical and electronic form) to all parties;

(b) Delivery of a post-closing summary letter to VHG outlining the Company's ongoing obligations under the Indenture and the Registration Rights Agreement, including filing deadlines, reporting covenants, and compliance milestones; and

(c) Preparation of a matter closing memorandum for the Firm's internal files, summarizing the terms of the transaction and the closing deliverables.

1.7 Tax Advisory

In addition to the tax opinion described in Section 1.5(f) above, C&H will provide the following tax advisory services in connection with the Engagement:

(a) Analysis of the federal income tax treatment of the Notes, including whether the Notes are issued with original issue discount ("OID") for purposes of Sections 1271 through 1275 of the Internal Revenue Code of 1986, as amended (the "Code");

(b) Analysis of the deductibility of interest on the Notes under Section 163(j) of the Code, including a review of VHG's adjusted taxable income, business interest expense, and the applicable limitations on interest deductibility;

(c) Analysis of whether the Notes constitute "applicable high yield discount obligations" ("AHYDOs") under Section 163(e)(5) of the Code and, if so, the consequences thereof for VHG; and

(d) Preparation of an internal tax memorandum summarizing the foregoing analyses for the benefit of VHG management and the Board of Directors.

1.8 Excluded Scope

The scope of C&H's representation under this Engagement Letter is expressly limited to the matters described in Sections 1.1 through 1.7 above. Without limiting the generality of the foregoing, the following matters are excluded from the scope of this Engagement:

(a) C&H is not engaged to provide advice regarding VHG's ongoing periodic reporting obligations under the Securities Exchange Act of 1934, as amended, or the rules and regulations of the Nasdaq Stock Market (VHG being listed on the Nasdaq Global Select Market under the ticker symbol "VMRK," CIK No. 0001847293), except to the extent directly related to the filing deadlines and effectiveness requirements arising under the Registration Rights Agreement to be entered into in connection with this offering.

(b) C&H is not engaged to advise VHG on any antitrust, environmental, employment, ERISA, or intellectual property matters, whether arising in connection with this offering or otherwise.

(c) C&H is not acting as counsel to the initial purchasers in connection with this offering. The initial purchasers are separately represented by Whitfield, Crane & Aldrich LLP, 51 West 52nd Street, New York, NY 10019 (Nathaniel R. Bosch, lead partner). C&H's obligations run solely to VHG as its client, and nothing in this Engagement Letter shall be construed as creating an attorney-client relationship between C&H and any of the initial purchasers, the Trustee, or any other party to the transaction.

(d) Third-party source materials, including VHG's audited and unaudited financial statements, the comfort letter to be delivered by Palladian & Howe LLP, rating agency reports, and management projections and forecasts, are outside the scope of C&H's preparation responsibility. C&H will, however, review such materials in the ordinary course for purposes of its 10b-5 negative assurance letter and its review of the offering memoranda, and will rely upon such materials as provided by VHG and its advisors without independent verification.

2. Staffing

The following attorneys will comprise the core team staffed on this Engagement:

Theodore Langston, Partner, Capital Markets Group — Mr. Langston will serve as the Responsible Partner on this Engagement and will have primary client relationship responsibility and overall supervisory authority over all aspects of the matter. Mr. Langston will participate in key drafting sessions, negotiations with initial purchasers' counsel, and delivery of closing opinions.

Vivienne St. Claire, Partner, Capital Markets Group — Ms. St. Claire will serve as the Billing Partner on this Engagement and will be responsible for all billing, fee arrangements, and financial administration of the engagement. Ms. St. Claire will also contribute substantively to the drafting and negotiation of the Indenture and the Registration Rights Agreement.

Claire Dempsey, Associate, Capital Markets Group — Ms. Dempsey will serve as the Lead Associate on this Engagement and will be responsible for the day-to-day management of all drafting, negotiations with Whitfield, Crane & Aldrich LLP and other transaction parties, due diligence coordination, and the closing process. Ms. Dempsey will serve as the primary day-to-day point of contact for VHG, alongside Mr. Langston.

Audrey Zhou, Associate, Capital Markets Group — Ms. Zhou will provide drafting support across all transaction documents, will manage the entity diligence process for VHG and each guarantor subsidiary, and will be responsible for the closing checklist, closing index, and signature page compilation.

Sylvia Hartwell, Partner, Tax Group — Ms. Hartwell will lead the tax advisory component of the Engagement, including the OID, AHYDO, and Section 163(j) analyses described in Section 1.7, and will prepare and deliver the tax opinion described in Section 1.5(f).

Additional attorneys, paralegals, and support staff may be assigned to the Engagement as circumstances require. The Client will be promptly notified of any material changes to the composition of the core engagement team described above. The primary day-to-day contacts for VHG on this Engagement will be Claire Dempsey (telephone: (212) 455-7834; email: cdempsey@calderwoodharkness.com) and Theodore Langston (telephone: (212) 455-7812; email: tlangston@calderwoodharkness.com).

3. Fee Arrangements

3.1 Billing Basis

C&H will bill for services rendered in connection with this Engagement on an hourly basis at the Firm's standard rates in effect at the time services are performed. The current standard hourly rates for the members of the core engagement team, as of April 2024, are as follows:

The Firm's standard hourly rates are subject to periodic adjustment, typically effective as of January 1 of each calendar year. The Client will be notified in advance of any changes to the applicable hourly rates. In the event that additional attorneys are assigned to the Engagement, the applicable hourly rates for such attorneys will be consistent with the Firm's then-current standard rate schedule for attorneys of comparable seniority and experience.

3.2 Billing Procedures

C&H will render invoices to VHG on a monthly basis. Each invoice will contain a reasonably detailed description of the services performed during the applicable billing period, including the date of service, the name and title of the timekeeper, the number of hours expended, and a narrative description of the work performed. All invoices are due and payable within thirty (30) days of receipt.

The Billing Partner for this Engagement is Vivienne St. Claire. All inquiries regarding invoices, billing adjustments, or fee-related matters should be directed to Ms. St. Claire at (212) 455-7819 or vstclaire@calderwoodharkness.com. In the event of any dispute regarding the amount or propriety of any invoice, the Client agrees to promptly notify the Billing Partner in writing, and the parties will endeavor to resolve any such dispute in good faith.

3.3 Expenses and Disbursements

In addition to professional fees, VHG will reimburse C&H for all reasonable out-of-pocket expenses and disbursements incurred in connection with this Engagement. Such expenses and disbursements may include, but are not limited to, the following:

(a) Travel expenses, including airfare, ground transportation, lodging, and meals, incurred in connection with roadshow support (if C&H's attendance is requested by VHG), in-person negotiation sessions, or closing attendance;

(b) Filing fees, including fees for UCC searches, good standing certificates, and Secretary of State filings in Delaware, Florida, Nevada, and any other applicable jurisdictions;

(c) Printing and document production charges, including charges incurred in coordination with Meridian Document Services Inc. for the printing of the Preliminary Offering Memorandum, the Final Offering Memorandum, and closing sets;

(d) Overnight delivery and courier charges;

(e) Database and research charges, including charges for Westmark Data Systems, Calderon Systems, Cascade Services Inc., and similar legal research services; and

(f) Long-distance telecommunications charges.

All expenses and disbursements will be itemized on the Firm's monthly invoices and are subject to the same payment terms applicable to professional fees.

3.4 Estimated Budget

C&H will provide a preliminary fee estimate for this Engagement upon request by the Client. The Client acknowledges that actual fees will depend on a number of factors that cannot be predicted with certainty at the outset of the Engagement, including the scope and complexity of the transaction, the extent and duration of negotiations with Whitfield, Crane & Aldrich LLP on behalf of the initial purchasers regarding the terms of the Purchase Agreement, the Indenture, and the Registration Rights Agreement, the number and complexity of issues that arise during the due diligence and document preparation process, market conditions, and the timing and pace of the transaction.

The Company has been advised, and acknowledges, that total transaction fees and expenses in connection with the offering (including, without limitation, C&H legal fees, initial purchasers' counsel legal fees, initial purchasers' discount, Trustee fees, printing costs, rating agency fees, and other customary transaction expenses) are currently estimated at approximately $6,863,285.90. Transaction expenses (including C&H legal fees) are expected to be funded from the net proceeds of the offering and will be set forth in detail in the Funds Flow Memorandum to be prepared by C&H in connection with the closing.

4. Terms of Representation

4.1 Client Identification

The Client in this Engagement is Verimark Hospitality Group Inc. and no other person or entity. C&H does not represent, and shall not be deemed to represent, any subsidiary, affiliate, director, officer, employee, or shareholder of VHG in their individual capacities in connection with this Engagement. C&H does not represent the initial purchasers (Kensington Barrow & Co., Ridgeline Capital Markets LLC, or Stonebridge Marvelo Securities Inc.), the Trustee (Fidelitas Trust Company, N.A.), or any other party to the transaction. C&H does not represent any of the guarantor subsidiaries of VHG in any capacity other than in connection with their execution and delivery of the subsidiary guarantees and related joinder documentation as part of this offering; such representation is provided solely for the convenience of the Company and does not give rise to an independent attorney-client relationship between C&H and any guarantor subsidiary.

4.2 Confidentiality. C&H will maintain the confidentiality of all non-public information received from the Client in connection with this Engagement. This obligation is subject to the following exceptions: (i) disclosure that is required by applicable law, regulation, or order of a court or governmental authority of competent jurisdiction; (ii) disclosure to C&H personnel, including attorneys, paralegals, and support staff, and to the Firm's outside advisors, in each case on a need-to-know basis in connection with the provision of services under this Engagement; and (iii) disclosure as may be necessary in order for C&H to render the opinions and provide the services contemplated by this Engagement Letter, including the legal opinion, tax opinion, and negative assurance letter described herein.

The Client hereby authorizes C&H to disclose the fact and general nature of its representation of VHG in this offering in the Firm's professional listings, pitch materials, league table submissions, experience databases, and similar marketing and business development materials, provided that such disclosure shall not include any confidential or proprietary information of the Client.

4.3 Conflicts of Interest

C&H has conducted a conflicts review in connection with this Engagement, as documented separately in the Firm's internal Conflicts Check Memorandum dated April 15, 2024, Conflicts Check Reference No. CCM-2024-04827. Based on that review, C&H has concluded that no disqualifying conflict of interest exists that would prevent the Firm from undertaking this Engagement.

The Client acknowledges that C&H is a large, diversified law firm that represents and has represented numerous clients in a range matters, including parties that may be involved, directly or indirectly, in the transactions contemplated by this Engagement Letter. C&H's representation of VHG in this Engagement does not preclude the Firm from representing other clients in matters unrelated to this Engagement, even if such clients are adverse to VHG in other contexts, provided that no such representation involves a matter substantially related to this Engagement.

In the event that a conflict of interest arises during the course of this Engagement, C&H will promptly notify the Client and will take appropriate steps to address the conflict, which may include seeking the Client's informed written consent to continued representation, implementing an ethical screen within the Firm, or, if the conflict cannot be satisfactorily resolved, withdrawing from the representation in accordance with the applicable rules of professional conduct.

4.4 No Guarantee of Outcome

C&H will use its reasonable professional efforts in providing the services described in this Engagement Letter. The Client acknowledges and agrees, however, that C&H does not and cannot guarantee any particular outcome of the Engagement, including but not limited to the successful completion of the offering, the receipt of investment-grade or other favorable credit ratings from any rating agency, the satisfaction of all conditions to closing, the successful payoff and discharge of the Existing Credit Facility, or the achievement of any particular pricing terms or financial result. The outcome of any legal matter depends upon many factors, including facts and circumstances unique to each matter, the actions of third parties, and the application of applicable law, none of which are within C&H's exclusive control.

4.5 Document Retention

C&H will maintain files relating to this Engagement in accordance with the Firm's document retention policies, a copy of which is available upon request. Upon the conclusion of the Engagement, the Client's files (including correspondence, memoranda, and work product generated in connection with the Engagement) will be retained by the Firm for a period of ten (10) years from the date of the closing of the offering or, if the offering does not close, from the date of termination of the Engagement, after which such files may be destroyed in accordance with the Firm's standard procedures unless the Client provides written instructions to the contrary prior to the expiration of such period. Notwithstanding the foregoing, the Client may request the return of its files at any time during or after the Engagement, and the Firm will comply with such request within a reasonable time, subject to the Firm's right to retain copies for its records and as may be required by applicable professional responsibility rules.

4.6 Limitation of Liability

To the fullest extent permitted by applicable law, C&H's aggregate liability to the Client arising out of or in connection with this Engagement, whether based on breach of contract, negligence, breach of fiduciary duty, or any other theory of liability, shall not exceed the total amount of fees actually paid by the Client to C&H in connection with this Engagement. In no event shall C&H be liable for any indirect, consequential, incidental, special, or punitive damages, including lost profits or business opportunities, arising out of or in connection with this Engagement, regardless of whether such damages were foreseeable or whether C&H was advised of the possibility thereof. Nothing in this Section 4.6 shall limit C&H's liability for fraud or willful misconduct.

5. Anticipated Timeline

Set forth below is a preliminary, indicative timeline for the principal milestones of the offering. The Client acknowledges that this timeline is subject to change based on market conditions, the progress of negotiations among the parties, the timing of rating agency deliberations, and other factors beyond the control of C&H.

The foregoing timeline is provided for planning purposes only and does not constitute a commitment by C&H to complete any particular deliverable by the date indicated. C&H will work diligently to meet the target dates set forth above but shall not be liable for any delays attributable to the actions or inactions of third parties, market disruptions, or other circumstances beyond the Firm's reasonable control.

6. Governing Law

This Engagement Letter shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice-of-law or conflicts-of-law rules or provisions that would cause the application of the laws of any other jurisdiction. Any action, suit, or proceeding arising out of or relating to this Engagement Letter or the relationship between C&H and the Client shall be brought exclusively in the courts of the State of New York sitting in the County of New York or, if federal jurisdiction exists, in the United States District Court for the Southern District of New York. Each party hereby irrevocably consents to the personal jurisdiction of such courts and waives any objection to venue in such courts, including any objection based on inconvenient forum.

7. Termination

Either party may terminate this Engagement at any time upon written notice to the other party. Termination of the Engagement shall not relieve VHG of its obligation to pay all fees and reimburse all expenses incurred by C&H through the effective date of such termination in accordance with the terms of this Engagement Letter. In the event of termination, C&H will provide reasonable cooperation in the orderly transition of the matter to successor counsel designated by VHG, including the prompt transfer of the Client's files, work product, and other materials in C&H's possession that are reasonably necessary for successor counsel to continue the representation, subject to the Client's payment of all outstanding fees and expenses. C&H's obligations of confidentiality under Section 4.2 shall survive the termination of this Engagement.

8. Acceptance and Counterparts

We respectfully request that VHG acknowledge and agree to the terms of this Engagement Letter by having an authorized representative of the Company countersign this letter in the space provided below and return an executed copy to Calderwood & Harkness LLP, attention Theodore Langston, at the address set forth above, or by email to tlangston@calderwoodharkness.com. This Engagement Letter may be executed in one or more counterparts (including by facsimile or electronic transmission in portable document format), each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. This Engagement Letter shall become effective upon execution and delivery by both parties.

We look forward to working with you and the entire Verimark team on this important transaction. Please do not hesitate to contact Theodore Langston or Claire Dempsey if you have any questions regarding the terms of this letter or any other aspect of the Engagement.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Theodore Langston Partner, Capital Markets Calderwood & Harkness LLP One Liberty Plaza, 45th Floor New York, NY 10006 Telephone: (212) 455-7812

Email: tlangston@calderwoodharkness.com

By: ________

Vivienne St. Claire Partner, Capital Markets Calderwood & Harkness LLP One Liberty Plaza, 45th Floor New York, NY 10006 Telephone: (212) 455-7819

Email: vstclaire@calderwoodharkness.com

ACKNOWLEDGED AND AGREED:

VERIMARK HOSPITALITY GROUP INC.

By: ________

Name: David K. Moretti

Title: General Counsel & Secretary

Date: ________

cc: Marcus J. Delano, Chief Executive Officer, Verimark Hospitality Group Inc. cc: Patricia R. Henning, Chief Financial Officer, Verimark Hospitality Group Inc. cc: Eleanor M. Vasquez, Chairman of the Board, Verimark Hospitality Group Inc.

Timekeeper	Title	Hourly Rate
Theodore Langston	Partner	$1,850.00
Vivienne St. Claire	Partner	$1,775.00
Sylvia Hartwell	Partner (Tax)	$1,725.00
Claire Dempsey	Senior Associate	$1,150.00
Audrey Zhou	Associate	$975.00
Paralegals / Legal Assistants	—	$425.00 – $525.00
Milestone	Target Date
Engagement opens; initial organizational call	April 15, 2024
Initial drafts of Purchase Agreement and Indenture circulated to all parties	May 3, 2024
Rating agency presentations (S&P Global Ratings / Moody's Investors Service)	May 14–15, 2024
Credit ratings expected	May 28, 2024
Preliminary Offering Memorandum distributed to prospective investors	June 3, 2024
Investor roadshow	June 10–14, 2024
Pricing and signing of Purchase Agreement	June 17–18, 2024
Closing and T+5 settlement; payoff of Existing Credit Facility	June 25, 2024
Completion of post-closing deliverables (UCC filings, mortgage releases, closing binders)	July 8, 2024

CALDERWOOD & HARKNESS LLP Attorneys at Law
One Liberty Plaza, 45th Floor New York, NY 10006
Telephone: (212) 455-7800 Facsimile: (212) 455-7801 www.calderwoodharkness.com
April 15, 2024
Mr. David K. Moretti General Counsel & Secretary Verimark Hospitality Group Inc. 2400 Brickell Bay Drive, Suite 3100 Miami, FL 33129
Dear Mr. Moretti:
Calderwood & Harkness LLP ("C&H" or the "Firm") is pleased to confirm its engagement by Verimark Hospitality Group Inc., a Delaware corporation ("VHG," the "Company," or the "Client"), to serve as issuer's counsel in connection with the Company's proposed private offering of senior notes (the "Engagement"). Specifically, the Firm will represent VHG in connection with the proposed offering of up to $500,000,000 in aggregate principal amount of Senior Notes due 2031 (the "Notes") to be offered and sold pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the "Securities Act"). We understand that the offering is intended to refinance the Company's existing indebtedness outstanding under the Amended and Restated Credit Agreement, dated as of March 15, 2021, among VHG, the lenders party thereto from time to time, and Greystone National Bank, N.A., as administrative agent (the "Existing Credit Facility").
This letter sets forth the scope of our representation, the staffing of the engagement, the fee arrangements applicable thereto, and the other terms governing C&H's representation of the Client in connection with the Engagement. We ask that you review this letter carefully and, if the terms set forth herein are acceptable to the Company, countersign and return an executed copy to us in accordance with Section 8 below.
1. Scope of Engagement
C&H will act as issuer's counsel to VHG in connection with all aspects of the proposed offering of the Notes. Our representation will include, but will not be limited to, the matters described in Sections 1.1 through 1.8 below.
1.1 Offering Documentation
C&H will prepare, draft, review, and negotiate the Preliminary Offering Memorandum and the Final Offering Memorandum to be used in connection with the offering of the Notes. C&H will have primary drafting responsibility for the following sections of the offering memoranda: Description of Notes, Description of Other Indebtedness, Certain U.S. Federal Income Tax Considerations, Plan of Distribution, Legal Matters, and Notice to Investors (including legends and transfer restrictions applicable to the Rule 144A and Regulation S tranches).
In connection with the preparation of the offering memoranda, C&H will coordinate with VHG management, including Chief Executive Officer Marcus J. Delano, Chief Financial Officer Patricia R. Henning, and General Counsel David K. Moretti, with respect to the business and financial disclosure sections of the offering memoranda, including the sections entitled Summary, Risk Factors, Use of Proceeds, Capitalization, Selected Financial Data, Management's Discussion and Analysis of Financial Condition and Results of Operations, Business, Management, and related sections. While VHG management and the initial purchasers' counsel will have primary drafting responsibility for certain of these sections, C&H will review and comment on all such sections and will assist in ensuring the overall consistency and accuracy of the disclosure.
C&H will also coordinate with the Company's independent registered public accounting firm, Palladian & Howe LLP (Kenneth W. Sturgis, Engagement Partner), regarding financial statement presentation within the offering memoranda, the scope and content of the comfort letter to be delivered by Palladian & Howe at the time of pricing and at closing, and related audit and review matters. C&H will assist VHG in preparing and transmitting the comfort letter request to Palladian & Howe and will review drafts of the comfort letter in consultation with VHG management and the initial purchasers' counsel.
1.2 Transaction Agreements
C&H will prepare, draft, review, and negotiate the principal transaction agreements in connection with the offering, including the following:
(a) Purchase Agreement. C&H will draft and negotiate the Purchase Agreement among VHG, the subsidiary guarantors listed therein, and the initial purchasers (Kensington Barrow & Co., as representative of the several initial purchasers, together with Ridgeline Capital Markets LLC and Stonebridge Marvelo Securities Inc.). The Purchase Agreement will set forth the terms and conditions upon which the initial purchasers will purchase the Notes from VHG, including representations and warranties of VHG and the guarantors, conditions to closing, indemnification provisions, and related matters.
(b) Indenture. C&H will draft and negotiate the Indenture governing the Notes, to be entered into among VHG, as issuer, the subsidiary guarantors named therein, and Fidelitas Trust Company, N.A., as trustee (the "Trustee"). The Indenture will set forth the terms of the Notes, including interest rate, maturity, redemption provisions, covenants (including, as applicable, limitations on indebtedness, restricted payments, asset sales, affiliate transactions, and mergers and consolidations), events of default, and related provisions customary for high yield senior note offerings of this type.
(c) Forms of Global Notes. C&H will draft the Forms of Global Notes for each of the Rule 144A tranche and the Regulation S tranche, including all required legends and CUSIP/ISIN identifiers.
(d) Registration Rights Agreement. C&H will draft and negotiate the Registration Rights Agreement among VHG, the subsidiary guarantors, and the initial purchasers, setting forth the Company's obligations with respect to the filing and effectiveness of an exchange offer registration statement or, in certain circumstances, a shelf registration statement, and providing for the payment of additional interest in the event of a registration default.
(e) Escrow Agreement. C&H will draft the Escrow Agreement among VHG, the initial purchasers, and Fidelitas Trust Company, N.A. (in its capacity as escrow agent), governing the escrow of the net proceeds of the offering pending satisfaction of certain conditions to the release thereof, including the payoff and discharge of the Existing Credit Facility.
1.3 Subsidiary Guarantees and Entity Work
C&H will prepare the Guarantor Joinder Agreements and related documentation for each of the following subsidiary guarantors of VHG:
(i) Verimark Resort Holdings LLC, a Delaware limited liability company;
(ii) VHG Properties Inc., a Delaware corporation;
(iii) Bayshore Hotel Management LLC, a Florida limited liability company;
(iv) Verimark Capital Holdings LLC, a Delaware limited liability company; and
(v) Pinnacle Lodging Enterprises Inc., a Nevada corporation.
In connection with the foregoing, C&H will conduct organizational and entity diligence for VHG and each guarantor subsidiary, including review of organizational documents (certificates of incorporation, certificates of formation, operating agreements, bylaws, and amendments thereto), review of existing contractual restrictions on the incurrence of indebtedness or the granting of guarantees, and preparation of a summary entity chart reflecting the corporate structure of VHG and its subsidiaries.
C&H will also prepare board resolutions (or manager resolutions, as applicable) for VHG and each guarantor subsidiary authorizing the offering of the Notes, the execution and delivery of the Indenture, the Purchase Agreement, the Registration Rights Agreement, the Escrow Agreement, and all related transaction documents, and the granting of the subsidiary guarantees.
1.4 Payoff and Discharge of Existing Credit Facility
In connection with the intended application of the net proceeds of the offering to refinance the Company's existing indebtedness under the Existing Credit Facility, C&H will undertake the following:
(a) Payoff Letter. C&H will prepare a draft Payoff Letter for execution by Greystone National Bank, N.A., as administrative agent under the Existing Credit Facility, setting forth the aggregate payoff amount, per diem interest accrual, wire transfer instructions, and the conditions upon which Greystone will release all liens securing the obligations under the Existing Credit Facility.
(b) Lien Release and Termination Request Letters. C&H will prepare Lien Release and Termination Request Letters to be delivered to Greystone National Bank, N.A., requesting the execution and filing of UCC-3 termination statements and the release and discharge of all mortgages, deeds of trust, security agreements, and other collateral documents securing the Existing Credit Facility.
(c) Notice of Termination. C&H will prepare the formal Notice of Termination of the Existing Credit Facility, to be delivered by VHG to Greystone National Bank, N.A., and the syndicate lenders, in accordance with the terms of the Existing Credit Facility.
(d) Coordination with Lenders. C&H will coordinate with Greystone National Bank, N.A., and the syndicate lenders party to the Existing Credit Facility, including Harborview Lending Group, Cascade Federal Bank, and Meriden Commercial Finance LLC, regarding the preparation, execution, and filing of UCC-3 termination statements and the preparation and recording of mortgage and deed of trust releases in all applicable jurisdictions.
1.5 Closing Deliverables
C&H will prepare or coordinate the preparation and delivery of the following closing deliverables in connection with the offering:
(a) Officer's Certificate of VHG, certifying as to the accuracy of the representations and warranties of the Company and the satisfaction of the closing conditions set forth in the Purchase Agreement;
(b) Secretary's Certificate of VHG, certifying as to the Company's organizational documents, incumbency of officers, and the adoption of authorizing resolutions;
(c) Board Resolutions of VHG and each guarantor subsidiary, in form and substance satisfactory to the initial purchasers and their counsel;
(d) Good Standing Certificates from the Delaware Secretary of State (for VHG and each Delaware-organized guarantor subsidiary) and the Florida Department of State (for VHG, as a foreign corporation qualified to do business in Florida, and for Bayshore Hotel Management LLC, as a Florida limited liability company), and such other jurisdictions as may be required;
(e) Legal Opinion of Issuer's Counsel, addressed to the initial purchasers and the Trustee, covering the due authorization, execution, and delivery of the Notes, the Indenture, the subsidiary guarantees, and the other transaction documents, the valid issuance of the Notes, the enforceability of the Indenture and the guarantees (subject to customary exceptions and qualifications), and such other matters as are customary for offerings of this type;
(f) Tax Opinion of Issuer's Counsel, addressed to VHG, covering the U.S. federal income tax treatment of the Notes and the offering, including original issue discount analysis and such other tax matters as may be appropriate;
(g) 10b-5 Negative Assurance Letter, addressed to the initial purchasers, stating that, based on C&H's participation in the preparation of the Preliminary Offering Memorandum and the Final Offering Memorandum and our discussions with Company management and other parties, nothing has come to our attention that causes us to believe that the offering memoranda, as of their respective dates and as of the date of the closing, contained or contain an untrue statement of a material fact or omitted or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (subject to customary exceptions, limitations, and qualifications);
(h) Funds Flow Memorandum, detailing wire transfer instructions, sources and uses of funds, and the sequencing of closing-day fund flows, including the disbursement of net proceeds to Greystone National Bank, N.A., in satisfaction of the Existing Credit Facility and the payment of transaction fees and expenses;
(i) DTC Letter of Representations, for submission to The Depository Trust Company in connection with the eligibility of the Notes for book-entry transfer through DTC's facilities; and
(j) Closing Checklist, Closing Index, and compilation of executed Signature Pages for all transaction documents, to be assembled and distributed to all parties following the closing.
1.6 Post-Closing Matters
Following the closing of the offering, C&H will undertake the following post-closing tasks:
(a) Tracking and completion of all post-closing deliverables, including the filing of UCC-3 termination statements, the recording of mortgage and deed of trust releases, and the assembly and distribution of closing binders (in both physical and electronic form) to all parties;
(b) Delivery of a post-closing summary letter to VHG outlining the Company's ongoing obligations under the Indenture and the Registration Rights Agreement, including filing deadlines, reporting covenants, and compliance milestones; and
(c) Preparation of a matter closing memorandum for the Firm's internal files, summarizing the terms of the transaction and the closing deliverables.
1.7 Tax Advisory
In addition to the tax opinion described in Section 1.5(f) above, C&H will provide the following tax advisory services in connection with the Engagement:
(a) Analysis of the federal income tax treatment of the Notes, including whether the Notes are issued with original issue discount ("OID") for purposes of Sections 1271 through 1275 of the Internal Revenue Code of 1986, as amended (the "Code");
(b) Analysis of the deductibility of interest on the Notes under Section 163(j) of the Code, including a review of VHG's adjusted taxable income, business interest expense, and the applicable limitations on interest deductibility;
(c) Analysis of whether the Notes constitute "applicable high yield discount obligations" ("AHYDOs") under Section 163(e)(5) of the Code and, if so, the consequences thereof for VHG; and
(d) Preparation of an internal tax memorandum summarizing the foregoing analyses for the benefit of VHG management and the Board of Directors.
1.8 Excluded Scope
The scope of C&H's representation under this Engagement Letter is expressly limited to the matters described in Sections 1.1 through 1.7 above. Without limiting the generality of the foregoing, the following matters are excluded from the scope of this Engagement:
(a) C&H is not engaged to provide advice regarding VHG's ongoing periodic reporting obligations under the Securities Exchange Act of 1934, as amended, or the rules and regulations of the Nasdaq Stock Market (VHG being listed on the Nasdaq Global Select Market under the ticker symbol "VMRK," CIK No. 0001847293), except to the extent directly related to the filing deadlines and effectiveness requirements arising under the Registration Rights Agreement to be entered into in connection with this offering.
(b) C&H is not engaged to advise VHG on any antitrust, environmental, employment, ERISA, or intellectual property matters, whether arising in connection with this offering or otherwise.
(c) C&H is not acting as counsel to the initial purchasers in connection with this offering. The initial purchasers are separately represented by Whitfield, Crane & Aldrich LLP, 51 West 52nd Street, New York, NY 10019 (Nathaniel R. Bosch, lead partner). C&H's obligations run solely to VHG as its client, and nothing in this Engagement Letter shall be construed as creating an attorney-client relationship between C&H and any of the initial purchasers, the Trustee, or any other party to the transaction.
(d) Third-party source materials, including VHG's audited and unaudited financial statements, the comfort letter to be delivered by Palladian & Howe LLP, rating agency reports, and management projections and forecasts, are outside the scope of C&H's preparation responsibility. C&H will, however, review such materials in the ordinary course for purposes of its 10b-5 negative assurance letter and its review of the offering memoranda, and will rely upon such materials as provided by VHG and its advisors without independent verification.
2. Staffing
The following attorneys will comprise the core team staffed on this Engagement:
Theodore Langston, Partner, Capital Markets Group — Mr. Langston will serve as the Responsible Partner on this Engagement and will have primary client relationship responsibility and overall supervisory authority over all aspects of the matter. Mr. Langston will participate in key drafting sessions, negotiations with initial purchasers' counsel, and delivery of closing opinions.
Vivienne St. Claire, Partner, Capital Markets Group — Ms. St. Claire will serve as the Billing Partner on this Engagement and will be responsible for all billing, fee arrangements, and financial administration of the engagement. Ms. St. Claire will also contribute substantively to the drafting and negotiation of the Indenture and the Registration Rights Agreement.
Claire Dempsey, Associate, Capital Markets Group — Ms. Dempsey will serve as the Lead Associate on this Engagement and will be responsible for the day-to-day management of all drafting, negotiations with Whitfield, Crane & Aldrich LLP and other transaction parties, due diligence coordination, and the closing process. Ms. Dempsey will serve as the primary day-to-day point of contact for VHG, alongside Mr. Langston.
Audrey Zhou, Associate, Capital Markets Group — Ms. Zhou will provide drafting support across all transaction documents, will manage the entity diligence process for VHG and each guarantor subsidiary, and will be responsible for the closing checklist, closing index, and signature page compilation.
Sylvia Hartwell, Partner, Tax Group — Ms. Hartwell will lead the tax advisory component of the Engagement, including the OID, AHYDO, and Section 163(j) analyses described in Section 1.7, and will prepare and deliver the tax opinion described in Section 1.5(f).
Additional attorneys, paralegals, and support staff may be assigned to the Engagement as circumstances require. The Client will be promptly notified of any material changes to the composition of the core engagement team described above. The primary day-to-day contacts for VHG on this Engagement will be Claire Dempsey (telephone: (212) 455-7834; email: cdempsey@calderwoodharkness.com) and Theodore Langston (telephone: (212) 455-7812; email: tlangston@calderwoodharkness.com).
3. Fee Arrangements
3.1 Billing Basis
C&H will bill for services rendered in connection with this Engagement on an hourly basis at the Firm's standard rates in effect at the time services are performed. The current standard hourly rates for the members of the core engagement team, as of April 2024, are as follows:
The Firm's standard hourly rates are subject to periodic adjustment, typically effective as of January 1 of each calendar year. The Client will be notified in advance of any changes to the applicable hourly rates. In the event that additional attorneys are assigned to the Engagement, the applicable hourly rates for such attorneys will be consistent with the Firm's then-current standard rate schedule for attorneys of comparable seniority and experience.
3.2 Billing Procedures
C&H will render invoices to VHG on a monthly basis. Each invoice will contain a reasonably detailed description of the services performed during the applicable billing period, including the date of service, the name and title of the timekeeper, the number of hours expended, and a narrative description of the work performed. All invoices are due and payable within thirty (30) days of receipt.
The Billing Partner for this Engagement is Vivienne St. Claire. All inquiries regarding invoices, billing adjustments, or fee-related matters should be directed to Ms. St. Claire at (212) 455-7819 or vstclaire@calderwoodharkness.com. In the event of any dispute regarding the amount or propriety of any invoice, the Client agrees to promptly notify the Billing Partner in writing, and the parties will endeavor to resolve any such dispute in good faith.
3.3 Expenses and Disbursements
In addition to professional fees, VHG will reimburse C&H for all reasonable out-of-pocket expenses and disbursements incurred in connection with this Engagement. Such expenses and disbursements may include, but are not limited to, the following:
(a) Travel expenses, including airfare, ground transportation, lodging, and meals, incurred in connection with roadshow support (if C&H's attendance is requested by VHG), in-person negotiation sessions, or closing attendance;
(b) Filing fees, including fees for UCC searches, good standing certificates, and Secretary of State filings in Delaware, Florida, Nevada, and any other applicable jurisdictions;
(c) Printing and document production charges, including charges incurred in coordination with Meridian Document Services Inc. for the printing of the Preliminary Offering Memorandum, the Final Offering Memorandum, and closing sets;
(d) Overnight delivery and courier charges;
(e) Database and research charges, including charges for Westmark Data Systems, Calderon Systems, Cascade Services Inc., and similar legal research services; and
(f) Long-distance telecommunications charges.
All expenses and disbursements will be itemized on the Firm's monthly invoices and are subject to the same payment terms applicable to professional fees.
3.4 Estimated Budget
C&H will provide a preliminary fee estimate for this Engagement upon request by the Client. The Client acknowledges that actual fees will depend on a number of factors that cannot be predicted with certainty at the outset of the Engagement, including the scope and complexity of the transaction, the extent and duration of negotiations with Whitfield, Crane & Aldrich LLP on behalf of the initial purchasers regarding the terms of the Purchase Agreement, the Indenture, and the Registration Rights Agreement, the number and complexity of issues that arise during the due diligence and document preparation process, market conditions, and the timing and pace of the transaction.
The Company has been advised, and acknowledges, that total transaction fees and expenses in connection with the offering (including, without limitation, C&H legal fees, initial purchasers' counsel legal fees, initial purchasers' discount, Trustee fees, printing costs, rating agency fees, and other customary transaction expenses) are currently estimated at approximately $6,863,285.90. Transaction expenses (including C&H legal fees) are expected to be funded from the net proceeds of the offering and will be set forth in detail in the Funds Flow Memorandum to be prepared by C&H in connection with the closing.
4. Terms of Representation
4.1 Client Identification
The Client in this Engagement is Verimark Hospitality Group Inc. and no other person or entity. C&H does not represent, and shall not be deemed to represent, any subsidiary, affiliate, director, officer, employee, or shareholder of VHG in their individual capacities in connection with this Engagement. C&H does not represent the initial purchasers (Kensington Barrow & Co., Ridgeline Capital Markets LLC, or Stonebridge Marvelo Securities Inc.), the Trustee (Fidelitas Trust Company, N.A.), or any other party to the transaction. C&H does not represent any of the guarantor subsidiaries of VHG in any capacity other than in connection with their execution and delivery of the subsidiary guarantees and related joinder documentation as part of this offering; such representation is provided solely for the convenience of the Company and does not give rise to an independent attorney-client relationship between C&H and any guarantor subsidiary.
4.2 Confidentiality.  C&H will maintain the confidentiality of all non-public information received from the Client in connection with this Engagement. This obligation is subject to the following exceptions: (i) disclosure that is required by applicable law, regulation, or order of a court or governmental authority of competent jurisdiction; (ii) disclosure to C&H personnel, including attorneys, paralegals, and support staff, and to the Firm's outside advisors, in each case on a need-to-know basis in connection with the provision of services under this Engagement; and (iii) disclosure as may be necessary in order for C&H to render the opinions and provide the services contemplated by this Engagement Letter, including the legal opinion, tax opinion, and negative assurance letter described herein.
The Client hereby authorizes C&H to disclose the fact and general nature of its representation of VHG in this offering in the Firm's professional listings, pitch materials, league table submissions, experience databases, and similar marketing and business development materials, provided that such disclosure shall not include any confidential or proprietary information of the Client.
4.3 Conflicts of Interest
C&H has conducted a conflicts review in connection with this Engagement, as documented separately in the Firm's internal Conflicts Check Memorandum dated April 15, 2024, Conflicts Check Reference No. CCM-2024-04827. Based on that review, C&H has concluded that no disqualifying conflict of interest exists that would prevent the Firm from undertaking this Engagement.
The Client acknowledges that C&H is a large, diversified law firm that represents and has represented numerous clients in a range matters, including parties that may be involved, directly or indirectly, in the transactions contemplated by this Engagement Letter. C&H's representation of VHG in this Engagement does not preclude the Firm from representing other clients in matters unrelated to this Engagement, even if such clients are adverse to VHG in other contexts, provided that no such representation involves a matter substantially related to this Engagement.
In the event that a conflict of interest arises during the course of this Engagement, C&H will promptly notify the Client and will take appropriate steps to address the conflict, which may include seeking the Client's informed written consent to continued representation, implementing an ethical screen within the Firm, or, if the conflict cannot be satisfactorily resolved, withdrawing from the representation in accordance with the applicable rules of professional conduct.
4.4 No Guarantee of Outcome
C&H will use its reasonable professional efforts in providing the services described in this Engagement Letter. The Client acknowledges and agrees, however, that C&H does not and cannot guarantee any particular outcome of the Engagement, including but not limited to the successful completion of the offering, the receipt of investment-grade or other favorable credit ratings from any rating agency, the satisfaction of all conditions to closing, the successful payoff and discharge of the Existing Credit Facility, or the achievement of any particular pricing terms or financial result. The outcome of any legal matter depends upon many factors, including facts and circumstances unique to each matter, the actions of third parties, and the application of applicable law, none of which are within C&H's exclusive control.
4.5 Document Retention
C&H will maintain files relating to this Engagement in accordance with the Firm's document retention policies, a copy of which is available upon request. Upon the conclusion of the Engagement, the Client's files (including correspondence, memoranda, and work product generated in connection with the Engagement) will be retained by the Firm for a period of ten (10) years from the date of the closing of the offering or, if the offering does not close, from the date of termination of the Engagement, after which such files may be destroyed in accordance with the Firm's standard procedures unless the Client provides written instructions to the contrary prior to the expiration of such period. Notwithstanding the foregoing, the Client may request the return of its files at any time during or after the Engagement, and the Firm will comply with such request within a reasonable time, subject to the Firm's right to retain copies for its records and as may be required by applicable professional responsibility rules.
4.6 Limitation of Liability
To the fullest extent permitted by applicable law, C&H's aggregate liability to the Client arising out of or in connection with this Engagement, whether based on breach of contract, negligence, breach of fiduciary duty, or any other theory of liability, shall not exceed the total amount of fees actually paid by the Client to C&H in connection with this Engagement. In no event shall C&H be liable for any indirect, consequential, incidental, special, or punitive damages, including lost profits or business opportunities, arising out of or in connection with this Engagement, regardless of whether such damages were foreseeable or whether C&H was advised of the possibility thereof. Nothing in this Section 4.6 shall limit C&H's liability for fraud or willful misconduct.
5. Anticipated Timeline
Set forth below is a preliminary, indicative timeline for the principal milestones of the offering. The Client acknowledges that this timeline is subject to change based on market conditions, the progress of negotiations among the parties, the timing of rating agency deliberations, and other factors beyond the control of C&H.
The foregoing timeline is provided for planning purposes only and does not constitute a commitment by C&H to complete any particular deliverable by the date indicated. C&H will work diligently to meet the target dates set forth above but shall not be liable for any delays attributable to the actions or inactions of third parties, market disruptions, or other circumstances beyond the Firm's reasonable control.
6. Governing Law
This Engagement Letter shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice-of-law or conflicts-of-law rules or provisions that would cause the application of the laws of any other jurisdiction. Any action, suit, or proceeding arising out of or relating to this Engagement Letter or the relationship between C&H and the Client shall be brought exclusively in the courts of the State of New York sitting in the County of New York or, if federal jurisdiction exists, in the United States District Court for the Southern District of New York. Each party hereby irrevocably consents to the personal jurisdiction of such courts and waives any objection to venue in such courts, including any objection based on inconvenient forum.
7. Termination
Either party may terminate this Engagement at any time upon written notice to the other party. Termination of the Engagement shall not relieve VHG of its obligation to pay all fees and reimburse all expenses incurred by C&H through the effective date of such termination in accordance with the terms of this Engagement Letter. In the event of termination, C&H will provide reasonable cooperation in the orderly transition of the matter to successor counsel designated by VHG, including the prompt transfer of the Client's files, work product, and other materials in C&H's possession that are reasonably necessary for successor counsel to continue the representation, subject to the Client's payment of all outstanding fees and expenses. C&H's obligations of confidentiality under Section 4.2 shall survive the termination of this Engagement.
8. Acceptance and Counterparts
We respectfully request that VHG acknowledge and agree to the terms of this Engagement Letter by having an authorized representative of the Company countersign this letter in the space provided below and return an executed copy to Calderwood & Harkness LLP, attention Theodore Langston, at the address set forth above, or by email to tlangston@calderwoodharkness.com. This Engagement Letter may be executed in one or more counterparts (including by facsimile or electronic transmission in portable document format), each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. This Engagement Letter shall become effective upon execution and delivery by both parties.
We look forward to working with you and the entire Verimark team on this important transaction. Please do not hesitate to contact Theodore Langston or Claire Dempsey if you have any questions regarding the terms of this letter or any other aspect of the Engagement.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Theodore Langston Partner, Capital Markets Calderwood & Harkness LLP One Liberty Plaza, 45th Floor New York, NY 10006 Telephone: (212) 455-7812
Email: tlangston@calderwoodharkness.com
By: ________
Vivienne St. Claire Partner, Capital Markets Calderwood & Harkness LLP One Liberty Plaza, 45th Floor New York, NY 10006 Telephone: (212) 455-7819
Email: vstclaire@calderwoodharkness.com
ACKNOWLEDGED AND AGREED:
VERIMARK HOSPITALITY GROUP INC.
By: ________
Name: David K. Moretti
Title: General Counsel & Secretary
Date: ________
cc: Marcus J. Delano, Chief Executive Officer, Verimark Hospitality Group Inc. cc: Patricia R. Henning, Chief Financial Officer, Verimark Hospitality Group Inc. cc: Eleanor M. Vasquez, Chairman of the Board, Verimark Hospitality Group Inc.
Timekeeper | Title | Hourly Rate
Theodore Langston | Partner | $1,850.00
Vivienne St. Claire | Partner | $1,775.00
Sylvia Hartwell | Partner (Tax) | $1,725.00
Claire Dempsey | Senior Associate | $1,150.00
Audrey Zhou | Associate | $975.00
Paralegals / Legal Assistants | — | $425.00 – $525.00
Milestone | Target Date
Engagement opens; initial organizational call | April 15, 2024
Initial drafts of Purchase Agreement and Indenture circulated to all parties | May 3, 2024
Rating agency presentations (S&P Global Ratings / Moody's Investors Service) | May 14–15, 2024
Credit ratings expected | May 28, 2024
Preliminary Offering Memorandum distributed to prospective investors | June 3, 2024
Investor roadshow | June 10–14, 2024
Pricing and signing of Purchase Agreement | June 17–18, 2024
Closing and T+5 settlement; payoff of Existing Credit Facility | June 25, 2024
Completion of post-closing deliverables (UCC filings, mortgage releases, closing binders) | July 8, 2024

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

ACKNOWLEDGED AND AGREED:

VERIMARK HOSPITALITY GROUP INC.

Record

Parties

Dates

Amounts