Exhibit 10.1
Final Version
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BANK OF AMERICA, N.A.
BofA SECURITIES, INC.
One Bryant Park
New York, New York 10036
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DEUTSCHE BANK SECURITIES INC.
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH
DEUTSCHE BANK AG NEW YORK BRANCH
60 Wall Street New York, NY 10005
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BARCLAYS
745 Seventh Avenue
New York, New York 10019
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CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
CREDIT SUISSE LOAN FUNDING LLC
11 Madison Avenue
New York, NY 10010
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JPMORGAN CHASE BANK, N.A.
383 Madison Avenue
New York, NY 10179
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GOLDMAN SACHS BANK USA
200 West Street
New York, NY 10282
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MUFG BANK, LTD.
1221 Avenue of the Americas
New York, NY 10020
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March 25, 2021
Hilton Grand Vacations Borrower LLC
5323 Millenia Lakes Boulevard, Suite 400
Orlando, FL 32839
Attention: Dan Mathewes, Executive Vice President and Chief Financial Officer
Project Odyssey
Amended and Restated Commitment Letter
Ladies and Gentlemen:
Reference is made to (i) the Commitment Letter dated as of March 10, 2021 (the “Original Commitment Letter”) made by and among Hilton Grand Vacations Borrower LLC, a Delaware limited liability company (the “Company” or “you”), Bank of America, N.A. (“BANA”), BofA Securities, Inc. (or any of its designated affiliates, “BofA Securities” and, together with BANA, “Bank of America”), Deutsche Bank Securities Inc. (“DBSI”), Deutsche Bank AG Cayman Islands Branch (“DBCI”), Deutsche Bank AG New York Branch (“DBNY” and, together with DBSI and DBCI, “Deutsche Bank”) and Barclays Bank PLC (“Barclays”) and (ii) the Fee Letter dated as of March 10, 2021 (the “Original Fee Letter”) made by and among you, Bank of America, Deutsche Bank and Barclays. This letter agreement and the attached Exhibit A, Exhibit B, Exhibit C and Exhibit D (collectively, the “Exhibits” and, together with this letter agreement, the “Commitment Letter”) amends, restates and supersedes in its entirety the Original Commitment Letter and such Original Commitment Letter shall be of no further force or effect.
You have advised Bank of America, Deutsche Bank, Barclays, Credit Suisse AG, Cayman Islands Branch (“CSCI”), Credit Suisse Loan Funding LLC (“CSLF” and, together with CSCI, “Credit Suisse”), JPMorgan Chase Bank, N.A. (“JPMorgan”), Goldman Sachs Bank USA (“Goldman Sachs”), MUFG Bank, Ltd. (“MUFG”) and each of the banks and lending institutions listed on Annex I thereto (the “Co-Manager Bank Schedule”; such banks and lending institutions listed on the Co-Manager Bank Schedule being collectively referred to herein as the “Co-Manager Banks” and, together with Bank of America, Deutsche Bank, Barclays, Credit Suisse, JPMorgan, Goldman Sachs and MUFG, the “Commitment Parties”, “we” or “us”) that the Company desires to consummate the Transactions (as defined in Exhibit A hereto (such exhibit, the “Transactions Description”)). Capitalized terms used in this Commitment Letter but not defined herein shall have the meanings given to them in the Exhibits hereto.
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Upon the terms and subject only to the conditions described in this Commitment Letter, (a) each of BANA, DBCI, Barclays, CSCI, JPMorgan, Goldman Sachs and MUFG is pleased to inform you of its commitment to provide an amount equal to 23.4125%, 20.91875%, 20.91875%, 11.5%, 5.5%, 4.0% and 4.0%, respectively, of the Senior Unsecured Bridge Facility, (b) each of BANA, DBNY, Barclays, CSCI, JPMorgan, Goldman Sachs and MUFG is pleased to inform you of its commitment to provide an amount equal to 23.4125%, 20.91875%, 20.91875%, 11.5%, 5.5%, 4.0% and 4.0%, respectively, of the Term Facility and (c) each Co-Manager Bank is pleased to inform you of its commitment to provide (i) an amount equal to the percentage of the Senior Unsecured Bridge Facility indicated opposite their respective names in the column of the Co-Manager Bank Schedule entitled “Senior Unsecured Bridge Facility Commitment” and (ii) an amount equal to the percentage of the Term Facility indicated opposite their respective names in the column of the Co-Manager Bank Schedule entitled “Term Facility Commitment” (each of BANA, DBCI, DBNY, Barclays, CSCI, JPMorgan, Goldman Sachs, MUFG and each Co-Manager Bank, an “Initial Lender” and, collectively in such capacities, the “Initial Lenders”). The Senior Unsecured Bridge Facility and the Term Facility are collectively the “Facilities”.
You hereby appoint (i) each of BofA Securities, DBSI and Barclays and each of BofA Securities, DBSI and Barclays hereby agrees to act, as a global coordinator with respect to the Senior Unsecured Bridge Facility and the Term Facility (in such capacities, a “Global Coordinator” and, collectively in such capacities, the “Global Coordinators”), (ii) each of BofA Securities, DBSI, Barclays, CSLF, JPMorgan, Goldman Sachs and MUFG and each of BofA Securities, DBSI, Barclays, CSLF, JPMorgan, Goldman Sachs and MUFG hereby agrees to act, as a bookrunner with respect to the Senior Unsecured Bridge Facility and the Term Facility (in such capacities, an “Arranger” and, collectively in such capacities, the “Arrangers”), (iii) each Co-Manager Bank and each Co-Manager Bank hereby agrees to act as a co-manager with respect to the Senior Unsecured Bridge Facility and the Term Facility and (iv) BANA to act, and BANA hereby agrees to act, as sole administrative agent with respect to the Term Facility (in such capacities, the “Term Facility Agent”) and DBCI to act, and DBCI hereby agrees to act, as sole administrative agent with respect to the Senior Unsecured Bridge Facility (in such capacities, the “Bridge Facility Agent”; together with the Term Facility Agent, the “Agents”), in each case upon the terms and subject to the conditions described in this Commitment Letter. You agree that no additional agents, co-agents, bookrunners, lead arrangers or co-managers will be appointed, or other titles conferred, and no compensation (other than that expressly contemplated by this Commitment Letter and the Fee Letter referred to below) will be paid to any other person in order to obtain commitments to any Facility unless you and the Commitment Parties as of the date hereof shall so agree. BofA Securities will have primary authority for managing the syndication of the Term Facility and BofA Securities shall have “left side” placement in any and all marketing materials or other documentation used in connection with the Term Facility and shall hold the leading role and responsibilities conventionally associated with such “left” placement. DBSI will have primary authority for managing the syndication of the Senior Unsecured Bridge Facility and DBSI shall have “left side” placement in any and all marketing materials or other documentation used in connection with the Senior Unsecured Bridge Facility and shall hold the leading role and responsibilities conventionally associated with such “left” placement.
The Commitment Parties reserve the right, prior to and/or after the execution of the definitive documentation (including any ancillary agreements, certificates or other documents delivered in connection therewith) with respect to any Facility (collectively, the “Operative Documents” with respect to such applicable Facility), to syndicate all or a portion of their commitments under such Facility to one or more other banks, financial institutions, investors and other lenders identified by us in consultation with you and subject to your consent (such consent not to be unreasonably withheld, conditioned or delayed)
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(the lenders providing the Facilities, together with the Initial Lenders, are collectively referred to herein as the “Lenders”). Subject to the foregoing, the Global Coordinators will manage all aspects of the syndication of each Facility in consultation with the Company, including the timing of the commencement of syndication efforts, the timing of all offers to potential Lenders, the determination of all amounts offered to potential Lenders, the selection of Lenders and the allocation of commitments among the Lenders.
Without limiting your obligations to assist with syndication efforts as set forth herein, it is understood that our commitments hereunder are not conditioned upon the syndication of, or receipt of commitments in respect of, any Facility and in no event shall the commencement or successful completion of syndication of any Facility, nor the obligation to assist with syndication efforts as set forth herein, constitute a condition to the commitment hereunder or the funding of any Facility on the date of the consummation of the Acquisition and the initial funding under the Facilities and/or the issuance of the Senior Unsecured Notes (the date of such consummation and funding and/or issuance, the “Closing Date”). The Global Coordinators may commence syndication efforts promptly upon the execution of this Commitment Letter and as part of their syndication efforts it is the Global Coordinators’ intent to have Lenders commit to each Facility prior to the Closing Date. Until the earlier of (i) the 45th day following the Closing Date and (ii) the date upon which the Facilities are Successfully Syndicated (such earlier date, the “Syndication Date”), the Company hereby agrees to use its commercially reasonable efforts to assist (and, to the extent practical and appropriate and in all instances not in contravention of the terms of the Acquisition Agreement as in effect on the date of the Original Commitment Letter, to use its commercially reasonable efforts to cause the Target and its affiliates to assist) us in achieving a syndication that is reasonably satisfactory to us and you. “Successfully Syndicated” means with respect to each of the Senior Unsecured Bridge Facility and the Term Facility, the Initial Lenders’ commitments and loans thereunder are reduced to $0 (“Successful Syndication” has a correlative meaning). The Company’s assistance in achieving such syndication of the Facilities shall include but not be limited to: (i) making appropriate members of the senior management, representatives and advisors of the Company (and, to the extent practical and appropriate and in all instances not in contravention of the terms of the Acquisition Agreement as in effect on the date of the Original Commitment Letter, appropriate members of the senior management, representatives and advisors of the Target) available to participate in informational meetings (or a conference call in lieu of any such meeting) with potential Lenders and/or ratings agencies at such times and locations mutually agreed upon by the Company with the Global Coordinators; (ii) using your commercially reasonable efforts to ensure that the syndication efforts benefit from the existing lending relationships of the Company (and, to the extent practical and appropriate and in all instances not in contravention of the terms of the Acquisition Agreement as in effect on the date of the Original Commitment Letter, the Target); (iii) assisting (and, to the extent practical and appropriate and in all instances not in contravention of the terms of the Acquisition Agreement as in effect on the date of the Original Commitment Letter, causing the Target to assist) in the preparation of a customary confidential information memorandum for each Facility and other customary marketing materials to be used in connection with the syndication of each Facility; (iv) the hosting, with the Global Coordinators, of a reasonable number of meetings or conference calls of prospective Lenders at such at times and locations mutually agreed upon by the Company with the Global Coordinators and (v) using your commercially reasonable efforts (A) to procure a rating of the Senior Unsecured Bridge Facility, the Senior Unsecured Notes and the Term Facility by Moody’s Investors Service, Inc. (“Moody’s”) and S&P Global Ratings, a division of S&P Global, Inc. (“S&P”), prior to the date of the bank meeting in connection with the Term Facility (but no specific rating) and (B) to maintain your corporate family rating or corporate rating, as applicable, from each of Moody’s and S&P (but no specific rating). Notwithstanding the foregoing or anything else to the contrary (but without limiting the Exclusive Funding Conditions), it is understood and agreed that you have no obligation hereunder to make available to us any documentation or information (i) subject to confidentiality obligations binding upon you, Hilton Grand Vacations Inc. (“HGVI”) or Hilton Grand Vacations Parent LLC, the direct parent company of the Company (“Holdings”) (in each case, not entered into in contemplation hereof) or (ii) subject to applicable attorney-client privilege; provided, you
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will use commercially reasonable efforts to notify us if any material documentation and information is being so withheld and provide a general description of such withheld documentation or information, in each case, to the extent permitted under the applicable obligation of confidentiality or privilege. Without limiting any of the Exclusive Funding Conditions and without limiting your obligations to assist with syndication efforts as set forth herein, (i) none of the foregoing shall constitute a condition to the commitments hereunder or the funding of any Facility on the Closing Date, (ii) neither the commencement nor the completion of the syndication of any Facility shall constitute a condition to the commitments hereunder or the funding of any Facility on the Closing Date and (iii) unless you otherwise agree in writing, each Commitment Party shall retain exclusive control over all rights and obligations with respect to its commitments under each Facility, including all rights with respect to consents, modifications, waivers and amendments, until the Closing Date has occurred. You hereby authorize the Global Coordinators to download copies of your trademark logos from your websites and post copies thereof on the Platform (as defined below) established by the Global Coordinators to syndicate the Facilities and use the logos on any confidential information memoranda, presentations and other marketing materials prepared in connection with the syndication of the Facilities or in any advertisements to which you consent that any Arranger may place after the Closing Date in financial and other newspapers and journals, or otherwise, at its own expense describing its services to the Company hereunder.
You acknowledge that (i) the Global Coordinators may make available the Company Materials on a confidential basis to potential Lenders by posting the Company Materials on Intralinks, SyndTrak Online, Debtdomain, the internet, email and/or similar electronic transmission systems (the “Platform”) and (ii) certain of the potential Lenders may be public side Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to you, your subsidiaries, HGVI, Holdings, the Target or their respective subsidiaries or any securities of any thereof) (each, a “Public Lender”). You agree that (A) at the request of the Global Coordinators, you will assist us in preparing a version of the confidential information memorandum and lender presentation (the “Company Materials”) to be provided to potential Lenders that does not contain any material non-public information concerning you, your subsidiaries, HGVI, Holdings, the Target or their respective subsidiaries or of the securities of any thereof for purposes of United States federal and state securities laws (any such information, “MNPI”, and any Company Materials that contains MNPI is referred to as “Private-Side Materials”); (B) all Private-Side Materials will be clearly and conspicuously marked “Private, contains Material Non-Public Information”; (C) if any Company Materials are not so marked, except to the extent you notify us to the contrary and provided that you shall have been given a reasonable opportunity to review such documents, you will be deemed to have authorized the Arrangers and the proposed Lenders to treat such Company Materials as not containing any MNPI; (D) all Company Materials not marked “Private, contains Material Non-Public Information” are permitted to be made available through a portion of the Platform designated “Public Lender” and (E) you shall provide us with customary authorization letters for inclusion in the Company Materials that contain a customary 10b-5 representation and represent that any Company Materials with respect to the Company not marked “Private, contains Material Non-Public Information” do not include MNPI with respect to the Company and exculpate you, us and our respective affiliates with respect to any liability related to the use or misuse of the contents of the Company Materials by the recipients thereof. The Arrangers agree to treat any Company Materials that are marked “Private, contains Material Non-Public Information” as being suitable only for posting on a portion of the Platform not designated “Public Lender”. To ensure an orderly and effective syndication of each Facility, the Company agrees that, until the Syndication Date, the Company will not, and will not permit any of its subsidiaries to (and will use its commercially reasonable efforts to not permit the Target or any of its subsidiaries to) syndicate, issue, place or arrange any debt facility or debt security (excluding the Senior Unsecured Bridge Facility and/or the Senior Unsecured Notes and/or the Term Facility) without the prior written consent of the Global Coordinators if such syndication, issuance, placement or arrangement could reasonably be expected to materially and adversely impair the primary syndication of the Senior Unsecured Bridge Facility and/or the Senior Unsecured Notes and/or the Term Facility (it being understood that (A) the incurrence of the
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Facilities, (B) indebtedness of the Company and its subsidiaries incurred in the ordinary course of business, including short term debt for working capital, capital leases, purchase money debt, equipment financings and ordinary course of business letter of credit facilities, (C) any indebtedness of the Target and its subsidiaries permitted under the Acquisition Agreement as in effect on the date of the Original Commitment Letter (including any warehouse facilities or asset-backed securitizations) and (D) other indebtedness to be agreed among you and the Global Coordinators shall not be subject to this provision).
The commitments of each Commitment Party hereunder to fund its respective portion of the Facilities on the Closing Date and the agreements of each of the Arrangers to perform the services described herein are subject solely to the satisfaction (or waiver by each of the Commitment Parties) of the following conditions precedent: (a) since the Agreement Date (as defined in the Acquisition Agreement) no Company Material Adverse Effect (as defined below), has occurred and is continuing, (b) subject to the Limited Conditionality Provisions (as defined below), the execution and delivery of the Operative Documents in respect of the Facilities on the terms set forth in this Commitment Letter (it being understood and agreed that each party hereto will negotiate such additional terms in good faith to finalize such Operative Documents and that the terms of such Operative Documents shall not impair the availability of the Facilities on the Closing Date if the Limited Conditionality Provisions are satisfied) and (c) the satisfaction (or waiver by each of the Commitment Parties) of the other conditions set forth in Exhibit D hereto (clauses (a), (b) and (c) collectively, the “Exclusive Funding Conditions”); it being understood that there are no conditions (implied or otherwise) to the commitments hereunder in respect of the Facilities other than the Exclusive Funding Conditions (and upon satisfaction or waiver of the Exclusive Funding Conditions, the initial funding under the Facilities shall occur). For purposes of this Commitment Letter, “Company Material Adverse Effect” shall have the meaning assigned to “Company Material Adverse Effect” in the Acquisition Agreement as in effect on the date of the Original Commitment Letter.
Notwithstanding anything set forth in this Commitment Letter, the Fee Letter, the Original Commitment Letter, the Original Fee Letter or the Operative Documents, or any other letter agreement or other undertaking concerning the financing of the Transactions to the contrary, (i) the only representations and warranties, the accuracy of which shall be a condition to availability of the Facilities on the Closing Date, shall be (x) such of the representations and warranties made by or on behalf of the Target in the Acquisition Agreement as are material to the interests of the Lenders or the Arrangers (in their capacities as such), but only to the extent that the Company has the right (taking into account any applicable cure provisions) to terminate its obligations (or to refuse to consummate the Acquisition) under the Acquisition Agreement as a result of a breach of any of such representations and warranties (to such extent, the “Acquisition Agreement Representations”) and (y) the Specified Representations (as defined below) made by the Company and the Guarantors in the Operative Documents and (ii) the terms of the Operative Documents shall be in a form such that they do not impair the availability of the Facilities on the Closing Date if the Exclusive Funding Conditions are satisfied (it being understood that, to the extent any security interest in any Collateral is not or cannot be provided and/or perfected on the Closing Date (other than (1) the pledge and perfection of the security interest in the certificated equity interests of the Company and each of its wholly owned material U.S. restricted subsidiaries (to the extent required by Exhibit C) (provided that, to the extent you have used commercially reasonable efforts to procure the delivery thereof prior to the Closing Date, certificated equity interests of the subsidiaries of the Target, to the extent required by Exhibit C, will only be required to be delivered and/or perfected on the Closing Date pursuant to the terms set forth above if such certificated equity interests are received from the Target) and (2) other assets pursuant to which a lien may be perfected by the filing of a financing statement under the Uniform Commercial Code) after your use of commercially reasonable efforts to do so or without undue burden or expense, then the provision and/or perfection of a security interest in such Collateral shall not constitute a condition to the availability of the Facilities on the Closing Date, but instead shall be required to be
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delivered after the Closing Date pursuant to arrangements and timing to be mutually agreed (but, in any event, not earlier than 90 days after the Closing Date or such longer period as may be agreed by the Term Facility Agent) by the Term Facility Agent and the Company acting reasonably). For purposes hereof, “Specified Representations” means the representations and warranties set forth in the Operative Documents (with respect to the Company and the Guarantors) relating to the legal existence of the Company and the Guarantors; power and authority, due authorization, execution, delivery and validity, in each case, related to the entering into, borrowing under, guaranteeing under, performance of and granting of security interests in the collateral pursuant to, the Operative Documents; the enforceability of the Operative Documents against the Company and each Guarantor; the execution and performance of the Operative Documents by the Company and each Guarantor not conflicting with or violating the Company’s or any Guarantor’s organizational documents; Federal Reserve margin regulations; the Investment Company Act of 1940, as amended; solvency of the Company and its subsidiaries on a consolidated basis as of the Closing Date after giving effect to the Transactions; creation, validity, perfection and priority (subject to customary permitted liens) of security interests in the Collateral; USA PATRIOT Act; and use of the proceeds of the applicable Facility not violating laws applicable to sanctioned persons and laws and regulations promulgated by OFAC, anti-money laundering laws or the Foreign Corrupt Practices Act. The provisions of this paragraph are referred to as the “Limited Conditionality Provisions”. Without limiting the conditions precedent provided herein for availability of the Facilities on the Closing Date, the Arrangers will cooperate with you as reasonably requested in coordinating the timing and procedures for the funding of the Facilities in a manner consistent with the Acquisition Agreement.
4.
Commitment Termination.
Each Commitment Party’s commitment hereunder and the other obligations set forth in this Commitment Letter will terminate on the earliest of: (a) the consummation of the Acquisition with or without the funding of any Facility; (b) five business days after the Termination Date (as defined in the Acquisition Agreement is in effect on the date of the Original Commitment Letter); and (c) the date the Acquisition Agreement is terminated (such earliest date, the “Commitment Termination Date”).
As consideration for our commitments and other obligations hereunder and our agreement to perform the services described herein, you agree to pay (or to cause to be paid) to us the fees set forth in this Commitment Letter, the Amended and Restated Fee Letter dated the date hereof among the parties hereto and each Agent Fee Letter dated the date of the Original Commitment Letter (such fee letters, as further amended, amended and restated, supplemented or otherwise modified, collectively, the “Fee Letter”). The terms of the Fee Letter are an integral part of our commitments and other obligations hereunder and our agreement to perform the services described herein and constitute part of this Commitment Letter for all purposes hereof. Each of the fees described in this Commitment Letter and the Fee Letter shall be nonrefundable when paid except as expressly agreed.
The Company shall indemnify and hold harmless each Commitment Party, its affiliates, and each Commitment Party’s and such affiliates’ respective directors, officers, employees, agents, trustees, representatives, attorneys and advisors and their respective successors and permitted assigns (each, a “Protected Party”) from and against any and all claims (including, without limitation, shareholder actions), damages, losses, liabilities and expenses (including, without limitation, reasonable and documented out-of-pocket fees and disbursements of one primary counsel for the Protected Parties, taken as a whole, one additional counsel to each group of similarly situated Protected Parties as required due to actual or reasonably perceived conflicts of interest and local counsel in each material jurisdiction, as necessary), that may be incurred by or asserted or awarded against any Protected Party (including, without limitation, in
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connection with or relating to any investigation, litigation or proceeding or the preparation of a defense in connection therewith), in each case arising out of or in connection with or by reason of this Commitment Letter, the Fee Letter, the Original Commitment Letter, the Original Fee Letter or the Operative Documents, the Transactions or the transactions contemplated hereby or thereby or any use of the proceeds thereof (any of the foregoing, a “Proceeding”), except to the extent such claim, damage, loss, liability or expense is (i) found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from such Protected Party’s (or its Related Parties’) bad faith, gross negligence or willful misconduct or material breach of this Commitment Letter or (ii) the result of any Proceeding that is not the result of an act or omission by you or any of your affiliates and that is brought by any Protected Party against any other Protected Party (other than any claims against any Commitment Party in its capacity or in fulfilling its role as Arranger, administrative agent or any similar role under any Facility). In the case of an investigation, litigation or other proceeding to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Company, any of its affiliates, security holders or creditors, a Protected Party or any other person, or a Protected Party is otherwise a party thereto and whether or not the Transactions are consummated. “Related Party” of a Protected Party means (a) any of such Protected Party’s directors, officers or employees or (b) any of such Protected Party’s agents, trustees, representatives, attorneys, consultants or advisors, in each case acting at the instructions of, or for the benefit of, such Protected Party.
In no event shall any party hereto be liable on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings); provided that nothing contained in this paragraph shall limit your indemnity and reimbursement obligations for such damages awarded to third parties to the extent set forth in the immediately preceding paragraph. The commitments and obligations of the Commitment Parties hereunder and under the Fee Letter are several and not joint, and no Commitment Party shall be liable on any theory of liability to you or any other person for the actions or omissions of any other Commitment Party.
You agree that, without our prior written consent, neither you nor any of your subsidiaries will settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding in respect of which indemnification could be sought under the indemnification provision of this Commitment Letter (whether or not we or any other Protected Party is an actual or potential party to such claim, action or proceeding), unless such settlement, compromise or consent includes an unconditional release of each Protected Party from all liability arising out of such claim, action or proceeding and does not include a statement as to or an admission of fault, culpability or failure to act by or on behalf of any Protected Party.
The Company acknowledges that information and other materials relative to the Operative Documents and the Transactions may be transmitted through the Platform. No Protected Party will be liable to the Company or any of its affiliates or any of its security holders or creditors for any damages arising from the use by unauthorized persons of information or other materials sent through the Platform that are intercepted by such persons, except to the extent such liability is determined by a final non-appealable judgment by a court of competent jurisdiction to have resulted from such Protected Party’s bad faith, gross negligence or willful misconduct.
The Company shall pay, or reimburse the Commitment Parties on demand for, all reasonable and documented out-of-pocket costs and expenses incurred by the Commitment Parties in connection with any Facility, the Transactions and the preparation, negotiation, execution and delivery of this Commitment Letter, the Fee Letter, the Original Commitment Letter, the Original Fee Letter and the Operative Documents, including, without limitation, the reasonable fees, disbursements and other charges
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of one primary counsel for the Commitment Parties, taken as a whole, one additional counsel to each group of similarly situated persons as required due to actual or reasonably perceived conflicts of interest and local counsel in each material jurisdiction, as necessary; provided that such costs and expenses shall only be payable if the Transactions are consummated and the Closing Date occurs. The Company shall also pay all reasonable and documented out-of-pocket costs and expenses of the Commitment Parties (including, without limitation, the reasonable fees, disbursements and other charges of one primary counsel for the Commitment Parties, taken as a whole, one additional counsel to each group of similarly situated persons as required due to actual or reasonably perceived conflicts of interest and local counsel in each material jurisdiction, as necessary) incurred by the Commitment Parties in connection with the enforcement of any of their rights and remedies hereunder. You acknowledge that we may receive a benefit, including without limitation, a discount, credit or other accommodation, from any of such counsel based on the fees such counsel may receive on account of their relationship with us including, without limitation, fees paid pursuant hereto.
The Company agrees that this Commitment Letter, the Fee Letter, the Original Commitment Letter and the Original Fee Letter are for its confidential use only and that neither their existence nor the terms hereof or thereof will be disclosed by it to any person other than its parent entities, subsidiaries and the officers, directors, employees, managers, members, partners, accountants, attorneys and other advisors of HGVI and its subsidiaries (the “Borrower Representatives”), and then only on a confidential and “need to know” basis in connection with the transactions contemplated hereby; provided, however, that the Company may disclose this Commitment Letter and the Original Commitment Letter and the contents hereof and thereof: (a)(i) as may be compelled or requested in a judicial or administrative proceeding, action or process or pursuant to the order or request of any court or administrative agency or upon the request or demand of any regulatory authority, (ii) as otherwise required by applicable law, regulation or governmental request or (iii) in any required (as reasonably determined by the Company) filings with the Securities and Exchange Commission and to the extent required by applicable regulatory authorities or stock exchanges (but, in the case of this clause (iii), not the Fee Letter or the Original Fee Letter or the contents thereof, except as part of generic disclosure of aggregate sources and uses with respect to the Transactions); (b) to Moody’s or S&P in connection with obtaining a rating of the Senior Unsecured Bridge Facility, the Senior Unsecured Notes and/or the Term Facility (but not the Fee Letter or the Original Fee Letter or the contents thereof, except as part of generic disclosure of aggregate sources and uses with respect to the Transactions); (c) to HGVI, Holdings and their respective subsidiaries and controlling persons and the officers, directors, employees, managers, members, partners, accountants, attorneys and other advisors of any of the foregoing who are directly involved in the consideration of this matter (together with an unredacted copy of the Fee Letter), in each case on a confidential and “need to know” basis in connection with the transactions contemplated hereby; (d) in syndication or other marketing materials relating to any Facility (but not the Fee Letter or the Original Fee Letter or the contents thereof, except as part of generic disclosure of aggregate sources and uses with respect to the Transactions); (e) to the Sellers, the Target and their respective officers, directors, employees, attorneys, accountants, agents and advisors, on a confidential basis (and you may disclose an unredacted copy of the Fee Letter and the Original Fee Letter and the contents thereof); (f) to HGVI, the Company and their respective affiliates’ accountants for customary audit or accounting purposes; (g) in connection with the exercise of any rights or remedies or (h) with our prior written consent. Your obligations under this paragraph shall automatically terminate on the earlier of (x) the date occurring 24 months after the date of the Original Commitment Letter and (y) the date that is 12 months after the termination of this Commitment Letter in accordance with its terms.
Each Commitment Party, on behalf of itself and its affiliates, agrees that it will use all confidential information provided to it or its affiliates by or on behalf of you hereunder solely for the purpose of providing the services which are the subject of this Commitment Letter or the Original
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Commitment Letter and shall treat confidentially all such information; provided that nothing herein shall prevent any Commitment Party from disclosing any such information (a) pursuant to the order of any court or administrative agency or otherwise as required by applicable law or regulation or as requested by a governmental authority (in which case such Commitment Party, to the extent permitted by law and except with respect to any audit or examination conducted by bank accountants or any governmental bank authority exercising examination or regulatory authority, agrees to inform you promptly thereof), (b) upon the request or demand of any regulatory authority having jurisdiction over such Commitment Party or any of its affiliates, (c) to the extent that such information becomes publicly available other than by reason of disclosure by any Commitment Party or any of its affiliates in violation of this paragraph, (d) to the extent that such information is received by any Commitment Party or its affiliates from a third party that is not, in each case to such Commitment Party’s knowledge, (i) in such third party’s possession illegally or as a result of a violation of this paragraph or (ii) subject to confidentiality obligations to you, HGVI or your or any of its subsidiaries, (e) to the extent that such information is independently developed by any Commitment Party or its affiliates, (f) to any of the Commitment Parties’ affiliates and any of their respective employees, legal counsel, independent auditors and other experts or agents who need to know such information in connection with any Facility and are informed of the confidential nature of such information, (g) to prospective Lenders, participants or assignees of obligations under any Facility, in each case who agree to be bound by the terms of this paragraph (or language substantially similar to this paragraph), (h) to Moody’s or S&P in connection with obtaining a rating of the Senior Unsecured Bridge Facility, the Senior Unsecured Notes and/or the Term Facility in consultation and coordination with you, (i) for the purposes of establishing any appropriate defense or in connection with the exercise of any rights or remedies or (j) to service providers to the Arrangers, Co-Manager Banks and the Lenders in connection with the administration and management of any Facility and, after the Closing Date, to market data collectors and similar services providers to the lending industry; provided that such information is limited to the existence of this Commitment Letter, the Original Commitment Letter and the Facilities and the terms of the Facilities customarily provided to such service providers. The Commitment Parties’ obligations under this paragraph shall automatically terminate and be superseded by the confidentiality provisions in the Operative Documents upon the execution and delivery thereof and, in the event the Operative Documents have not been executed and delivered, shall expire on the date occurring 24 months after the date of the Original Commitment Letter.
You acknowledge that neither any of the Commitment Parties nor any of their affiliates provide accounting, tax or legal advice. You further acknowledge that the Commitment Parties and their affiliates may be providing debt financing, equity capital or other services (including, without limitation, financial advisory services) to other persons in respect of which you, HGVI and your and its affiliates may have conflicting interests regarding the transactions described herein and otherwise. You also acknowledge that none of the Commitment Parties or their affiliates has any obligation to use in connection with the transactions contemplated by this Commitment Letter, or to furnish to you, confidential information obtained by them from other persons. As you know, the Commitment Parties are full service securities firms engaged, either directly or through their affiliates, in various activities, including securities trading, commodities trading, investment management, financing and brokerage activities and financial planning and benefits counseling for both companies and individuals. In the ordinary course of these activities, the Commitment Parties and their respective affiliates actively engage in commodities trading or trade the debt and equity securities (or related derivative securities) and financial instruments (including bank loans and other obligations) of HGVI, the Company and other companies which may be the subject of the arrangements contemplated by this Commitment Letter for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities. The Commitment Parties or their affiliates may also co-invest with, make direct investments in, and invest or co-invest client monies in or with funds or other investment vehicles managed by other parties, and such funds or other investment vehicles may trade or make investments in securities of you, HGVI and its subsidiaries or other companies which may be the subject of the arrangements contemplated by this Commitment Letter or engage in
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commodities trading with any thereof. The Company acknowledges that (i) BANA, an affiliate of BofA Securities, currently is acting as administrative agent and (ii) each Commitment Party or its affiliate currently is acting as a lender, in each case under the Existing Credit Agreement and the Company’s and its affiliates’ rights and obligations under any other agreement with any Commitment Party or any of its affiliates (including the Existing Credit Agreement) that currently or hereafter may exist are, and shall be, separate and distinct from the rights and obligations of the parties pursuant to this Commitment Letter, and none of such rights and obligations under such other agreements shall be affected by any Commitment Party’s performance or lack of performance of services hereunder. The Company further acknowledges that an affiliate of DBSI currently is acting as a lender under the Existing Credit Agreement and the Receivables Loan Agreement, dated as of December 16, 2016 (as amended, restated, amended and restated or otherwise modified from time to time, the “DB Warehouse Agreement”), by and among Diamond Resorts DB Borrower LLC, as borrower, Wells Fargo Bank, National Association, as collateral agent, paying agent and securities intermediary, the persons from time to time party thereto as conduit lenders, the financial institutions from time to time party thereto as committed lenders, the financial institutions from time to time party thereto as managing agents and DBSI, as administrative agent and as structuring agent, and the Company’s and its affiliates’ rights and obligations under any other agreement with DBSI or any of its affiliates (including the Existing Credit Agreement and the DB Warehouse Agreement) that currently or hereafter may exist are, and shall be, separate and distinct from the rights and obligations of the parties pursuant to this Commitment Letter, and none of such rights and obligations under such other agreements shall be affected by DBCI’s or DBSI’s performance or lack of performance of services hereunder. In addition, please note that Goldman Sachs & Co. LLC has been retained by the Seller as the financial advisor (in such capacity, the “Financial Advisor”) to the Seller in connection with the Acquisition. You agree to such retention, and further agree not to assert any claim you might allege based on any actual or potential conflicts of interest that might be asserted to arise or result from, on the one hand, the engagement of the Financial Advisor and, on the other hand, our and our affiliates’ relationships with you as described and referred to herein. Each of the Commitment Parties hereto acknowledges (i) the retention of Goldman Sachs & Co. LLC as the Financial Advisor and (ii) that such relationship does not create any fiduciary duties or fiduciary responsibilities to such Commitment Party on the part of Goldman Sachs or its affiliates.
9.
Representations and Warranties.
The Company represents and warrants (which representation and warranty, in the case of any information relating to the Target and its subsidiaries prior to the Acquisition, is to the best of the Company’s knowledge) that all written information, other than Projections (as defined below), other forward-looking information and information of a general economic or industry-specific nature, that has been or will hereafter be made available to any of the Commitment Parties, any Lender or any potential Lender by or on behalf of the Company or any of its representatives (the “Information”) is and will be, when furnished, true and correct in all material respects and does not and will not, taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements were or are made (after giving effect to all supplements and updates thereto provided prior to the earlier of the Closing Date and the Syndication Date) and all financial projections, if any, that have been or will be prepared by or on behalf of the Company or any of its representatives and made available to any of the Commitment Parties, any Lender or any potential Lender (the “Projections”) have been or will be prepared in good faith based upon assumptions that are believed by you to be reasonable at the time made available (it being understood that such Projections are as to future events and are not to be viewed as facts, that actual results during the period or periods covered by any such Projections may differ significantly from the projected results and that such differences may be material, that such Projections are subject to significant uncertainties and contingencies many of which are beyond your control, and that no assurance can be given that the projected results will be realized). If, at any time from the date of the Original Commitment Letter until the later of the Closing Date and the Syndication Date, you become aware that
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any of the representations and warranties in the preceding sentence would be incorrect in any material respect if the Information or Projections were being furnished, and such representations and warranties were being made, at such time, then you agree to (or, prior to the Closing Date, with respect to Information and Projections relating to the Target and its subsidiaries, use your commercially reasonable efforts to) promptly supplement the Information and/or Projections so that the representations and warranties contained in this paragraph remain true and correct in all material respects under those circumstances. For the avoidance of doubt, the accuracy of the representations and warranties in this Section 9, in and of itself, shall not be a condition to the obligations of the Commitment Parties hereunder or the funding of the Facilities.
In arranging and syndicating the Facilities, the Commitment Parties will be entitled to use, and to rely on the representations and warranties in the preceding paragraph relating to, any information furnished to us by or on behalf of the Company and its affiliates without responsibility for independent verification thereof.
The Company may not assign or delegate any of its rights or obligations under this Commitment Letter or the Fee Letter without our prior written consent, and any attempted assignment without such consent shall be null and void. No Commitment Party may assign or delegate any of its rights or obligations under this Commitment Letter or its commitment hereunder (except to one or more of its designated affiliates) other than as expressly permitted hereunder without the Company’s prior written consent; provided, that Goldman Sachs may, without notice to the Company or any other party, assign its obligations, commitments and agreements hereunder in whole or in part to Goldman Sachs Lending Partners LLC and such assignment shall relieve Goldman Sachs in respect of any commitments hereunder that are so assigned pursuant to this proviso.
Neither this Commitment Letter nor the Fee Letter may be amended or any provision hereof waived or modified except by an instrument in writing signed by the Company and each party hereto or thereto, as applicable.
This Commitment Letter (and any claim, controversy or dispute arising under or related to any of the foregoing, whether based on contract, tort or otherwise) shall be governed by, and construed in accordance with, the law of the State of New York, without giving effect to any conflicts of law principles which would result in the application of the laws of another state; provided, however, that (i) the interpretation of the definition of Company Material Adverse Effect (and whether a Company Material Adverse Effect has occurred) for purposes of the condition in clause (a) of the first sentence of Section 3 above relating to the occurrence of a Company Material Adverse Effect and (ii) the determination of the accuracy of any Acquisition Agreement Representations and whether as a result of any inaccuracy thereof the Company (or any of its affiliates) have the right to terminate its obligations (or to refuse to consummate the Acquisition) under the Acquisition Agreement, as applicable, in each case shall be governed by, and construed in accordance with, the laws of the State of Delaware (excluding conflict of laws rules and principles to the extent that to do so would result in the application of the laws of another jurisdiction).
Each party hereto irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Commitment Letter, the Fee Letter, the Original Commitment Letter, the Original Fee Letter, the Operative Documents, the transactions contemplated hereby or thereby or the actions of the parties hereto or any of their affiliates
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in the negotiation, performance or enforcement of this Commitment Letter, the Fee Letter, the Original Commitment Letter, the Original Fee Letter or the Operative Documents.
Each of the parties hereto irrevocably and unconditionally submits to the exclusive jurisdiction of the Supreme Court of the State of New York, County of New York, Borough of Manhattan or if under applicable law jurisdiction is vested in Federal courts, the United States District Court for the Southern District of New York (and the appellate courts thereof), over any suit, action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter, the Original Commitment Letter, the Original Fee Letter, the Operative Documents, the transactions contemplated hereby or thereby or the actions of the parties hereto or thereto or any of their affiliates in the negotiation, performance or enforcement of this Commitment Letter, the Fee Letter, the Original Commitment Letter, the Original Fee Letter or the Operative Documents, and agrees that all claims in respect of any such action or proceeding shall be brought, heard and determined only in such New York State court or, to the extent permitted by law, in such federal court. Service of any process, summons, notice or document by registered mail addressed to any such party shall be effective service of process against such person for any suit, action or proceeding brought in any such court. Each of the parties hereto irrevocably and unconditionally waives any objection to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. A final judgment in any such suit, action or proceeding brought in any such court may be enforced in any other courts to whose jurisdiction such party is or may be subject by suit upon judgment.
Each of the parties hereto agrees that, (i) this Commitment Letter is a binding and enforceable agreement with respect to the subject matter contained herein, including an agreement to negotiate in good faith the Operative Documents by the parties hereto in a manner consistent with this Commitment Letter, it being acknowledged and agreed that the funding of the Facilities is subject to the Exclusive Funding Conditions and (ii) the Fee Letter is a binding and enforceable agreement of the parties thereto with respect to the subject matter set forth therein.
All payments under this Commitment Letter and the Fee Letter will, except as otherwise provided herein, be made in U.S. Dollars in New York, New York and shall be without set off or counterclaim.
This Commitment Letter and the Fee Letter contain the entire agreement between the parties relating to the subject matter hereof and supersede all oral statements and prior writings with respect thereto. Section headings herein are for convenience only and are not a part of this Commitment Letter. This Commitment Letter and the Fee Letter are solely for the benefit of the parties hereto and thereto (and Indemnified Persons, to the extent set forth in Section 6), and no other person shall acquire or have any rights under or by virtue of this Commitment Letter or the Fee Letter. This Commitment Letter is not intended to create a fiduciary relationship among the parties hereto, and the Company waives, to the fullest extent permitted by law, any claims it may have against any of the Commitment Parties or any of their affiliates for breach of fiduciary duty or alleged breach of fiduciary duty in connection with the transactions contemplated by this Commitment Letter and agrees that none of the Commitment Parties or any of their affiliates shall have any liability (whether direct or indirect) to the Company or any of its affiliates in respect of such a fiduciary duty claim or to any person asserting such a fiduciary duty claim on behalf of or in right of the Company or any of its affiliates. Any and all services to be provided by any of the Commitment Parties hereunder may be performed, and any and all rights of any of the Commitment Parties hereunder may be exercised, by or through any of such Commitment Party’s affiliates and branches, and, in connection with the provision of such services, each Commitment Party may exchange with such affiliates and
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branches information concerning the Company or any of its affiliates and the other companies that may be the subject of the transactions contemplated by this Commitment Letter and, to the extent so employed, such affiliates and branches shall be entitled to the benefits afforded to the Commitment Parties hereunder, subject to the confidentiality provisions herein.
The indemnification, compensation (if applicable), reimbursement, sharing of information, absence of fiduciary relationships, jurisdiction, governing law, venue, service of process, waiver of jury trial, syndication and confidentiality provisions (except to the extent expressly set forth herein) contained herein and in the Fee Letter shall remain in full force and effect regardless of whether the Operative Documents shall be executed and delivered and notwithstanding the termination or expiration of this Commitment Letter or the Commitment Parties’ commitments hereunder; provided that your obligations under this Commitment Letter (other than your obligations with respect to (a) assistance to be provided in connection with the syndication thereof (including supplementing and/or correcting Information and Projections) prior to the later of the Closing Date and the Syndication Date and (b) confidentiality) shall automatically terminate and be superseded by the provisions of the Operative Documents upon the initial funding thereunder, in each case solely to the extent covered thereby with retroactive application to the date of the Original Commitment Letter. You shall have the right to terminate this Commitment Letter and the commitments of the Initial Lenders hereunder (or any portion thereof pro rata among the Initial Lenders) at any time upon written notice to the Initial Lenders from you, other than with respect to your surviving obligations as set forth above.
We hereby notify you that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Patriot Act”) and the requirements of 31 C.F.R. § 1010.230 (the “Beneficial Ownership Regulation”), we and the other Lenders may be required to obtain, verify and record information that identifies each borrower and each guarantor under the Operative Documents, which information includes the name, address and tax identification number and other customary information regarding any such borrower or guarantor that will allow us and the other Lenders to identify any such borrower or guarantor in accordance with the Patriot Act or the Beneficial Ownership Regulation, as applicable. We and the other Lenders may also request corporate formation documents, or other forms of identification, to verify the information provided. This notice is given in accordance with the requirements of the Patriot Act and is effective as to each Lender. You hereby acknowledge and agree that the Commitment Parties shall be permitted to share any or all such information with the Lenders.
If any term, provision, covenant or restriction contained in this Commitment Letter is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the remainder of the terms, provisions, covenants and restrictions contained herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated. The parties hereto shall endeavor in good faith negotiations to replace the invalid, void or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, void or unenforceable provisions.
This Commitment Letter may be executed in multiple counterparts and by different parties hereto in separate counterparts, all of which, taken together, shall constitute an original. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission or electronic transmission (in .pdf format) will be effective as delivery of a manually executed counterpart hereof. This Commitment Letter may be in the form of an Electronic Record (as defined herein) and may be executed using Electronic Signatures (as defined herein) (including, without limitation, facsimile and .pdf) and shall be considered an original, and shall have the same legal effect, validity and enforceability as a paper record. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by the Commitment Parties of a manually signed paper communication which has been converted into electronic form (such as scanned into .pdf format), or an electronically signed communication converted into another format, for transmission, delivery and/or retention. Upon the request
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of any Commitment Party any Electronic Signature shall be promptly followed by a manually executed, original counterpart. “Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time. For the avoidance of doubt, the foregoing also applies to any amendment, extension or renewal of this Commitment Letter.
If the foregoing correctly sets forth our agreement with you, please indicate your acceptance of the terms of this Commitment Letter and of the Fee Letter by returning executed counterparts to this Commitment Letter and the Fee Letter to us at or before 11:59 p.m. (New York City time) on March 25, 2021. If you do not return such executed counterparts prior to the date and time provided above, the commitment and other obligations of the Commitment Parties set forth in this Commitment Letter will automatically terminate.
[Signature Pages Follow]
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Very truly yours,
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BANK OF AMERICA, N.A.
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By:
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/s/ Joseph Stephanak
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Name: Joseph Stephanak
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Title: Director
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BofA SECURITIES, INC.
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By:
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/s/ Joseph Stephanak
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Name: Joseph Stephanak
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Title: Director
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DEUTSCHE BANK SECURITIES INC.
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By:
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/s/ Nicholas Hayes
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Name: Nicholas Hayes
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Title: Managing Director
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By:
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/s/ Ryan Corning
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Name: Ryan Corning
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Title: Ryan Corning
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DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH
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By:
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/s/ Nicholas Hayes
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Name: Nicholas Hayes
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Title: Managing Director
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By:
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/s/ Ryan Corning
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Name: Ryan Corning
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Title: Managing Director
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DEUTSCHE BANK AG NEW YORK BRANCH
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By:
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/s/ Nicholas Hayes
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Name: Nicholas Hayes
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Title: Managing Director
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By:
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/s/ Ryan Corning
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Name: Ryan Corning
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Title: Managing Director
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BARCLAYS BANK PLC
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By:
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/s/ Jeremy Hazan
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Name: Jeremy Hazan
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Title: Managing Director
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CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
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By:
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/s/ Lingzi Huang
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Name: Lingzi Huang
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Title: Authorized Signatory
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CREDIT SUISSE LOAN FUNDING LLC
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By:
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/s/ Malcolm Price
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Name: Malcolm Price
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Title: Authorized Signatory
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JPMORGAN CHASE BANK, N.A.
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By:
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/s/ Nadeige Dang
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Name: Nadeige Dang
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Title: Executive Director
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GOLDMAN SACHS BANK USA
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By:
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/s/ Charles Johnston
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Name: Charles Johnston
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Title: Authorized Signatory
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MUFG BANK, LTD.
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By:
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/s/ Grant Moyer
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Name: Grant Moyer
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Title: Managing Director
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WELLS FARGO SECURITIES, LLC
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By:
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/s/ William L. Zvara
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Name: William L. Zvara
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Title: Vice President
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WELLS FARGO BANK, NATIONAL ASSOCIATION
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By:
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/s/ Mark F. Monahan
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Name: Mark F. Monahan
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Title: Director
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CITIZENS BANK, N.A.
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By:
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/s/ Ryan Vermette
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Name: Ryan Vermette
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Title: Vice President
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FIFTH THIRD BANK, NATIONAL ASSOCIATION
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By:
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/s/ Nathaniel Evett
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Name: Nathaniel Evett
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Title: Director
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REGIONS BANK
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By:
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/s/ Tim Blakley
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Name: Tim Blakley
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Title: Managing Director
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REGIONS CAPITAL MARKETS, A DIVISION OF REGIONS BANK
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By:
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/s/ Russ Fallis
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Name: Russ Fallis
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Title: Managing Director
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MIZUHO BANK, LTD.
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By:
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/s/ Tracy Rahn
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Name: Tracy Rahn
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Title: Executive Director
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ACCEPTED and agreed to as of the date
first written above:
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HILTON GRAND VACATIONS BORROWER LLC
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By:
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/s/ Ben Loper
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Name: Ben Loper
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Title: Vice President and Treasurer
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Annex 1
Co-Manager Bank Schedule
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Commitment Party
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Senior Unsecured Bridge Facility Commitment
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Term Facility Commitment
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Wells Fargo Securities, LLC
Wells Fargo Bank, National Association
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3.0%
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3.0%
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Citizens Bank, N.A.
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2.0%
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2.0%
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Fifth Third Bank, National Association
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2.0%
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2.0%
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Regions Bank
Regions Capital Markets, a Division of Regions Bank
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2.0%
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2.0%
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Mizuho Bank, Ltd.
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0.75%
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0.75%
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Exhibit A
to
Commitment Letter
Transactions Description
All capitalized terms used herein but not defined herein shall have the meanings provided in the letter agreement to which this Exhibit A is attached or in the other Exhibits to such letter agreement, as applicable. The following transactions are referred to herein collectively as the “Transactions”.
The Company intends to acquire (the “Acquisition”), directly or indirectly, all of the outstanding capital stock of, or, directly or indirectly merge with, the company previously identified to us as “Diamond” (the “Target”) pursuant to the Acquisition Agreement (as defined below). In connection with the foregoing, it is intended that:
1.
Pursuant to the Agreement and Plan of Merger, dated as of March 10, 2021 (together with all schedules, exhibits, attachments and annexes thereto, the “Acquisition Agreement”), by and among Hilton Grand Vacations Inc., as parent, the Company, the Target, AP VIII Dakota Holdings, L.P., as the seller representative, and the Sellers (as defined therein), the Target will be merged with and into the Company (the “Merger”) with the Company as the survivor of the Merger.
2.
The Company will borrow senior unsecured increasing rate bridge loans (the “Senior Unsecured Bridge Loans”) under a new senior unsecured bridge loan facility (the “Senior Unsecured Bridge Facility”) on the terms set forth in Exhibit B to the Commitment Letter in an aggregate principal amount of up to (i) $675,000,000, less (ii) the amount of gross cash proceeds actually received by the Company from the issuance of one or more series of senior unsecured notes (collectively, the “Senior Unsecured Notes”) in a Rule 144A or other private placement on or prior to the Closing Date.
3.
The Company will borrow a seven-year senior secured term loan B facility on the terms set forth in Exhibit C to the Commitment Letter (the “Term Facility”) in an aggregate principal amount of $1,300,000,000.
4.
Pursuant to the Acquisition Agreement, the Company will use a combination of cash on hand and/or borrowings under (a) the revolving credit facility under the Existing Credit Agreement and (b) the proceeds of the Senior Unsecured Notes and/or Senior Unsecured Bridge Loans (as applicable) and of the Term Facility for the purpose of consummating the Acquisition, the Refinancing and the other Transactions.
5.
On or prior to the Closing Date, (i) all “Term Loans” under and as defined in the credit agreement dated as of December 28, 2016 (as heretofore amended, modified, refinanced or restated on or prior to the date hereof, including by, for the avoidance of doubt, amendment no. 4 after giving effect thereto, the “Existing Credit Agreement”) among the Company, the guarantors party thereto, and Bank of America, N.A., as administrative agent, will be repaid in full and all commitments, guarantees and security interests with respect thereto (as applicable) will be terminated, (ii) the indebtedness in respect of the Company’s 6.125% senior unsecured notes due 2024 will be satisfied and discharged, (iii) the indebtedness of the Target and its subsidiaries under the First Lien Credit Agreement, dated as of September 2, 2016, as heretofore amended, modified, refinanced or restated, among the Target, Barclays Bank PLC, as administrative agent, and other parties thereto will be repaid in full and all commitments, guarantees and security interests with respect thereto will be terminated and (iv) the indebtedness of the Target and its subsidiaries in respect of its 7.750% first-priority senior secured notes due 2023 under that certain Indenture, dated as of August 31, 2016 by an among Dakota Resorts
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6.
International, Inc. (as successor in merger with Dakota Merger Sub, Inc.) as issuer and Wilmington Trust, National Association, as trustee will be satisfied and discharged (the “Refinancing”).
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Exhibit B
to
Commitment Letter
$675,000,000 Senior Unsecured Bridge Facility
Summary of Principal Terms and Conditions
All capitalized terms used herein but not defined herein shall have the meanings provided in the letter agreement to which this Exhibit B is attached or in the other Exhibits to such letter agreement, as applicable.
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Borrower:
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Hilton Grand Vacations Borrower LLC, a Delaware limited liability company (the “Company”).
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Administrative Agent:
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Deutsche Bank AG Cayman Islands Branch will act as sole administrative agent (in such capacities, the “Agent”) for a syndicate of banks, financial institutions, investors and other lenders (together with the Initial Lenders, the “Lenders”), and will perform the duties customarily associated with such roles.
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Bookrunners:
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Each of Deutsche Bank Securities Inc., BofA Securities, Inc., Barclays Bank PLC, Credit Suisse Loan Funding LLC, JPMorgan Chase Bank, N.A., Goldman Sachs Bank USA and MUFG Bank, Ltd. will act as a bookrunner for the Senior Unsecured Bridge Facility (as defined below), and will perform the duties customarily associated with such roles.
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Co-Managers:
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Each of the Co-Managers Banks will act as a co-manager for the Senior Unsecured Bridge Facility and will perform the duties customarily associated with such roles.
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Senior Unsecured Bridge Facility:
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$675,000,000 in aggregate principal amount of senior unsecured increasing rate bridge loans (the “Senior Unsecured Bridge Loans”), less the amount of gross cash proceeds from any sale of the Senior Unsecured Notes actually received by the Company on or prior to the Closing Date.
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Purpose:
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The proceeds of the Senior Unsecured Bridge Loans will be used by the Company on the Closing Date to consummate the Acquisition and the Refinancing and for the payment of fees, costs and expenses in connection with the Transactions.
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Availability:
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The full amount of the Senior Unsecured Bridge Loans must be drawn in a single drawing on the Closing Date. Amounts borrowed under the Senior Unsecured Bridge Facility and repaid may not be reborrowed.
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Ranking:
|
The Senior Unsecured Bridge Loans will constitute senior unsecured indebtedness of the Company.
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Conversion and Maturity:
|
On the first anniversary of the Closing Date (the “Conversion Date”), any Senior Unsecured Bridge Loan that has not been previously repaid in full will be automatically converted into a senior unsecured term loan (each a “Senior Unsecured Term Loan”) due on the date that is eight
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years after the Closing Date (the “Senior Unsecured Maturity Date”), subject to the Conditions Precedent to Conversion set forth in Annex B-I hereto. At any time on or after the Conversion Date, at the option of the applicable Lender, such Senior Unsecured Term Loans may be exchanged in whole or in part for senior unsecured exchange notes (the “Senior Unsecured Exchange Notes”) having an equal principal amount and having the terms set forth in Annex B-II to this Exhibit B; provided, however, that the Company may defer the first issuance of Senior Unsecured Exchange Notes until such time as the Company shall have received requests to issue an aggregate of at least $150,000,000 in principal amount of Senior Unsecured Exchange Notes.
The Senior Unsecured Term Loans will be governed by the provisions of the Operative Documents and will have the same terms as the Senior Unsecured Bridge Loans except as expressly set forth in Annex B-I hereto. The Senior Unsecured Exchange Notes will be issued pursuant to an indenture that will have the terms set forth on Annex B-II hereto.
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Guarantees:
|
All obligations of the Company under the Senior Unsecured Bridge Facility will be unconditionally guaranteed on a joint and several basis (the “Guarantees”) by (a) the entities that are guarantors under the Existing Credit Agreement and (b) the Target and its subsidiaries that would be required to be guarantors under the Existing Credit Agreement (collectively, the “Guarantors”).
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Security:
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None.
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Mandatory Prepayments and Commitments Reductions:
|
The commitments in respect of the Senior Unsecured Bridge Facility shall be automatically reduced by, and the Senior Unsecured Bridge Loans shall be prepaid at par with, (a) 100% of the net cash proceeds of all non-ordinary course asset sales and other dispositions of property by the Company and its restricted subsidiaries (including proceeds from the sale of equity securities of any restricted subsidiary and insurance and condemnation proceeds) (subject to any requirement for prepayment of the Company’s existing indebtedness, the Term Facility (to which such net cash proceeds shall be first applied to prepay the loans thereunder before being applied to reduce the Senior Unsecured Bridge Facility) and other exceptions or baskets and reinvestment provisions to be agreed upon in accordance with the Bridge Documentation Principles, and, in the case of reinvestment rights, to be required to be reinvested within 12 months, or 18 months with a binding commitment to reinvest within 12 months, after receipt of such proceeds), (b) 100% of the net cash proceeds of issuances, offerings or placements of debt for borrowed money (including the Senior Unsecured Notes and other refinancing debt in respect of the Senior Unsecured Bridge Facility) of the Company and its restricted subsidiaries (subject to exceptions for (i) borrowings under the Existing Credit Agreement and any amendment, refinancing, restatement and/or replacement thereof that in each case does not increase the aggregate revolving commitments thereunder (other than by the amount of accrued and unpaid interest on the indebtedness being refinanced and the amount of any costs, fees and expenses incurred in connection
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therewith), (ii) any intercompany debt of the Company and its subsidiaries, (iii) any warehouse facilities or asset-backed securitizations, (iv) any debt incurred under the Facilities, (v) any debt of the Company or any of its subsidiaries incurred in the ordinary course, including without limitation, purchase money indebtedness, equipment financings, deferred purchase price obligations, short term debt for working capital, capital leases, letter of credit facilities and overdraft facilities and/or (vi) debt of the Target and its subsidiaries contemplated under the Acquisition Agreement); provided that in the event any Lender or affiliate of a Lender purchases debt securities from the Company pursuant to a securities demand at a price above the level at which such Lender or affiliate has reasonably determined such debt securities can be resold by such Lender or affiliate to a bona fide third party at the time of such purchase (and notifies the Company thereof) the net cash proceeds received by the Company in respect of such debt security may, at the option of such Lender or affiliate, be applied first to prepay the Senior Unsecured Bridge Loans of such Lender or affiliate prior to being applied to prepay the Senior Unsecured Bridge Loans held by other Lenders and (c) 100% of the net cash proceeds received from the issuance of equity by, or equity contributions to, the Company or any of its subsidiaries (subject to exceptions for (i) equity-based employee compensation plans, including employee stock option plans, equity issued by a subsidiary of the Company to the Company or any other subsidiary, (ii) equity issuances contemplated under the Acquisition Agreement, (iii) equity securities issued as consideration in any acquisition or as directors’ qualifying shares and/or (iv) other nominal amounts required to be held by persons and other customary exceptions to be agreed), which net cash proceeds shall be applied to reduce the commitments under and prepay the Senior Unsecured Bridge Facility.
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Voluntary Prepayments:
|
Voluntary prepayments of borrowings under the Senior Unsecured Bridge Facility may be made at any time, on three business days’ notice in the case of a prepayment of LIBOR loans or one business day’s notice in the case of a prepayment of Base Rate loans, without premium or penalty in minimum principal amounts to be agreed; provided that voluntary prepayments of LIBOR loans made on a date other than the last day of an interest period applicable thereto shall be subject to customary breakage costs.
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Interest Rates:
|
Interest for the first three month period commencing on the Closing Date shall be payable at Adjusted LIBOR plus 450 basis points (the “Spread”). At the end of the three-month period commencing on the Closing Date, and at the end of each three-month period thereafter, the Spread for the immediately succeeding three-month period shall increase by an additional 50 basis points. Interest shall be payable quarterly in arrears. Notwithstanding anything to the contrary set forth above, at no time shall the per annum interest rate on the Senior Unsecured Bridge Loans, the Senior Unsecured Term Loans (as defined below) or the Senior Unsecured Exchange Notes (as defined below) exceed the Total Senior Unsecured Cap (as defined in the Fee Letter), subject to the Default Interest below. As used herein, “Adjusted LIBOR” means the London
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interbank offered rate (“LIBOR”) for U.S. dollars (adjusted for statutory reserve requirements) as determined by the Agent for the respective interest period selected by the Company (subject to a floor of zero ).
The Operative Documents will include LIBOR modifications to reflect LIBOR replacement provisions consistent with the ARRC “hardwired” approach (with such modifications as agreed between the Company and the Administrative Agent), with a floor of zero.
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Default Interest:
|
Overdue principal, interest and other amounts shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any loan, 2.00% plus the rate otherwise applicable to such loan or (ii) in the case of any other amount, 2.00% plus the rate applicable to Base Rate loans. Such interest shall be payable on demand.
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Conditions Precedent to Initial Borrowings:
|
The funding of the Senior Unsecured Bridge Loans on the Closing Date shall be subject to only those conditions precedent that are Exclusive Funding Conditions.
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Documentation:
|
The Operative Documents with respect to the Senior Unsecured Bridge Facility will include a single credit agreement providing for the Senior Unsecured Bridge Facility and shall be negotiated in good faith, giving effect to the Limited Conditionality Provision, and shall be consistent with the terms herein, the Commitment Letter, the Fee Letter and, except as otherwise provided herein or in the Commitment Letter or the Fee Letter, substantially identical to that certain Indenture, dated as of October 24, 2016, among the Company, as issuer, the co-issuer party thereto and Wilmington Trust, National Association, as trustee (as amended or supplemented to the date hereof, the “Existing Indenture”), with additions, deletions, modifications and other changes as the Company and the Global Coordinators reasonably determine to be necessary or advisable, including, among other things, (i) to give effect to the Transactions and other transactions contemplated hereby, (ii) to provide for and give effect to the Guarantees and to reflect the unsecured nature of the Senior Unsecured Bridge Facility, (iii) to reflect changes in law (including customary QFC and EU and UK bail-in provisions and provisions to address LLC divisions under Delaware law) or accounting standards or cure mistakes or defects, (iv) to reflect reasonable administrative, agency and operational requirements of the Agent, (v) give due regard to the operational requirements of the Company and its subsidiaries in light of its size, structure, industry, business and proposed business plan and operations and (vi) to reflect covenants and financial definitions that are no less favorable to the Company and its subsidiaries than the Existing Credit Agreement (except as otherwise set forth in this Commitment Letter), and in any event, will contain only those conditions to borrowing, prepayments, representations and warranties, covenants and events of default expressly set forth in this Exhibit B (the “Bridge Documentation Principles”).
Notwithstanding the foregoing, all obligations of the Company and its restricted subsidiaries that are or would have been treated as operating
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leases for purposes of GAAP prior to the issuance by the Financial Accounting Standards Board on February 25, 2016 of an Accounting Standards Update (the “ASU”) shall continue to be accounted for as operating leases for purposes of all financial definitions and calculations for purpose of the Operative Documents (whether or not such operating lease obligations were in effect on such date) notwithstanding the fact that such obligations are required in accordance with the ASU (on a prospective or retroactive basis or otherwise) to be treated as capitalized lease obligations in the financial statements to be delivered pursuant to the Operative Documents.
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Representations and Warranties:
|
Limited to the following (applicable to the Company and its restricted subsidiaries): organization and powers; authorization and enforceability; governmental approvals and no conflicts (including no creation of liens); accuracy of financial statements; no material adverse change (after the Closing Date); ownership of properties and possession under leases; absence of any actual or threatened actions, suits or proceedings; compliance with environmental laws; compliance with labor matters; compliance with law; compliance with anti-terrorism and money laundering laws and regulations and laws applicable to sanctioned persons, Office of Foreign Assets Protection Act (“OFAC”), the Foreign Corrupt Practices Act (“FCPA”) and other applicable anti-corruption laws and regulations; inapplicability of the Investment Company Act of 1940; margin regulations; payment of taxes; compliance with ERISA; accuracy of disclosed information; subsidiaries; intellectual property; licenses; subordination of junior financing; solvency of the Company and its restricted subsidiaries on a consolidated basis, in each case subject to customary materiality thresholds, baskets, qualifications and exceptions substantially consistent with the Bridge Documentation Principles.
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Affirmative Covenants:
|
Limited to the following (applicable to the Company and its restricted subsidiaries): delivery of audited annual consolidated financial statements for the Company, unaudited quarterly consolidated financial statements for the Company (for the first three fiscal quarters of each fiscal year) and other financial information and other information; delivery of notices of default, litigation, material adverse effect; maintenance of organizational existence and rights; payment and performance of obligations; maintenance of properties in good working order; maintenance of customary insurance; maintenance and inspection of books and properties; compliance with laws; compliance with environmental laws; designation of subsidiaries; additional guarantors; further assurances; and commercially reasonable efforts to maintain ratings (but not a specific rating), in each case subject to thresholds, baskets, qualifications and exceptions substantially consistent with the Bridge Documentation Principles.
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Negative Covenants:
|
Incurrence-based negative covenants that are consistent with the Bridge Documentation Principles; provided that prior to the Conversion Date, the debt, lien and restricted payment covenants applicable to the Senior Unsecured Bridge Loans shall be more restrictive than those applicable
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to the Senior Unsecured Term Loans and the Senior Unsecured Exchange Notes.
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Financial Covenant:
|
None.
|
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Events of Default:
|
Usual for facilities and transactions of this type and limited to the following: nonpayment of principal, interest or other amounts; inaccuracy of representations and warranties in any material respect; violation of covenants; cross acceleration and cross payment default to material indebtedness; voluntary and involuntary bankruptcy or insolvency proceedings; inability to pay debts as they become due; material monetary judgments; ERISA events that would result in a material adverse effect; actual or asserted invalidity of Operative Documents (including Guarantees); invalidity of senior debt status or subordination provisions; and Change in Control (as defined in the Existing Indenture), in each case with customary grace periods, materiality thresholds, qualifications and exceptions substantially consistent with the Bridge Documentation Principles.
In case an event of default shall occur and be continuing, the holders of at least a majority in aggregate principal amount of the Senior Unsecured Bridge Loans then outstanding, by notice in writing to the Company, may declare the principal of, and all accrued interest on, all Senior Unsecured Bridge Loans to be due and payable immediately. If a bankruptcy event of the Company occurs, the principal of and accrued interest on the Senior Unsecured Bridge Loans will be immediately due and payable without any notice, declaration or other act on the part of the holders of the Senior Unsecured Bridge Loans. An acceleration notice may be annulled and past defaults (except for monetary defaults not yet cured) may be waived by the holders of a majority in aggregate principal amount of the Senior Unsecured Bridge Loans.
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Voting:
|
Amendments and waivers of the Operative Documents will require the acknowledgement by the Agent and the approval of Lenders holding more than 50% of the aggregate amount of the Senior Unsecured Bridge Loans, except that (a) the consent of each Lender adversely affected thereby shall be required with respect to, among other things, (i) extension, increases or non-pro rata reductions in commitments, (ii) reductions or forgiveness of principal or interest or any other amounts, (iii) extensions of final maturity (except as provided under the caption “Conversion and Maturity” above) or postponement of any payment dates, (iv) modifications to any of the voting percentages and (v) modifications of the length of interest period and (b) the consent of 100% of the Lenders shall be required with respect to (i) releases of all or substantially all of the value of the Guarantees (other than in connection with any release of the relevant Guarantees permitted by the Operative Documents) and (ii) additional restrictions on the right to exchange Senior Unsecured Term Loans for Senior Unsecured Exchange Notes or any amendment of the rate of such exchange.
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Cost and Yield Protection:
|
Usual for facilities and transactions of this type, including customary tax gross-up provisions.
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Assignments and Participation:
|
After execution of the Operative Documents, each Lender may assign all or, subject to minimum amounts to be agreed, a portion of its loans and commitments under the Senior Unsecured Bridge Facility. Such assignments will require payment of an administrative fee to the Agent and the consent of the Agent and, prior to the occurrence of a payment or bankruptcy event of default with respect to the Company or the occurrence of a Demand Failure Event (as defined in the Fee Letter), the Company (such consent not to be unreasonably withheld or delayed) if, after giving effect thereto, the Arrangers and their affiliates would hold, in the aggregate, less than 50.1% of the aggregate amount of the commitments and outstanding loans under the Senior Unsecured Bridge Facility; provided that no consent of the Agent or the Company shall be required for an assignment to an existing Lender or an affiliate or approved fund of an existing Lender. In addition, each Lender may sell participations in all or a portion of its loans and commitments under the Senior Unsecured Bridge Facility without restriction; provided that no purchaser of a participation shall have the right to exercise or to cause the selling Lender to exercise voting rights in respect of the Senior Unsecured Bridge Facility (except as to certain customary matters).
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Expenses and Indemnification:
|
Usual for facilities and transactions of this type giving due regard to the Bridge Documentation Principles.
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Governing Law and Forum:
|
New York.
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Counsel to Agent and Arrangers:
|
Davis Polk & Wardwell LLP.
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#94338132v7
ANNEX B-I
Senior Unsecured Term Loans
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Maturity:
|
The Senior Unsecured Term Loans will mature on the date that is eight years after the Closing Date.
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Interest Rate:
|
The Senior Unsecured Term Loans will bear interest at an interest rate per annum equal to the Total Senior Unsecured Cap. Interest shall be payable on the last day of each fiscal quarter of the Company and on the Senior Unsecured Maturity Date, in each case payable in arrears and computed on the basis of a 360 day year.
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Guarantees:
|
Same as the Senior Unsecured Bridge Loans.
|
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Security:
|
None.
|
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Covenants, Prepayments, Events of Default and Voting:
|
Upon and after the Conversion Date, the covenants, mandatory offer to repurchase provisions, events of default and voting provisions that would be applicable to the Senior Unsecured Exchange Notes, if issued, will also be applicable to the Senior Unsecured Term Loans in lieu of the corresponding provisions of the Operative Documents; provided that the optional prepayment provisions applicable to the Senior Unsecured Bridge Loans shall remain applicable to the Senior Unsecured Term Loans and any offer to repurchase upon the occurrence of a Change of Control (as defined in a manner consistent with the Bridge Documentation Principles) will be made at 100% of the outstanding principal amount thereof, plus accrued and unpaid interest to the date of repurchase.
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Conditions Precedent to Conversion:
|
The conversion of the Senior Unsecured Bridge Loans into Senior Unsecured Term Loans on the Conversion Date is subject to no event of default in effect with respect to a payment or bankruptcy event of default of the Company.
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#94338132v7
ANNEX B-II
Senior Unsecured Exchange Notes
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Issuer:
|
The Company, in its capacity as the issuer of the Senior Unsecured Exchange Notes, is referred to as the “Issuer”.
|
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Issue:
|
The Senior Unsecured Exchange Notes will be issued under an indenture substantially identical to the Existing Indenture, with changes consistent with the Bridge Documentation Principles and giving effect to customary differences in documentation between the market for syndicated terms loans and the unsecured high yield bond market.
|
|
Maturity:
|
The Senior Unsecured Exchange Notes will mature on the date that is eight years after the Closing Date.
|
|
Interest Rate:
|
The Senior Unsecured Exchange Notes will bear interest at a fixed rate equal to the Total Senior Unsecured Cap.
|
|
Guarantees:
|
Same as the Senior Unsecured Bridge Loans.
|
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Security:
|
None.
|
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Ranking:
|
Consistent with the Senior Unsecured Bridge Loans.
|
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Optional Redemption:
|
Unless a Demand Failure Event has occurred, in the case of Senior Unsecured Exchange Notes held by an Initial Lender under the Senior Unsecured Bridge Facility or any affiliate of any such Initial Lender (other than an Asset Management Affiliate (as defined below) or with respect to Senior Unsecured Exchange Notes acquired in ordinary course market making), the Issuer may redeem such Senior Unsecured Exchange Notes in whole or in part at par plus accrued and unpaid interest at any time after the issuance thereof. The redemption provisions of the Senior Unsecured Exchange Notes will provide for non-ratable voluntary redemptions of Senior Unsecured Exchange Notes held by any Initial Lender and its affiliates (other than Asset Management Affiliates or with respect to Senior Unsecured Exchange Notes acquired in ordinary course market making) at such prices for so long as such Senior Unsecured Exchange Notes are held by them; provided that such non-ratable voluntary
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redemption shall, as between such Initial Lender and such affiliates, be made on a pro rata basis.
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Except as set forth below, Senior Unsecured Exchange Notes held by any party that is not an Initial Lender under the Senior Unsecured Bridge Facility and is not affiliated with any such Initial Lender (other than bona fide investment funds and entities that manage assets on behalf of unaffiliated third parties (the “Asset Management Affiliates”) or in ordinary course market making), will be non-callable until the third anniversary of the Closing Date.
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Prior to the third anniversary of the Closing Date, the Issuer may redeem such Senior Unsecured Exchange Notes at a make-whole price based on U.S. Treasury notes with a maturity closest to the third anniversary of the Closing Date plus 50 basis points.
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Prior to the third anniversary of the Closing Date, the Issuer may redeem up to 40% of such Senior Unsecured Exchange Notes in an amount equal to the proceeds from an equity offering at a price equal to par plus the coupon on such Senior Unsecured Exchange Notes.
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After the third anniversary of the Closing Date, Senior Unsecured Exchange Notes will be callable at par plus accrued interest plus a premium equal to 50% of the coupon on such Senior Unsecured Exchange Notes, which premium shall decline to 25% of the coupon on the fourth anniversary of the Closing Date and to zero on the fifth anniversary of the Closing Date.
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Offer to Purchase from
Asset Sale Proceeds:
|
The Issuer will be required to make an offer to repurchase the Senior Unsecured Exchange Notes with the net cash proceeds from any non-ordinary course asset sales or dispositions by the Issuer or any restricted subsidiary in a manner customary for high yield debt securities to the extent any such proceeds are not otherwise applied or reinvested.
|
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Offer to Repurchase Upon a Change of Control:
|
The Issuer will be required to make an offer to repurchase the Senior Unsecured Exchange Notes following the occurrence of a “change of control” (to be defined in a manner consistent with the Bridge Documentation Principles) at a price in cash equal to 101% (or, 100% in the case of Senior
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Unsecured Exchange Notes held by a Commitment Party or its affiliates other than Asset Management Affiliates and Senior Unsecured Exchange Notes acquired pursuant to bona fide open-market purchases from third parties or market making activities) of the outstanding principal amount thereof, plus accrued and unpaid interest to the date of repurchase.
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Registration Rights:
|
None (Rule 144A for life).
|
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Covenants:
|
Consistent with the Bridge Documentation Principles. For the avoidance of doubt, there shall be no financial maintenance covenants.
|
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Events of Default:
|
Consistent with the Bridge Documentation Principles.
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#94338132v7
Exhibit C
to
Commitment Letter
$1,300,000,000 Term Loan Facility
Summary of Principal Terms and Conditions
All capitalized terms used herein but not defined herein shall have the meanings provided in the letter agreement to which this Exhibit C is attached or in the other Exhibits to such letter agreement, as applicable.
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Borrower:
|
Hilton Grand Vacations Borrower LLC, a Delaware limited liability company (the “Company”).
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Administrative Agent:
|
Bank of America, N.A. will act as administrative agent (in such capacities, the “Agent”) for a syndicate of banks, financial institutions, investors and other lenders, and will perform the duties customarily associated with such roles.
|
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Bookrunners:
|
Each of BofA Securities, Inc., Deutsche Bank Securities Inc., Barclays Bank PLC, Credit Suisse Loan Funding LLC, JPMorgan Chase Bank, N.A., Goldman Sachs Bank USA and MUFG Bank, Ltd. will act as a bookrunner for the Term Facility (as defined below), and will perform the duties customarily associated with such roles.
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Co-Managers:
|
Each of the Co-Managers Banks will act as a co-manager for the Term Facility and will perform the duties customarily associated with such roles.
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Term Facility:
|
The lenders will provide a senior secured term loan B facility in an aggregate principal amount of $1,300 million (the “Term Facility”; the loans incurred under the Term Facility, the “Term Loans”; and the lenders under the Term Facility, the “Lenders”).
|
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Purpose:
|
The proceeds of the Term Loans will be used by the Company on the Closing Date to refinance the “Term Loans” outstanding under the Existing Credit Agreement and to consummate the Acquisition and the Refinancing and for the payment of fees, costs and expenses in connection with the Transactions (including to fund any original issue discount or any upfront fees); provided that the total amount outstanding under the Existing Credit Agreement as of the Closing Date after giving effect to the refinancing of the “Term Loans”
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under the Existing Credit Agreement shall not exceed $350.0 million.
|
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Availability:
|
The Term Facility will be available in a single drawing on the Closing Date. Amounts borrowed under the Term Facility that are repaid or prepaid may not be reborrowed.
|
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Ranking:
|
The loans under the Term Facility will constitute senior secured indebtedness of the Company.
|
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Maturity and Amortization:
|
The Term Facility will mature on the date that is seven years after the Closing Date and will amortize in equal quarterly installments in aggregate annual amounts equal to 1.00% per annum of the original principal amount of the Term Facility, commencing with the first full fiscal quarter ending after the Closing Date, with the balance payable on the final maturity date; provided that the maturity date of the Term Facility will be the 91st day before September 1, 2024 if on such date more than $100 million of (x) 10.750% senior notes due 2024 are outstanding pursuant to that certain Indenture, dated as of August 31, 2016 by an among (Dakota Resorts International, Inc. (as successor in merger with Dakota Merger Sub, Inc.) as issuer and Wilmington Trust, National Association, as trustee or (y) any indebtedness incurred to refinance such senior notes is outstanding having a maturity date on or prior to September 1, 2024; provided further that the Operative Documents shall provide the right for individual Lenders to agree to extend the maturity date of their outstanding Term Loans upon the request of the Company and without the consent of any other Lender (it being understood that each Lender under the tranche that is being extended shall have the opportunity to participate in such extension on the same terms and conditions as each other Lender under such tranche).
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Guarantees:
|
Subject to the Limited Conditionality Provision, all obligations of the Company under the Term Facility will be unconditionally guaranteed on a joint and several basis (the “Guarantees”) by (a) the entities that are guarantors under the Existing Credit Agreement and (b) the Target and its subsidiaries that would be required to be guarantors under the Existing Credit Agreement (collectively, the “Guarantors”).
|
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Security:
|
Subject to the Limited Conditionality Provision, consistent with the Existing Credit Agreement, all obligations of the Company and Guarantors under the Term Facility will be secured by substantially all assets of the Company and Guarantors, subject to the same exceptions and thresholds set forth in the Existing Credit Agreement.
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Incremental Facilities:
|
Subject to the Term Facility Documentation Principles, substantially the same as set forth in the Existing Credit Agreement. The Operative Documents will permit the Company to (a) add one or more incremental term loan facilities and/or increase commitments under the Term Facility (each, an “Incremental Term Facility”) and (b) add one or more revolving credit facilities (any such revolving credit facility or increase, an “Incremental Revolving Facility”; the Incremental Revolving Facilities and the Incremental Term Facilities are collectively referred to as the “Incremental Facilities”); provided that (i) the Incremental Facilities when aggregated with other Indebtedness incurred in reliance on the Fixed Incremental Amount do not exceed in the aggregate the sum of (A) the greater of (x) $625 million and (y) 100% of Consolidated EBITDA (as defined in the Existing Credit Agreement) at the time of determination (this clause (A), the “Incremental Dollar Amount”) plus (B) all voluntary prepayments of the Term Facility and voluntary commitment reductions of the revolving facility under the Existing Credit Agreement made prior to such date of incurrence (except (I) any indebtedness incurred pursuant to clause (C) and (II) any prepayments financed with the incurrence of indebtedness) plus (C) additional amounts (including at any time prior to utilization of amounts set forth in clause (A) and (B) above) so long as the Consolidated First Lien Net Leverage Ratio (as defined in the Existing Credit Agreement, but assuming all commitments under any Incremental Revolving Facility are fully drawn and excluding the cash proceeds of any borrowing under any such Incremental Facilities and limited to netting of (i) all unrestricted cash and cash equivalents and (ii) VOI escrow deposits in an amount not to exceed $75 million) as of the last day of the most recently ended period of four consecutive fiscal quarters for which financial statements are internally available, on a pro forma basis after giving effect to such Incremental Facility, does not exceed Applicable Consolidated First Lien Net Leverage Ratio Level (or if such Incremental Facilities are incurred in connection with a Permitted Acquisition or other similar investment not prohibited by the Operative Documents, no greater than the greater of (1) the Applicable Consolidated First Lien Net Leverage Ratio Level and (2) the Consolidated First Lien Net Leverage Ratio immediately prior to the consummation of such Permitted Acquisition), (the amounts under the Incremental Dollar Amount and the foregoing clause (B), the “Fixed Incremental Amount” and, the amounts under the foregoing clause (C), the “Ratio Incremental Amount”). “Applicable Consolidated First Lien Net Leverage Ratio Level” means 2.25:1.00. The Company may elect to use the Ratio Incremental Amount prior to the Fixed Incremental Amount or any combination thereof, and any portion of any
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Incremental Facility incurred in reliance on the Fixed Incremental Amount shall be reclassified, as the Company may elect from time to time, as incurred under the Ratio Incremental Amount if the Company meets the applicable ratio for the Fixed Incremental Amount at such time on a pro forma basis, and if any applicable ratio for the Ratio Incremental Amount would be satisfied on a pro forma basis as of the end of any subsequent fiscal quarter after the initial incurrence of such Incremental Facility, such reclassification shall be deemed to have automatically occurred whether or not elected by the Company. In the event the Fixed Incremental Amounts are intended to be utilized together with any Ratio Incremental Amount in a single transaction or series of related transactions, compliance with or satisfaction of any applicable financial ratios or tests for the portion of such indebtedness or other applicable transaction or action to be incurred under the Ratio Incremental Amount shall first be calculated without giving effect to amounts being utilized pursuant to the Fixed Incremental Amount, but giving full pro forma effect to all applicable and related transactions (including, any incurrence and repayments of indebtedness) and all other permitted pro forma adjustments and thereafter, incurrence of the portion of such indebtedness or other applicable transaction or action to be incurred under the Fixed Incremental Amount shall be calculated. Additionally, any Fixed Incremental Amount previously incurred shall be reclassified as having been incurred under the Ratio Incremental Amount if such Ratio Incremental Amount would be satisfied in any subsequent fiscal quarter and such reclassification shall be deemed to have automatically occurred whether or not elected by the Company,
(ii) no Lender will be required to participate in any such Incremental Facility,
(iii) the Incremental Facilities will rank pari passu in right of payment and security with the other Term Facility,
(iv) the Incremental Term Facilities will have a final maturity no earlier than the final maturity of the Term Loans,
(v) the weighted average life to maturity of any Incremental Term Facility shall be no shorter than that of the Term Loans,
(vi) subject to clause (v) above, the amortization schedule applicable to any Incremental Term Facility shall be determined by the Company and the lenders thereunder and the Incremental Revolving Facility shall not have amortization,
(vii) no event of default shall have occurred and be continuing or would result therefrom (except in connection with a
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Permitted Acquisition, where such condition shall be no payment or bankruptcy event of default),
(viii) the all-in yield (whether in the form of interest rate margins, original issue discount or upfront fees, but excluding arrangement fees, structuring fees, commitment fees, underwriting fees and similar fees (regardless of whether paid in whole or in part to any or all lenders)) applicable to any Incremental Facility will be determined by the Company and the Lenders providing such Incremental Facility; provided, that with respect to any Incremental Term Facility established on or prior to the date that is six (6) months after the Closing Date that is (v) denominated in the same currency as the initial Term Facility, (w) secured by the Collateral on a pari passu basis with the initial Term Facility, (x) incurred pursuant to the Ratio Incremental Amount, (y) incurred other than for purposes of consummating a Permitted Acquisition or other similar transaction and (z) maturing earlier than the first anniversary of the maturity date with respect to the initial Term Facility denominated in the same currency, the all-in yield will not be more than 0.75% higher than the corresponding all-in yield for the initial Term Facility unless the interest rate margins with respect to the initial Term Facility are increased by an amount equal to the difference between the all-in yield with respect to the Incremental Term Facility and the corresponding all-in yield on the initial Term Facility, minus 0.75%; provided, further, that customary bridge facilities and/or customary term A loans shall not be subject to the requirements of this clause (viii) (this clause (viii), the “MFN Provision”);
(ix) (A) any Incremental Revolving Facility will provide for the ability to permanently repay and terminate incremental revolving commitments on a pro rata basis, except that the Company shall be permitted to permanently repay and terminate commitments of any class of revolving commitments on a better than pro rata basis as compared to any other class of revolving commitments with a later maturity date than such class and (B) any Incremental Term Facility may provide for the ability to participate on a pro rata basis or non-pro rata basis in any voluntary prepayments of the incremental term loans (but, with respect to mandatory prepayments, on not better than a pro rata basis); and
(x) except as otherwise required or permitted in clauses (i) through (ix) above, all other terms of such Incremental Facility, if not consistent with the terms of the existing Term Facility shall be reasonably satisfactory to the Agent (it being understood that to the extent any financial maintenance covenant is added for the benefit of any Incremental Facility, no consent shall be required from the Agent or any of the
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Lenders to the extent that such financial maintenance covenant is added for the benefit of any corresponding existing facility).
The Company may seek commitments in respect of the Incremental Facilities from existing Lenders (each of which shall be entitled to agree or decline to participate in its sole discretion) and additional banks, financial institutions and other institutional lenders (in the case of such additional banks, financial institutions and other institutional lenders, subject to the consent of the Agent (not to be unreasonably withheld or delayed) if such consent is required under “Assignments and Participations”) who will become Lenders in connection therewith. No Lender shall be under any obligation to provide any portion of any requested Incremental Facilities.
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Refinancing Facilities:
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Subject to the Term Facility Documentation Principles, substantially the same as set forth in the Existing Credit Agreement. The Company will be permitted to refinance loans under the Term Facility or commitments under any revolving credit facility from time to time, in whole or in part, with one or more new term facilities (each, a “Refinancing Term Facility”) or new revolving credit facilities (each, a “Refinancing Revolving Facility”; the Refinancing Term Facilities and the Refinancing Revolving Facilities are collectively referred to as “Refinancing Facilities”), respectively, under the Operative Documents with the consent of the Company, the Agent and the lenders providing such Refinancing Term Facility or Refinancing Revolving Facility or in the case of debt refinancing a Term Facility, with one or more additional series of senior unsecured or senior subordinated notes or loans or senior secured notes or loans that will be secured by the Collateral on a pari passu basis with the Term Facility being refinanced or junior lien secured notes or loans that will be secured on a subordinated basis to the Term Facility (any such notes or loans, “Refinancing Notes” and, together with the Refinancing Facilities, the “Refinancing Debt”); provided that (i) any Refinancing Term Facility or Refinancing Notes do not mature prior to the maturity date of, or have a shorter weighted average life to maturity than, loans under the applicable Term Facility being refinanced, (ii) any Refinancing Revolving Facility does not mature prior to the maturity date of the revolving commitments being refinanced, (iii) the other terms and conditions of such Refinancing Term Facility, Refinancing Revolving Facility or Refinancing Notes (excluding pricing, fees, rate floors and optional prepayment or redemption terms) are substantially identical to, or (taken as a whole) are no more favorable to the lenders providing such Refinancing Term Facility, Refinancing Revolving Facility or Refinancing Notes, as applicable, than, those applicable to the applicable
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Term Facility or revolving commitments being refinanced (except for covenants or other provisions applicable only to periods after the latest final maturity date of the applicable Term Facility and revolving credit commitments existing at the time of such refinancing) and (iv) any secured Refinancing Debt shall be subject to an intercreditor agreement on terms reasonably acceptable to the Agent.
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Limited Condition Transaction:
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In the case of the incurrence or assumption of any indebtedness or liens or the making of any investments, restricted payments or fundamental changes, the repayment of any indebtedness for which an irrevocable notice of prepayment or redemption is required or the designation of any restricted subsidiaries or unrestricted subsidiaries, in each case, in connection with a permitted acquisition or similar permitted investment the consummation of which is not conditioned on the availability of, or obtaining, third party financing (a “Limited Condition Transaction”), at the Company’s option, the relevant ratios and baskets shall be determined as of the date either (a) the definitive acquisition agreements for such Limited Condition Transaction are entered into or prepayment or redemption notices are made, as applicable (and not at the time of consummation of such Limited Condition Transaction), or (b) solely in connection with an acquisition to which the United Kingdom City Code on Takeovers and Mergers applies (or similar law or practice in other jurisdictions), the date on which a “Rule 2.7 announcement” of a firm intention to make an offer or similar announcement or determination in another jurisdiction subject to laws similar to the United Kingdom City Code on Takeovers and Mergers (a “Public Offer”) in respect of a target of a Limited Condition Transaction and, in each case, calculated as if the Limited Condition Transaction and other pro forma events in connection therewith were consummated on such date; provided, that if the Company has made such an election, in connection with determining whether the calculation of any ratio or basket with respect to the incurrence of any debt or liens, or the making of any investments, restricted payments, prepayments of subordinated debt, asset sales, fundamental changes or the designation of a restricted subsidiary or unrestricted subsidiary, in each case, in connection with such Limited Condition Transaction is permitted on or following such date and prior to the earlier of the date on which such Limited Condition Transaction is consummated or the definitive agreement or notice for, or, as applicable, the Public Offer for, such acquisition is terminated or expires without the consummation of such acquisition, any such ratio or basket shall be calculated on a pro forma basis assuming such Limited Condition Transaction and other pro forma events in connection therewith (including any incurrence of indebtedness) have been consummated as if they
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occurred at the beginning of the applicable test period. For the avoidance of doubt, if any of such ratios are exceeded as a result of fluctuations in such ratio including due to fluctuations in Consolidated EBITDA of the Company or the person subject to such acquisition or investment, at or prior to the consummation of the relevant transaction or action, such ratios will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether the relevant transaction or action is permitted to be consummated or taken; provided, that if such ratios improve as a result of such fluctuations, such improved ratios may be utilized.
In connection with any action being taken in connection with a Limited Condition Transaction, for purposes of determining compliance with any provision which requires that no default, event of default or specified event of default, as applicable, has occurred, is continuing or would result from any such action, as applicable, such condition shall, at the option of the Company, be deemed satisfied, so long as no default, event of default or specified event of default, as applicable, exists on the date the definitive agreements for such Limited Condition Transaction are entered into or applicable notices are made, as applicable.
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Interest Rates and Fees:
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As set forth on Annex C-I hereto.
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Default Rate:
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Subject to the Term Facility Documentation Principles, substantially the same as set forth in the Existing Credit Agreement. Any principal or interest payable under or in respect of the Term Facility not paid when due shall bear interest at the applicable interest rate plus 2% per annum. Other overdue amounts shall bear interest at the interest rate applicable to ABR loans plus 2% per annum.
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Mandatory Prepayments:
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Loans under the Term Facility shall be prepaid with (a) 50% of Excess Cash Flow (to be defined in a manner to be mutually agreed) for each fiscal year of the Company (commencing with the first full fiscal year completed after the Closing Date) with step-downs to 25% if the Consolidated First Lien Net Leverage Ratio is equal to or less than 0.50 to 1.00 less than the Consolidated First Lien Net Leverage Ratio as of the Closing Date and 0% if the Consolidated First Lien Net Leverage Ratio is equal to or less than 1.00 to 1.00 less than the Consolidated First Lien Net Leverage Ratio as of the Closing Date (in each case, with the calculation of such Consolidated First Lien Net Leverage Ratio to be made after giving pro forma effect to any such prepayments of Excess Cash Flow and any prepayments, repurchases or redemptions of indebtedness made on or prior to the date such Excess Cash Flow payment is required to be made); provided, that (i) voluntary prepayments, repurchases or redemptions of the
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loans under the Term Facility, any revolving facility under the Existing Credit Agreement, any Incremental Facilities, any Refinancing Debt, any incremental equivalent debt, or any other permitted debt (in the case of any revolving credit facilities, to the extent accompanied by a permanent reduction of the corresponding commitment), in each case, secured on a pari passu basis with the Term Facility (but, in each case, excluding prepayments, repurchases or redemptions to the extent funded with the proceeds of long-term funded indebtedness (other than revolving loans)), made during such fiscal year or after year-end and prior to the time such Excess Cash Flow prepayment is due will reduce the amount of Excess Cash Flow prepayments required for such fiscal year on a dollar-for-dollar basis and (ii) required Excess Cash Flow prepayments shall be reduced on a dollar-for-dollar basis, without duplication, for, among other things, cash used for capital expenditures, permitted investments, permitted acquisitions and certain restricted payments, in each case made (or committed to be made) during such fiscal year and, at the option of the Company, made after year-end and prior to the payment due date (it being understood that to the extent such prepayment, redemption, repurchase, capital expenditure, investment, acquisition or restricted payment is not actually made as committed in a subsequent period, such amount shall be added back in calculating the required Excess Cash Flow payments for such subsequent period); provided, further, that prepayments shall only be required under this clause (a) for any fiscal year if the prepayment amount required under clause (a) for such fiscal year is greater than $25 million (and then only amounts in excess of such amount shall be required to be prepaid), (b) 100% of the net cash proceeds of all non-ordinary course asset sales or other dispositions of property by the Company and its restricted subsidiaries (including casualty insurance and condemnation proceeds, but with exceptions for sales of inventory and other ordinary course dispositions, obsolete or worn-out property, property no longer useful in the business and other exceptions as set forth in the Existing Credit Agreement) and, subject to the right of the Company to reinvest if such proceeds are reinvested (or committed to be reinvested) within 12 months and, if so committed to reinvestment, reinvested no later than 180 days after the end of such 12-month period, and other exceptions as set forth in the Existing Credit Agreement and (c) 100% of the net cash proceeds of issuances of debt obligations of the Company and its restricted subsidiaries (except the net cash proceeds of any permitted debt other than Refinancing Debt).
Mandatory prepayments shall be applied pro rata among the remaining scheduled installments of principal of the Term Facility. Mandatory prepayments in clause (a) and (b) above
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shall be subject to limitations to the extent required to be made from cash at non-U.S. restricted subsidiaries, the repatriation of which would result in material adverse tax consequences or would be prohibited or restricted by applicable law.
The Operative Documents will provide customary provisions pursuant to which any Lender may elect not to accept any mandatory prepayment described in clause (a) or (b) above, with such amount to be retained by the Company, with such amount to be retained by the Company and such amount may be applied to increase the cumulative “builder” or “growth” basket.
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Voluntary Prepayments and Reductions in Commitments:
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Voluntary reductions of the unutilized portion of the Term Facility commitments and prepayments of borrowings under any class, series or tranche will be permitted at any time (subject to customary notice requirements), in minimum principal amounts to be agreed, without premium or penalty, subject to reimbursement of the Lenders’ redeployment costs (other than lost profits) in the case of a prepayment of Adjusted LIBOR borrowings prior to the last day of the relevant interest period; provided, that if, prior to the date that is six-months after the Closing Date, (a) there shall occur any amendment, amendment and restatement or other modification of the definitive documentation for the initial Term Facility the primary purpose of which is to reduce the all-in yield then in effect for the initial Term Loans thereunder, (b) all or any portion of the initial Term Facility is voluntarily prepaid or mandatorily prepaid with the net cash proceeds of issuances, offerings or placement of debt obligations, or refinanced substantially concurrently with the incurrence of, or conversion of the loans thereunder into, new syndicated term loans of the same currency in a transaction the primary purpose of which is to lower the all-in yield below the all-in yield in effect for the term loans of such currency so prepaid, or (c) a Lender must assign its term loans under the initial Term Facility as a result of its failure to consent to an amendment, amendment and restatement or other modification of the initial Term Facility the primary purpose of which is to reduce the all-in yield then in effect for the term loans under the initial Term Facility (any of clause (a), (b) or (c), a “Repricing Transaction”), then in each case the aggregate principal amount so subject to such Repricing Transaction (other than any Repricing Transaction made in connection with a Change of Control (as defined in the Existing Credit Agreement) or Transformative Acquisition (as defined below)) will be subject to a 1.00% prepayment premium.
“Transformative Acquisition” shall mean any acquisition or investment by the Company or any restricted subsidiary that
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either (a) is not permitted by the terms of the Operative Documents immediately prior to the consummation of such acquisition or investment or (b) if permitted by the terms of the Operative Documents immediately prior to the consummation of such acquisition or investment, would not provide the Company and its subsidiaries with adequate flexibility under the Operative Documents for the continuation and/or expansion of their combined operations following such consummation, as determined by the Company acting in good faith.
All voluntary prepayments (other than from the proceeds of Refinancing Debt which shall be applied solely to prepay the debt being refinanced) shall be applied as directed by the Company (and in the absence of such direction, in direct order of maturity), which may be applied to any specific class or classes, tranche or tranches or facility or facilities as selected by the Company; provided, that such prepayments shall be made on a pro rata basis within such class, tranche or facility.
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Representations and Warranties:
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Subject to the Term Facility Documentation Principles, substantially the same as set forth in the Existing Credit Agreement and limited to the following (to be applicable to the Company and its restricted subsidiaries and with respect to certain customary representations and warranties, Holdings): organization; existence, qualification and power; compliance with laws; authorization; no contravention (including third party consents); governmental authorization; binding effect of the Operative Documents; financial statements; no material adverse effect; litigation; labor matters; ownership of property; environmental matters; taxes; ERISA compliance; subsidiaries; margin regulations; Investment Company Act; disclosure and accuracy of information; intellectual property; projections; creation, validity and perfection of security interests in the Collateral (subject to permitted liens); status as senior debt (if applicable); no material undisclosed liabilities; PATRIOT ACT, FCPA, OFAC and other anti-terrorism laws; and solvency on a consolidated basis as of the Closing Date.
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Conditions Precedent to Initial Borrowings:
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The funding of the Term Loans on the Closing Date shall be subject to only those conditions precedent that are Exclusive Funding Conditions.
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Conditions Precedent to Borrowings (other than Initial Borrowing on the Closing Date):
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Subject to the Term Facility Documentation Principles and the Limited Conditionality Provision (with respect to borrowings under any Incremental Facility), substantially the same as set forth in the Existing Credit Facilities, including
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delivery of notice, accuracy of representations and warranties in all material respects and absence of defaults.
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Documentation:
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The Operative Documents with respect to the Term Facility will include a single credit agreement providing for the Term Facility and shall be negotiated in good faith, giving effect to the Limited Conditionality Provision, and shall be consistent with the terms herein, the Commitment Letter, the Fee Letter and, except as otherwise provided herein or in the Commitment Letter or the Fee Letter, substantially identical to the Existing Credit Agreement, with additions, deletions, modifications and other changes as the Company and the Global Coordinators reasonably determine to be necessary or advisable, including, among other things, (i) to give effect to the Transactions and other transactions contemplated hereby, (ii) to provide for and give effect to the Guarantees, (iii) to reflect changes in law (including customary QFC and EU and UK bail-in provisions and provisions to address LLC divisions under Delaware law) or accounting standards or cure mistakes or defects, (iv) to reflect reasonable administrative, agency and operational requirements of the Agent, (v) give due regard to the operational requirements of the Company and its subsidiaries in light of its size, structure, industry, business and proposed business plan and operations and (vi) to reflect covenants and financial definitions that are no less favorable to the Company and its subsidiaries than the Existing Credit Agreement (except as otherwise set forth in this Commitment Letter), and in any event, will contain only those conditions to borrowing, prepayments, representations and warranties, covenants and events of default expressly set forth in this Exhibit C (the “Term Facility Documentation Principles”).
Notwithstanding the foregoing, all obligations of the Company and its restricted subsidiaries that are or would have been treated as operating leases for purposes of GAAP prior to the issuance by the Financial Accounting Standards Board on February 25, 2016 of an Accounting Standards Update (the “ASU”) shall continue to be accounted for as operating leases for purposes of all financial definitions and calculations for purpose of the Operative Documents (whether or not such operating lease obligations were in effect on such date) notwithstanding the fact that such obligations are required in accordance with the ASU (on a prospective or retroactive basis or otherwise) to be treated as capitalized lease obligations in the financial statements to be delivered pursuant to the Operative Documents.
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Affirmative Covenants:
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Subject to the Term Facility Documentation Principles and the Limited Conditionality Provisions, substantially the same as and limited to those set forth in the Existing Credit Agreement (to be applicable to the Company and its restricted subsidiaries): quarterly and annual financial statements of the Company (with annual financial statements accompanied by an opinion of an independent accounting firm (which opinion shall not contain any going concern qualification other than resulting from (x) the activities, operations, financial results, assets or liabilities of any unrestricted subsidiary, (y) the impending maturity of any indebtedness and (z) any prospective or actual breach of any financial covenant)); certificates; other information; notices of default and other material events; payment of taxes; preservation of existence; maintenance of properties; maintenance of insurance; compliance with laws; books and records; inspection rights; covenant to guarantee obligations and give security; further assurances as to security (including, other than pursuant to a transaction or for any other purpose not prohibited by Term Facility Documentation (including Permitted Acquisitions and other investments)), that all real property owned or acquired by the Company or its restricted subsidiaries is owned by or transferred to the Company or a Guarantor or a restricted subsidiary of the Company or Guarantor whose equity interests constitute Collateral); compliance with environmental laws; designation of subsidiaries; and use of commercially reasonable efforts to maintain credit ratings (but not a specific rating);
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Negative Covenants:
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Subject to the Term Facility Documentation Principles and the Limited Conditionality Provisions, substantially the same as and limited to those set forth in the Existing Credit Agreement (to be applicable to the Company and its restricted subsidiaries and, in the case of the passive holding company covenant set forth below, Holdings): liens (which shall permit liens securing any Refinancing Debt, Permitted Ratio Debt (as defined below) and any Incremental Facilities and shall include a general liens basket not to exceed the greater of (x) $280 million and (y) 5% of consolidated total assets) (provided that the Company and its restricted subsidiaries shall not grant any liens or security interests or otherwise encumber any fee-owned real property, other than liens on real property not constituting inventory securing obligations in an aggregate amount outstanding at any time not to exceed the greater of (x) $25 million and (y) 10% of the total gross book value (including any applicable depreciation and amortization) of all such real property); investments (including acquisitions, loans, etc.); debt (which shall permit any Refinancing Debt, Permitted Ratio Debt, the Senior Unsecured Bridge Facility and/or the Senior Unsecured Notes and any Incremental Facilities); fundamental changes;
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dispositions; restricted payments; material changes in nature of business; changes in fiscal year; burdensome agreements; use of proceeds; transactions with affiliates; prepayments of material subordinated debt, subject to exceptions as set forth in the Existing Credit Agreement; Holdings incurring material liabilities, owning material assets or conducting material business other than as a passive holding company; and amendments to material subordinated debt documents; provided that if on any date (i) no event of default has occurred and is continuing and (ii) the loans have a rating of Baa3 (or the equivalent) and BBB- (or the equivalent) from Moody’s and S&P, respectively, or better, then, beginning on such date and for the period in which there are no subsequent changes which lower the ratings than those set forth above, the debt, restricted payments and transactions with affiliates covenants will no longer be applicable to the loans during such period.
The Company or any restricted subsidiary will be permitted to make acquisitions (each, a “Permitted Acquisition”) so long as subject to the limitations set forth in “Guarantees” and “Security” above, the acquired company and its subsidiaries (other than any designated as an Excluded Subsidiary (as defined in the Existing Credit Agreement)) will become Guarantors and pledge their Collateral to the Agent to the extent required by the Operative Documents.
The Company and any restricted subsidiary will be permitted to:
(a) incur (i) an unlimited amount of unsecured indebtedness, subject to compliance with either (I) a Consolidated Interest Coverage Ratio (as defined in the Existing Credit Agreement) of no less than either (A) 2.00 to 1.00 or (B) in the case of any such indebtedness incurred in connection with a Permitted Acquisition, the Consolidated Interest Coverage Ratio immediately prior to the incurrence of such indebtedness and consummation of such Permitted Acquisition or (II) a Consolidated Total Net Leverage Ratio (as defined in the Existing Credit Agreement) no greater than either (A) 4.00 to 1.00 or (B) in the case of any such indebtedness incurred in connection with a Permitted Acquisition, the Consolidated Total Net Leverage Ratio immediately prior to the incurrence of such indebtedness and consummation of such Permitted Acquisition, in each case, on a pro forma basis as of the date of incurrence of such Indebtedness, (ii) indebtedness secured on a junior lien basis with the Term Facility, subject to pro forma compliance with Applicable Consolidated Total Net Leverage Ratio Level (or if such indebtedness is incurred in connection with a Permitted Acquisition, no greater than the greater of (1) the Applicable Consolidated Total Net Leverage Ratio Level and (2) the Consolidated Total Net Leverage
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Ratio immediately prior to the consummation of such Permitted Acquisition) (or if the Company is not otherwise in compliance with such leverage ratio, such indebtedness when aggregated with the Incremental Dollar Amount and indebtedness referred to in the parenthetical in clause (iii) below, does not exceed the greater of (x) $625 million and (y) 100% of Consolidated EBITDA); provided, that at the election of the Company (such election to be made no more than once during the life of the Term Facility), the level set forth in either this clause (ii) shall be increased by 0.50:1.00 (a “half-turn”) in connection with a Qualified Acquisition (as defined in the Existing Credit Agreement) only for the four quarter period starting with the fiscal quarter in which such Qualified Acquisition is consummated and continuing for the three fiscal quarters immediately following such fiscal quarter, and, for the avoidance of doubt, no other quarter-end (other than such four quarter-ends), (iii) indebtedness secured on a pari passu basis with the Term Facility, subject to pro forma compliance with the Applicable Consolidated First Lien Net Leverage Ratio Level (or if such indebtedness is incurred in connection with a Permitted Acquisition, no greater than the greater of (1) the Applicable Consolidated First Lien Net Leverage Ratio Level and (2) the Consolidated First Lien Net Leverage Ratio immediately prior to the consummation of such Permitted Acquisition) (or if the Company is not otherwise in compliance with such leverage ratio, such indebtedness when aggregated with the Incremental Dollar Amount and indebtedness referred to in the parenthetical in clause (ii) above, does not exceed the greater of (x) $625 million and (y) 100% of Consolidated EBITDA); provided, that at the election of the Company (such election to be made no more than once during the life of the Term Facility), the level set forth in either this clause (iii) shall be increased by a half-turn in connection with a Qualified Acquisition only for the four quarter period starting with the fiscal quarter in which such Qualified Acquisition is consummated and continuing for the three fiscal quarters immediately following such fiscal quarter, and, for the avoidance of doubt, no other quarter-end (other than such four quarter-ends); provided that with respect to any indebtedness incurred pursuant to clauses (ii) and (iii) above, such indebtedness shall (A) in the case of clause (ii), have a maturity at least 91 days after the latest date of maturity of the Term Facility, and in the case of clause (iii), mature no earlier than the latest date of maturity of the Term Facility, (B) have a weighted average life to maturity no shorter than the longest remaining average life to maturity under the Term Facility, (C) in the event such indebtedness is incurred or guaranteed on a secured basis by the Company or a Guarantor, be subject to customary intercreditor agreements to be agreed and (D) have terms and conditions (other than pricing, rate floors, discounts, fees, and optional redemption provisions) that are not
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materially less favorable (when taken as a whole) to the Company than the terms and conditions of the applicable Term Facility Documentation (when taken as a whole) (any debt incurred pursuant to clauses (ii) and (iii), “Permitted Ratio Debt”), (iv) additional indebtedness incurred or assumed in connection with the consummation of a Permitted Acquisition in an amount not to exceed $75 million; provided, further, that any such debt incurred pursuant to clauses (i), (ii), (iii) or (iv) above by a restricted subsidiary that is not a Guarantor shall be capped at the greater of $240 million and 4.25% of consolidated total assets and (v) additional indebtedness not to exceed the greater of (x) $420 million and (y) 7.25% of consolidated total assets. “Applicable Consolidated Total Net Leverage Ratio Level” means 3.25:1.00;
(b) make unlimited non-ordinary course asset sales subject to fair market value, the consideration for such sales being at least 75% cash consideration, non-ordinary course asset sales subject to fair market value for non-cash consideration not to exceed the greater of $280 million and 5% of consolidated total assets as set forth in the Existing Credit Agreement and, in each case, compliance, if required, with the mandatory prepayment provisions;
(c) make unlimited investments, subject only to pro forma compliance with the Applicable Consolidated Total Net Leverage Ratio Level;
(d) make unlimited investments in the Company or its restricted subsidiaries;
(e) make other investments, including but not limited to, (i) investments in joint ventures following the Closing Date not to exceed the greater of (x) $280 million and (y) 5% of consolidated total assets, (ii) investments in unrestricted subsidiaries not to exceed the greater of (x) $280 million and (y) 5% of consolidated total assets, (iii) additional investments not to exceed the greater of (x) $280 million and (y) 5% of consolidated total assets, (iv) make additional investments (A) in connection with the purchases of vacation ownership intervals (“VOIs”) for inventory or resale, the purchase or payment for use of land/property for, the conversion of properties to, or the development of, expansion of or enhancement of, VOIs and any investments reasonably related, complementary, synergistic or ancillary thereto and (B) all investments in (I) the Company or any restricted subsidiary, (II) any person becoming a restricted subsidiary as a result of such investment and (III) joint-ventures, in each case, made in connection with the investments described in the foregoing clause (A), subject to pro forma compliance with
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the Applicable Consolidated Total Net Leverage Ratio Level and (v) permit Timeshare Loans (as defined in the Existing Credit Agreement) in “fee-for-service” arrangements or other similar arrangements in an HGV club or HGV branded residential unit where the purchase of the VOI is not from the Company or its subsidiaries;
(f) make unlimited dividends, distributions or redemptions, subject only to (i) no event of default shall have occurred and be continuing and (ii) pro forma compliance with a Consolidated Total Net Leverage Ratio of equal to or less than 3.00:1.00;
(g) make other dividends, distributions or redemptions, including but not limited to, (i) dividends, distributions or redemptions up to the sum of (A) 6% per annum of the net proceeds received by (or contributed to) the Company and its restricted subsidiaries from a public equity offering and (B) 6% of Market Capitalization (as defined in the Existing Credit Agreement) and (ii) additional dividends, distributions or redemptions not to exceed the greater of (x) $200 million and (y) 3.5% of consolidated total assets; and
(h) Restricted payments (including dividends and voluntary prepayments of material subordinated indebtedness) and investments (i) from a cumulative “builder” or “growth” basket (the availability of which shall not be subject to a leverage or other financial performance test and which shall include a “starter” basket of the greater of $350 million and at the election of the Company prior to the date of the bank meeting in connection with the Term Facility, a percentage of consolidated total assets or a percentage of Consolidated EBITDA, in each case, that is substantially equivalent to the initial monetary cap) to be based on either (to be selected by the Company prior to the date of the bank meeting in connection with the Term Facility) (A) cumulative retained Excess Cash Flow (which shall not be less than zero for each year) or (B) 50% of cumulative net income, in each case, plus the proceeds of (and fair market value of assets received from) equity issuances and contributions (other than excluded contributions) received by the Company or Holdings after the Closing Date and other than in connection with the Acquisition, and other items to be mutually agreed, subject only to (other than with respect to investments), solely in the case of the “builder” or “growth” component thereof, no payment or bankruptcy (with respect to the Company or Holdings) event of default which has occurred and is continuing (or would result therefrom).
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Financial Covenant:
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None.
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Unrestricted Subsidiaries:
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Subject to the Term Facility Documentation Principles, substantially the same as and limited to those set forth in the Existing Credit Agreement, including that, subject to customary limitations on investments, loans, advances to, and other investments in, Unrestricted Subsidiaries, the Company will be permitted to designate any existing or subsequently acquired or organized subsidiary as an “unrestricted subsidiary” and subsequently re-designate any such Unrestricted Subsidiary as a restricted subsidiary; provided that after giving effect to such designation, no default shall have occurred and be continuing. Unrestricted Subsidiaries will not be subject to the representations and warranties, affirmative or negative covenants or event of default provisions of the Operative Documents and the results of operations and indebtedness of and cash and cash equivalents held by, Unrestricted Subsidiaries will not be taken into account for purposes of determining any financial ratio or covenant contained in the Operative Documents.
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Events of Default:
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Subject to the Term Facility Documentation Principles, substantially the same as and limited to those set forth in the Existing Credit Agreement (to be applicable to the Company and its restricted subsidiaries): nonpayment of principal, interest or fees (with grace periods for interest, fees and other amounts); failure to perform negative covenants (and affirmative covenants to provide notice of default or maintain the Company’s corporate existence); failure to perform other covenants subject to a 30-day cure period after notice by the Agent; any representation or warranty incorrect in any material respect when made; cross-default of, and cross-acceleration to, other indebtedness, subject to a threshold amount; bankruptcy or insolvency proceedings; final monetary judgments, subject to a threshold amount; ERISA events, subject to material adverse effect; invalidity (actual or asserted in writing by the Company) of the applicable Operative Documents or material portion of Collateral; and Change of Control; provided, that, notwithstanding anything to the contrary in the Operative Documents, a breach of any financial covenant under any Incremental Revolving Facility or Refinancing Revolving Facility will not constitute an Event of Default for purposes of the Term Facility (or any other facility, other than any Incremental Revolving Facility or Refinancing Revolving Facility, as applicable), and the Lenders under the Term Facility (or any other facility other than any Incremental Revolving Facility or Refinancing Revolving Facility, as applicable) will not be permitted to exercise any remedies with respect to an uncured breach of such financial covenant until the date, if any, on which the commitments under any Incremental Revolving Facility or Refinancing Revolving Facility, as applicable, have been
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terminated or the loans thereunder have been accelerated as a result of such breach.
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Voting:
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Subject to the Term Facility Documentation Principles, substantially the same as and limited to those set forth in the Existing Credit Agreement. Amendments and waivers of the Operative Documents will require the approval of Lenders holding more than 50% of the aggregate principal amount of the loans and commitments under the Term Facility (the “Required Lenders”), except, that the consent of each Lender directly adversely affected thereby shall be required with respect to (a) increases in the commitment of such Lender, (b) reductions of principal, interest or fees, (c) extensions of final maturity or the due date of any interest or fee payment, (d) releases of all or substantially all Guarantors or all or substantially all of the Collateral and (e) changes in voting percentages; provided that certain matters as set forth in the Existing Credit Agreement will require class voting. Defaulting Lenders will be subject to the suspension of certain voting rights. Notwithstanding the foregoing, amendments and waivers of the Operative Documents that affect solely the Lenders under the Term Facility or any Incremental Facility (including waiver or modification of the availability and conditions to funding of any Incremental Facility (but not the conditions for implementing any Incremental Facility as noted above), pricing and other modifications), will require only the consent of Lenders holding more than 50% of the aggregate commitments or loans, as applicable, under such Term Facility or Incremental Facility) and no other consents or approvals shall be required. Any changes to the provisions of the Operative Documents affecting the Agent shall require the consent of the Agent.
The Operative Documents will permit amendments thereof without the approval or consent of the Lenders to effect a permitted “repricing transaction” (i.e., a transaction in which any tranche of loans is refinanced with a replacement tranche of loans, or is modified with the effect of, bearing a lower rate of interest) other than any Lender holding loans subject to such “repricing transaction” that will continue as a Lender in respect of the repriced tranche of loans or modified loans.
For the avoidance of doubt, each of the Operative Documents may be amended in order to modify any provision relating to pro rata sharing of payments among the Lenders (and, in any case, any provision requiring pro rata payments or sharing of payments in connection with “amend and extend” transactions) with the consent of the Required Lenders.
In addition, if the Agent and the Company shall have jointly identified an obvious error or any error or omission of a
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technical nature in the Operative Documents, then the Agent and the Company shall be permitted to amend such provision without any further action or consent of any other party with notice given to the Lenders of any such amendment.
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Assignments and Participations:
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Subject to the Term Facility Documentation Principles, substantially the same as and limited to those set forth in the Existing Credit Agreement, which provides that the Lenders will be permitted to assign loans under the Term Facility with the consent of the Company (not to be unreasonably withheld or delayed); provided that (i) no consent of the Company shall be required (A) if such assignment is made to another Lender or an affiliate or approved fund of a Lender or (B) after the occurrence and during the continuance of a payment or bankruptcy (with respect to the Company) event of default and (ii) the Company shall be deemed to have consented to an assignment of Term Loans if the Company does not object within 10 business days of a written request therefor. All assignments will require the consent of the Agent, not to be unreasonably withheld or delayed; provided that no consent of the Agent shall be required if such assignment is made to another Lender or an affiliate or approved fund of a Lender. Each assignment will be in an amount of an integral multiple of $1,000,000 with respect to the Term Facility or, if less, all of such Lender’s remaining loans and commitments of the applicable class. An assignment fee in the amount of $3,500 shall be paid by the respective assignor or assignee to the Agent.
The Lenders will be permitted to sell participations in Term Loans without consent being required, subject to customary limitations. Voting rights of participants shall be limited to matters in respect of (a) increases in commitments participated to such participants, (b) reductions of principal, interest or fees, (c) extensions of final maturity or the due date of any amortization, interest or fee payment, (d) releases of the guarantees of all or substantially all Guarantors or all or substantially all of the Collateral and (e) changes in voting thresholds.
The Operative Documents shall provide that so long as no default or event of default is continuing, Term Loans may be purchased by and assigned to Holdings or any of its subsidiaries on (a) a non-pro rata basis through open market purchases and/or (b) on a pro rata basis through Dutch auctions open to all Lenders in accordance with customary procedures as set forth in the Existing Credit Agreement; provided that any such Term Loans shall be automatically and permanently cancelled immediately upon acquisition thereof by Holdings or any of its subsidiaries and no proceeds of any
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revolving facility may be used to consummate any such assignment.
The Operative Documents will contain customary provisions allowing the Company to replace a Lender or terminate the commitment of a Lender and prepay that Lender’s outstanding Loans in full in connection with amendments and waivers requiring the consent of all Lenders or of all Lenders directly adversely affected thereby (so long as the Required Lenders have approved the amendment or waiver), increased costs, taxes, etc. and defaulting lenders.
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Cost and Yield Protection:
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Subject to the Term Facility Documentation Principles, substantially the same as and limited to those set forth in the Existing Credit Agreement.
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Expenses and Indemnification:
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Subject to the Term Facility Documentation Principles, substantially the same as and limited to those set forth in the Existing Credit Agreement.
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Governing Law and Forum:
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New York.
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Counsel to the Agent and the Arrangers:
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Davis Polk & Wardwell LLP.
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ANNEX C-I
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Interest Rates:
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The interest rates under the Term Facility will be, at the option of the Company, Adjusted LIBOR plus 2.50% or, ABR plus 1.50%.
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The Company may elect interest periods of 1, 2, 3 or 6 months (or, if agreed by all relevant Lenders, 12 months or a shorter period) for LIBOR borrowings.
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Calculation of interest shall be on the basis of the actual days elapsed in a year of 360 days (or 365 or 366 days, as the case may be, in the case of ABR loans based on the Prime Rate) and interest shall be payable (i) in the case of LIBOR loans, at the end of each interest period and, in any event, at least every 3 months and (ii) in the case of ABR loans, quarterly in arrears.
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ABR is the Alternate Base Rate, which is the highest of (i) the Agent’s Prime Rate, (ii) the Federal Funds Effective Rate (which, if negative, shall be deemed to be 0.00%) plus 1/2 of 1.00%, (iii) one-month Adjusted LIBOR plus 1.00% and (iv) 1.00%.
Adjusted LIBOR is the London interbank offered rate for dollars, adjusted for customary Eurodollar reserve requirements, if any, and shall be subject to a floor of 0.50%. The Term Facility Documentation will include LIBOR replacement provisions substantially consistent with the Term Facility Agent’s “hardwired” approach (with such modifications as agreed between the Company and the Agent).
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Exhibit D
to
Commitment Letter
Summary of Additional Conditions Precedent
All capitalized terms used herein but not defined herein shall have the meanings provided in the letter agreement to which this Exhibit D is attached or in the other Exhibits to such letter agreement, as applicable. The initial borrowings under each Facility shall be subject to the Limited Conditionality Provision in all respects and the following additional conditions precedent:
1.
The Acquisition shall have been consummated, or shall be consummated substantially concurrently with the initial borrowing under any Facility, in accordance with the terms of the Acquisition Agreement. The Acquisition Agreement shall not have been amended or waived in any material respect by the Company or any of its affiliates, nor shall the Company or any of its affiliates have given a material consent thereunder, in each case in a manner materially adverse to the Lenders (in their capacity as such) without the consent of the Global Coordinators (such consent not to be unreasonably withheld, delayed or conditioned) (it being understood and agreed that any change, amendment, waiver or consent in respect of (x) the definition of “Company Material Adverse Effect” contained in the Acquisition Agreement or (y) Section 7.3(f) of the Acquisition Agreement shall be deemed to be materially adverse to the Lenders); provided that (a) any amendment, waiver or consent which results in a reduction in the purchase price for the Acquisition shall not be deemed to be materially adverse to the Lenders to the extent it is applied to reduce the amount of commitments in respect of the Senior Unsecured Bridge Facility and the Term Facility ratably and (b) any increase in purchase price for the Acquisition shall not be deemed to be materially adverse to the Lenders, to the extent such increase is not funded with any indebtedness (other than the Facilities).
2.
The Acquisition Agreement Representations and the Specified Representations shall be true and correct in all material respects on the Closing Date (or in all respects, if separately qualified by materiality).
3.
Subject to the Limited Conditionality Provisions, the Arrangers shall have received customary legal opinions, customary corporate documents and officers’ certifications; customary notices of borrowing; organizational documents; customary evidence of authorization to enter into the Operative Documents; and good standing certificates in jurisdictions of formation/organization (to the extent such a certificate exists in the applicable jurisdiction), in each case of the Company and the Guarantors. Each of the Agents shall have received a solvency certificate from the chief financial officer (or other comparable financial officer) of the Company substantially in the form attached as an exhibit to the Existing Credit Agreement.
4.
All fees required to be paid on the Closing Date pursuant to the Commitment Letter and the Fee Letter and out-of-pocket expenses required to be paid on the Closing Date pursuant to the Commitment Letter (to the extent invoiced at least three business days prior to the Closing Date) shall, upon the initial borrowing under the Facilities, have been paid.
5.
Each of the Agents shall have received, at least three business days prior to the Closing Date, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act and the Beneficial Ownership Regulation, that such Agent has requested at least ten business days prior to the Closing Date.
6.
The Arrangers shall have received (a) (i) the audited consolidated balance sheets and related statements of operations, stockholder’s equity and cash flows of HGVI as of and for the three (3) most
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recently completed fiscal years ended at least 90 days prior to the Closing Date and (ii) the unaudited condensed consolidated balance sheets and related statements of operations, stockholder’s equity and cash flows of HGVI as of and for each fiscal quarter ended after December 31, 2020 and at least 45 days prior to the Closing Date (but, excluding the fourth quarter of any fiscal year) (and the comparable period in the prior fiscal year), in each case prepared in accordance with GAAP (including footnotes thereto); provided that the Arrangers acknowledge receipt of the audited financial statements of HGVI for the fiscal years ended December 31, 2018, December 31, 2019 and December 31, 2020, (b) (i) the audited consolidated balance sheets and related statements of income, retained earnings, stockholder’s equity and changes in financial position of the Target as of and for the two (2) most recently completed fiscal years ended at least 90 days prior to the Closing Date and (ii) the unaudited consolidated balance sheets and related statements of income, retained earnings, stockholder’s equity and changes in financial position of the Target as of and for each fiscal quarter ended after December 31, 2019 and at least 45 days prior to the Closing Date (but, excluding the fourth quarter of any fiscal year) (and the comparable period in the prior fiscal year), in each case prepared in accordance with GAAP (including footnotes thereto); provided that the Arrangers acknowledge receipt of the audited financial statements of the Target for the fiscal years ended December 31, 2018 and December 31, 2019 and the unaudited financial statements for the Target for the fiscal quarters ended March 31, 2020, June 30, 2020 and September 30, 2020, and (c) a pro forma consolidated balance sheet and related pro forma consolidated statement of operations of HGVI as of and for the twelve-month period ending on, the last day of the most recently completed four-fiscal quarter period for which financial statements of HGVI pursuant to clause (a) above have been delivered, prepared after giving effect to the Transactions as if the Transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of the statement of operations), without any requirement to reflect therein adjustments for purchase accounting.
7.
(i) One or more investment banks (collectively, the “Investment Banks”) shall have been engaged pursuant to an amended and restated engagement letter dated as of the date hereof to privately place the Senior Unsecured Notes, and such Investment Banks each shall have received, not later than 12 consecutive Business Days prior to the Closing Date (such period prior to the Closing Date, the “Marketing Period”), a preliminary offering memorandum or preliminary private placement memorandum for the Senior Unsecured Notes (the “Offering Document”) suitable for use in a customary “high-yield road show” relating to the Senior Unsecured Notes in a form customary for senior unsecured Rule 144A-for-life offerings (except for portions thereof and information that would customarily be provided by the Investment Banks and parts of which, including with respect to the “description of notes”, the Investment Bank’s or its advisors’ cooperation is required for them to complete, provided that the Company shall have used its commercially reasonable efforts to cause them to be complete), which contains all financial statements, pro forma financial statements, business and other data with respect to HGVI, the Company and the Target customarily included therein (including all audited financial statements, all unaudited financial statements and, in the case of unaudited financial statements, reviewed by applicable independent accountants as provided in Statement on Auditing Standards No. 100, in each case with respect to each of the Company and the Target), necessary for the Investment Banks to receive customary (for high yield debt securities) “comfort” (including “negative assurance” comfort) in connection with the offering of such debt securities from each of HGVI’s and the Target’s independent accountants, along with drafts of the applicable comfort letters which such independent accountants are prepared to deliver upon the “pricing” of any offering of the Senior Unsecured Notes following completion of customary procedures, which Offering Document shall be updated by the Company from time to time during the Marketing Period as necessary to meet the requirements of the foregoing so long as the Marketing Period has not been completed, and (ii) the Investment Banks shall have been afforded a period of at least 12 consecutive Business Days following receipt of an Offering Document including the information described in clause (i) to seek to place the Senior Unsecured Notes; provided that, (x) May 28, 2021, July 2, 2021 and November 26, 2021 shall not constitute Business Days for purposes of the Marketing Period and (y) notwithstanding anything to the contrary
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herein, if the Marketing Period has not been completed on or prior to August 23, 2021, the Marketing Period shall not commence until September 7, 2021.
8.
The Refinancing shall have been consummated, or shall be consummated substantially concurrently with the initial borrowing under the Facilities.
9.
With respect to the Term Facility, subject to the Limited Conditionality Provision, to the extent required by the Operative Documents, all documents and instruments required to create and perfect the Term Facility Agent’s security interests in the Collateral shall have been executed and delivered and, if applicable, be in proper form for filing.
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Exhibit 10.2
Execution Version
Hilton grand vacations borrower escrow, llc
HILTON GRAND VACATIONS BORROWER ESCROW, INC.
PURCHASE AGREEMENT
May 20, 2021
DEUTSCHE BANK SECURITIES INC.
As Representative of the Initial Purchasers
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005
Ladies and Gentlemen:
Introductory. Hilton Grand Vacations Borrower Escrow, LLC, a Delaware limited liability company (the “Issuer”), and Hilton Grand Vacations Borrower Escrow, Inc., a Delaware corporation (the “Co-Issuer” and, together with the Issuer, the “Issuers”), each an indirect wholly-owned subsidiary of Hilton Grand Vacations Inc. (the “Parent”), the indirect parent of Hilton Grand Vacations Borrower LLC, a Delaware limited liability company (the “Surviving Issuer”), and Hilton Grand Vacations Borrower Inc., a Delaware corporation (the “Surviving Co-Issuer” and, together with the Surviving Issuer, the “Surviving Issuers”), propose to issue and sell to Deutsche Bank Securities Inc. (“Deutsche Bank”) and the other several initial purchasers named in Annex A (collectively, the “Initial Purchasers”), acting severally and not jointly, the respective amounts set forth in Annex A of $850,000,000 aggregate principal amount of the Issuers’ 5.000% Senior Notes due 2029 (the “Notes”). Deutsche Bank has agreed to act as the representative of the several Initial Purchasers (the “Representative”) in connection with the offer and sale of the Notes and the related Guarantees (as defined below) (the “Offering”).
The Notes will be issued pursuant to an indenture (the “Indenture”), to be dated as of the Closing Date (as defined below), by and among the Issuers, the Escrow Guarantor (as defined below) and Wilmington Trust, National Association, as trustee (the “Trustee”). The Notes will be issued only in book-entry form in the name of Cede & Co., as nominee of The Depository Trust Company (the “Depositary”), pursuant to a blanket issuer letter of representations, as supplemented by the relevant riders, each to be dated on or before the Closing Date (as so supplemented, the “DTC Agreement”), among the Issuers and the Depositary.
The representations, warranties, covenants and agreements of the Surviving Issuers and the Guarantors (as defined below), other than the Surviving Issuer in its capacity as the Escrow Guarantor, under this agreement (this “Agreement”) shall not become effective until the execution by the Surviving Issuers and the Guarantors of a joinder agreement to this Agreement, substantially in the form attached hereto as Exhibit C (the “Joinder Agreement”), at which time such representations, warranties, covenants and agreements shall become effective as of the date hereof pursuant to the terms of the Joinder Agreement, and each of the Surviving Issuers and the Guarantors shall, without any further action by any person, become a party to this Agreement.
The Offering is occurring in connection with the Agreement and Plan of Merger, dated as of March 10, 2021 (as amended, the “Merger Agreement”), by and among the Parent, the Surviving Issuer, Dakota Holdings, Inc., a Delaware corporation (“Diamond”), and the stockholders of Diamond named therein, pursuant to which Diamond will merge with and into the Surviving Issuer (the “Diamond
#94399344v20
Merger”). The Surviving Issuer will be the surviving entity of the Diamond Merger. In conjunction with or prior to the Diamond Merger and the Offering, and as described in the Pricing Disclosure Package (as defined below) and the Final Offering Memorandum (as defined below), the Parent, Holdings (as defined below), the Surviving Issuer and certain of the Surviving Issuer’s subsidiaries will (i) enter into a Credit Agreement, to be dated on or about the Closing Date, with Bank of America, N.A., as administrative agent, and the lenders and other parties party thereto (the “New Credit Agreement”), providing for a new $1.3 billion seven-year senior secured term loan facility, and (ii) amend (such amendment, the “Revolver Amendment” and, together with the New Credit Agreement and any other documents, agreements or instruments delivered in connection therewith, the “New Credit Documents”) their existing revolving credit facility under the Credit Agreement, dated as of December 28, 2016, as further amended, supplemented or otherwise modified, by and among the Parent, Holdings, the Surviving Issuer and certain of the Surviving Issuer’s subsidiaries, Bank of America, N.A., as administrative agent, and the lenders and other parties party thereto. As described in the Pricing Disclosure Package and the Final Offering Memorandum, the proceeds from the Offering are expected to be used to fund the repayment of certain existing indebtedness of the Surviving Issuers and Diamond and to pay related fees and expenses.
If the Closing Date occurs prior to the Completion Date, concurrently with the closing of the offering of the Notes, the Issuers will enter into a customary escrow agreement relating to the Notes (the “Escrow Agreement”) with the Trustee, Wilmington Trust, National Association, as escrow agent (the “Escrow Agent”), and the Escrow Guarantor. Pursuant to the Escrow Agreement, (i) the Issuers will deposit or cause to be deposited the gross proceeds of the Offering into a segregated escrow account established pursuant to the Escrow Agreement (the “Escrow Account”) and (ii) the Escrow Guarantor will agree to pay (the “Escrow Guarantee”) an amount necessary to fund the interest due on the Notes from June 4, 2021 to, but excluding the Special Mandatory Redemption Date (as defined in the Preliminary Offering Memorandum). The funds held in the Escrow Account will be released to the Surviving Issuer upon delivery by the Issuers to the Escrow Agent and the Trustee of an officer’s certificate certifying that the Escrow Conditions (as defined in the Pricing Disclosure Package) have been or, substantially concurrently with the release of the funds held in the Escrow Account, will be met, including (a) the consummation of the Diamond Merger, (b) the application of the funds held in the Escrow Account in connection with the Diamond Merger as described in the Pricing Disclosure Package and the Final Offering Memorandum, (c) the execution and delivery by the Surviving Issuers and the Guarantors of (i) the Supplemental Indenture (as defined below) and (ii) the Joinder Agreement ((i) and (ii) together, the “Assumption”), and (d) the consummation of (i) the merger of the Issuer with and into the Surviving Issuer, with the Surviving Issuer continuing as the surviving entity, and (ii) the merger of the Co-Issuer with and into the Surviving Co-Issuer, with the Surviving Co-Issuer continuing as the surviving entity (collectively, the “Escrow Mergers”). The date, if any, when the Escrow Conditions are satisfied is herein referred to as the “Escrow Release Date.” In the event that upon the earlier of (a) the Escrow Agent not having received the officer’s certificate described above on or prior to the Escrow End Date (as defined in the Preliminary Offering Memorandum), (b) the Issuers notifying the Escrow Agent and the Trustee in writing that the Diamond Merger will not be consummated on or prior to the Termination Date (as defined in the Merger Agreement) or (c) the Merger Agreement having been terminated in accordance with its terms (such earlier date, the “Cut-Off Date”), the Issuers will be required to redeem the Notes in accordance with the special mandatory redemption provisions set forth in the Indenture. For the purposes of this Agreement, the term “Completion Date” means the Escrow Release Date. On and after the Closing Date and prior to the Completion Date, the Notes will be secured pursuant to the terms of the Escrow Agreement on a first-priority basis, by a lien on the Escrow Account and funds therein as described in the Pricing Disclosure Package and the Final Offering Memorandum (the “Escrow Collateral”). If the Diamond Merger is consummated on the Closing Date, all references to the “Completion Date” in this Agreement will refer to the Closing Date, and the escrow arrangements described herein will not be implemented.
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On and after the Completion Date, the payment of principal, premium and interest on the Notes will be fully and unconditionally guaranteed on a senior unsecured basis (the “Guarantees”), in each case jointly and severally, by (i) by the Parent, Hilton Grand Vacations Parent LLC, a Delaware limited liability company (“Holdings” and, together with the Parent, the “Parent Guarantors”), and each of the Surviving Issuer’s wholly owned domestic restricted subsidiaries (other than the Surviving Co-Issuer) as of the Completion Date, after giving effect to the Transactions and including the Diamond Entities (as defined below), that as of such date will guarantee the obligations under the Surviving Issuer’s senior secured credit facilities, which subsidiaries are expected to be those entities set forth on Schedule I-1 and Schedule I-2 hereto, as applicable (collectively, the “Subsidiary Guarantors” and, together with the Parent Guarantors, the “Guarantors”), and (ii) any other subsidiary of the Surviving Issuer formed or acquired after the Closing Date that is required to provide an additional guarantee in accordance with the terms of the Indenture, and their respective successors and assigns, pursuant to their respective Guarantees. Each of the Surviving Issuers and the Guarantors shall, on the Completion Date, execute and deliver a supplemental indenture (the “Supplemental Indenture”) to the Indenture (and other agreements and opinions reasonably satisfactory to the Trustee) pursuant to which they assume all of the obligations of the Issuer, in the case of the Surviving Issuer, and of the Co-Issuer, in the case of the Surviving Co-Issuer, or become Guarantors, in the case of the Guarantors, under the Indenture, the Notes and the Guarantees thereof, as the case may be, and from and after the Completion Date, references herein to the “Indenture” shall mean such Indenture dated as of the Closing Date, as supplemented by the Supplemental Indenture dated as of the Completion Date. The Notes, the Escrow Guarantee and the Guarantees are herein collectively referred to as the “Securities.”
As used herein, (i) the term “Diamond Entities” refers to each of Diamond’s wholly owned domestic restricted subsidiaries set forth on Schedule I-2 hereto, (ii) the term “Transactions” refers collectively to the consummation of the Diamond Merger pursuant to the Merger Agreement, the Offering, the issuance and sale of the Notes pursuant to the terms of this Agreement and the Indenture, the issuance of the Escrow Guarantee pursuant to the terms of the Indenture, the entry into the Escrow Agreement and the deposit of proceeds of the issuance and sale of the Notes into the Escrow Account, the granting of any security interest under the Escrow Agreement, the consummation of the Escrow Mergers, the Assumption, the release of funds from the Escrow Account and the use thereof for the repayment of certain outstanding indebtedness, the entry into the Joinder Agreement, the entry into the Supplemental Indenture, the issuance of the Guarantees pursuant to the terms of the Supplemental Indenture, the execution of the New Credit Documents, the borrowings under the New Credit Agreement and the use thereof for the repayment of certain outstanding indebtedness, and the payment of all fees and expenses related thereto, as well as any other transactions included in the definition of the “Transactions” in the Pricing Disclosure Package and the Final Offering Memorandum, and (iii) the term “Transaction Agreements” refers to the Merger Agreement, this Agreement, the Indenture, the Escrow Agreement, the Joinder Agreement, the Supplemental Indenture and the New Credit Documents.
The Issuers and the Escrow Guarantor understand that the Initial Purchasers propose to effect the Offering on the terms and in the manner set forth herein and in the Pricing Disclosure Package and agree that the Initial Purchasers may resell, subject to the conditions set forth herein, all or a portion of the Securities to purchasers (the “Subsequent Purchasers”) at any time after the time this Agreement is executed by the parties hereto. The “Time of Execution” means 3:30 p.m. (New York City time) on May 20, 2021, which is the time of the first sale of the Securities by the Initial Purchasers. The Securities are to be offered and sold to, and are expected to be sold by, the Initial Purchasers without being registered with the Securities and Exchange Commission (the “Commission”) under the Securities Act, in reliance upon exemptions therefrom. The terms of the Securities and the Indenture will require that investors that acquire the Securities shall be deemed to have agreed that the Securities may only be resold or otherwise transferred, after the date hereof, if such Securities are registered for sale under the Securities Act or if an exemption from the registration requirements of the Securities Act is available (including the exemptions
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afforded by Rule 144A under the Securities Act (“Rule 144A”) or Regulation S under the Securities Act (“Regulation S”)).
The Issuers have prepared and delivered to each Initial Purchaser copies of a Preliminary Offering Memorandum, dated May 17, 2021 (the “Preliminary Offering Memorandum”), and have prepared and delivered to each Initial Purchaser copies of a Pricing Supplement, dated May 20, 2021 (in the form attached hereto as Exhibit A, the “Pricing Supplement”), describing the terms of the Securities, each for use by each Initial Purchaser in connection with its solicitation of offers to purchase the Securities. The Preliminary Offering Memorandum and the Pricing Supplement (taken together) are herein referred to as the “Pricing Disclosure Package.” Promptly after the Time of Execution, the Issuers will prepare and deliver to each Initial Purchaser a Final Offering Memorandum dated the date hereof (the “Final Offering Memorandum”).
All references herein to the terms “Pricing Disclosure Package” and “Final Offering Memorandum” shall be deemed to mean and include all information filed by the Parent under the Securities Exchange Act of 1934 (as amended, the “Exchange Act,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder) prior to the Time of Execution and incorporated by reference in the Pricing Disclosure Package (including the Preliminary Offering Memorandum) or the Final Offering Memorandum (as the case may be), and all references herein to the terms “amend,” “amendment” or “supplement” with respect to the Final Offering Memorandum shall be deemed to mean and include all information filed by the Parent under the Exchange Act after the Time of Execution and incorporated by reference in the Final Offering Memorandum.
The Issuers, the Escrow Guarantor and, effective upon the execution of the Joinder Agreement, the Surviving Issuers and the Guarantors (including the Diamond Entities), jointly and severally, hereby confirm their agreements with the Initial Purchasers as follows:
1.
Representations and Warranties. As of the date hereof, each of the Issuers and the Escrow Guarantor, jointly and severally, hereby represents, warrants and covenants (it being understood that all representations, warranties and covenants of the Issuers and the Escrow Guarantor with respect to Diamond and its subsidiaries are made to the knowledge of the Issuers and the Escrow Guarantor, after due inquiry) and, upon execution and delivery of the Joinder Agreement, each of the Surviving Issuers and the Guarantors, jointly and severally, hereby represents, warrants and covenants to each Initial Purchaser that, as of the date hereof and as of the Closing Date (references in this Section 1 to the “Offering Memorandum” are to (x) the Pricing Disclosure Package in the case of representations and warranties made as of the date hereof and (y) the Pricing Disclosure Package and the Final Offering Memorandum in the case of representations and warranties made as of the Closing Date):
a.
No Registration Required. Subject to compliance by the Initial Purchasers with the representations and warranties set forth in Section 1 and 2 hereof and with the procedures set forth in Section 8 hereof, it is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchasers and to each Subsequent Purchaser in the manner contemplated by this Agreement and the Offering Memorandum to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder).
b.
No Integration of Offerings or General Solicitation. The Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and any other direct or indirect subsidiary of the Parent have not, directly or indirectly, solicited any offer to buy or offered to sell, and will not, directly or indirectly, solicit any offer to buy or offer to sell, in the United States or to any United States citizen or resident, any security which is or would be integrated with the sale of any series of Securities in a manner that would
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require such Securities to be registered under the Securities Act. None of the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors, any of their respective affiliates, as such term is defined in Rule 501 under the Securities Act (each, an “Affiliate”), or, to their knowledge, any person acting on any of their behalf (other than the Initial Purchasers, as to whom the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors make no representation or warranty) has engaged or will engage, in connection with the Offering, in any form of general solicitation or general advertising within the meaning of Rule 502 under the Securities Act or in any manner involving a public offering within the meaning of Section 4(a)(2) under the Securities Act. With respect to those Securities sold in reliance upon Regulation S, none of the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors, any of their respective Affiliates or, to their knowledge, any person acting on any of their behalf (other than the Initial Purchasers, as to whom the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors make no representation or warranty) has engaged or will engage in any directed selling efforts within the meaning of Regulation S and each of the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and their respective Affiliates and, to their knowledge, any person acting on any of their behalf (other than the Initial Purchasers, as to whom the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors make no representation or warranty) has complied and will comply with the offering restrictions set forth in Regulation S.
c.
Eligibility for Resale Under Rule 144A. The Securities are eligible for resale pursuant to Rule 144A and will not be, at the Closing Date, of the same class (within the meaning of Rule 144A) as securities listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the “Exchange Act,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder) or quoted in a U.S. automated interdealer quotation system.
d.
The Pricing Disclosure Package and Offering Memorandum. Neither the Pricing Disclosure Package, as of the Time of Execution, nor the Final Offering Memorandum, as of its date or (as amended or supplemented in accordance with Section 4(b) hereof, as applicable) as of the Closing Date, contains or will contain an untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation and warranty shall not apply to statements in or omissions from the Pricing Disclosure Package, the Final Offering Memorandum or any amendment or supplement thereto made in reliance upon and in conformity with information furnished to the Issuers in writing by any Initial Purchaser through the Representative expressly for use in the Pricing Disclosure Package, the Final Offering Memorandum or any amendment or supplement thereto, as the case may be (it being understood that the only such information is that information specified in Section 9(b)).
e.
Issuer Additional Written Communications. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors have not prepared, made, used, authorized, approved or distributed and will not prepare, make, use, authorize, approve or distribute any written communication (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy the Securities other than the Pricing Disclosure Package, the Final Offering Memorandum and any electronic or written road show presentation or other written communications, in each case used in accordance with Section 4(a) hereof (each such communication by the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors or their respective agents and representatives pursuant to clause (iii) of the preceding sentence, an “Issuer Additional Written Communication”). Each Issuer Additional Written Communication, as supplemented by and taken together with the Pricing Supplement, does not conflict in any material respect with the information contained in the Pricing Disclosure Package or the Final Offering Memorandum and each Issuer Additional Written Communication, as supplemented by and, taken together with the Pricing Disclosure Package, as of the Time of Execution, did not include, and
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at the Closing Date will not include, any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation, warranty and agreement shall not apply to statements in or omissions from each such Issuer Additional Written Communication made in reliance upon and in conformity with information furnished to the Issuers in writing by any Initial Purchaser through the Representative expressly for use in any Issuer Additional Written Communication (it being understood that the only such information is that information specified in Section 9(b)).
f.
Incorporated Documents. The documents incorporated or deemed to be incorporated by reference in the Offering Memorandum at the time they were or hereafter are filed with the Commission (collectively, the “Incorporated Documents”) complied and will comply in all material respects with the requirements of the Exchange Act. Each such Incorporated Document, when taken together with the Pricing Disclosure Package and as updated and/or superseded by any subsequently filed Incorporated Document(s), as of the Time of Execution, did not contain, and at the Closing Date will not contain, any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
g.
The Purchase Agreement and the Joinder Agreement. This Agreement has been duly authorized, executed and delivered by the Issuers and the Escrow Guarantor and, on the Completion Date, the Joinder Agreement will have been duly authorized, executed and delivered by the Surviving Issuers and the Guarantors.
h.
The Indenture and the Supplemental Indenture. The Indenture (including, in the case of the Escrow Guarantor, the Escrow Guarantee set forth in the Indenture) has been duly authorized by the Issuers and the Escrow Guarantor and, on the Closing Date, will have been duly executed and delivered by the Issuers and the Escrow Guarantor, and, when duly executed and delivered in accordance with its terms by the Trustee, will constitute a valid and binding agreement of the Issuers and the Escrow Guarantor enforceable against the Issuers and the Escrow Guarantor in accordance with its terms, except as the enforcement thereof may be limited by the effects of bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors generally from time to time in effect; the application of general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether enforcement is considered in proceedings at law or in equity); and applicable law and public policy with respect to rights to indemnity and contribution (the “Enforceability Exceptions”). On the Completion Date, the Supplemental Indenture (including, in the case of the Guarantors, the Guarantees set forth in the Indenture) will have been duly authorized, executed and delivered by the Surviving Issuers and the Guarantors and, when duly executed and delivered in accordance with its terms by the Trustee, the Indenture (as so supplemented) will constitute a valid and binding agreement of the Surviving Issuers and the Guarantors enforceable against the Surviving Issuers and the Guarantors in accordance with their terms, except as the enforcement thereof may be limited by the Enforceability Exceptions.
i.
Authorization of the Notes, the Escrow Guarantee and the Guarantees. The Notes to be purchased by the Initial Purchasers from the Issuers will, on the Closing Date, be in the form contemplated by the Indenture, have been duly authorized by the Issuers for issuance and sale pursuant to this Agreement and the Indenture and, at the Closing Date, will have been duly executed by the Issuers, and, when authenticated in the manner provided for in the Indenture and delivered against payment of the purchase price therefor, will constitute valid and binding obligations of the Issuers, enforceable against the Issuers in accordance with their terms, except as the enforcement thereof may be limited by the Enforceability Exceptions, and will be entitled to the benefits of the Indenture. On the Completion Date, the Notes will have been duly authorized by the Surviving Issuers and will constitute valid and binding
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obligations of the Surviving Issuers, enforceable against the Surviving Issuers in accordance with their terms, except as the enforcement thereof may be limited by the Enforceability Exceptions, and will be entitled to the benefits of the Indenture. The Escrow Guarantee will be in the form contemplated by the Indenture; the Escrow Guarantee, on the Closing Date, will have been duly authorized by the Escrow Guarantor for issuance pursuant to this Agreement and the Indenture; the Escrow Guarantee, on the Closing Date, will have been duly executed by the Escrow Guarantor and, when the Notes have been authenticated in the manner provided for in the Indenture and issued and delivered against payment of the purchase price therefor, the Escrow Guarantee will constitute valid and binding agreement of the Escrow Guarantor, enforceable against the Escrow Guarantor in accordance with its terms, except as the enforcement thereof may be limited by the Enforceability Exceptions, and will be entitled to the benefits of the Indenture. The Guarantees will be in the form contemplated by the Indenture; the Guarantees, on the Completion Date, will have been duly authorized by the Guarantors for issuance pursuant to this Agreement and the Indenture; the Guarantees, on the Completion Date, will have been duly executed by the Guarantors and, when the Notes have been authenticated in the manner provided for in the Indenture and issued and delivered against payment of the purchase price therefor and the Supplemental Indenture has been executed by the Surviving Issuers and the Guarantors, the Guarantees will constitute valid and binding agreements of the Guarantors, enforceable against the Guarantors in accordance with their terms, except as the enforcement thereof may be limited by the Enforceability Exceptions, and will be entitled to the benefits of the Indenture.
j.
The Escrow Agreement. The Escrow Agreement has been duly authorized by the Issuers and the Escrow Guarantor and, on the Closing Date, will have been duly executed and delivered by, and, when duly executed and delivered in accordance with its terms by each of the other parties thereto, will constitute a valid and binding agreement of, the Issuers and the Escrow Guarantor, enforceable against the Issuers and the Escrow Guarantor in accordance with its terms, except as the enforcement thereof may be limited by the Enforceability Exceptions. The Escrow Agreement will, on the Closing Date, create in favor of the Trustee, for the benefit of itself and the holders of the Notes, as applicable, a legal, valid and enforceable security interest in the Escrowed Funds described therein as security for the Notes, as applicable, to the extent that a legal, valid, binding and enforceable security interest in such Escrowed Funds may be created under any applicable law of the United States of America and any states thereof, including, without limitation, the applicable Uniform Commercial Code (“UCC”), which security interest, upon execution of the Escrow Agreement, will constitute a fully perfected lien on, and security interest in, all right, title and interest of each Issuer in such Escrowed Funds.
k.
Description of the Transaction Documents. The Transaction Documents will conform in all material respects to the respective statements relating thereto contained in the Offering Memorandum.
l.
No Material Adverse Effect. Neither the Parent, Diamond, nor any of their respective subsidiaries has sustained since the date of the latest audited financial statements included or incorporated by reference in the Offering Memorandum any material loss or material interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any court or governmental action, order or decree; and subsequent to the respective dates as of which information is given in the Offering Memorandum (exclusive of any amendment or supplement thereto): there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse effect on the condition (financial or otherwise), business or results of operations, whether or not arising from transactions in the ordinary course of business, of the Parent or its subsidiaries, or of Diamond or its subsidiaries, in each case taken as a whole and after giving effect to the Transactions (any such change or development, a “Material Adverse Effect”), and the Parent and its subsidiaries, and Diamond and its subsidiaries, in each case considered as one entity, have not except as otherwise disclosed in the Offering Memorandum, incurred any material liability or obligation (whether indirect, direct or contingent), or except as otherwise disclosed in the Offering Memorandum, entered into any
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material transaction or agreement, in each case not in the ordinary course of business, except for transactions and agreements related to the Transactions.
m.
Independent Accountants. Ernst & Young LLP who have expressed their opinion with respect to certain financial statements (which term as used in this Agreement includes the related notes thereto) of the Parent included or incorporated by reference in in the Offering Memorandum, are independent auditors with respect to the Parent within the meaning of the rules of the American Institute of Certified Public Accountants. Deloitte & Touche LLP who have expressed their opinion with respect to certain financial statements of Diamond included in the Offering Memorandum, are independent auditors with respect to Diamond within the meaning of the rules of the American Institute of Certified Public Accountants.
n.
Preparation of the Financial Statements. The consolidated historical financial statements of each of (i) the Parent and its consolidated subsidiaries and (ii) Diamond and its consolidated subsidiaries and the related notes thereto included or incorporated by reference in the Offering Memorandum present fairly in all material respects the consolidated financial position of the Parent and Diamond and their respective consolidated subsidiaries, as the case may be, as of and at the dates indicated and the results of their operations and cash flows for the periods specified in conformity with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis throughout the periods involved (except as otherwise stated therein). The historical financial data of the Parent and Diamond and their respective consolidated subsidiaries included or incorporated by reference in the Offering Memorandum under the captions “Summary—Summary Historical Consolidated Financial Information of HGV” and “Summary—Summary Historical Consolidated Financial Information of Diamond” present fairly in all material respects the information set forth therein on a basis consistent with that of the audited financial statements contained in the Offering Memorandum. The pro forma condensed consolidated financial statements of the Parent and its subsidiaries and the related notes thereto included or incorporated by reference under the caption “Summary—Summary Pro Forma Financial Information,” “Unaudited Pro Forma Condensed Combined Financial Information of HGV and Diamond” and elsewhere in the Offering Memorandum present fairly the information contained therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial statements in all material respects and have been properly presented on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. The statistical and market related data included or incorporated by reference in the Offering Memorandum are based on or derived from sources that the Parent and its subsidiaries believe to be reliable and accurate in all material respects and represent their good faith estimates that are made on the basis of data derived from such sources.
o.
Incorporation and Good Standing. Each of the Issuers, the Escrow Guarantor, the Surviving Issuers and each of the Guarantors has been duly incorporated or formed, as applicable, and is validly existing as a corporation, limited liability company or limited partnership, as applicable, in good standing (to the extent such concept exists in the applicable jurisdiction) under the laws of the jurisdiction of its incorporation or formation, as applicable, has corporate or other organizational power, as applicable, and authority to own, lease and operate its properties and conduct its business as described in the Offering Memorandum, as applicable, and has been duly qualified as a foreign entity for the transaction of business and is in good standing (to the extent such concept exists in the applicable jurisdiction) under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except, in the case of clauses (ii) and (iii), where the failure to have such power or authority or to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Parent does not own or control, directly or indirectly, any corporation, association or other entity that is expected to be a Subsidiary Guarantor as of the Completion Date other than the subsidiaries listed on Schedule I-1 hereto and each of the
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subsidiaries of the Parent listed on Schedule I-1 hereto is organized in the jurisdiction set forth beside such subsidiary’s name on Schedule I-1. Diamond does not own or control, directly or indirectly, any corporation, association or other entity that is expected to be a Subsidiary Guarantor as of the Completion Date other than the subsidiaries listed on Schedule I-2 hereto and each of the subsidiaries of Diamond listed on Schedule I-2 hereto is organized in the jurisdiction set forth beside such subsidiary’s name on Schedule I-2. As used in this Agreement, “subsidiary” or “subsidiaries” shall mean both direct and indirect subsidiaries of an entity.
p.
Capitalization and Other Capital Stock Matters. Except as set forth in the Offering Memorandum, all of the issued and outstanding capital stock or other ownership interests of each Issuer, the Escrow Guarantor, each Surviving Issuer and each Guarantor has been duly authorized and validly issued, is fully paid and nonassessable and (except for directors’ qualifying shares and capital stock or other ownership interests of the Parent) is owned or will after the consummation of the Transactions be owned, directly or indirectly, by the Parent, free and clear of all liens, encumbrances, equities or claims other than as expressly permitted in the Indenture. As of March 31, 2021 (other than with respect to common stock, which is calculated assuming a number of shares issued based on a May 13, 2021 closing date of the Merger in the case of the Pricing Disclosure Package, and a May 20, 2021 closing date of the Merger in the case of the Final Offering Memorandum), after giving pro forma effect to the Transactions, on a consolidated basis, the Parent would have had an authorized and outstanding capitalization as set forth in the Offering Memorandum under the caption “Capitalization” and there are no outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Parent, the Issuers, the Surviving Issuers or any of their respective subsidiaries other than those described in the Pricing Disclosure Package and the Final Offering Memorandum.
q.
Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required. None of the Issuers, the Escrow Guarantor, the Surviving Issuers or any of the Guarantors is in violation of its charter or bylaws or other organizational documents, as applicable, or in default (“Default”) in the performance or observance of any obligation, agreement, covenant or condition under any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound (each, an “Existing Instrument”), or (C) in violation of any law or statute applicable to the Issuers, the Escrow Guarantor, the Surviving Issuers or any of the Guarantors or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Issuers, the Escrow Guarantor, the Surviving Issuers or any of the Guarantors, except, in the case of clauses (B) and (C), such defaults and violations as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
The execution, delivery and performance of the Transaction Documents by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, as applicable, the issuance and delivery of the Securities, and the consummation of the Transactions (i) will not result in any violation of the provisions of the charter or by-laws or similar organizational documents of any of the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors, (ii) will not conflict with or constitute a breach of, or Default or, except as otherwise disclosed in the Offering Memorandum, a Debt Repayment Triggering Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Parent, the Parent’s subsidiaries, Diamond or the Diamond Entities pursuant to, or require the consent (except as shall have been obtained prior to the Completion Date) of any other party to, any Existing Instrument, and (iii) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Parent, any subsidiary of the Parent, Diamond or any Diamond Entity, except, in the case of clauses (i) (other than with respect to the Issuers and the Surviving Issuers), (ii) and (iii) above, for such conflicts, breaches, Defaults, Debt Repayment Triggering Events, liens, charges, encumbrances, consents or violations as are disclosed in the
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Offering Memorandum or as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. As used herein, a “Debt Repayment Triggering Event” means any event or condition which gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors and their respective subsidiaries.
Except as otherwise disclosed in the Offering Memorandum, no consent, approval, authorization or other order of, or registration, qualification or filing with, any court or other governmental or regulatory authority or agency, is required for the execution, delivery and performance of the Transaction Documents by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, as applicable, the issuance and delivery of the Securities, or consummation of the Transactions, except (i) such as will be obtained or made by the Parent, the Surviving Issuers or the Issuers under the Securities Act, the Trust Indenture Act, applicable state securities or Blue Sky laws, (ii) such mortgages, filings and recordings with governmental or regulatory authorities or agencies as may be required to perfect security interests under the Escrow Agreement, and (iii) as shall have been obtained or made prior to the Closing Date, except where the failure to obtain any such consents, approvals, authorizations, orders, registrations or qualifications or make such filings would not impair, in any material respect, the ability of the Parent, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors to consummate the Transactions.
r.
No Material Actions or Proceedings. Except as otherwise disclosed in the Offering Memorandum, there are no material legal or governmental actions, suits or proceedings pending or, to the Issuers’, the Escrow Guarantor’s, the Surviving Issuers’ and the Guarantors’ knowledge, threatened against or affecting the Parent, Diamond or any of their respective subsidiaries or which has as the subject thereof any property owned or leased by the Parent, Diamond or any of their respective subsidiaries which would be required by the Securities Act to be described in the Offering Memorandum if the Offering Memorandum were a prospectus included in a registration statement on Form S-1 filed with the Commission.
s.
No Labor Disputes. There are no strikes or other labor disputes against the Parent or any of its subsidiaries pending or, to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, threatened, except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
t.
Intellectual Property Rights. The Parent and its subsidiaries own, license or possess or have sufficient rights to use the trademarks, trade names, patents, copyrights, trade secrets and other similar rights (collectively, “Intellectual Property Rights”) reasonably necessary to conduct their businesses as currently conducted and as described in the Offering Memorandum, except where the failure to so own or possess or have the right to use would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect; and, except as otherwise disclosed in the Offering Memorandum, any expiration, cancellation, abandonment, forfeiture or relinquishment of any of such Intellectual Property Rights would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. Neither the Parent nor any of its subsidiaries has received any unresolved written notice of any claim of infringement with asserted Intellectual Property Rights of others in the past two years, except for any such claims as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
u.
All Necessary Permits, etc. The Parent and its subsidiaries possess such valid and current certificates, authorizations or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct their respective businesses and as described in the Offering Memorandum, except as would not reasonably be expected, individually or in the aggregate, to result in a
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Material Adverse Effect, and except as described in the Offering Memorandum, the Parent and its subsidiaries have not received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit, except for any such proceedings as would not, individually or in the aggregate reasonably be expected to result in a Material Adverse Effect.
v.
Title to Properties. The Parent and its subsidiaries have good and marketable title to all the properties and assets reflected as owned in the financial statements referred to in Section 1(n) hereof (other than properties sold in the ordinary course of business since the date of such financial statements), and hold any leased real or personal property under valid and enforceable leases, except, in each case, as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
w.
Tax Law Compliance. Except for any failures or exceptions that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, or as disclosed in the Offering Memorandum, (i) the Parent and each of the Parent’s subsidiaries has timely filed (taking into account valid extensions) all federal, state, local and foreign tax returns required to be filed by it and has paid all taxes (and any related interest, penalties and additions to tax) required to be paid by it (including in its capacity as a withholding agent) except for any taxes being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP, and (ii) to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, there is no proposed tax deficiency or assessment against the Parent or any of the Parent’s subsidiaries.
x.
Issuers, Escrow Guarantor, Surviving Issuers and Guarantors Not an “Investment Company”. None of the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors is, or after receipt of payment for the Securities, consummation of the Transactions or application of the net proceeds from the Offering as described in the Offering Memorandum will be, required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
y.
No Price Stabilization or Manipulation. None of the Parent or any of the Parent’s subsidiaries has taken or will take, directly or indirectly, any action that is designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Parent or its subsidiaries to facilitate the sale or resale of the Securities.
z.
Accounting Systems. Parent maintains a system of internal controls over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that has been designed by the Parent’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurances that: transactions are executed in accordance with management’s general or specific authorization; transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP; access to assets is permitted only in accordance with management’s general or specific authorization; and the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences; the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors are not aware of any material weaknesses in Parent’s internal control over financial reporting.
aa.
Solvency. The Parent and its subsidiaries, taken as a whole, are, and after giving effect to the Transactions, will be, Solvent. As used herein, the term “Solvent” means that on such date (i) the fair value of the assets of the Parent and its subsidiaries, taken as a whole, exceeds, taken as a whole, the debts and liabilities, subordinated, contingent or otherwise, of the Parent and its subsidiaries, (ii) the present fair saleable value of the property of the Parent and its subsidiaries, taken as a whole, is greater than the amount that will be required to pay the probable liabilities of the Parent and its subsidiaries, taken as a whole, and their debts as they become absolute and matured, (iii) the Parent and its subsidiaries, taken as a whole, are able to realize upon their assets and pay their debts and other liabilities,
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including contingent obligations, as they mature and (iv) the Parent and its subsidiaries, taken as a whole, do not have unreasonably small capital.
bb.
Disclosure Controls and Procedures. The Parent has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) designed to ensure that material information relating to the Parent and its subsidiaries is made known to the chief executive officer and chief financial officer of the Parent by others within the Parent or any of its subsidiaries, and such disclosure controls and procedures are reasonably effective to perform the functions for which they were established subject to the limitations of any such control system.
cc.
Regulations T, U, X. None of the Parent or any of the Parent’s subsidiaries, nor, to their knowledge, any agent thereof acting on their behalf (other than any Initial Purchaser, as to which no representation is given) has taken, and none of them will take, any action that might cause this Agreement or the issuance or sale of the Securities to violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System.
dd.
Compliance with Environmental Laws. Except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect or as disclosed in the Offering Memorandum: the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors, and their respective subsidiaries are in compliance with all applicable federal, state, local and foreign laws and regulations relating to pollution or protection of human health (to the extent relating to exposure to hazardous or toxic substances or wastes, pollutants, contaminants, chemicals, petroleum and petroleum products (collectively, “Materials of Environmental Concern”), including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of Materials of Environmental Concern, or otherwise relating to the use, generation, treatment, storage, disposal, transport or handling of Materials of Environmental Concern (collectively, “Environmental Laws”); neither the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors nor any of their respective subsidiaries has received written notice of any claim, investigation, action or cause of action filed with a court or governmental authority, violation, or actual or potential liability under Environmental Law (collectively, “Environmental Claims”), and, to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, no such Environmental Claims have been threatened against the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors and their respective subsidiaries or any person or entity whose liability for any Environmental Claim, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors and their respective subsidiaries have retained or assumed either contractually or by operation of law; and to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, there has been no activity, circumstance, condition, event or occurrence, including, without limitation, the release, emission, discharge, presence or disposal of any Materials of Environmental Concern, that would reasonably be expected to result in a violation of or liability of the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors or any of their respective subsidiaries under Environmental Laws or form the basis of an Environmental Claim against the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors or any of their respective subsidiaries or against any person or entity whose liability for any Environmental Claim the Parent and its subsidiaries have retained or assumed either contractually or by operation of law.
ee.
ERISA Compliance. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, none of the following events has occurred or exists: (a) a “reportable event” as defined under the United States Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the regulations and published interpretations thereunder with respect to a Plan (as defined below); (b) a withdrawal from a Plan subject to Section 4063 of ERISA during a plan year in which Parent or any of its subsidiaries was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section
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4062(e) of ERISA; (c) a complete or partial withdrawal from a Plan; (d) the filing by the PBGC of a notice of intent to terminate any Plan, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, respectively, or the commencement of proceedings by the PBGC to terminate a Plan; (e) appointment of a trustee to administer any Plan; (f) with respect to a Plan, the failure to satisfy the minimum funding standard of Section 412 of the Code or Section 302, 303 or 304 of ERISA, whether or not waived; (g) the imposition of any liability under Title IV of ERISA with respect to any Plan, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA; (h) an audit or investigation by the Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any other federal or state governmental agency or any foreign regulatory agency with respect to any Plan; or (i) any violation of law or applicable qualification standards, with respect to any Plan. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, none of the following events has occurred or is reasonably likely to occur: (a) an increase in the aggregate amount of contributions required to be made to all Plans in the current fiscal year of the Parent and its subsidiaries compared to the amount of such contributions made in the most recently completed fiscal year of the Parent and its subsidiaries; (b) an increase in the “accumulated post−retirement benefit obligations” (within the meaning of Statement of Financial Accounting Standards 106) of the Parent and its subsidiaries compared to the amount of such obligations in the most recently completed fiscal year of the Parent and its subsidiaries; (c) liability under Title IV of ERISA with respect to the termination of, or withdrawal from, any Plan; or (d) the filing of a material claim by one or more employees or former employees of the Parent or any of its subsidiaries related to their employment. For purposes of this paragraph, the term “Plan” means a plan (within the meaning of Section 3(3) of ERISA) subject to Title IV of ERISA with respect to which the Parent or any of its subsidiaries may have any liability.
ff.
No Unlawful Contributions or Other Payments. Neither the Parent nor any of its subsidiaries nor, to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, any director, officer, agent, employee or other person associated with or acting on behalf of the Parent or any of its subsidiaries, or any controlled affiliate of the Parent, is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), and the rules and regulations thereunder, any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the U.K. Bribery Act of 2010, or any other applicable anti-bribery or anti-corruption law, including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA or other applicable anti-bribery or anti-corruption law) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA or other applicable anti-bribery or anti-corruption law, and the Parent, its subsidiaries and, to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, Parent’s controlled affiliates have conducted their businesses in compliance with the FCPA and other applicable anti-bribery or anti-corruption law, and have instituted and maintain and enforce policies and procedures designed to achieve, and which are reasonably expected to continue to achieve, continued compliance therewith.
gg.
No Conflict with Sanctions Laws. Neither the Parent nor any of its subsidiaries nor, to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, any director, officer, agent, employee or controlled affiliate of the Parent or any of its subsidiaries is currently the subject or target of any sanctions administered or enforced by the U.S. government, including without limitation by the Office of Foreign Assets Control of the U.S. Treasury Department, the U.S. Department of Commerce, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor is the Parent
13
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or any of its subsidiaries located, organized or resident in a country or territory that is the subject or target of Sanctions. The Parent, the Issuers and the Surviving Issuers will not, directly or indirectly, use the proceeds of the Offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, (i) to fund or facilitate any activities of or business with any person, entity or government that, at the time of such funding or facilitation, is the subject or target of Sanctions, or (ii) in any other manner that will result in a violation by any person (including any person participating in the offering, whether as initial purchaser, underwriter, advisor, investor or otherwise) of Sanctions.
hh.
Compliance with Money Laundering Laws. The operations of the Parent and its subsidiaries are and have been conducted at all times in compliance in all material respects with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Parent or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, threatened.
ii.
Regulation S. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors and their respective affiliates and all persons acting on their behalf (other than the Initial Purchasers, as to whom the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors make no representation) have complied with and will comply with the offering restrictions requirements of Regulation S in connection with the Offering outside the United States and, in connection therewith, and the Offering Memorandum will contain the disclosure required by Rule 902 of Regulation S. The Securities sold in reliance on Regulation S will be represented upon issuance by a temporary global security that may not be exchanged for definitive securities until the expiration of the 40-day restricted period referred to in Rule 903 of the Securities Act and only upon certification of beneficial ownership of such Securities by non-U.S. persons or U.S. persons who purchased such Securities in transactions that were exempt from the registration requirements of the Securities Act.
jj.
Cybersecurity. Except as would not, individually or in the aggregate, have a Material Adverse Effect, the information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases of the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and their respective subsidiaries (collectively, “IT Systems”) now or proposed to be operated by them, are adequate for, and operate and perform as required in connection with the operation of the business of the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and their respective subsidiaries as described in the Offering Memorandum, and, to the knowledge of Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and their respective subsidiaries, are free and clear of all bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants. Except as would not, individually or in the aggregate, have a Material Adverse Effect, the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and their respective subsidiaries have implemented and maintained commercially reasonable controls, policies, procedures, and safeguards to maintain and protect their confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data (including all personal, personally identifiable, sensitive, confidential or regulated data (“Personal Data”)) collected, processed, stored or used in connection with their businesses, and, to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and their respective subsidiaries, there have been no breaches, violations, outages or unauthorized uses of or accesses to same, except for those that have been remedied without cost or liability or the duty to notify any other person or entity, nor any incidents under internal review or
14
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investigations relating to the same. The Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and their respective subsidiaries are presently, except as would not, individually or in the aggregate, have a Material Adverse Effect, in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification.
kk.
Limitations on Distributions. Except as may be limited by applicable state corporation law or comparable laws, no subsidiary of Parent is currently prohibited, directly or indirectly, from paying any dividends to the Parent or the Surviving Issuers, as applicable, from making any other distribution on such subsidiary’s capital stock or other ownership interests, from repaying to the Parent or the Surviving Issuers, as applicable, any loans or advances to such subsidiary from the Parent or the Surviving Issuers, as applicable, or from transferring any of such subsidiary’s property or assets to the Parent or the Surviving Issuers, as applicable, or any other subsidiary of the Parent or the Surviving Issuers, as applicable, except as described in the Offering Memorandum.
ll.
Merger Agreement. The Merger Agreement has been duly authorized, executed and delivered by the Parent and the Surviving Issuer and constitutes a valid and binding agreement of such persons, enforceable against such persons in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and equitable principles of general applicability. Neither the Parent nor the Surviving Issuer has received any written notice of termination of the Merger Agreement. Nothing has come to the knowledge of either the Parent, the Surviving Issuers, the Issuers or the Escrow Guarantor that would cause it to believe that, and none of them has received any written notice to the effect that, any conditions to the closing of the transactions contemplated by the Merger Agreement will not be satisfied by any party thereto, at or prior to December 10, 2021. In addition, to the knowledge of the Parent, the Surviving Issuers, the Issuers or the Escrow Guarantor, after due inquiry, (i) the representations and warranties of Diamond in the Merger Agreement are true and correct, except to the extent such representations and warranties are made as of another date, in which case, such representations and warranties shall be true and correct as of that date, in each case, with the same force and effect as if made as of the date hereof or the Closing Date, as applicable, and (ii) each of the parties to the Merger Agreement has complied in all material respects with the covenants in the Merger Agreement applicable to it.
Any certificate signed pursuant to this Agreement by an officer of the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors and delivered to the Representative or to counsel for the Initial Purchasers in connection with the closing of the Offering shall be deemed to be a representation and warranty by such Issuer, the Escrow Guarantor, Surviving Issuer and Guarantor, as the case may be, to the Initial Purchasers as to the matters set forth therein.
3.
Purchase, Sale and Delivery of the Securities.
mm.
The Securities. On the basis of the representations, warranties, covenants and agreements and subject to the terms and conditions, set forth herein, the Issuers agree to sell to the several Initial Purchasers all of the Securities, and subject to the conditions set forth herein, the Initial Purchasers agree, severally and not jointly, to purchase from the Issuers the aggregate principal amount of Notes set forth opposite their respective names on Annex A, at a purchase price of 100.000% of the principal amount thereof (the “Purchase Price”), plus accrued interest, if any, from June 4, 2021, to the Closing Date.
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nn.
The Closing Date. Delivery of certificates for the Notes in global form to be purchased by the Initial Purchasers and payment therefor shall be made at the offices of Simpson Thacher & Bartlett LLP (or such other place as may be agreed to by the Issuers and the Representative) at 9:00 a.m., New York City time, on June 4, 2021 or such other time and date as the Representative and the Issuers may agree to in writing (the time and date of such closing are called the “Closing Date”).
oo.
Delivery of the Securities. The Issuers shall deliver to the Representative for the accounts of the several Initial Purchasers certificates for the Notes at the Closing Date against the irrevocable release of a wire transfer in the amount of the aggregate Purchase Price for the Notes, plus accrued interest, if any, to the Closing Date, to the Escrow Account in immediately available funds, and such payment shall include the aggregate Deferred Discount (as defined below). The certificates for the Notes shall be in such denominations and registered in the name of Cede & Co., as nominee of the Depositary, pursuant to the DTC Agreement, and will be deposited with the Trustee as custodian for the Depositary and shall be made available for inspection on the business day preceding the Closing Date at a location in New York City, as the Representative and the Issuers may agree. Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the Initial Purchasers.
pp.
Deferred Discount. On the Completion Date, pursuant to the terms of the Escrow Agreement, a deferred discount in the aggregate amount of $12,750,000 with respect to the Notes (the “Deferred Discount”), shall be released from the Escrow Account to the Representative for the accounts of the several Initial Purchasers, to be paid by wire transfer to the account or accounts specified by the Representative in immediately available funds. If the Completion Date does not occur on or prior to the Cut-Off Date, the aggregate Purchase Price, including the Deferred Discount, shall be used to redeem the Notes pursuant to the terms of the Escrow Agreement and the special mandatory redemption provisions set forth in the Indenture.
4.
Additional Covenants. Each of the Issuers and the Escrow Guarantor further covenants and agrees and, upon execution and delivery of the Joinder Agreement, each of the Surviving Issuers and the Guarantors further covenants and agrees, jointly and severally, with each Initial Purchaser as follows:
qq.
Delivery of Final Offering Memorandum; Initial Purchasers’ Review of Proposed Amendments and Supplements and Issuer Additional Written Communications. As promptly as practicable following the Time of Execution and in any event not later than the fourth business day following the date hereof, the Issuers and the Escrow Guarantor will prepare and deliver to the Initial Purchasers the Final Offering Memorandum. None of the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors shall amend or supplement the Preliminary Offering Memorandum, the Pricing Supplement or the Final Offering Memorandum prior to the Closing Date unless the Initial Purchasers shall previously have been furnished a copy of the proposed amendment or supplement prior to the proposed use or filing, and the Representative shall not have reasonably objected to such amendment or supplement. Before making, preparing, using, authorizing, approving or distributing any Issuer Additional Written Communication, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors will furnish to the Representative a copy of such written communication for review and will not make, prepare, use, authorize, approve or distribute any such written communication to which the Representative reasonably objects.
rr.
Amendments and Supplements to the Final Offering Memorandum and Other Securities Act Matters. If, prior to the later of the Closing Date and the completion of the placement of the Securities by the Initial Purchasers with the Subsequent Purchasers (but in no event more than 180 days after the date hereof), any event shall occur or condition exist as a result of which the Pricing Disclosure Package or the Final Offering Memorandum would include any untrue statement of material fact or omit
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to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and it is necessary to amend or supplement the Pricing Disclosure Package or the Final Offering Memorandum in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if in the reasonable judgment of the Representative or counsel for the Initial Purchasers it is otherwise necessary to amend or supplement the Pricing Disclosure Package or the Final Offering Memorandum to comply with any applicable law, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors agree to promptly prepare, and furnish at their own expense to the Representative, amendments or supplements to the Pricing Disclosure Package or the Final Offering Memorandum (as applicable) so that the statements in the Pricing Disclosure Package or the Final Offering Memorandum (as applicable) as so amended or supplemented will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made and at the time of sale of Securities and at the Closing Date, not misleading or so that the Final Offering Memorandum, as amended or supplemented, will comply with all applicable law. Upon request of any holder or prospective purchaser of the Securities, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors will provide all the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the Securities Act.
ss.
Copies of the Offering Memorandum. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors agree to furnish to the Initial Purchasers, without charge, during the period referred to in paragraph (b) above, as many copies of the Pricing Disclosure Package and the Final Offering Memorandum and any amendments and supplements thereto as the Initial Purchasers shall have reasonably requested.
tt.
Blue Sky Compliance. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors shall cooperate with the Representative and counsel for the Initial Purchasers to qualify or register the Securities for sale under (or obtain exemptions from the application of) the Blue Sky or state securities laws of those jurisdictions reasonably designated by the Initial Purchasers, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Securities. None of the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors shall be required to qualify as a foreign corporation or other foreign entity or to take any action that would subject them to general service of process in any such jurisdiction where they are not presently qualified or where they would be subject to taxation as a foreign corporation or other foreign entity. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors will advise the Initial Purchasers promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors shall use their commercially reasonable efforts to obtain the withdrawal thereof at the earliest possible moment.
uu.
Escrow of Gross Proceeds. The Issuers shall deposit or cause to be deposited the gross proceeds from the sale of the Securities received by the Issuers in the Escrow Account.
vv.
Use of Proceeds. The Issuers and the Surviving Issuers shall apply the net proceeds from the sale of the Securities sold by them in the manner described under the caption “Use of Proceeds” in the Pricing Disclosure Package and the Final Offering Memorandum.
ww.
The Depositary. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors will cooperate with the Initial Purchasers and use their commercially reasonable efforts to permit the Securities to be eligible for clearance and settlement through the facilities of the Depositary.
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xx.
Agreement Not to Offer or Sell Additional Securities. During the period from the date hereof through and including the date that is 60 days following the date hereof, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors will not, and they will cause their respective subsidiaries not to, without the prior written consent of the Representative (which consent may be withheld at the sole discretion of the Representative), directly or indirectly, sell, offer, contract or grant any option to sell, pledge, transfer or establish an open “put equivalent position” within the meaning of Rule 16a-1 under the Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file any registration statement under the Securities Act in respect of, any debt securities of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors or securities exchangeable for or convertible into debt securities of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors (other than as contemplated by this Agreement); provided that this Section 4(h) shall not apply to the issuance of new asset-backed securities by the Parent, Diamond or any of their subsidiaries.
yy.
Future Reports to the Initial Purchasers. For so long as any Securities remain outstanding, during any period when the Parent is not publicly filing information required under Section 13 or Section 15 of the Exchange Act on the Commission’s EDGAR system or posting such information on the Parent’s website (or otherwise providing such information to the Trustee or the holders of the Securities in accordance with the terms of the Indenture), the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors will furnish to the Representative: as soon as practicable after the end of each fiscal year, copies of the Annual Report of the Parent containing the balance sheet of the Parent as of the close of such fiscal year and statements of income, stockholders’ equity and cash flows for the year then ended and the opinion thereon of the Parent’s independent public or certified public accountants; and as soon as available, copies of any report or communication of the Parent mailed generally to holders of its capital stock or debt securities (including the holders of the Securities).
zz.
No Integration. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors agree that they will not, and will cause their subsidiaries or any other person acting on any of their behalf (other than the Initial Purchasers, as to which no covenant is given) not to, make any offer or sale of securities of the Issuers of any class if, as a result of the doctrine of “integration” referred to in Rule 502 under the Securities Act, such offer or sale would render invalid (for the purpose of the resale of the Securities by the Initial Purchasers to Subsequent Purchasers or the resale of the Securities by such Subsequent Purchasers to others) the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof or by Rule 144A or by Regulation S or otherwise.
aaa.
No General Solicitation or Directed Selling Efforts. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors agree that they will not and will not permit any of their subsidiaries or any other person acting on any of their behalf (other than the Initial Purchasers, as to which no covenant is given) to solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act or engage in any directed selling efforts with respect to the Securities within the meaning of Regulation S, and the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors will and will cause all such persons to comply with the offering restrictions requirement of Regulation S with respect to the Securities.
bbb.
Ratings of Securities. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors shall take all reasonable actions necessary to enable Standard & Poor’s Ratings Services, a division of The McGraw Hill, Inc. Companies, and Moody’s Investors Service, Inc. to provide their respective credit ratings to the Securities.
ccc.
Legended Securities. Each certificate for a Note will bear the legend contained in “Notice to Investors; Transfer Restrictions” in the Pricing Disclosure Package and the Final Offering Memorandum
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for the time period and upon the other terms stated in the Pricing Disclosure Package and the Final Offering Memorandum.
ddd.
Completion Date Documents, Opinions and Certificates. On the Completion Date, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors shall:
i.
cause to be delivered to the Initial Purchasers (A) an opinion of Simpson Thacher & Bartlett LLP, counsel for the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, and (B) opinions from such local counsel furnishing opinions under the New Credit Agreement, in each case dated as of the Completion Date and in form and substance reasonably satisfactory to the Representative;
ii.
cause to be executed (A) the Joinder Agreement and (B) the Supplemental Indenture, in each case in form and substance reasonably satisfactory to the Representative, and the Initial Purchasers shall have received executed copies thereof; and
iii.
cause to be delivered to the Initial Purchasers any other certificates, evidence and documents confirming compliance with and satisfaction of the Escrow Conditions in accordance with the Escrow Agreement and such other certificates or documents as the Initial Purchasers shall reasonably request.
The Representative on behalf of the several Initial Purchasers, may, in its sole discretion, waive in writing the performance by the Issuers, the Escrow Guarantor, the Surviving Issuers and any Guarantor of any one or more of the foregoing covenants or extend the time for their performance.
5.
Payment of Expenses. Each of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, jointly and severally, agrees to pay all costs, fees and expenses incurred by each of them and their subsidiaries (if any) in connection with the performance of their obligations hereunder and in connection with the transactions contemplated hereby, including, without limitation, all expenses incident to the issuance and delivery of the Securities (including all printing and engraving costs), all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Securities to the Initial Purchasers, all fees and expenses of the counsel to the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, and independent public or certified public accountants, all costs and expenses incurred in connection with the preparation, printing, shipping and distribution (including any form of electronic distribution) of the Pricing Disclosure Package and the Final Offering Memorandum (including the financial statements set forth or incorporated by reference therein), and all amendments and supplements thereto, all filing fees and reasonable attorneys’ fees and expenses incurred by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Securities for offer and sale under the securities laws of the several states of the United States or the provinces of Canada (including, without limitation, the cost of preparing, printing and mailing preliminary and final Blue Sky or legal investment memoranda and any related supplements to the Pricing Disclosure Package or the Final Offering Memorandum) and advising the Initial Purchasers of such qualifications, registrations and exemptions, the fees and expenses of the Trustee and the Escrow Agent, including the fees and disbursements of counsel for the Trustee and the Escrow Agent, in connection with the transactions contemplated hereby, any fees payable in connection with the rating of the Securities with the ratings agencies, the transportation and other expenses incurred by or on behalf of representatives of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors in connection with presentations to prospective purchasers of the Securities, and expenses associated with any electronic road show (it being understood that the Initial Purchasers, collectively, shall bear one-half of the costs associated with any chartered aircraft as well as their representatives’ other transportation and
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other expenses), all fees and expenses associated with the grant or perfection of the security interests and liens to be obtained under the Escrow Agreement, including, without limitation, the preparation of the Escrow Agreement and the other documents required thereunder in connection therewith and all lien search and filing fees in connection with perfecting the security interest in the Escrowed Funds, and all fees and expenses (including reasonable fees and expenses of counsel) of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors in connection with approval of the Securities by Depositary for “book-entry” transfer, and the performance by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors of their respective obligations under this Agreement. Except as provided in this Section 5 and Section 7, Section 9 and Section 10 hereof, the Initial Purchasers shall pay their own expenses, including the fees and disbursements of their counsel.
6.
Conditions of the Obligations of the Initial Purchasers. The obligations of the several Initial Purchasers to purchase and pay for the Securities as provided herein on the Closing Date shall be subject to the accuracy of the representations and warranties set forth in Section 1 hereof as of the date hereof and as of the Closing Date as though then made and to the timely performance by the Issuers and the Escrow Guarantor of their covenants and other obligations hereunder in all material respects (except to the extent already qualified by materiality), and to each of the following additional conditions:
eee.
Accountants’ Comfort Letters. At the Time of Execution, each of Ernst & Young LLP and Deloitte & Touche LLP shall have furnished to the Initial Purchasers a “comfort letter,” dated the date hereof and to take effect at the Time of Execution, in form and substance reasonably satisfactory to the Initial Purchasers and covering the matters contained or incorporated by reference in the Preliminary Offering Memorandum, and, in addition, on the Closing Date, the Initial Purchasers shall have received from each of Ernst & Young LLP and Deloitte & Touche LLP a “bring-down comfort letter” dated the Closing Date and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Initial Purchasers, in the form of the “comfort letter” delivered at the Time of Execution, except that such bring-down comfort letter shall cover the financial information contained or incorporated by reference in the Final Offering Memorandum and any amendment or supplement thereto and procedures shall be brought down to a date no more than three days prior to the Closing Date.
fff.
No Material Adverse Effect or Ratings Agency Change. For the period from and after the date of this Agreement and prior to the Closing Date:
i.
there shall not have been any material adverse change or any development involving a prospective material adverse change in the condition (financial or otherwise), business or results of operations of the Parent and its subsidiaries, or of Diamond and its subsidiaries, in each case taken as a whole and after giving effect to the Transactions, the effect of which is, or would reasonably be expected to become, in the judgment of the Representative, so material and adverse as to make it impractical or inadvisable to proceed with the completion of the Offering on the terms and in the manner contemplated in the Pricing Disclosure Package and the Final Offering Memorandum; and
ii.
there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded the Parent or any of its subsidiaries or any of its securities or indebtedness, including the Notes, by any “nationally recognized statistical rating organization,” as such term is defined in Section 3(a)(62) of the Exchange Act.
ggg.
Opinion of Counsel for the Issuers and the Escrow Guarantor. On the Closing Date, the Initial Purchasers shall have received an opinion and a negative assurance statement of Simpson Thacher
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& Bartlett LLP, counsel for the Issuers and the Escrow Guarantor, dated as of the Closing Date, substantially in the forms attached as Exhibit B-1 and Exhibit B-2, respectively;
hhh.
Opinion of Counsel for the Initial Purchasers. On the Closing Date, the Initial Purchasers shall have received an opinion and negative assurance statement of Davis Polk & Wardwell LLP, counsel for the Initial Purchasers, dated as of such Closing Date, with respect to such matters as may be reasonably requested by the Initial Purchasers.
iii.
Officers’ Certificate for the Issuers and the Escrow Guarantor. On the Closing Date, the Initial Purchasers shall have received a written certificate executed by two executive officers of the Issuers and the Escrow Guarantors, on behalf of the Issuers and the Escrow Guarantor, dated as of the Closing Date, to the effect that:
iii.
there has not occurred any downgrading, nor has any notice been given of any intended potential downgrading, or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded the Parent or any of its subsidiaries or any of their securities or indebtedness, including the Notes, by any “nationally recognized statistical rating organization” as such term is defined in Section 3(a)(62) of the Exchange Act;
iv.
for the period from and after the date of this Agreement and prior to the Closing Date, there has not occurred any material adverse change in the condition (financial or otherwise), business or results of operations of the Parent and its subsidiaries, or Diamond and its subsidiaries, in each case taken as a whole and after giving effect to the Transactions (except as set forth in or contemplated in the Pricing Disclosure Package and the Final Offering Memorandum, exclusive of any amendment or supplement thereto);
v.
the representations and warranties set forth in Section 1 hereof are true and correct (with respect to the Diamond Entities, to their knowledge, after due inquiry) with the same force and effect as though expressly made on and as of the Closing Date; and
vi.
each of the Issuers and the Escrow Guarantor has complied with all the agreements and satisfied all the conditions on their part to be performed or satisfied at or prior to the Closing Date, in each case in all material respects.
jjj.
DTC. At the Closing Date, the Issuers and/or the Escrow Guarantor shall have taken all action reasonably requested by the Representative to enable the Notes to be eligible for clearance and settlement through DTC.
kkk.
Indenture. On or prior to the Closing Date, the Issuers and the Escrow Guarantor shall have executed and delivered the Indenture and the Notes shall have been executed and delivered by the Issuers and authenticated by the Trustee in accordance with the Indenture, in each case in form and substance reasonably satisfactory to the Initial Purchasers, and the Initial Purchasers shall have received executed copies thereof.
lll.
Escrow Agreement. On or prior to the Closing Date, the Escrow Agreement shall have been entered into by the parties thereto and the Initial Purchasers shall have received an executed copy thereof.
mmm.
Parent Chief Financial Officer’s Certificate. On the date hereof and the Closing Date, the Initial Purchasers shall have received a written certificate executed by the Chief Executive Officer of Parent, on behalf of the Parent, dated as of the date hereof or the Closing Date, as applicable, substantially in the form attached as Exhibit D-1;
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nnn.
Diamond Chief Financial Officer’s Certificate. On the date hereof and the Closing Date, the Initial Purchasers shall have received a written certificate executed by the Chief Financial Officer of Diamond, on behalf of Diamond, dated as of the date hereof or the Closing Date, as applicable, substantially in the form attached as Exhibit D-2;
ooo.
Additional Documents. On or prior to the Closing Date, the Initial Purchasers and counsel for the Initial Purchasers shall have received such information and documents as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Securities as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 6 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Representative by notice to the Issuers at any time on or prior to the Closing Date, which termination shall be without liability on the part of any party to any other party, except that Section 5, Section 7, Section 9 and Section 10 shall at all times be effective and shall survive such termination.
7.
Reimbursement of Initial Purchasers’ Expenses. If this Agreement is terminated by the Representative pursuant to Section 6 or the sale to the Initial Purchasers of the Securities on the Closing Date is not consummated because of any refusal, inability or failure on the part of the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors to perform any agreement herein or to comply with any provision hereof, other than by reason of a default by any of the Initial Purchasers, including as described in Section 19 hereof, or (c) the Completion Date does not occur on or prior to the Cut-Off Date, then in each case, the Issuers and the Escrow Guarantor agree, jointly and severally, to reimburse the Initial Purchasers upon demand for all out-of-pocket expenses that shall have been reasonably incurred by the Initial Purchasers in connection with the Offering, including, but not limited to reasonable fees and disbursements of one counsel (and, if necessary, one local counsel in any relevant material jurisdiction), printing expenses, travel expenses, postage, facsimile and telephone charges.
8.
Offer, Sale and Resale Procedures. Each of the Initial Purchasers, severally and not jointly, agrees with the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors that, and hereby agrees to observe the following procedures in connection with the offer and sale of the Securities:
ppp.
such Initial Purchaser, severally and not jointly, represents and warrants to, and agrees with, the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors that it is a “qualified institutional buyer” within the meaning of Rule 144A and an “accredited investor” within the meaning of Regulation D under the Securities Act;
qqq.
Each such offer or sale shall only be made to persons whom the offeror or seller reasonably believes to be “qualified institutional buyers” (as defined in Rule 144A) in transactions meeting the requirements of Rule 144A, or non-U.S. persons outside the United States in reliance upon Regulation S under the Securities Act, upon the terms and conditions set forth in Annex B hereto, which Annex B is hereby expressly made a part hereof; and
rrr.
no general solicitation or general advertising (within the meaning of Rule 502 under the Securities Act) will be used in the United States in connection with the Offering.
Following the sale of the Securities by the Initial Purchasers to Subsequent Purchasers pursuant to the terms hereof, except as expressly set forth in Sections 9 and 10 hereof, the Initial Purchasers shall not be liable or responsible to the Issuers for any losses, damages or liabilities suffered or incurred by the
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Issuers, including any losses, damages or liabilities under the Securities Act, arising from or relating to any resale or transfer of any Security.
sss.
Indemnification of the Initial Purchasers by the Issuers and the Guarantors. Each of the Issuers and the Escrow Guarantor, jointly and severally, agrees and, upon the execution and delivery of the Joinder Agreement, each of the Surviving Issuers and the Guarantors (including the Diamond Entities), jointly and severally, agrees to indemnify and hold harmless each Initial Purchaser, its affiliates, directors, officers and employees, and each person, if any, who controls any Initial Purchaser within the meaning of the Securities Act and the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which such Initial Purchaser, affiliate, director, officer, employee or controlling person may become subject, under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Issuers or the Surviving Issuers, as applicable (not to be unreasonably withheld)), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in the Pricing Disclosure Package, any Issuer Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto), or the omission or alleged omission therefrom, of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and to reimburse each Initial Purchaser and each such affiliate, director, officer, employee or controlling person for any and all reasonable expenses (including the reasonable fees and disbursements of counsel chosen by the Representative) as such expenses are reasonably incurred by such Initial Purchaser or such affiliate, director, officer, employee or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the foregoing indemnity agreement shall not apply to any loss, claim, damage, liability, expense or action to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Parent by such Initial Purchaser through the Representative expressly for use in the Pricing Disclosure Package, any Issuer Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto) (it being understood that the only such information is that information specified in Section 9(b)). The indemnity agreement set forth in this Section 9(a) shall be in addition to any liabilities that the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors may otherwise have.
ttt.
Indemnification of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors. Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold harmless as of the date hereof, each Issuer and the Escrow Guarantor and, upon execution and delivery of the Joinder Agreement, each Surviving Issuer and each Guarantor, the employees, directors and officers of each Issuer and the Escrow Guarantor as of the date hereof and, upon the execution and delivery of the Joinder Agreement, of each Surviving Issuer and each Guarantor, and each person, if any, who controls, as of the date hereof, each Issuer and the Escrow Guarantor and, upon the execution and delivery of the Joinder Agreement, each Surviving Issuer and each Guarantor, in each case within the meaning of the Securities Act or the Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which any Issuer, the Escrow Guarantor, any Surviving Issuer, any Guarantor or any such employee, director, officer or controlling person may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Initial Purchaser), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in the Pricing
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Disclosure Package, any Issuer Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Pricing Disclosure Package, any Issuer Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto), in reliance upon and in conformity with written information furnished to the Parent by such Initial Purchaser through the Representative expressly for use therein; and to reimburse any Issuer and the Escrow Guarantor and, upon execution and delivery of the Joinder Agreement where applicable, any Surviving Issuer, any Guarantor and each such employee, director, officer or controlling person for any and all reasonable expenses (including the reasonable fees and disbursements of counsel) as such expenses are reasonably incurred by any Issuer, the Escrow Guarantor, any Surviving Issuer, any Guarantor or such employee, director, officer or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors hereby acknowledge that the only information that the Initial Purchasers have furnished to the Parent through the Representative expressly for use in the Pricing Disclosure Package, any Issuer Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto) are the statements set forth in the second sentence of the ninth paragraph, the tenth paragraph and the first, second, third and fourth sentences of the eleventh paragraph under the caption “Plan of Distribution” in the Preliminary Offering Memorandum and the Final Offering Memorandum. The indemnity agreement set forth in this Section 9(b) shall be in addition to any liabilities that each Initial Purchaser may otherwise have.
uuu.
Notifications and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 9 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 9, notify the indemnifying party in writing of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party under this Section 9, except to the extent it is materially prejudiced by such failure (through the forfeiture of substantive rights and defenses) and shall not relieve the indemnifying party from any liability that the indemnifying party may have to an indemnified party other than under this Section 9. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded (based on the advice of counsel) that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party’s election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 9 for any fees or expenses of counsel subsequently incurred by such indemnified party in connection with the defense thereof (other than the reasonable costs of investigation) unless the indemnified party shall have employed separate counsel in accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (together with one local counsel (in each applicable jurisdiction)), which
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shall be selected by the Representative (in the case of counsel representing the Initial Purchasers or their related persons), representing the indemnified parties who are parties to such action) or the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying party.
vvv.
Settlements. The indemnifying party under this Section 9 shall not be liable for any settlement of any proceeding effected without its written consent (not to be unreasonably withheld), but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding and does not include any statements as to or any findings of fault, culpability or failure to act by or on behalf of any indemnified party.
10.
Contribution. If the indemnification provided for in Section 9 hereof is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein (other than by virtue of the failure of an indemnified party to notify the indemnifying party of its right to indemnification pursuant to Section 9(c) hereof, where the indemnifying party is materially prejudiced by such failure (through the forfeiture of substantive rights and defenses)), then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein in such proportion as is appropriate to reflect the relative benefits received by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, from the Offering or if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in connection with the Offering shall be deemed to be in the same respective proportions as the total net proceeds from the Offering (before deducting expenses) received by the Issuers and the Surviving Issuers, and the total discount and expense reimbursements received by the Initial Purchasers bear to the aggregate initial offering price of the Securities. The relative fault of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, on the one hand, or the Initial Purchasers, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 9 herein, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The provisions set forth in Section 9 herein with respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this
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Section 10; provided, however, that no additional notice shall be required with respect to any action for which notice has been given under Section 9 herein for purposes of indemnification.
The Issuers, the Escrow Guarantor and the Initial Purchasers agree and, upon execution and delivery of the Joinder Agreement, each Surviving Issuers and each Guarantor will agree, that it would not be just and equitable if contribution pursuant to this Section 10 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 10.
Notwithstanding the provisions of this Section 10, no Initial Purchaser shall be required to contribute any amount in excess of the discount received by such Initial Purchaser in connection with the Securities distributed by it. No person guilty of fraudulent misrepresentation (within the meaning of Section 11 of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers’ obligations to contribute pursuant to this Section 10 are several, and not joint, in proportion to their respective commitments as set forth opposite their names in Annex A. For purposes of this Section 10, each affiliate, director, officer and employee of such Initial Purchaser and each person, if any, who controls such Initial Purchaser within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as such Initial Purchaser, and each employee, director or officer of any Issuer, the Escrow Guarantor, any Surviving Issuer or any Guarantor, and each person, if any, who controls any Issuer, the Escrow Guarantor, any Surviving Issuer or any Guarantor within the meaning of the Securities Act and the Exchange Act, shall have the same rights to contribution as the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors.
11.
Termination of This Agreement. Subsequent to the execution and delivery of this Agreement, this Agreement may be terminated by the Representative by notice given to the Issuers if at any time there shall have occurred any of the following: trading in securities generally on the New York Stock Exchange or the NASDAQ Global Select Market has been suspended or minimum prices shall have been established on any such exchange or such market by the Commission, by such exchange or by any other regulatory body or governmental authority having jurisdiction; trading or quotation in any of the Parent’s or Issuers’ securities (if any) on the New York Stock Exchange shall have been suspended or limited, a banking moratorium has been declared by Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by Congress or any other national or international calamity, crisis or emergency if, in the judgment of the Representative (other than any defaulting Initial Purchaser under Section 19 hereof), the effect of any such attack, outbreak, escalation, act, declaration, calamity, crisis or emergency makes it impractical or inadvisable to proceed with completion of the Offering; or the occurrence of any other calamity, crisis (including, without limitation, as a result of terrorist activities), or material adverse change in general economic, political or financial conditions (or the effect of international conditions on the financial markets in the United States shall be such) as to make it, in the judgment of the Representative (other than any defaulting Initial Purchaser under Section 19 hereof), impracticable or inadvisable to proceed with the Offering or the delivery of the Notes being delivered on the Closing Date on the terms and in the manner contemplated by the Pricing Disclosure Package and the Final Offering Memorandum. Any termination pursuant to this Section 11 shall be without liability on the part of any party to any other party, except that Section 5, Section 7, Section 9, Section 10, Section 17 and Section 21 shall at all times be effective and shall survive such termination.
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12.
Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations and warranties of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, their respective officers and the several Initial Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Initial Purchaser, any Issuer, the Escrow Guarantor, any Surviving Issuer or any Guarantor or any of its or their partners, officers or directors or any controlling person, as the case may be, and will survive delivery of and payment for the Securities sold hereunder and any termination of this Agreement.
13.
Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered, couriered or facsimiled and confirmed to the parties hereto as follows:
If to the Initial Purchasers:
Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005
Attention: Leveraged Debt Capital Markets, Second Floor
Facsimile: (212) 797-4877
with a copy to the attention of the General Counsel, 36th Floor; Facsimile: (212) 797-4561
with a copy to:
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
Attention: Marcel Fausten
Facsimile: (212) 701-5111
If to the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors:
Hilton Grand Vacation Inc.
6355 MetroWest Boulevard, Suite 180
Orlando, Florida 32835
Facsimile: (703) 883-6188
Attention: Charles R. Corbin, Executive Vice President and General Counsel
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with a copy to:
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attention: Jonathan Ozner
Facsimile: (212) 455-2502
Alston & Bird LLP
950 F Street, NW
Washington, DC 20004
Attention: Alexander J. Park
Facsimile: (202) 239-3333
Any party hereto may change the address or facsimile number for receipt of communications by giving written notice to the others.
14.
Recognition of the U.S. Special Resolution Regimes.
www.
In the event that any Initial Purchaser that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Initial Purchaser of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
xxx.
In the event that any Initial Purchaser that is a Covered Entity or a BHC Act Affiliate of such Initial Purchaser becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Initial Purchaser are per-mitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
yyy.
For the purpose of this Section 14:
“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity” means any of the following:
(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
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“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
15.
Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of the indemnified parties referred to in Section 9 and Section 10 hereof, and in each case their respective successors, and no other person will have any right or obligation hereunder. The term “successors” shall not include any purchaser of the Securities as such from any of the Initial Purchasers merely by reason of such purchase.
16.
Partial Unenforceability. The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.
17.
Governing Law Provisions. THIS AGREEMENT, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
18.
Representations of the Initial Purchasers. The Representative will act for the several Initial Purchasers in connection with the purchase of the Securities, and any action under this Agreement taken by the Representative will be binding upon all of the Initial Purchasers.
19.
Default of One or More of the Several Initial Purchasers. If any one or more of the Initial Purchasers shall fail or refuse to purchase Securities that it or they have agreed to purchase hereunder on the Closing Date, and the aggregate number of Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase does not exceed 10% of the aggregate number of the Securities to be purchased on such date, the other Initial Purchasers shall be obligated, severally, in the proportions that the number of Securities set forth opposite their respective names on Annex A bears to the aggregate number of Securities set forth opposite the names of all such non-defaulting Initial Purchasers, or in such other proportions as may be specified by the Initial Purchasers with the consent of the non-defaulting Initial Purchasers, to purchase the Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase on the Closing Date. If any one or more of the Initial Purchasers shall fail or refuse to purchase Securities and the aggregate number of Securities with respect to which such default occurs exceeds 10% of the aggregate number of Securities to be purchased on the Closing Date, and arrangements satisfactory to the Initial Purchasers and the Issuers for the purchase of such Securities are not made within 36 hours after such default, this Agreement shall terminate without liability of any party to any other party except that the provisions of Section 5, Section 7, Section 9 and Section 10 hereof shall at all times be effective and shall survive such termination. In any such case either the Initial Purchasers or the Issuers shall have the right to postpone the Closing Date, as the case may be, but in no event for longer than seven days in order that the required changes, if any, to the Offering Memorandum or any other documents or arrangements may be effected.
As used in this Agreement, the term “Initial Purchaser” shall be deemed to include any person substituted for a defaulting Initial Purchaser under this Section 19. Any action taken under this Section 19 shall not relieve any defaulting Initial Purchaser from liability in respect of any default of such Initial Purchaser under this Agreement.
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20.
No Advisory or Fiduciary Responsibility. Each of the Issuers and the Escrow Guarantor acknowledges and agrees and, upon execution and delivery of the Joinder Agreement, each of the Surviving Issuers and each Guarantor will acknowledge and agree that: the purchase and sale of the Securities pursuant to this Agreement, including the determination of the offering price of the Securities and any related discounts and commissions, is an arm’s-length commercial transaction between the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, on the one hand, and the several Initial Purchasers, on the other hand, and the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated by this Agreement; in connection with each transaction contemplated hereby and the process leading to such transaction, each Initial Purchaser is and has been acting solely as a principal and is not the agent or fiduciary of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors or their respective affiliates, stockholders, creditors or employees or any other party; no Initial Purchaser has assumed or will assume an advisory or fiduciary responsibility in favor of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors with respect to any of the transactions contemplated hereby or the process leading thereto (irrespective of whether such Initial Purchaser has advised or is currently advising the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors on other matters) or any other obligation to the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors except the obligations expressly set forth in this Agreement; the several Initial Purchasers and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, and the several Initial Purchasers have no obligation to disclose any of such interests by virtue of any fiduciary or advisory relationship; and the Initial Purchasers have not provided any legal, accounting, regulatory or tax advice with respect to the Offering, and the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors have consulted their own legal, accounting, regulatory and tax advisors to the extent they deemed appropriate.
This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, on the one hand, and the several Initial Purchasers, or any of them, on the other hand with respect to the Offering. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors hereby waive and release, to the fullest extent permitted by law, any claims that the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors may have against the several Initial Purchasers with respect to any breach or alleged breach of fiduciary duty in connection with the purchase and sale of the Securities pursuant to this Agreement.
21.
Consent to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United States of America located in the City and County of New York or the courts of the State of New York in each case located in the City and County of New York (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any Specified Court in a Related Proceeding, as to which such jurisdiction is non-exclusive) of the Specified Courts in any Related Proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any Related Proceeding brought in any Specified Court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any Related Proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any Specified Court that any Related Proceeding brought in any Specified Court has been brought in an inconvenient forum.
30
#94399344v20
22.
Compliance with USA PATRIOT Act. In accordance with the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Initial Purchasers are required to obtain, verify and record information that identifies their respective clients, including the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, which information may include the name and address of their respective clients, as well as other information that will allow the Initial Purchasers to properly identify their respective clients.
23.
General Provisions. This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. The section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.
[Remainder of Page Intentionally Blank]
31
#94399344v20
If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Parent the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.
Very truly yours,
|
|
|
|
Hilton Grand Vacations Borrower Escrow, LLC
By: Hilton Grand Vacations Borrower LLC,
its Managing Member and Sole Member
By: Hilton Grand Vacations Parent LLC,
its Managing Member and Sole Member
By: Hilton Grand Vacations Inc.,
its Managing Member and Sole Member
|
|
By:
|
/s/ Ben Loper
|
|
|
Name: Ben Loper
|
|
|
Title: Vice President
|
|
|
|
|
Hilton Grand Vacations Borrower Escrow, Inc.
|
|
By:
|
/s/ Ben Loper
|
|
|
Name: Ben Loper
|
|
|
Title: Vice President and Treasurer
|
|
|
|
|
Hilton Grand Vacations Borrower LLC
By: Hilton Grand Vacations Parent LLC,
its Managing Member and Sole Member
By: Hilton Grand Vacations Inc.,
its Managing Member and Sole Member
|
|
By:
|
/s/ Ben Loper
|
|
|
Name: Ben Loper
|
|
|
|
|
|
Title: Vice President
|
32
#94399344v20
The foregoing Purchase Agreement is hereby confirmed and accepted by the Initial Purchasers as of the date first above written.
|
|
|
|
Deutsche Bank Securities, Inc.
Acting on behalf of itself
and as the Representative of
the several Initial Purchasers
|
|
By:
|
Deutsche Bank Securities, Inc.
|
|
By:
|
/s/ Shaun Ryan
|
|
|
Name: Shaun Ryan
|
|
|
Title: Director
|
|
|
|
|
By:
|
/s/ Ryan Corning
|
|
|
Name: Ryan Corning
|
|
|
Title: Managing Director
|
33
#94399344v20
ANNEX A
|
|
|
|
Initial Purchasers
|
Aggregate Principal Amount of Notes to be Purchased
|
|
Deutsche Bank Securities, Inc.
|
$177,810,000
|
|
BofA Securities, Inc.
|
$199,006,000
|
|
Barclays Capital Inc.
|
$177,809,000
|
|
Credit Suisse Securities (USA) LLC
|
$97,750,000
|
|
Goldman Sachs & Co. LLC
|
$34,000,000
|
|
J.P. Morgan Securities LLC
|
$46,750,000
|
|
MUFG Securities Americas Inc.
|
$34,000,000
|
|
Wells Fargo Securities, LLC
|
$25,500,000
|
|
Fifth Third Securities, Inc.
|
$17,000,000
|
|
Regions Securities LLC
|
$17,000,000
|
|
Citizens Capital Markets, Inc.
|
$17,000,000
|
|
Mizuho Securities USA LLC
|
$6,375,000
|
|
Total
|
$850,000,000
|
34
#94399344v20
ANNEX B
Resale Pursuant to Regulation S or Rule 144A. Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that:
Such Initial Purchaser has not offered or sold and will not offer or sell the Securities in the United States or to, or for the benefit or account of, a U.S. person (other than a distributor), in each case, as defined in Rule 902 of Regulation S (i) as part of its distribution at any time and (ii) otherwise until 40 days after the later of the commencement of the Offering and the Closing Date, other than in accordance with Regulation S or another exemption from the registration requirements of the Securities Act. Such Initial Purchaser agrees that, during such 40-day restricted period, it will not cause any advertisement with respect to the Securities (including any “tombstone” advertisement) to be published in any newspaper or periodical or posted in any public place and will not issue any circular relating to the Securities, except such advertisements as are permitted by and include the statements required by Regulation S.
Such Initial Purchaser agrees that, at or prior to confirmation of a sale of Securities by it to any distributor, dealer or person receiving a selling concession, fee or other remuneration during the 40-day restricted period referred to in Rule 903 of Regulation S, it will send to such distributor, dealer or person receiving a selling concession, fee or other remuneration a confirmation or notice to substantially the following effect:
“The Securities covered hereby have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered and sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of your distribution at any time or (ii) otherwise until 40 days after the later of the date the Securities were first offered to persons other than distributors in reliance upon Regulation S and the Closing Date, except in either case in accordance with Regulation S under the Securities Act (or in accordance with Rule 144A under the Securities Act or to accredited investors in transactions that are exempt from the registration requirements of the Securities Act), and in connection with any subsequent sale by you of the Securities covered hereby in reliance on Regulation S under the Securities Act during the period referred to above to any distributor, dealer or person receiving a selling concession, fee or other remuneration, you must deliver a notice to substantially the foregoing effect. Terms used above have the meanings assigned to them in Regulation S under the Securities Act.”
None of such Initial Purchaser or any of its affiliates or any other person acting on its or their behalf has engaged or will engage in any directed selling efforts with respect to the Securities.
In connection with cash resale pursuant to Rule 144A, such Initial Purchaser has taken or will take reasonable steps to ensure that each purchaser of Securities is aware that such sale is being made in reliance on Rule 144A.
Such Initial Purchaser agrees that the Securities offered and sold in reliance on Regulation S will be represented upon issuance by a global security that may not be exchanged for definitive securities until the expiration of the 40 day restricted period referenced in Rule 903 of Regulation S and only upon certification of beneficial ownership of such Securities by non-U.S. persons or U.S. persons who purchased such Securities in transactions that were exempt from the registration requirements of the Securities Act.
35
#94399344v20
36
#94399344v20
SCHEDULE I-1
Anticipated Subsidiary Guarantors (Existing Parent Subsidiaries)
|
|
|
|
Entity Name
|
Jurisdiction
|
|
HILTON GRAND VACATIONS PARENT LLC
|
Delaware
|
|
HILTON GRAND VACATIONS INC.
|
Delaware
|
|
48TH STREET HOLDING LLC
|
Delaware
|
|
GRAND VACATIONS REALTY, LLC
|
Delaware
|
|
GRAND VACATIONS TITLE, LLC
|
Delaware
|
|
HILTON GRAND VACATIONS CLUB, LLC
|
Delaware
|
|
HILTON GRAND VACATIONS COMPANY, LLC
|
Delaware
|
|
HILTON GRAND VACATIONS FINANCING, LLC
|
Delaware
|
|
HILTON GRAND VACATIONS MANAGEMENT, LLC
|
Nevada
|
|
HILTON KINGSLAND 1, LLC
|
Delaware
|
|
HILTON RESORTS CORPORATION
|
Delaware
|
|
HILTON TRAVEL, LLC
|
Delaware
|
|
HRC ISLANDER LLC
|
Delaware
|
|
GRAND VACATIONS SERVICES LLC
|
Delaware
|
|
HILTON RESORTS MARKETING CORP.
|
Delaware
|
|
2400 PRINCE EDWARD, LLC
|
Delaware
|
|
CUSTOMER JOURNEY, LLC
|
Delaware
|
|
KUPONO PARTNERS LLC
|
Hawaii
|
37
#94399344v20
SCHEDULE I-2
Anticipated Subsidiary Guarantors (Diamond Entities)
|
|
|
|
Entity Name
|
Jurisdiction
|
|
Diamond Resorts International, Inc.
|
Delaware
|
|
AB Blue Acquisition, LLC
|
Delaware
|
|
AHC Professionals US Majority, LLC
|
Nevada
|
|
AHC Professionals US Minority, LLC
|
Nevada
|
|
AKGI St. Maarten N.V.
|
Delaware/Dutch West Indies
|
|
Crescent One, LLC
|
Florida
|
|
DestinationXchange, LLC
|
Delaware
|
|
Diamond Asia Development, Inc.
|
Delaware
|
|
Diamond Resorts Beach Quarters Development, LLC
|
Delaware
|
|
Diamond Resorts Beachwoods Development, LLC
|
Delaware
|
|
Diamond Resorts Boardwalk Development, LLC
|
Delaware
|
|
Diamond Resorts California Collection Development, LLC
|
Delaware
|
|
Diamond Resorts Centralized Services Company
|
Delaware
|
|
Diamond Resorts Citrus Share Holding, LLC
|
Delaware
|
|
Diamond Resorts Coral Sands Development, LLC
|
Delaware
|
|
Diamond Resorts Corporation
|
Maryland
|
|
Diamond Resorts Cypress Pointe I Development, LLC
|
Delaware
|
|
Diamond Resorts Cypress Pointe II Development, LLC
|
Delaware
|
|
Diamond Resorts Cypress Pointe III Development, LLC
|
Delaware
|
|
Diamond Resorts Desert Isle Development, LLC
|
Nevada
|
|
Diamond Resorts Developer and Sales Holding Company
|
Delaware
|
|
Diamond Resorts DPM Development, LLC
|
Nevada
|
|
Diamond Resorts Epic Mortgage Holdings, LLC
|
Delaware
|
|
Diamond Resorts Fall Creek Development, LLC
|
Delaware
|
|
Diamond Resorts Finance Holding Company
|
Delaware
|
|
Diamond Resorts Franz Klammer Development, LLC
|
Delaware
|
|
Diamond Resorts GK Development, LLC
|
Delaware
|
|
Diamond Resorts Grand Beach I Development, LLC
|
Delaware
|
|
Diamond Resorts Grand Beach II Development, LLC
|
Delaware
|
|
Diamond Resorts Greensprings Development, LLC
|
Delaware
|
|
Diamond Resorts Hawaii Collection Development, LLC
|
Delaware
|
|
Diamond Resorts Hilton Head Development, LLC
|
Delaware
|
|
Diamond Resorts Holdings, LLC
|
Nevada
|
|
Diamond Resorts International Club, Inc.
|
Florida
|
|
Diamond Resorts International Golf, LLC
|
Delaware
|
|
Diamond Resorts International Marketing, Inc.
|
California
|
|
Diamond Resorts International Marketing Mexico, LLC
|
Nevada
|
|
Diamond Resorts International, LLC
|
Nevada
|
|
Diamond Resorts IW Holding Company
|
Delaware
|
|
Diamond Resorts IW Resort Ownership U.S. Corporation
|
Delaware
|
|
Diamond Resorts IW Trading Company
|
Delaware
|
|
Diamond Resorts IW Ventures, Inc.
|
Delaware
|
|
Diamond Resorts Kona Development, LLC
|
Delaware
|
|
Diamond Resorts Kona II Development, LLC
|
Delaware
|
|
Diamond Resorts Las Vegas Development, LLC
|
Delaware
|
38
#94399344v20
|
|
|
|
Diamond Resorts Management & Exchange Holding Company
|
Delaware
|
|
Diamond Resorts Management, Inc.
|
Arizona
|
|
Diamond Resorts MGV Development, LLC
|
Nevada
|
|
Diamond Resorts Mortgage Holdings, LLC
|
Delaware
|
|
Diamond Resorts Mystic Dunes Development, LLC
|
Nevada
|
|
Diamond Resorts Ocean Beach Club Development, LLC
|
Delaware
|
|
Diamond Resorts Oceanaire Development, LLC
|
Delaware
|
|
Diamond Resorts Palm Springs Development, LLC
|
Delaware
|
|
Diamond Resorts Poco Diablo Development, LLC
|
Delaware
|
|
Diamond Resorts Poipu Development, LLC
|
Delaware
|
|
Diamond Resorts Polo Development, LLC
|
Nevada
|
|
Diamond Resorts Port Royal Development, LLC
|
Delaware
|
|
Diamond Resorts Powhatan Development, LLC
|
Delaware
|
|
Diamond Resorts Rancho Manana Development, LLC
|
Delaware
|
|
Diamond Resorts Real Estate Academy, LLC
|
Delaware
|
|
Diamond Resorts Residual Assets Development, LLC
|
Delaware
|
|
Diamond Resorts Residual Assets Finance, LLC
|
Delaware
|
|
Diamond Resorts Residual Assets M&E, LLC
|
Delaware
|
|
Diamond Resorts Ridge on Sedona Development, LLC
|
Delaware
|
|
Diamond Resorts Ridge Pointe Development, LLC
|
Delaware
|
|
Diamond Resorts River Club Development, LLC
|
Delaware
|
|
Diamond Resorts San Luis Bay Development, LLC
|
Delaware
|
|
Diamond Resorts Santa Fe Development, LLC
|
Delaware
|
|
Diamond Resorts Sapphire Valley Development, LLC
|
Delaware
|
|
Diamond Resorts Scottsdale Development, LLC
|
Delaware
|
|
Diamond Resorts Sedona Springs Development, LLC
|
Delaware
|
|
Diamond Resorts Sedona Summit Development, LLC
|
Delaware
|
|
Diamond Resorts St. Croix Development, LLC
|
Delaware
|
|
Diamond Resorts Steamboat Development, LLC
|
Delaware
|
|
Diamond Resorts Tahoe Beach & Ski Development, LLC
|
Delaware
|
|
Diamond Resorts Tahoe Seasons Development, LLC
|
Delaware
|
|
Diamond Resorts Teton Club Development, LLC
|
Nevada
|
|
Diamond Resorts Turtle Cay Development, LLC
|
Delaware
|
|
Diamond Resorts U.S. Collection Development, LLC
|
Delaware
|
|
Diamond Resorts U.S. Collection-Hawaii Development, LLC
|
Delaware
|
|
Diamond Resorts Villa Mirage Development, LLC
|
Delaware
|
|
Diamond Resorts Villas of Sedona Development, LLC
|
Delaware
|
|
Diamond Resorts West Maui Development, LLC
|
Delaware
|
|
Diamond Resorts, LLC
|
Nevada
|
|
DPM Acquisition, LLC
|
Delaware
|
|
DPM Holdings, LLC
|
Delaware
|
|
DPM RP Subsidiary, LLC
|
Delaware
|
|
Extraordinary Escapes Corporation
|
Delaware
|
|
Four C’s Hospitality, LLC
|
Nevada
|
|
Galaxy Exchange Company
|
Florida
|
|
George Acquisition Subsidiary, Inc.
|
Nevada
|
|
Grand Escapes, LLC
|
Delaware
|
|
Hospitality Management and Consulting Service, L.L.C.
|
Nevada
|
|
ILX Acquisition, Inc.
|
Delaware
|
|
ILX Acquisition, LLC
|
Delaware
|
|
International Timeshares Marketing, LLC
|
Delaware
|
39
#94399344v20
|
|
|
|
Island One Development, LLC
|
Nevada
|
|
Lake Tahoe Resort Partners, LLC
|
California
|
|
Mazatlan Development Inc.
|
Washington
|
|
MMG Development Corp.
|
Florida
|
|
Mystic Dunes Myrtle Beach, LLC
|
Delaware
|
|
Mystic Dunes, LLC
|
Delaware
|
|
Navigo Vacation Club, Inc.
|
Florida
|
|
Poipu Resort Partners, L.P.
|
Hawaii
|
|
Resort Management International, Inc.
|
California
|
|
Resort Ventures, L.P.
|
California
|
|
Resorts Development International, Inc.
|
Nevada
|
|
Tempus Acquisition, LLC
|
Delaware
|
|
Tempus Holdings, LLC
|
Delaware
|
|
Vacation OTA, LLC
|
Nevada
|
|
West Maui Resort Partners, L.P.
|
Delaware
|
|
World Discovery Kids Club, LLC
|
Delaware
|
|
Diamond Resorts Financial Services, Inc.
|
Nevada
|
|
Bridgespire Financial Services, Inc.
|
Nevada
|
|
Diamond Resorts HK, LLC
|
Nevada
|
|
HK F&B Services, LLC
|
Delaware
|
|
Diamond Resorts Daytona Development, LLC
|
Delaware
|
|
Nevada HK F&B Services, LLC
|
Nevada
|
|
Florida Diamond Resorts Management, LLC
|
Florida
|
|
Island One Resorts Management Corporation
|
Florida
|
|
Island One, Inc.
|
Florida
|
|
Diamond Resorts Waikiki Development, LLC
|
Delaware
|
|
DR Modern Spa, LLC
|
Hawaii
|
|
Amber Group, Inc.
|
Florida
|
|
Amber Vacation Realty, Inc.
|
Florida
|
|
Amber Vacation Realty of Tennessee, Inc.
|
Tennessee
|
|
Poinciana Vacation Resorts, Inc.
|
Florida
|
|
Sunrise Ridge Resort, Inc.
|
Tennessee
|
|
Diamond Resorts St. Louis Development, LLC
|
Delaware
|
|
Diamond Resorts Kahana Development, LLC
|
Delaware
|
|
Diamond Resorts Real Estate Academy-Hawaii, LLC
|
Delaware
|
|
Diamond Resorts River Club Members, LLC
|
Delaware
|
40
#94399344v20
EXHIBIT A
Pricing Supplement
P R I C I N G S U P P L E M E N T C O N F I D E N T I A L
$850,000,000
5.000% Senior Notes due 2029
__________________________
Pricing Supplement dated May 20, 2021
to the
Preliminary Offering Memorandum dated May 17, 2021
(the “Preliminary Offering Memorandum”)
This Pricing Supplement is qualified in its entirety by reference to the Preliminary Offering Memorandum. The information in this Pricing Supplement supplements the Preliminary Offering Memorandum and supersedes the information in the Preliminary Offering Memorandum to the extent inconsistent with the information in the Preliminary Offering Memorandum. Other information (including financial information) presented in the Preliminary Offering Memorandum is deemed to have changed to the extent affected by the changes described herein. Capitalized terms used herein but not defined shall have the meanings assigned to them in the Preliminary Offering Memorandum.
The total size of the offering has been increased from $675,000,000 to $850,000,000.
Concurrently with the closing of the offering of the 2029 Notes, the gross proceeds received from the issuance of the Notes, including the increase of $175,000,000 in the total offering size of the 2029 Notes, will be deposited into an Escrow Account, and the Issuer (as defined below) will agree to pay (the “HGV Escrow Guarantee”) an amount up to the amount necessary to fund the interest due on the 2029 Notes, including on such increased total offering size, from the Settlement Date (as defined below) to, but excluding, the Special Mandatory Redemption Date, which, when taken together with the Escrowed Funds, will be sufficient to fund the Special Mandatory Redemption Price of the 2029 Notes on the third business day following the Escrow End Date, if a Special Mandatory Redemption were to occur on such date. Upon satisfaction of the Escrow Release Conditions and release of the Escrowed Funds as described in the Preliminary Offering Memorandum, the net proceeds received from the increase of $175,000,000 in the total offering size are expected to be used to repay additional amounts outstanding under our Revolving Credit Facility (as defined in the Preliminary Offering Memorandum). If the Escrow Release Conditions are not satisfied, the gross proceeds received from the 2029 Notes, including from such increase of $175,000,000, will be used to redeem the 2029 Notes pursuant to the Special Mandatory Redemption as described under “Description of the Notes—Special Mandatory Redemption” in the Preliminary Offering Memorandum.
As a result of the increase in the aggregate principal amount of the 2029 Notes and the intended use of proceeds from such increase as described above, the aggregate principal amount to be outstanding under our Revolving Credit Facility following the consummation of the Transactions, on a pro forma basis, as set forth under “Capitalization,” “Unaudited Pro Forma Condensed Combined Financial Information of HGV and Diamond” and other sections of the Preliminary Offering Memorandum, is expected to be approximately $172,000,000. Corresponding changes will be deemed to be made wherever applicable throughout the Preliminary Offering Memorandum.
The 2029 Notes (as defined below) have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) or any other applicable securities laws, and are being offered and sold only to persons reasonably
41
#94399344v20
believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act and to certain non-U.S. person in transactions outside the United States in reliance on Regulation S under the Securities Act.
|
|
|
|
Escrow Issuers and Issuers:
|
Hilton Grand Vacations Borrower Escrow, LLC and Hilton Grand Vacations Borrower Escrow, Inc. (collectively, the “Escrow Issuers”); their obligations to be assumed by Hilton Grand Vacations Borrower LLC (the “Issuer”) and Hilton Grand Vacations Borrower Inc., respectively (collectively with the Issuer, the “Issuers”).
|
|
Title of Securities:
|
5.000% Senior Notes due 2029 (the “2029 Notes”).
|
|
Principal Amount:
|
$850,000,000.
|
|
Final Maturity Date:
|
June 1, 2029.
|
|
Issue Price:
|
100.0%, plus accrued interest, if any, from June 4, 2021.
|
|
Coupon:
|
5.000%.
|
|
Yield to Maturity:
|
5.000%.
|
|
Spread to Benchmark Treasury:
|
+ 356 basis points
|
|
Benchmark Treasury:
|
2.375% UST due May 15, 2029
|
|
Interest Payment Dates:
|
June 1 and December 1.
|
|
Record Dates:
|
May 15 and November 15.
|
|
First Interest Payment Date:
|
December 1, 2021.
|
|
Optional Redemption:
|
The Issuers may, at their option, redeem at any time and from time to time prior to June 1, 2024, some or all of the 2029 Notes at 100% of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, plus a “make-whole premium” calculated based on the applicable Treasury Rate + 50 bps.
From and after June 1, 2024, the Issuers may, at their option, redeem at any time and from time to time some or all of the 2029 Notes at the following redemption prices (expressed as a percentage of the principal amount of the 2029 Notes to be redeemed), plus accrued and unpaid interest to, but excluding, the redemption date, if redeemed during the 12-month period beginning on June 1 of each of the years set forth below:
Year Percentage
2024………………….. 102.500%
2025………………….. 101.250%
2026 and thereafter…... 100.000%
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Optional Redemption with Equity Proceeds:
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On or prior to June 1, 2024, the Issuers may, at their option, redeem an aggregate principal amount of the 2029 Notes not to exceed the net cash proceeds from certain equity offerings at the redemption price of 105.000% of the principal amount of the 2029 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date; provided that the amount to be redeemed shall not exceed 40% of the aggregate principal amount of the 2029 Notes.
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Change of Control Triggering Event:
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Put right at 101% of the aggregate principal amount of the 2029 Notes, plus accrued and unpaid interest to, but excluding, the repurchase date.
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CUSIP Numbers/ISINs:
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144A: 43284M AA6 / US43284MAA62.
Reg S: U4329K AA6 / USU4329KAA61.
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Ratings*:
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B2 (Moody’s) / B- (S&P) / BB- (Fitch)
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Escrow of Gross Proceeds; Mandatory Redemption:
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Concurrently with the closing of the offering of the 2029 Notes, the Escrow Issuers will deposit the gross proceeds of the offering into an Escrow Account and the Issuer will provide the HGV Escrow Guarantee.
If any Special Mandatory Redemption Event occurs, the Escrow Issuers will be required to redeem the 2029 Notes at a redemption price of 100% of the issue price of the 2029 Notes, plus accrued and unpaid interest to, but excluding, the redemption date. The Escrowed Funds would be released and applied to pay for such redemption.
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Distribution:
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144A and Reg S with no registration rights.
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Bookrunners:
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Deutsche Bank Securities, Inc.
BofA Securities, Inc.
Barclays Capital Inc.
Credit Suisse Securities (USA) LLC
Goldman Sachs & Co. LLC
J.P. Morgan Securities LLC
MUFG Securities Americas Inc.
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Co-Managers:
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Wells Fargo Securities, LLC
Fifth Third Securities, Inc.
Regions Securities LLC
Citizens Capital Markets, Inc.
Mizuho Securities USA LLC
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Trade Date:
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May 20, 2021
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Settlement Date:
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June 4, 2021 (T+10) (the “Settlement Date”)
The Escrow Issuers expect that delivery of the 2029 Notes will be made to investors on or about June 4, 2021, which will be the tenth business day following the date of pricing of the 2029 Notes (such settlement being referred to as “T+10”). Under Rule 15c6-1 under the Securities Exchange Act of 1934, as amended, trades in the secondary market are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly,
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purchasers who wish to trade 2029 Notes prior to the second business day before the delivery of the 2029 Notes will be required, by virtue of the fact that the 2029 Notes will not initially settle in T+2, to specify an alternate settlement arrangement at the time of any such trade to prevent a failed settlement. Purchasers of the 2029 Notes who wish to trade the 2029 Notes prior to their date of delivery hereunder should consult their advisors.
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* A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
This material is confidential and is for your information only and is not intended to be used by anyone other than you. This information does not purport to be a complete description of the 2029 Notes or the offering. Please refer to the Preliminary Offering Memorandum for a complete description.
This communication is being distributed solely to persons reasonably believed to be qualified institutional buyers, as defined in Rule 144A under the Securities Act, and to non-U.S. persons outside the United States, as defined under Regulation S.
This communication does not constitute an offer to sell the 2029 Notes and is not a solicitation of an offer to buy the 2029 Notes in any jurisdiction where the offer or sale is not permitted.
Any disclaimers or other notices that may appear below are not applicable to this communication and should be disregarded. Such disclaimers or other notices were automatically generated as a result of this communication being sent via Bloomberg email or another communication system.
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EXHIBIT C
Form of Joinder Agreement
$850,000,000 of 5.000% Senior Notes due 2029
WHEREAS, Hilton Grand Vacations Borrower LLC, Hilton Grand Vacations Borrower Escrow, LLC, a Delaware limited liability company, Hilton Grand Vacations Borrower Escrow, Inc., a Delaware corporation, and Deutsche Bank Securities, Inc. (the “Representative”), for itself and the other Initial Purchasers named in the Purchase Agreement referenced below (the “Initial Purchasers”), heretofore executed and delivered a Purchase Agreement, dated May 20, 2021 (the “Purchase Agreement”), providing for the issuance and sale of the Securities (as defined therein); and
WHEREAS, in connection therewith, the Surviving Issuers and each Guarantor (as defined in the Purchase Agreement) has agreed to join in the Purchase Agreement pursuant to this agreement (this “Joinder Agreement”) on the Completion Date.
Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Purchase Agreement.
NOW, THEREFORE, each Surviving Issuer and each Guarantor hereby agrees for the benefit of the Initial Purchasers, as follows:
1. Joinder. Each of the undersigned hereby acknowledges that it has received a copy of the Purchase Agreement and acknowledges and agrees with the Initial Purchasers that by its execution and delivery hereof it shall: (i) join and become a party to the Purchase Agreement; (ii) be bound by all covenants, agreements, representations, warranties and acknowledgements applicable to the Surviving Issuer, the Surviving Co-Issuer or a Guarantor, as applicable, in the Purchase Agreement as if made by such party as set forth in and in accordance with the terms of the Purchase Agreement; and (iii) perform all obligations and duties of the Surviving Issuer, the Surviving Co-Issuer or a Guarantor, as applicable, in accordance with the Purchase Agreement.
2. Representations and Warranties. The undersigned hereby represents and warrants to and agrees with the Initial Purchasers that it has all requisite corporate or limited liability company power and authority to execute, deliver and perform its obligations under the Transaction Agreements and it has duly and validly taken all necessary action for the consummation of the transactions contemplated hereby and by the Purchase Agreement.
3. Counterparts. This Joinder Agreement may be executed in two or more counterparts each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
4. Amendments. No amendment, modification or waiver of any provision of this Joinder Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by all of the parties thereto.
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5. Headings. The section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Joinder Agreement.
6. GOVERNING LAW. THIS JOINDER AGREEMENT, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS JOINDER AGREEMENT, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, the undersigned has executed this agreement this____ day of _________________ 2021.
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SUBSIDIARY GUARANTORS:
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[___________]
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By:
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Name:
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Title:
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SURVIVING ISSUER:
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Hilton Grand Vacations Borrower LLC
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By: __________________________________
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Name:
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Title:
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SURVIVING CO-ISSUER:
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Hilton Grand Vacations Borrower Inc.
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By: __________________________________
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Name:
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Title:
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The foregoing Joinder Agreement is hereby confirmed and accepted by the Initial Purchasers as of the date first above written.
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Deutsche Bank Securities, Inc.
Acting on behalf of itself
and as the Representative of
the several Initial Purchasers
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By:
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Deutsche Bank Securities, Inc.
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By:
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Name:
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Title:
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Exhibit 10.3
Execution version
Hilton grand vacations borrower escrow, llc
HILTON GRAND VACATIONS BORROWER ESCROW, INC.
PURCHASE AGREEMENT
June 14, 2021
DEUTSCHE BANK SECURITIES INC.
As Representative of the Initial Purchasers
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005
Ladies and Gentlemen:
Introductory. Hilton Grand Vacations Borrower Escrow, LLC, a Delaware limited liability company (the “Issuer”), and Hilton Grand Vacations Borrower Escrow, Inc., a Delaware corporation (the “Co-Issuer” and, together with the Issuer, the “Issuers”), each an indirect wholly-owned subsidiary of Hilton Grand Vacations Inc. (the “Parent”), the indirect parent of Hilton Grand Vacations Borrower LLC, a Delaware limited liability company (the “Surviving Issuer”), and Hilton Grand Vacations Borrower Inc., a Delaware corporation (the “Surviving Co-Issuer” and, together with the Surviving Issuer, the “Surviving Issuers”), propose to issue and sell to Deutsche Bank Securities Inc. (“Deutsche Bank”) and the other several initial purchasers named in Annex A (collectively, the “Initial Purchasers”), acting severally and not jointly, the respective amounts set forth in Annex A of $500,000,000 aggregate principal amount of the Issuers’ 4.875% Senior Notes due 2031 (the “Notes”). Deutsche Bank has agreed to act as the representative of the several Initial Purchasers (the “Representative”) in connection with the offer and sale of the Notes and the related Guarantees (as defined below) (the “Offering”).
The Notes will be issued pursuant to an indenture (the “Indenture”), to be dated as of the Closing Date (as defined below), by and among the Issuers, the Surviving Issuer in its capacity as Escrow Guarantor (in such capacity, the “Escrow Guarantor”) and Wilmington Trust, National Association, as trustee (the “Trustee”). The Notes will be issued only in book-entry form in the name of Cede & Co., as nominee of The Depository Trust Company (the “Depositary”), pursuant to a blanket issuer letter of representations, as supplemented by the relevant riders, each to be dated on or before the Closing Date (as so supplemented, the “DTC Agreement”), among the Issuers and the Depositary.
The representations, warranties, covenants and agreements of the Surviving Issuers and the Guarantors (as defined below), other than the Escrow Guarantor, under this agreement (this “Agreement”) shall not become effective until the execution by the Surviving Issuers and the Guarantors of a joinder agreement to this Agreement, substantially in the form attached hereto as Exhibit C (the “Joinder Agreement”), at which time such representations, warranties, covenants and agreements shall become effective as of the date hereof pursuant to the terms of the Joinder Agreement, and each of the Surviving Issuers and the Guarantors shall, without any further action by any person, become a party to this Agreement.
The Offering is occurring in connection with the Agreement and Plan of Merger, dated as of March 10, 2021 (as amended, the “Merger Agreement”), by and among the Parent, the Surviving Issuer, Dakota Holdings, Inc., a Delaware corporation (“Diamond”), and the stockholders of Diamond named therein, pursuant to which Diamond will merge with and into the Surviving Issuer (the “Diamond
Merger”). The Surviving Issuer will be the surviving entity of the Diamond Merger. In conjunction with or prior to the Diamond Merger, and as described in the Pricing Disclosure Package (as defined below) and the Final Offering Memorandum (as defined below), the Parent, Holdings (as defined below), the Surviving Issuer and certain of the Surviving Issuer’s subsidiaries will (i) enter into a Credit Agreement, to be dated on or about the Closing Date, with Bank of America, N.A., as administrative agent, and the lenders and other parties party thereto (the “New Credit Agreement”), providing for a new $1.3 billion seven-year senior secured term loan facility, and (ii) amend (such amendment, the “Revolver Amendment” and, together with the New Credit Agreement and any other documents, agreements or instruments delivered in connection therewith, the “New Credit Documents”) their existing revolving credit facility under the Credit Agreement, dated as of December 28, 2016, as further amended, supplemented or otherwise modified, by and among the Parent, Holdings, the Surviving Issuer and certain of the Surviving Issuer’s subsidiaries, Bank of America, N.A., as administrative agent, and the lenders and other parties party thereto. In addition, in conjunction with the Diamond Merger and as described in the Pricing Disclosure Package, on June 4, 2021, the Issuers, the Escrow Guarantor and Wilmington Trust, National Association, as trustee, entered into an indenture (the “2029 Notes Indenture” and together any documents, agreements and instruments delivered in connection therewith, the "2029 Notes Documents") for the issuance and sale (the "2029 Notes Offering”) of $850,000,000 aggregate principal amount of 5.000% senior notes due 2029 (the “2029 Notes”) and, upon the closing of the Diamond Merger and the merger of the Issuer and Co-Issuer with and into the Surviving Issuer and Surviving Co-Issuer, respectively, the Surviving Issuers will thereupon assume the obligations under the 2029 Notes, the 2029 Notes will become guaranteed by the Guarantors and the proceeds of the 2029 Notes Offering will be released from escrow to fund the repayment of certain existing indebtedness of the Surviving Issuers and Diamond and to pay related fees and expenses (collectively, the "2029 Notes Transactions"). As described in the Pricing Disclosure Package and the Final Offering Memorandum, the proceeds from the Offering are expected to be used to fund the repayment of certain existing indebtedness of the Surviving Issuers and Diamond and to pay related fees and expenses.
If the Closing Date occurs prior to the Completion Date, concurrently with the closing of the offering of the Notes, the Issuers will enter into a customary escrow agreement relating to the Notes (the “Escrow Agreement”) with the Trustee, Wilmington Trust, National Association, as escrow agent (the “Escrow Agent”), and the Escrow Guarantor. Pursuant to the Escrow Agreement, (i) the Issuers will deposit or cause to be deposited the gross proceeds of the Offering into a segregated escrow account established pursuant to the Escrow Agreement (the “Escrow Account”) and (ii) the Escrow Guarantor will agree to pay (the “Escrow Guarantee”) an amount necessary to fund the interest due on the Notes from June 28, 2021 to, but excluding the Special Mandatory Redemption Date (as defined in the Preliminary Offering Memorandum). The funds held in the Escrow Account will be released to the Surviving Issuer upon delivery by the Issuers to the Escrow Agent and the Trustee of an officer’s certificate certifying that the Escrow Conditions (as defined in the Pricing Disclosure Package) have been or, substantially concurrently with the release of the funds held in the Escrow Account, will be met, including (a) the consummation of the Diamond Merger, (b) the application of the funds held in the Escrow Account in connection with the Diamond Merger as described in the Pricing Disclosure Package and the Final Offering Memorandum, (c) the execution and delivery by the Surviving Issuers and the Guarantors of (i) the Supplemental Indenture (as defined below) and (ii) the Joinder Agreement ((i) and (ii) together, the “Assumption”), and (d) the consummation of (i) the merger of the Issuer with and into the Surviving Issuer, with the Surviving Issuer continuing as the surviving entity, and (ii) the merger of the Co-Issuer with and into the Surviving Co-Issuer, with the Surviving Co-Issuer continuing as the surviving entity (collectively, the “Escrow Mergers”). The date, if any, when the Escrow Conditions are satisfied is herein referred to as the “Escrow Release Date.” In the event that upon the earlier of (a) the Escrow Agent not having received the officer’s certificate described above on or prior to the Escrow End Date (as defined in the Preliminary Offering Memorandum), (b) the Issuers notifying the Escrow Agent and the Trustee in writing that the Diamond Merger will not be consummated on or prior to the
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Termination Date (as defined in the Merger Agreement) or (c) the Merger Agreement having been terminated in accordance with its terms (such earlier date, the “Cut-Off Date”), the Issuers will be required to redeem the Notes in accordance with the special mandatory redemption provisions set forth in the Indenture. For the purposes of this Agreement, the term “Completion Date” means the Escrow Release Date. On and after the Closing Date and prior to the Completion Date, the Notes will be secured pursuant to the terms of the Escrow Agreement on a first-priority basis, by a lien on the Escrow Account and funds therein as described in the Pricing Disclosure Package and the Final Offering Memorandum (the “Escrow Collateral”). If the Diamond Merger is consummated on the Closing Date, all references to the “Completion Date” in this Agreement will refer to the Closing Date, and the escrow arrangements described herein will not be implemented.
On and after the Completion Date, the payment of principal, premium and interest on the Notes will be fully and unconditionally guaranteed on a senior unsecured basis (the “Guarantees”), in each case jointly and severally, by (i) by the Parent, Hilton Grand Vacations Parent LLC, a Delaware limited liability company (“Holdings” and, together with the Parent, the “Parent Guarantors”), and each of the Surviving Issuer’s wholly owned domestic restricted subsidiaries (other than the Surviving Co-Issuer) as of the Completion Date, after giving effect to the Transactions and including the Diamond Entities (as defined below), that as of such date will guarantee the obligations under the Surviving Issuer’s senior secured credit facilities, which subsidiaries are expected to be those entities set forth on Schedule I-1 and Schedule I-2 hereto, as applicable (collectively, the “Subsidiary Guarantors” and, together with the Parent Guarantors, the “Guarantors”), and (ii) any other subsidiary of the Surviving Issuer formed or acquired after the Closing Date that is required to provide an additional guarantee in accordance with the terms of the Indenture, and their respective successors and assigns, pursuant to their respective Guarantees. Each of the Surviving Issuers and the Guarantors shall, on the Completion Date, execute and deliver a supplemental indenture (the “Supplemental Indenture”) to the Indenture (and other agreements and opinions reasonably satisfactory to the Trustee) pursuant to which they assume all of the obligations of the Issuer, in the case of the Surviving Issuer, and of the Co-Issuer, in the case of the Surviving Co-Issuer, or become Guarantors, in the case of the Guarantors, under the Indenture, the Notes and the Guarantees thereof, as the case may be, and from and after the Completion Date, references herein to the “Indenture” shall mean such Indenture dated as of the Closing Date, as supplemented by the Supplemental Indenture dated as of the Completion Date. The Notes, the Escrow Guarantee and the Guarantees are herein collectively referred to as the “Securities.”
As used herein, (i) the term “Diamond Entities” refers to each of Diamond’s wholly owned domestic restricted subsidiaries set forth on Schedule I-2 hereto, (ii) the term “Transactions” refers collectively to the consummation of the Diamond Merger pursuant to the Merger Agreement, the Offering, the issuance and sale of the Notes pursuant to the terms of this Agreement and the Indenture, the issuance of the Escrow Guarantee pursuant to the terms of the Indenture, the entry into the Escrow Agreement and the deposit of proceeds of the issuance and sale of the Notes into the Escrow Account, the granting of any security interest under the Escrow Agreement, the consummation of the Escrow Mergers, the Assumption, the release of funds from the Escrow Account and the use thereof for the repayment of certain outstanding indebtedness, the entry into the Joinder Agreement, the entry into the Supplemental Indenture, the issuance of the Guarantees pursuant to the terms of the Supplemental Indenture, the execution of the New Credit Documents, the borrowings under the New Credit Agreement and the use thereof for the repayment of certain outstanding indebtedness, the 2029 Notes Offering, the issuance and sale of the 2029 Notes pursuant to the 2029 Notes Indenture, the entry into the 2029 Notes Documents, the consummation of the 2029 Notes Transactions, and the payment of all fees and expenses related thereto, as well as any other transactions included in the definition of the “Transactions” in the Pricing Disclosure Package and the Final Offering Memorandum, and (iii) the term “Transaction Agreements” refers to the Merger Agreement, this Agreement, the Indenture, the Escrow Agreement, the Joinder Agreement, the Supplemental Indenture, the New Credit Documents and the 2029 Notes Documents.
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The Issuers and the Escrow Guarantor understand that the Initial Purchasers propose to effect the Offering on the terms and in the manner set forth herein and in the Pricing Disclosure Package and agree that the Initial Purchasers may resell, subject to the conditions set forth herein, all or a portion of the Securities to purchasers (the “Subsequent Purchasers”) at any time after the time this Agreement is executed by the parties hereto. The “Time of Execution” means 4:35 p.m. (New York City time) on June 14, 2021, which is the time of the first sale of the Securities by the Initial Purchasers. The Securities are to be offered and sold to, and are expected to be sold by, the Initial Purchasers without being registered with the Securities and Exchange Commission (the “Commission”) under the Securities Act, in reliance upon exemptions therefrom. The terms of the Securities and the Indenture will require that investors that acquire the Securities shall be deemed to have agreed that the Securities may only be resold or otherwise transferred, after the date hereof, if such Securities are registered for sale under the Securities Act or if an exemption from the registration requirements of the Securities Act is available (including the exemptions afforded by Rule 144A under the Securities Act (“Rule 144A”) or Regulation S under the Securities Act (“Regulation S”)).
The Issuers have prepared and delivered to each Initial Purchaser copies of a Preliminary Offering Memorandum, dated June 14, 2021 (the “Preliminary Offering Memorandum”), and have prepared and delivered to each Initial Purchaser copies of a Pricing Supplement, dated June 14, 2021 (in the form attached hereto as Exhibit A, the “Pricing Supplement”), describing the terms of the Securities, each for use by each Initial Purchaser in connection with its solicitation of offers to purchase the Securities. The Preliminary Offering Memorandum and the Pricing Supplement (taken together) are herein referred to as the “Pricing Disclosure Package.” Promptly after the Time of Execution, the Issuers will prepare and deliver to each Initial Purchaser a Final Offering Memorandum dated the date hereof (the “Final Offering Memorandum”).
All references herein to the terms “Pricing Disclosure Package” and “Final Offering Memorandum” shall be deemed to mean and include all information filed by the Parent under the Securities Exchange Act of 1934 (as amended, the “Exchange Act,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder) prior to the Time of Execution and incorporated by reference in the Pricing Disclosure Package (including the Preliminary Offering Memorandum) or the Final Offering Memorandum (as the case may be), and all references herein to the terms “amend,” “amendment” or “supplement” with respect to the Final Offering Memorandum shall be deemed to mean and include all information filed by the Parent under the Exchange Act after the Time of Execution and incorporated by reference in the Final Offering Memorandum.
The Issuers, the Escrow Guarantor and, effective upon the execution of the Joinder Agreement, the Surviving Issuers and the Guarantors (including the Diamond Entities), jointly and severally, hereby confirm their agreements with the Initial Purchasers as follows:
1.
Representations and Warranties. As of the date hereof, each of the Issuers and the Escrow Guarantor, jointly and severally, hereby represents, warrants and covenants (it being understood that all representations, warranties and covenants of the Issuers and the Escrow Guarantor with respect to Diamond and its subsidiaries are made to the knowledge of the Issuers and the Escrow Guarantor, after due inquiry) and, upon execution and delivery of the Joinder Agreement, each of the Surviving Issuers and the Guarantors, jointly and severally, hereby represents, warrants and covenants to each Initial Purchaser that, as of the date hereof and as of the Closing Date (references in this Section 1 to the “Offering Memorandum” are to (x) the Pricing Disclosure Package in the case of representations and warranties made as of the date hereof and (y) the Pricing Disclosure Package and the Final Offering Memorandum in the case of representations and warranties made as of the Closing Date):
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a.
No Registration Required. Subject to compliance by the Initial Purchasers with the representations and warranties set forth in Section 1 and 2 hereof and with the procedures set forth in Section 8 hereof, it is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchasers and to each Subsequent Purchaser in the manner contemplated by this Agreement and the Offering Memorandum to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder).
b.
No Integration of Offerings or General Solicitation. The Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and any other direct or indirect subsidiary of the Parent have not, directly or indirectly, solicited any offer to buy or offered to sell, and will not, directly or indirectly, solicit any offer to buy or offer to sell, in the United States or to any United States citizen or resident, any security which is or would be integrated with the sale of any series of Securities in a manner that would require such Securities to be registered under the Securities Act. None of the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors, any of their respective affiliates, as such term is defined in Rule 501 under the Securities Act (each, an “Affiliate”), or, to their knowledge, any person acting on any of their behalf (other than the Initial Purchasers, as to whom the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors make no representation or warranty) has engaged or will engage, in connection with the Offering, in any form of general solicitation or general advertising within the meaning of Rule 502 under the Securities Act or in any manner involving a public offering within the meaning of Section 4(a)(2) under the Securities Act. With respect to those Securities sold in reliance upon Regulation S, none of the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors, any of their respective Affiliates or, to their knowledge, any person acting on any of their behalf (other than the Initial Purchasers, as to whom the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors make no representation or warranty) has engaged or will engage in any directed selling efforts within the meaning of Regulation S and each of the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and their respective Affiliates and, to their knowledge, any person acting on any of their behalf (other than the Initial Purchasers, as to whom the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors make no representation or warranty) has complied and will comply with the offering restrictions set forth in Regulation S.
c.
Eligibility for Resale Under Rule 144A. The Securities are eligible for resale pursuant to Rule 144A and will not be, at the Closing Date, of the same class (within the meaning of Rule 144A) as securities listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the “Exchange Act,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder) or quoted in a U.S. automated interdealer quotation system.
d.
The Pricing Disclosure Package and Offering Memorandum. Neither the Pricing Disclosure Package, as of the Time of Execution, nor the Final Offering Memorandum, as of its date or (as amended or supplemented in accordance with Section 4(b) hereof, as applicable) as of the Closing Date, contains or will contain an untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation and warranty shall not apply to statements in or omissions from the Pricing Disclosure Package, the Final Offering Memorandum or any amendment or supplement thereto made in reliance upon and in conformity with information furnished to the Issuers in writing by any Initial Purchaser through the Representative expressly for use in the Pricing Disclosure Package, the Final Offering Memorandum or any amendment or supplement thereto, as the case may be (it being understood that the only such information is that information specified in Section 9(b)).
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e.
Issuer Additional Written Communications. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors have not prepared, made, used, authorized, approved or distributed and will not prepare, make, use, authorize, approve or distribute any written communication (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy the Securities other than the Pricing Disclosure Package, the Final Offering Memorandum and any electronic or written road show presentation or other written communications, in each case used in accordance with Section 4(a) hereof (each such communication by the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors or their respective agents and representatives pursuant to clause (iii) of the preceding sentence, an “Issuer Additional Written Communication”). Each Issuer Additional Written Communication, as supplemented by and taken together with the Pricing Supplement, does not conflict in any material respect with the information contained in the Pricing Disclosure Package or the Final Offering Memorandum and each Issuer Additional Written Communication, as supplemented by and, taken together with the Pricing Disclosure Package, as of the Time of Execution, did not include, and at the Closing Date will not include, any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation, warranty and agreement shall not apply to statements in or omissions from each such Issuer Additional Written Communication made in reliance upon and in conformity with information furnished to the Issuers in writing by any Initial Purchaser through the Representative expressly for use in any Issuer Additional Written Communication (it being understood that the only such information is that information specified in Section 9(b)).
f.
Incorporated Documents. The documents incorporated or deemed to be incorporated by reference in the Offering Memorandum at the time they were or hereafter are filed with the Commission (collectively, the “Incorporated Documents”) complied and will comply in all material respects with the requirements of the Exchange Act. Each such Incorporated Document, when taken together with the Pricing Disclosure Package and as updated and/or superseded by any subsequently filed Incorporated Document(s), as of the Time of Execution, did not contain, and at the Closing Date will not contain, any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
g.
The Purchase Agreement and the Joinder Agreement. This Agreement has been duly authorized, executed and delivered by the Issuers and the Escrow Guarantor and, on the Completion Date, the Joinder Agreement will have been duly authorized, executed and delivered by the Surviving Issuers and the Guarantors.
h.
The Indenture and the Supplemental Indenture. The Indenture (including, in the case of the Escrow Guarantor, the Escrow Guarantee set forth in the Indenture) has been duly authorized by the Issuers and the Escrow Guarantor and, on the Closing Date, will have been duly executed and delivered by the Issuers and the Escrow Guarantor, and, when duly executed and delivered in accordance with its terms by the Trustee, will constitute a valid and binding agreement of the Issuers and the Escrow Guarantor enforceable against the Issuers and the Escrow Guarantor in accordance with its terms, except as the enforcement thereof may be limited by the effects of bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors generally from time to time in effect; the application of general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether enforcement is considered in proceedings at law or in equity); and applicable law and public policy with respect to rights to indemnity and contribution (the “Enforceability Exceptions”). On the Completion Date, the Supplemental Indenture (including, in the case of the Guarantors, the Guarantees set forth in the Indenture) will have been duly authorized, executed and delivered by the Surviving Issuers and the Guarantors and, when duly executed and delivered in accordance with its terms by the Trustee, the Indenture (as so supplemented) will constitute a valid and
6
binding agreement of the Surviving Issuers and the Guarantors enforceable against the Surviving Issuers and the Guarantors in accordance with their terms, except as the enforcement thereof may be limited by the Enforceability Exceptions.
i.
Authorization of the Notes, the Escrow Guarantee and the Guarantees. The Notes to be purchased by the Initial Purchasers from the Issuers will, on the Closing Date, be in the form contemplated by the Indenture, have been duly authorized by the Issuers for issuance and sale pursuant to this Agreement and the Indenture and, at the Closing Date, will have been duly executed by the Issuers, and, when authenticated in the manner provided for in the Indenture and delivered against payment of the purchase price therefor, will constitute valid and binding obligations of the Issuers, enforceable against the Issuers in accordance with their terms, except as the enforcement thereof may be limited by the Enforceability Exceptions, and will be entitled to the benefits of the Indenture. On the Completion Date, the Notes will have been duly authorized by the Surviving Issuers and will constitute valid and binding obligations of the Surviving Issuers, enforceable against the Surviving Issuers in accordance with their terms, except as the enforcement thereof may be limited by the Enforceability Exceptions, and will be entitled to the benefits of the Indenture. The Escrow Guarantee will be in the form contemplated by the Indenture; the Escrow Guarantee, on the Closing Date, will have been duly authorized by the Escrow Guarantor for issuance pursuant to this Agreement and the Indenture; the Escrow Guarantee, on the Closing Date, will have been duly executed by the Escrow Guarantor and, when the Notes have been authenticated in the manner provided for in the Indenture and issued and delivered against payment of the purchase price therefor, the Escrow Guarantee will constitute valid and binding agreement of the Escrow Guarantor, enforceable against the Escrow Guarantor in accordance with its terms, except as the enforcement thereof may be limited by the Enforceability Exceptions, and will be entitled to the benefits of the Indenture. The Guarantees will be in the form contemplated by the Indenture; the Guarantees, on the Completion Date, will have been duly authorized by the Guarantors for issuance pursuant to this Agreement and the Indenture; the Guarantees, on the Completion Date, will have been duly executed by the Guarantors and, when the Notes have been authenticated in the manner provided for in the Indenture and issued and delivered against payment of the purchase price therefor and the Supplemental Indenture has been executed by the Surviving Issuers and the Guarantors, the Guarantees will constitute valid and binding agreements of the Guarantors, enforceable against the Guarantors in accordance with their terms, except as the enforcement thereof may be limited by the Enforceability Exceptions, and will be entitled to the benefits of the Indenture.
j.
The Escrow Agreement. The Escrow Agreement has been duly authorized by the Issuers and the Escrow Guarantor and, on the Closing Date, will have been duly executed and delivered by, and, when duly executed and delivered in accordance with its terms by each of the other parties thereto, will constitute a valid and binding agreement of, the Issuers and the Escrow Guarantor, enforceable against the Issuers and the Escrow Guarantor in accordance with its terms, except as the enforcement thereof may be limited by the Enforceability Exceptions. The Escrow Agreement will, on the Closing Date, create in favor of the Trustee, for the benefit of itself and the holders of the Notes, as applicable, a legal, valid and enforceable security interest in the Escrowed Funds described therein as security for the Notes, as applicable, to the extent that a legal, valid, binding and enforceable security interest in such Escrowed Funds may be created under any applicable law of the United States of America and any states thereof, including, without limitation, the applicable Uniform Commercial Code (“UCC”), which security interest, upon execution of the Escrow Agreement, will constitute a fully perfected lien on, and security interest in, all right, title and interest of each Issuer in such Escrowed Funds.
k.
Description of the Transaction Documents. The Transaction Documents will conform in all material respects to the respective statements relating thereto contained in the Offering Memorandum.
7
l.
No Material Adverse Effect. Neither the Parent, Diamond, nor any of their respective subsidiaries has sustained since the date of the latest audited financial statements included or incorporated by reference in the Offering Memorandum any material loss or material interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any court or governmental action, order or decree; and subsequent to the respective dates as of which information is given in the Offering Memorandum (exclusive of any amendment or supplement thereto): there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse effect on the condition (financial or otherwise), business or results of operations, whether or not arising from transactions in the ordinary course of business, of the Parent or its subsidiaries, or of Diamond or its subsidiaries, in each case taken as a whole and after giving effect to the Transactions (any such change or development, a “Material Adverse Effect”), and the Parent and its subsidiaries, and Diamond and its subsidiaries, in each case considered as one entity, have not except as otherwise disclosed in the Offering Memorandum, incurred any material liability or obligation (whether indirect, direct or contingent), or except as otherwise disclosed in the Offering Memorandum, entered into any material transaction or agreement, in each case not in the ordinary course of business, except for transactions and agreements related to the Transactions.
m.
Independent Accountants. Ernst & Young LLP who have expressed their opinion with respect to certain financial statements (which term as used in this Agreement includes the related notes thereto) of the Parent included or incorporated by reference in in the Offering Memorandum, are independent auditors with respect to the Parent within the meaning of the rules of the American Institute of Certified Public Accountants. Deloitte & Touche LLP who have expressed their opinion with respect to certain financial statements of Diamond included in the Offering Memorandum, are independent auditors with respect to Diamond within the meaning of the rules of the American Institute of Certified Public Accountants.
n.
Preparation of the Financial Statements. The consolidated historical financial statements of each of (i) the Parent and its consolidated subsidiaries and (ii) Diamond and its consolidated subsidiaries and the related notes thereto included or incorporated by reference in the Offering Memorandum present fairly in all material respects the consolidated financial position of the Parent and Diamond and their respective consolidated subsidiaries, as the case may be, as of and at the dates indicated and the results of their operations and cash flows for the periods specified in conformity with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis throughout the periods involved (except as otherwise stated therein). The historical financial data of the Parent and Diamond and their respective consolidated subsidiaries included or incorporated by reference in the Offering Memorandum under the captions “Summary—Summary Historical Consolidated Financial Information of HGV” and “Summary—Summary Historical Consolidated Financial Information of Diamond” present fairly in all material respects the information set forth therein on a basis consistent with that of the audited financial statements contained in the Offering Memorandum. The pro forma condensed consolidated financial statements of the Parent and its subsidiaries and the related notes thereto included or incorporated by reference under the caption “Summary—Summary Pro Forma Financial Information,” “Unaudited Pro Forma Condensed Combined Financial Information of HGV and Diamond” and elsewhere in the Offering Memorandum present fairly the information contained therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial statements in all material respects and have been properly presented on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. The statistical and market related data included or incorporated by reference in the Offering Memorandum are based on or derived from sources that the Parent and its subsidiaries believe to be reliable and accurate in all material respects and represent their good faith estimates that are made on the basis of data derived from such sources.
8
o.
Incorporation and Good Standing. Each of the Issuers, the Escrow Guarantor, the Surviving Issuers and each of the Guarantors has been duly incorporated or formed, as applicable, and is validly existing as a corporation, limited liability company or limited partnership, as applicable, in good standing (to the extent such concept exists in the applicable jurisdiction) under the laws of the jurisdiction of its incorporation or formation, as applicable, has corporate or other organizational power, as applicable, and authority to own, lease and operate its properties and conduct its business as described in the Offering Memorandum, as applicable, and has been duly qualified as a foreign entity for the transaction of business and is in good standing (to the extent such concept exists in the applicable jurisdiction) under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except, in the case of clauses (ii) and (iii), where the failure to have such power or authority or to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Parent does not own or control, directly or indirectly, any corporation, association or other entity that is expected to be a Subsidiary Guarantor as of the Completion Date other than the subsidiaries listed on Schedule I-1 hereto and each of the subsidiaries of the Parent listed on Schedule I-1 hereto is organized in the jurisdiction set forth beside such subsidiary’s name on Schedule I-1. Diamond does not own or control, directly or indirectly, any corporation, association or other entity that is expected to be a Subsidiary Guarantor as of the Completion Date other than the subsidiaries listed on Schedule I-2 hereto and each of the subsidiaries of Diamond listed on Schedule I-2 hereto is organized in the jurisdiction set forth beside such subsidiary’s name on Schedule I-2. As used in this Agreement, “subsidiary” or “subsidiaries” shall mean both direct and indirect subsidiaries of an entity.
p.
Capitalization and Other Capital Stock Matters. Except as set forth in the Offering Memorandum, all of the issued and outstanding capital stock or other ownership interests of each Issuer, the Escrow Guarantor, each Surviving Issuer and each Guarantor has been duly authorized and validly issued, is fully paid and nonassessable and (except for directors’ qualifying shares and capital stock or other ownership interests of the Parent) is owned or will after the consummation of the Transactions be owned, directly or indirectly, by the Parent, free and clear of all liens, encumbrances, equities or claims other than as expressly permitted in the Indenture. As of March 31, 2021 (other than with respect to common stock, which is calculated assuming a number of shares issued based on a June 1, 2021 closing date of the Merger), after giving pro forma effect to the Transactions, on a consolidated basis, the Parent would have had an authorized and outstanding capitalization as set forth in the Offering Memorandum under the caption “Capitalization” and there are no outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Parent, the Issuers, the Surviving Issuers or any of their respective subsidiaries other than those described in the Pricing Disclosure Package and the Final Offering Memorandum.
q.
Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required. None of the Issuers, the Escrow Guarantor, the Surviving Issuers or any of the Guarantors is in violation of its charter or bylaws or other organizational documents, as applicable, or in default (“Default”) in the performance or observance of any obligation, agreement, covenant or condition under any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound (each, an “Existing Instrument”), or (C) in violation of any law or statute applicable to the Issuers, the Escrow Guarantor, the Surviving Issuers or any of the Guarantors or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Issuers, the Escrow Guarantor, the Surviving Issuers or any of the Guarantors, except, in the case of clauses (B) and (C), such defaults and violations as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
9
The execution, delivery and performance of the Transaction Documents by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, as applicable, the issuance and delivery of the Securities, and the consummation of the Transactions (i) will not result in any violation of the provisions of the charter or by-laws or similar organizational documents of any of the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors, (ii) will not conflict with or constitute a breach of, or Default or, except as otherwise disclosed in the Offering Memorandum, a Debt Repayment Triggering Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Parent, the Parent’s subsidiaries, Diamond or the Diamond Entities pursuant to, or require the consent (except as shall have been obtained prior to the Completion Date) of any other party to, any Existing Instrument, and (iii) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Parent, any subsidiary of the Parent, Diamond or any Diamond Entity, except, in the case of clauses (i) (other than with respect to the Issuers and the Surviving Issuers), (ii) and (iii) above, for such conflicts, breaches, Defaults, Debt Repayment Triggering Events, liens, charges, encumbrances, consents or violations as are disclosed in the Offering Memorandum or as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. As used herein, a “Debt Repayment Triggering Event” means any event or condition which gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors and their respective subsidiaries.
Except as otherwise disclosed in the Offering Memorandum, no consent, approval, authorization or other order of, or registration, qualification or filing with, any court or other governmental or regulatory authority or agency, is required for the execution, delivery and performance of the Transaction Documents by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, as applicable, the issuance and delivery of the Securities, or consummation of the Transactions, except (i) such as will be obtained or made by the Parent, the Surviving Issuers or the Issuers under the Securities Act, the Trust Indenture Act, applicable state securities or Blue Sky laws, (ii) such mortgages, filings and recordings with governmental or regulatory authorities or agencies as may be required to perfect security interests under the Escrow Agreement, and (iii) as shall have been obtained or made prior to the Closing Date, except where the failure to obtain any such consents, approvals, authorizations, orders, registrations or qualifications or make such filings would not impair, in any material respect, the ability of the Parent, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors to consummate the Transactions.
r.
No Material Actions or Proceedings. Except as otherwise disclosed in the Offering Memorandum, there are no material legal or governmental actions, suits or proceedings pending or, to the Issuers’, the Escrow Guarantor’s, the Surviving Issuers’ and the Guarantors’ knowledge, threatened against or affecting the Parent, Diamond or any of their respective subsidiaries or which has as the subject thereof any property owned or leased by the Parent, Diamond or any of their respective subsidiaries which would be required by the Securities Act to be described in the Offering Memorandum if the Offering Memorandum were a prospectus included in a registration statement on Form S-1 filed with the Commission.
s.
No Labor Disputes. There are no strikes or other labor disputes against the Parent or any of its subsidiaries pending or, to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, threatened, except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
t.
Intellectual Property Rights. The Parent and its subsidiaries own, license or possess or have sufficient rights to use the trademarks, trade names, patents, copyrights, trade secrets and other similar rights (collectively, “Intellectual Property Rights”) reasonably necessary to conduct their businesses as
10
currently conducted and as described in the Offering Memorandum, except where the failure to so own or possess or have the right to use would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect; and, except as otherwise disclosed in the Offering Memorandum, any expiration, cancellation, abandonment, forfeiture or relinquishment of any of such Intellectual Property Rights would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. Neither the Parent nor any of its subsidiaries has received any unresolved written notice of any claim of infringement with asserted Intellectual Property Rights of others in the past two years, except for any such claims as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
u.
All Necessary Permits, etc. The Parent and its subsidiaries possess such valid and current certificates, authorizations or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct their respective businesses and as described in the Offering Memorandum, except as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, and except as described in the Offering Memorandum, the Parent and its subsidiaries have not received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit, except for any such proceedings as would not, individually or in the aggregate reasonably be expected to result in a Material Adverse Effect.
v.
Title to Properties. The Parent and its subsidiaries have good and marketable title to all the properties and assets reflected as owned in the financial statements referred to in Section 1(n) hereof (other than properties sold in the ordinary course of business since the date of such financial statements), and hold any leased real or personal property under valid and enforceable leases, except, in each case, as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
w.
Tax Law Compliance. Except for any failures or exceptions that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, or as disclosed in the Offering Memorandum, (i) the Parent and each of the Parent’s subsidiaries has timely filed (taking into account valid extensions) all federal, state, local and foreign tax returns required to be filed by it and has paid all taxes (and any related interest, penalties and additions to tax) required to be paid by it (including in its capacity as a withholding agent) except for any taxes being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP, and (ii) to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, there is no proposed tax deficiency or assessment against the Parent or any of the Parent’s subsidiaries.
x.
Issuers, Escrow Guarantor, Surviving Issuers and Guarantors Not an “Investment Company”. None of the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors is, or after receipt of payment for the Securities, consummation of the Transactions or application of the net proceeds from the Offering as described in the Offering Memorandum will be, required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
y.
No Price Stabilization or Manipulation. None of the Parent or any of the Parent’s subsidiaries has taken or will take, directly or indirectly, any action that is designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Parent or its subsidiaries to facilitate the sale or resale of the Securities.
z.
Accounting Systems. Parent maintains a system of internal controls over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that has been designed by the Parent’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurances that: transactions are executed in accordance with management’s general or specific authorization; transactions are recorded as necessary to permit preparation of financial
11
statements in conformity with GAAP; access to assets is permitted only in accordance with management’s general or specific authorization; and the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences; the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors are not aware of any material weaknesses in Parent’s internal control over financial reporting.
aa.
Solvency. The Parent and its subsidiaries, taken as a whole, are, and after giving effect to the Transactions, will be, Solvent. As used herein, the term “Solvent” means that on such date (i) the fair value of the assets of the Parent and its subsidiaries, taken as a whole, exceeds, taken as a whole, the debts and liabilities, subordinated, contingent or otherwise, of the Parent and its subsidiaries, (ii) the present fair saleable value of the property of the Parent and its subsidiaries, taken as a whole, is greater than the amount that will be required to pay the probable liabilities of the Parent and its subsidiaries, taken as a whole, and their debts as they become absolute and matured, (iii) the Parent and its subsidiaries, taken as a whole, are able to realize upon their assets and pay their debts and other liabilities, including contingent obligations, as they mature and (iv) the Parent and its subsidiaries, taken as a whole, do not have unreasonably small capital.
bb.
Disclosure Controls and Procedures. The Parent has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) designed to ensure that material information relating to the Parent and its subsidiaries is made known to the chief executive officer and chief financial officer of the Parent by others within the Parent or any of its subsidiaries, and such disclosure controls and procedures are reasonably effective to perform the functions for which they were established subject to the limitations of any such control system.
cc.
Regulations T, U, X. None of the Parent or any of the Parent’s subsidiaries, nor, to their knowledge, any agent thereof acting on their behalf (other than any Initial Purchaser, as to which no representation is given) has taken, and none of them will take, any action that might cause this Agreement or the issuance or sale of the Securities to violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System.
dd.
Compliance with Environmental Laws. Except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect or as disclosed in the Offering Memorandum: the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors, and their respective subsidiaries are in compliance with all applicable federal, state, local and foreign laws and regulations relating to pollution or protection of human health (to the extent relating to exposure to hazardous or toxic substances or wastes, pollutants, contaminants, chemicals, petroleum and petroleum products (collectively, “Materials of Environmental Concern”), including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of Materials of Environmental Concern, or otherwise relating to the use, generation, treatment, storage, disposal, transport or handling of Materials of Environmental Concern (collectively, “Environmental Laws”); neither the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors nor any of their respective subsidiaries has received written notice of any claim, investigation, action or cause of action filed with a court or governmental authority, violation, or actual or potential liability under Environmental Law (collectively, “Environmental Claims”), and, to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, no such Environmental Claims have been threatened against the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors and their respective subsidiaries or any person or entity whose liability for any Environmental Claim, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors and their respective subsidiaries have retained or assumed either contractually or by operation of law; and to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, there has been no activity, circumstance, condition, event or occurrence, including, without limitation, the release, emission, discharge, presence or disposal
12
of any Materials of Environmental Concern, that would reasonably be expected to result in a violation of or liability of the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors or any of their respective subsidiaries under Environmental Laws or form the basis of an Environmental Claim against the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors or any of their respective subsidiaries or against any person or entity whose liability for any Environmental Claim the Parent and its subsidiaries have retained or assumed either contractually or by operation of law.
ee.
ERISA Compliance. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, none of the following events has occurred or exists: (a) a “reportable event” as defined under the United States Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the regulations and published interpretations thereunder with respect to a Plan (as defined below); (b) a withdrawal from a Plan subject to Section 4063 of ERISA during a plan year in which Parent or any of its subsidiaries was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal from a Plan; (d) the filing by the PBGC of a notice of intent to terminate any Plan, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, respectively, or the commencement of proceedings by the PBGC to terminate a Plan; (e) appointment of a trustee to administer any Plan; (f) with respect to a Plan, the failure to satisfy the minimum funding standard of Section 412 of the Code or Section 302, 303 or 304 of ERISA, whether or not waived; (g) the imposition of any liability under Title IV of ERISA with respect to any Plan, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA; (h) an audit or investigation by the Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any other federal or state governmental agency or any foreign regulatory agency with respect to any Plan; or (i) any violation of law or applicable qualification standards, with respect to any Plan. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, none of the following events has occurred or is reasonably likely to occur: (a) an increase in the aggregate amount of contributions required to be made to all Plans in the current fiscal year of the Parent and its subsidiaries compared to the amount of such contributions made in the most recently completed fiscal year of the Parent and its subsidiaries; (b) an increase in the “accumulated post−retirement benefit obligations” (within the meaning of Statement of Financial Accounting Standards 106) of the Parent and its subsidiaries compared to the amount of such obligations in the most recently completed fiscal year of the Parent and its subsidiaries; (c) liability under Title IV of ERISA with respect to the termination of, or withdrawal from, any Plan; or (d) the filing of a material claim by one or more employees or former employees of the Parent or any of its subsidiaries related to their employment. For purposes of this paragraph, the term “Plan” means a plan (within the meaning of Section 3(3) of ERISA) subject to Title IV of ERISA with respect to which the Parent or any of its subsidiaries may have any liability.
ff.
No Unlawful Contributions or Other Payments. Neither the Parent nor any of its subsidiaries nor, to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, any director, officer, agent, employee or other person associated with or acting on behalf of the Parent or any of its subsidiaries, or any controlled affiliate of the Parent, is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), and the rules and regulations thereunder, any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the U.K. Bribery Act of 2010, or any other applicable anti-bribery or anti-corruption law, including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA or other applicable anti-bribery or anti-corruption law) or any foreign political party or official
13
thereof or any candidate for foreign political office, in contravention of the FCPA or other applicable anti-bribery or anti-corruption law, and the Parent, its subsidiaries and, to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, Parent’s controlled affiliates have conducted their businesses in compliance with the FCPA and other applicable anti-bribery or anti-corruption law, and have instituted and maintain and enforce policies and procedures designed to achieve, and which are reasonably expected to continue to achieve, continued compliance therewith.
gg.
No Conflict with Sanctions Laws. Neither the Parent nor any of its subsidiaries nor, to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, any director, officer, agent, employee or controlled affiliate of the Parent or any of its subsidiaries is currently the subject or target of any sanctions administered or enforced by the U.S. government, including without limitation by the Office of Foreign Assets Control of the U.S. Treasury Department, the U.S. Department of Commerce, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor is the Parent or any of its subsidiaries located, organized or resident in a country or territory that is the subject or target of Sanctions. The Parent, the Issuers and the Surviving Issuers will not, directly or indirectly, use the proceeds of the Offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, (i) to fund or facilitate any activities of or business with any person, entity or government that, at the time of such funding or facilitation, is the subject or target of Sanctions, or (ii) in any other manner that will result in a violation by any person (including any person participating in the offering, whether as initial purchaser, underwriter, advisor, investor or otherwise) of Sanctions.
hh.
Compliance with Money Laundering Laws. The operations of the Parent and its subsidiaries are and have been conducted at all times in compliance in all material respects with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Parent or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, threatened.
ii.
Regulation S. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors and their respective affiliates and all persons acting on their behalf (other than the Initial Purchasers, as to whom the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors make no representation) have complied with and will comply with the offering restrictions requirements of Regulation S in connection with the Offering outside the United States and, in connection therewith, and the Offering Memorandum will contain the disclosure required by Rule 902 of Regulation S. The Securities sold in reliance on Regulation S will be represented upon issuance by a temporary global security that may not be exchanged for definitive securities until the expiration of the 40-day restricted period referred to in Rule 903 of the Securities Act and only upon certification of beneficial ownership of such Securities by non-U.S. persons or U.S. persons who purchased such Securities in transactions that were exempt from the registration requirements of the Securities Act.
jj.
Cybersecurity. Except as would not, individually or in the aggregate, have a Material Adverse Effect, the information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases of the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and their respective subsidiaries (collectively, “IT Systems”) now or proposed to be operated by them, are adequate for, and operate and perform as required in connection
14
with the operation of the business of the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and their respective subsidiaries as described in the Offering Memorandum, and, to the knowledge of Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and their respective subsidiaries, are free and clear of all bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants. Except as would not, individually or in the aggregate, have a Material Adverse Effect, the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and their respective subsidiaries have implemented and maintained commercially reasonable controls, policies, procedures, and safeguards to maintain and protect their confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data (including all personal, personally identifiable, sensitive, confidential or regulated data (“Personal Data”)) collected, processed, stored or used in connection with their businesses, and, to the knowledge of the Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and their respective subsidiaries, there have been no breaches, violations, outages or unauthorized uses of or accesses to same, except for those that have been remedied without cost or liability or the duty to notify any other person or entity, nor any incidents under internal review or investigations relating to the same. The Issuers, the Escrow Guarantor, the Surviving Issuers, the Guarantors and their respective subsidiaries are presently, except as would not, individually or in the aggregate, have a Material Adverse Effect, in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification.
kk.
Limitations on Distributions. Except as may be limited by applicable state corporation law or comparable laws, no subsidiary of Parent is currently prohibited, directly or indirectly, from paying any dividends to the Parent or the Surviving Issuers, as applicable, from making any other distribution on such subsidiary’s capital stock or other ownership interests, from repaying to the Parent or the Surviving Issuers, as applicable, any loans or advances to such subsidiary from the Parent or the Surviving Issuers, as applicable, or from transferring any of such subsidiary’s property or assets to the Parent or the Surviving Issuers, as applicable, or any other subsidiary of the Parent or the Surviving Issuers, as applicable, except as described in the Offering Memorandum.
ll.
Merger Agreement. The Merger Agreement has been duly authorized, executed and delivered by the Parent and the Surviving Issuer and constitutes a valid and binding agreement of such persons, enforceable against such persons in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and equitable principles of general applicability. Neither the Parent nor the Surviving Issuer has received any written notice of termination of the Merger Agreement. Nothing has come to the knowledge of either the Parent, the Surviving Issuers, the Issuers or the Escrow Guarantor that would cause it to believe that, and none of them has received any written notice to the effect that, any conditions to the closing of the transactions contemplated by the Merger Agreement will not be satisfied by any party thereto, at or prior to December 10, 2021. In addition, to the knowledge of the Parent, the Surviving Issuers, the Issuers or the Escrow Guarantor, after due inquiry, (i) the representations and warranties of Diamond in the Merger Agreement are true and correct, except to the extent such representations and warranties are made as of another date, in which case, such representations and warranties shall be true and correct as of that date, in each case, with the same force and effect as if made as of the date hereof or the Closing Date, as applicable, and (ii) each of the parties to the Merger Agreement has complied in all material respects with the covenants in the Merger Agreement applicable to it.
Any certificate signed pursuant to this Agreement by an officer of the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors and delivered to the Representative or to counsel for the Initial Purchasers in connection with the closing of the Offering shall be deemed to be a representation
15
and warranty by such Issuer, the Escrow Guarantor, Surviving Issuer and Guarantor, as the case may be, to the Initial Purchasers as to the matters set forth therein.
3.
Purchase, Sale and Delivery of the Securities.
mm.
The Securities. On the basis of the representations, warranties, covenants and agreements and subject to the terms and conditions, set forth herein, the Issuers agree to sell to the several Initial Purchasers all of the Securities, and subject to the conditions set forth herein, the Initial Purchasers agree, severally and not jointly, to purchase from the Issuers the aggregate principal amount of Notes set forth opposite their respective names on Annex A, at a purchase price of 100.000% of the principal amount thereof (the “Purchase Price”), plus accrued interest, if any, from June 28, 2021, to the Closing Date.
nn.
The Closing Date. Delivery of certificates for the Notes in global form to be purchased by the Initial Purchasers and payment therefor shall be made at the offices of Simpson Thacher & Bartlett LLP (or such other place as may be agreed to by the Issuers and the Representative) at 9:00 a.m., New York City time, on June 28, 2021 or such other time and date as the Representative and the Issuers may agree to in writing (the time and date of such closing are called the “Closing Date”).
oo.
Delivery of the Securities. The Issuers shall deliver to the Representative for the accounts of the several Initial Purchasers certificates for the Notes at the Closing Date against the irrevocable release of a wire transfer in the amount of the aggregate Purchase Price for the Notes, plus accrued interest, if any, to the Closing Date, to the Escrow Account in immediately available funds, and such payment shall include the aggregate Deferred Discount (as defined below). The certificates for the Notes shall be in such denominations and registered in the name of Cede & Co., as nominee of the Depositary, pursuant to the DTC Agreement, and will be deposited with the Trustee as custodian for the Depositary and shall be made available for inspection on the business day preceding the Closing Date at a location in New York City, as the Representative and the Issuers may agree. Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the Initial Purchasers.
pp.
Deferred Discount. On the Completion Date, pursuant to the terms of the Escrow Agreement, a deferred discount in the aggregate amount of $6,750,000 with respect to the Notes (the “Deferred Discount”), shall be released from the Escrow Account to the Representative for the accounts of the several Initial Purchasers, to be paid by wire transfer to the account or accounts specified by the Representative in immediately available funds. If the Completion Date does not occur on or prior to the Cut-Off Date, the aggregate Purchase Price, including the Deferred Discount, shall be used to redeem the Notes pursuant to the terms of the Escrow Agreement and the special mandatory redemption provisions set forth in the Indenture.
4.
Additional Covenants. Each of the Issuers and the Escrow Guarantor further covenants and agrees and, upon execution and delivery of the Joinder Agreement, each of the Surviving Issuers and the Guarantors further covenants and agrees, jointly and severally, with each Initial Purchaser as follows:
qq.
Delivery of Final Offering Memorandum; Initial Purchasers’ Review of Proposed Amendments and Supplements and Issuer Additional Written Communications. As promptly as practicable following the Time of Execution and in any event not later than the fourth business day following the date hereof, the Issuers and the Escrow Guarantor will prepare and deliver to the Initial Purchasers the Final Offering Memorandum. None of the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors shall amend or supplement the Preliminary Offering Memorandum, the Pricing
16
Supplement or the Final Offering Memorandum prior to the Closing Date unless the Initial Purchasers shall previously have been furnished a copy of the proposed amendment or supplement prior to the proposed use or filing, and the Representative shall not have reasonably objected to such amendment or supplement. Before making, preparing, using, authorizing, approving or distributing any Issuer Additional Written Communication, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors will furnish to the Representative a copy of such written communication for review and will not make, prepare, use, authorize, approve or distribute any such written communication to which the Representative reasonably objects.
rr.
Amendments and Supplements to the Final Offering Memorandum and Other Securities Act Matters. If, prior to the later of the Closing Date and the completion of the placement of the Securities by the Initial Purchasers with the Subsequent Purchasers (but in no event more than 180 days after the date hereof), any event shall occur or condition exist as a result of which the Pricing Disclosure Package or the Final Offering Memorandum would include any untrue statement of material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and it is necessary to amend or supplement the Pricing Disclosure Package or the Final Offering Memorandum in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if in the reasonable judgment of the Representative or counsel for the Initial Purchasers it is otherwise necessary to amend or supplement the Pricing Disclosure Package or the Final Offering Memorandum to comply with any applicable law, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors agree to promptly prepare, and furnish at their own expense to the Representative, amendments or supplements to the Pricing Disclosure Package or the Final Offering Memorandum (as applicable) so that the statements in the Pricing Disclosure Package or the Final Offering Memorandum (as applicable) as so amended or supplemented will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made and at the time of sale of Securities and at the Closing Date, not misleading or so that the Final Offering Memorandum, as amended or supplemented, will comply with all applicable law. Upon request of any holder or prospective purchaser of the Securities, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors will provide all the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the Securities Act.
ss.
Copies of the Offering Memorandum. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors agree to furnish to the Initial Purchasers, without charge, during the period referred to in paragraph (b) above, as many copies of the Pricing Disclosure Package and the Final Offering Memorandum and any amendments and supplements thereto as the Initial Purchasers shall have reasonably requested.
tt.
Blue Sky Compliance. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors shall cooperate with the Representative and counsel for the Initial Purchasers to qualify or register the Securities for sale under (or obtain exemptions from the application of) the Blue Sky or state securities laws of those jurisdictions reasonably designated by the Initial Purchasers, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Securities. None of the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors shall be required to qualify as a foreign corporation or other foreign entity or to take any action that would subject them to general service of process in any such jurisdiction where they are not presently qualified or where they would be subject to taxation as a foreign corporation or other foreign entity. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors will advise the Initial Purchasers promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending
17
such qualification, registration or exemption, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors shall use their commercially reasonable efforts to obtain the withdrawal thereof at the earliest possible moment.
uu.
Escrow of Gross Proceeds. The Issuers shall deposit or cause to be deposited the gross proceeds from the sale of the Securities received by the Issuers in the Escrow Account.
vv.
Use of Proceeds. The Issuers and the Surviving Issuers shall apply the net proceeds from the sale of the Securities sold by them in the manner described under the caption “Use of Proceeds” in the Pricing Disclosure Package and the Final Offering Memorandum.
ww.
The Depositary. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors will cooperate with the Initial Purchasers and use their commercially reasonable efforts to permit the Securities to be eligible for clearance and settlement through the facilities of the Depositary.
xx.
Agreement Not to Offer or Sell Additional Securities. During the period from the date hereof through and including the date that is 60 days following the date hereof, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors will not, and they will cause their respective subsidiaries not to, without the prior written consent of the Representative (which consent may be withheld at the sole discretion of the Representative), directly or indirectly, sell, offer, contract or grant any option to sell, pledge, transfer or establish an open “put equivalent position” within the meaning of Rule 16a-1 under the Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file any registration statement under the Securities Act in respect of, any debt securities of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors or securities exchangeable for or convertible into debt securities of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors (other than as contemplated by this Agreement); provided that this Section 4(h) shall not apply to the issuance of new asset-backed securities by the Parent, Diamond or any of their subsidiaries.
yy.
Future Reports to the Initial Purchasers. For so long as any Securities remain outstanding, during any period when the Parent is not publicly filing information required under Section 13 or Section 15 of the Exchange Act on the Commission’s EDGAR system or posting such information on the Parent’s website (or otherwise providing such information to the Trustee or the holders of the Securities in accordance with the terms of the Indenture), the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors will furnish to the Representative: as soon as practicable after the end of each fiscal year, copies of the Annual Report of the Parent containing the balance sheet of the Parent as of the close of such fiscal year and statements of income, stockholders’ equity and cash flows for the year then ended and the opinion thereon of the Parent’s independent public or certified public accountants; and as soon as available, copies of any report or communication of the Parent mailed generally to holders of its capital stock or debt securities (including the holders of the Securities).
zz.
No Integration. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors agree that they will not, and will cause their subsidiaries or any other person acting on any of their behalf (other than the Initial Purchasers, as to which no covenant is given) not to, make any offer or sale of securities of the Issuers of any class if, as a result of the doctrine of “integration” referred to in Rule 502 under the Securities Act, such offer or sale would render invalid (for the purpose of the resale of the Securities by the Initial Purchasers to Subsequent Purchasers or the resale of the Securities by such Subsequent Purchasers to others) the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof or by Rule 144A or by Regulation S or otherwise.
aaa.
No General Solicitation or Directed Selling Efforts. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors agree that they will not and will not permit any of their subsidiaries
18
or any other person acting on any of their behalf (other than the Initial Purchasers, as to which no covenant is given) to solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act or engage in any directed selling efforts with respect to the Securities within the meaning of Regulation S, and the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors will and will cause all such persons to comply with the offering restrictions requirement of Regulation S with respect to the Securities.
bbb.
Ratings of Securities. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors shall take all reasonable actions necessary to enable Standard & Poor’s Ratings Services, a division of The McGraw Hill, Inc. Companies, and Moody’s Investors Service, Inc. to provide their respective credit ratings to the Securities.
ccc.
Legended Securities. Each certificate for a Note will bear the legend contained in “Notice to Investors; Transfer Restrictions” in the Pricing Disclosure Package and the Final Offering Memorandum for the time period and upon the other terms stated in the Pricing Disclosure Package and the Final Offering Memorandum.
ddd.
Completion Date Documents, Opinions and Certificates. On the Completion Date, the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors shall:
i.
cause to be delivered to the Initial Purchasers (A) an opinion of Simpson Thacher & Bartlett LLP, counsel for the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, and (B) opinions from such local counsel furnishing opinions under the New Credit Agreement, in each case dated as of the Completion Date and in form and substance reasonably satisfactory to the Representative;
ii.
cause to be executed (A) the Joinder Agreement and (B) the Supplemental Indenture, in each case in form and substance reasonably satisfactory to the Representative, and the Initial Purchasers shall have received executed copies thereof; and
iii.
cause to be delivered to the Initial Purchasers any other certificates, evidence and documents confirming compliance with and satisfaction of the Escrow Conditions in accordance with the Escrow Agreement and such other certificates or documents as the Initial Purchasers shall reasonably request.
The Representative on behalf of the several Initial Purchasers, may, in its sole discretion, waive in writing the performance by the Issuers, the Escrow Guarantor, the Surviving Issuers and any Guarantor of any one or more of the foregoing covenants or extend the time for their performance.
5.
Payment of Expenses. Each of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, jointly and severally, agrees to pay all costs, fees and expenses incurred by each of them and their subsidiaries (if any) in connection with the performance of their obligations hereunder and in connection with the transactions contemplated hereby, including, without limitation, all expenses incident to the issuance and delivery of the Securities (including all printing and engraving costs), all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Securities to the Initial Purchasers, all fees and expenses of the counsel to the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, and independent public or certified public accountants, all costs and expenses incurred in connection with the preparation, printing, shipping and distribution (including any form of electronic distribution) of the Pricing Disclosure Package and the Final Offering Memorandum (including the financial statements set forth or incorporated by reference therein), and all
19
amendments and supplements thereto, all filing fees and reasonable attorneys’ fees and expenses incurred by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Securities for offer and sale under the securities laws of the several states of the United States or the provinces of Canada (including, without limitation, the cost of preparing, printing and mailing preliminary and final Blue Sky or legal investment memoranda and any related supplements to the Pricing Disclosure Package or the Final Offering Memorandum) and advising the Initial Purchasers of such qualifications, registrations and exemptions, the fees and expenses of the Trustee and the Escrow Agent, including the fees and disbursements of counsel for the Trustee and the Escrow Agent, in connection with the transactions contemplated hereby, any fees payable in connection with the rating of the Securities with the ratings agencies, the transportation and other expenses incurred by or on behalf of representatives of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors in connection with presentations to prospective purchasers of the Securities, and expenses associated with any electronic road show (it being understood that the Initial Purchasers, collectively, shall bear one-half of the costs associated with any chartered aircraft as well as their representatives’ other transportation and other expenses), all fees and expenses associated with the grant or perfection of the security interests and liens to be obtained under the Escrow Agreement, including, without limitation, the preparation of the Escrow Agreement and the other documents required thereunder in connection therewith and all lien search and filing fees in connection with perfecting the security interest in the Escrowed Funds, and all fees and expenses (including reasonable fees and expenses of counsel) of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors in connection with approval of the Securities by Depositary for “book-entry” transfer, and the performance by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors of their respective obligations under this Agreement. Except as provided in this Section 5 and Section 7, Section 9 and Section 10 hereof, the Initial Purchasers shall pay their own expenses, including the fees and disbursements of their counsel.
6.
Conditions of the Obligations of the Initial Purchasers. The obligations of the several Initial Purchasers to purchase and pay for the Securities as provided herein on the Closing Date shall be subject to the accuracy of the representations and warranties set forth in Section 1 hereof as of the date hereof and as of the Closing Date as though then made and to the timely performance by the Issuers and the Escrow Guarantor of their covenants and other obligations hereunder in all material respects (except to the extent already qualified by materiality), and to each of the following additional conditions:
eee.
Accountants’ Comfort Letters. At the Time of Execution, each of Ernst & Young LLP and Deloitte & Touche LLP shall have furnished to the Initial Purchasers a “comfort letter,” dated the date hereof and to take effect at the Time of Execution, in form and substance reasonably satisfactory to the Initial Purchasers and covering the matters contained or incorporated by reference in the Preliminary Offering Memorandum, and, in addition, on the Closing Date, the Initial Purchasers shall have received from each of Ernst & Young LLP and Deloitte & Touche LLP a “bring-down comfort letter” dated the Closing Date and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Initial Purchasers, in the form of the “comfort letter” delivered at the Time of Execution, except that such bring-down comfort letter shall cover the financial information contained or incorporated by reference in the Final Offering Memorandum and any amendment or supplement thereto and procedures shall be brought down to a date no more than three days prior to the Closing Date.
fff.
No Material Adverse Effect or Ratings Agency Change. For the period from and after the date of this Agreement and prior to the Closing Date:
i.
there shall not have been any material adverse change or any development involving a prospective material adverse change in the condition (financial or otherwise), business or results of operations of the Parent and its subsidiaries, or of Diamond and its subsidiaries, in each case
20
taken as a whole and after giving effect to the Transactions, the effect of which is, or would reasonably be expected to become, in the judgment of the Representative, so material and adverse as to make it impractical or inadvisable to proceed with the completion of the Offering on the terms and in the manner contemplated in the Pricing Disclosure Package and the Final Offering Memorandum; and
ii.
there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded the Parent or any of its subsidiaries or any of its securities or indebtedness, including the Notes, by any “nationally recognized statistical rating organization,” as such term is defined in Section 3(a)(62) of the Exchange Act.
ggg.
Opinion of Counsel for the Issuers and the Escrow Guarantor. On the Closing Date, the Initial Purchasers shall have received an opinion and a negative assurance statement of Simpson Thacher & Bartlett LLP, counsel for the Issuers and the Escrow Guarantor, dated as of the Closing Date, substantially in the forms attached as Exhibit B-1 and Exhibit B-2, respectively;
hhh.
Opinion of Counsel for the Initial Purchasers. On the Closing Date, the Initial Purchasers shall have received an opinion and negative assurance statement of Davis Polk & Wardwell LLP, counsel for the Initial Purchasers, dated as of such Closing Date, with respect to such matters as may be reasonably requested by the Initial Purchasers.
iii.
Officers’ Certificate for the Issuers and the Escrow Guarantor. On the Closing Date, the Initial Purchasers shall have received a written certificate executed by two executive officers of the Issuers and the Escrow Guarantor, on behalf of the Issuers and the Escrow Guarantor, dated as of the Closing Date, to the effect that:
iii.
there has not occurred any downgrading, nor has any notice been given of any intended potential downgrading, or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded the Parent or any of its subsidiaries or any of their securities or indebtedness, including the Notes, by any “nationally recognized statistical rating organization” as such term is defined in Section 3(a)(62) of the Exchange Act;
iv.
for the period from and after the date of this Agreement and prior to the Closing Date, there has not occurred any material adverse change in the condition (financial or otherwise), business or results of operations of the Parent and its subsidiaries, or Diamond and its subsidiaries, in each case taken as a whole and after giving effect to the Transactions (except as set forth in or contemplated in the Pricing Disclosure Package and the Final Offering Memorandum, exclusive of any amendment or supplement thereto);
v.
the representations and warranties set forth in Section 1 hereof are true and correct (with respect to the Diamond Entities, to their knowledge, after due inquiry) with the same force and effect as though expressly made on and as of the Closing Date; and
vi.
each of the Issuers and the Escrow Guarantor has complied with all the agreements and satisfied all the conditions on their part to be performed or satisfied at or prior to the Closing Date, in each case in all material respects.
21
jjj.
DTC. At the Closing Date, the Issuers and/or the Escrow Guarantor shall have taken all action reasonably requested by the Representative to enable the Notes to be eligible for clearance and settlement through DTC.
kkk.
Indenture. On or prior to the Closing Date, the Issuers and the Escrow Guarantor shall have executed and delivered the Indenture and the Notes shall have been executed and delivered by the Issuers and authenticated by the Trustee in accordance with the Indenture, in each case in form and substance reasonably satisfactory to the Initial Purchasers, and the Initial Purchasers shall have received executed copies thereof.
lll.
Escrow Agreement. On or prior to the Closing Date, the Escrow Agreement shall have been entered into by the parties thereto and the Initial Purchasers shall have received an executed copy thereof.
mmm.
Parent Chief Financial Officer’s Certificate. On the date hereof and the Closing Date, the Initial Purchasers shall have received a written certificate executed by the Chief Executive Officer of Parent, on behalf of the Parent, dated as of the date hereof or the Closing Date, as applicable, substantially in the form attached as Exhibit D-1;
nnn.
Diamond Chief Financial Officer’s Certificate. On the date hereof and the Closing Date, the Initial Purchasers shall have received a written certificate executed by the Chief Financial Officer of Diamond, on behalf of Diamond, dated as of the date hereof or the Closing Date, as applicable, substantially in the form attached as Exhibit D-2;
ooo.
Additional Documents. On or prior to the Closing Date, the Initial Purchasers and counsel for the Initial Purchasers shall have received such information and documents as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Securities as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 6 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Representative by notice to the Issuers at any time on or prior to the Closing Date, which termination shall be without liability on the part of any party to any other party, except that Section 5, Section 7, Section 9 and Section 10 shall at all times be effective and shall survive such termination.
7.
Reimbursement of Initial Purchasers’ Expenses. If this Agreement is terminated by the Representative pursuant to Section 6 or the sale to the Initial Purchasers of the Securities on the Closing Date is not consummated because of any refusal, inability or failure on the part of the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors to perform any agreement herein or to comply with any provision hereof, other than by reason of a default by any of the Initial Purchasers, including as described in Section 19 hereof, or (c) the Completion Date does not occur on or prior to the Cut-Off Date, then in each case, the Issuers and the Escrow Guarantor agree, jointly and severally, to reimburse the Initial Purchasers upon demand for all out-of-pocket expenses that shall have been reasonably incurred by the Initial Purchasers in connection with the Offering, including, but not limited to reasonable fees and disbursements of one counsel (and, if necessary, one local counsel in any relevant material jurisdiction), printing expenses, travel expenses, postage, facsimile and telephone charges.
8.
Offer, Sale and Resale Procedures. Each of the Initial Purchasers, severally and not jointly, agrees with the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors that, and hereby agrees to observe the following procedures in connection with the offer and sale of the Securities:
22
ppp.
such Initial Purchaser, severally and not jointly, represents and warrants to, and agrees with, the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors that it is a “qualified institutional buyer” within the meaning of Rule 144A and an “accredited investor” within the meaning of Regulation D under the Securities Act;
qqq.
Each such offer or sale shall only be made to persons whom the offeror or seller reasonably believes to be “qualified institutional buyers” (as defined in Rule 144A) in transactions meeting the requirements of Rule 144A, or non-U.S. persons outside the United States in reliance upon Regulation S under the Securities Act, upon the terms and conditions set forth in Annex B hereto, which Annex B is hereby expressly made a part hereof; and
rrr.
no general solicitation or general advertising (within the meaning of Rule 502 under the Securities Act) will be used in the United States in connection with the Offering.
Following the sale of the Securities by the Initial Purchasers to Subsequent Purchasers pursuant to the terms hereof, except as expressly set forth in Sections 9 and 10 hereof, the Initial Purchasers shall not be liable or responsible to the Issuers for any losses, damages or liabilities suffered or incurred by the Issuers, including any losses, damages or liabilities under the Securities Act, arising from or relating to any resale or transfer of any Security.
sss.
Indemnification of the Initial Purchasers by the Issuers and the Guarantors. Each of the Issuers and the Escrow Guarantor, jointly and severally, agrees and, upon the execution and delivery of the Joinder Agreement, each of the Surviving Issuers and the Guarantors (including the Diamond Entities), jointly and severally, agrees to indemnify and hold harmless each Initial Purchaser, its affiliates, directors, officers and employees, and each person, if any, who controls any Initial Purchaser within the meaning of the Securities Act and the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which such Initial Purchaser, affiliate, director, officer, employee or controlling person may become subject, under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Issuers or the Surviving Issuers, as applicable (not to be unreasonably withheld)), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in the Pricing Disclosure Package, any Issuer Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto), or the omission or alleged omission therefrom, of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and to reimburse each Initial Purchaser and each such affiliate, director, officer, employee or controlling person for any and all reasonable expenses (including the reasonable fees and disbursements of counsel chosen by the Representative) as such expenses are reasonably incurred by such Initial Purchaser or such affiliate, director, officer, employee or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the foregoing indemnity agreement shall not apply to any loss, claim, damage, liability, expense or action to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Parent by such Initial Purchaser through the Representative expressly for use in the Pricing Disclosure Package, any Issuer Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto) (it being understood that the only such information is that information specified in Section 9(b)). The indemnity agreement set forth in this
23
Section 9(a) shall be in addition to any liabilities that the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors may otherwise have.
ttt.
Indemnification of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors. Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold harmless as of the date hereof, each Issuer and the Escrow Guarantor and, upon execution and delivery of the Joinder Agreement, each Surviving Issuer and each Guarantor, the employees, directors and officers of each Issuer and the Escrow Guarantor as of the date hereof and, upon the execution and delivery of the Joinder Agreement, of each Surviving Issuer and each Guarantor, and each person, if any, who controls, as of the date hereof, each Issuer and the Escrow Guarantor and, upon the execution and delivery of the Joinder Agreement, each Surviving Issuer and each Guarantor, in each case within the meaning of the Securities Act or the Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which any Issuer, the Escrow Guarantor, any Surviving Issuer, any Guarantor or any such employee, director, officer or controlling person may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Initial Purchaser), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in the Pricing Disclosure Package, any Issuer Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Pricing Disclosure Package, any Issuer Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto), in reliance upon and in conformity with written information furnished to the Parent by such Initial Purchaser through the Representative expressly for use therein; and to reimburse any Issuer and the Escrow Guarantor and, upon execution and delivery of the Joinder Agreement where applicable, any Surviving Issuer, any Guarantor and each such employee, director, officer or controlling person for any and all reasonable expenses (including the reasonable fees and disbursements of counsel) as such expenses are reasonably incurred by any Issuer, the Escrow Guarantor, any Surviving Issuer, any Guarantor or such employee, director, officer or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors hereby acknowledge that the only information that the Initial Purchasers have furnished to the Parent through the Representative expressly for use in the Pricing Disclosure Package, any Issuer Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto) are the statements set forth in the second sentence of the ninth paragraph, the tenth paragraph and the first, second, third and fourth sentences of the eleventh paragraph under the caption “Plan of Distribution” in the Preliminary Offering Memorandum and the Final Offering Memorandum. The indemnity agreement set forth in this Section 9(b) shall be in addition to any liabilities that each Initial Purchaser may otherwise have.
uuu.
Notifications and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 9 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 9, notify the indemnifying party in writing of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party under this Section 9, except to the extent it is materially prejudiced by such failure (through the forfeiture of substantive rights and defenses) and shall not relieve the indemnifying party from any liability that the indemnifying party may have to an indemnified party other than under this Section 9. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in and, to the
24
extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded (based on the advice of counsel) that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party’s election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 9 for any fees or expenses of counsel subsequently incurred by such indemnified party in connection with the defense thereof (other than the reasonable costs of investigation) unless the indemnified party shall have employed separate counsel in accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (together with one local counsel (in each applicable jurisdiction)), which shall be selected by the Representative (in the case of counsel representing the Initial Purchasers or their related persons), representing the indemnified parties who are parties to such action) or the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying party.
vvv.
Settlements. The indemnifying party under this Section 9 shall not be liable for any settlement of any proceeding effected without its written consent (not to be unreasonably withheld), but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding and does not include any statements as to or any findings of fault, culpability or failure to act by or on behalf of any indemnified party.
10.
Contribution. If the indemnification provided for in Section 9 hereof is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein (other than by virtue of the failure of an indemnified party to notify the indemnifying party of its right to indemnification pursuant to Section 9(c) hereof, where the indemnifying party is materially prejudiced by such failure (through the forfeiture of substantive rights and defenses)), then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein in such proportion as is appropriate to reflect the relative benefits received by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, from the Offering or if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative
25
benefits received by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in connection with the Offering shall be deemed to be in the same respective proportions as the total net proceeds from the Offering (before deducting expenses) received by the Issuers and the Surviving Issuers, and the total discount and expense reimbursements received by the Initial Purchasers bear to the aggregate initial offering price of the Securities. The relative fault of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, on the one hand, or the Initial Purchasers, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 9 herein, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The provisions set forth in Section 9 herein with respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 10; provided, however, that no additional notice shall be required with respect to any action for which notice has been given under Section 9 herein for purposes of indemnification.
The Issuers, the Escrow Guarantor and the Initial Purchasers agree and, upon execution and delivery of the Joinder Agreement, each Surviving Issuers and each Guarantor will agree, that it would not be just and equitable if contribution pursuant to this Section 10 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 10.
Notwithstanding the provisions of this Section 10, no Initial Purchaser shall be required to contribute any amount in excess of the discount received by such Initial Purchaser in connection with the Securities distributed by it. No person guilty of fraudulent misrepresentation (within the meaning of Section 11 of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers’ obligations to contribute pursuant to this Section 10 are several, and not joint, in proportion to their respective commitments as set forth opposite their names in Annex A. For purposes of this Section 10, each affiliate, director, officer and employee of such Initial Purchaser and each person, if any, who controls such Initial Purchaser within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as such Initial Purchaser, and each employee, director or officer of any Issuer, the Escrow Guarantor, any Surviving Issuer or any Guarantor, and each person, if any, who controls any Issuer, the Escrow Guarantor, any Surviving Issuer or any Guarantor within the meaning of the Securities Act and the Exchange Act, shall have the same rights to contribution as the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors.
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11.
Termination of This Agreement. Subsequent to the execution and delivery of this Agreement, this Agreement may be terminated by the Representative by notice given to the Issuers if at any time there shall have occurred any of the following: trading in securities generally on the New York Stock Exchange or the NASDAQ Global Select Market has been suspended or minimum prices shall have been established on any such exchange or such market by the Commission, by such exchange or by any other regulatory body or governmental authority having jurisdiction; trading or quotation in any of the Parent’s or Issuers’ securities (if any) on the New York Stock Exchange shall have been suspended or limited, a banking moratorium has been declared by Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by Congress or any other national or international calamity, crisis or emergency if, in the judgment of the Representative (other than any defaulting Initial Purchaser under Section 19 hereof), the effect of any such attack, outbreak, escalation, act, declaration, calamity, crisis or emergency makes it impractical or inadvisable to proceed with completion of the Offering; or the occurrence of any other calamity, crisis (including, without limitation, as a result of terrorist activities), or material adverse change in general economic, political or financial conditions (or the effect of international conditions on the financial markets in the United States shall be such) as to make it, in the judgment of the Representative (other than any defaulting Initial Purchaser under Section 19 hereof), impracticable or inadvisable to proceed with the Offering or the delivery of the Notes being delivered on the Closing Date on the terms and in the manner contemplated by the Pricing Disclosure Package and the Final Offering Memorandum. Any termination pursuant to this Section 11 shall be without liability on the part of any party to any other party, except that Section 5, Section 7, Section 9, Section 10, Section 17 and Section 21 shall at all times be effective and shall survive such termination.
12.
Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations and warranties of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, their respective officers and the several Initial Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Initial Purchaser, any Issuer, the Escrow Guarantor, any Surviving Issuer or any Guarantor or any of its or their partners, officers or directors or any controlling person, as the case may be, and will survive delivery of and payment for the Securities sold hereunder and any termination of this Agreement.
13.
Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered, couriered or facsimiled and confirmed to the parties hereto as follows:
If to the Initial Purchasers:
Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005
Attention: Leveraged Debt Capital Markets, Second Floor
Facsimile: (212) 797-4877
with a copy to the attention of the General Counsel, 36th Floor; Facsimile: (212) 797-4561
with a copy to:
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
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Attention: Marcel Fausten
Facsimile: (212) 701-5111
If to the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors:
Hilton Grand Vacation Inc.
6355 MetroWest Boulevard, Suite 180
Orlando, Florida 32835
Facsimile: (703) 883-6188
Attention: Charles R. Corbin, Executive Vice President and General Counsel
with a copy to:
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attention: Jonathan Ozner
Facsimile: (212) 455-2502
Alston & Bird LLP
950 F Street, NW
Washington, DC 20004
Attention: Alexander J. Park
Facsimile: (202) 239-3333
Any party hereto may change the address or facsimile number for receipt of communications by giving written notice to the others.
14.
Recognition of the U.S. Special Resolution Regimes.
www.
In the event that any Initial Purchaser that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Initial Purchaser of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
xxx.
In the event that any Initial Purchaser that is a Covered Entity or a BHC Act Affiliate of such Initial Purchaser becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Initial Purchaser are per-mitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
yyy.
For the purpose of this Section 14:
“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity” means any of the following:
28
(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
15.
Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of the indemnified parties referred to in Section 9 and Section 10 hereof, and in each case their respective successors, and no other person will have any right or obligation hereunder. The term “successors” shall not include any purchaser of the Securities as such from any of the Initial Purchasers merely by reason of such purchase.
16.
Partial Unenforceability. The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.
17.
Governing Law Provisions. THIS AGREEMENT, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
18.
Representations of the Initial Purchasers. The Representative will act for the several Initial Purchasers in connection with the purchase of the Securities, and any action under this Agreement taken by the Representative will be binding upon all of the Initial Purchasers.
19.
Default of One or More of the Several Initial Purchasers. If any one or more of the Initial Purchasers shall fail or refuse to purchase Securities that it or they have agreed to purchase hereunder on the Closing Date, and the aggregate number of Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase does not exceed 10% of the aggregate number of the Securities to be purchased on such date, the other Initial Purchasers shall be obligated, severally, in the proportions that the number of Securities set forth opposite their respective names on Annex A bears to the aggregate number of Securities set forth opposite the names of all such non-defaulting Initial Purchasers, or in such other proportions as may be specified by the Initial Purchasers with the consent of the non-defaulting Initial Purchasers, to purchase the Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase on the Closing Date. If any one or more of the Initial Purchasers shall fail or refuse to purchase Securities and the aggregate number of Securities with respect to which such default occurs exceeds 10% of the aggregate number of Securities to be purchased on the Closing Date, and arrangements satisfactory to the
29
Initial Purchasers and the Issuers for the purchase of such Securities are not made within 36 hours after such default, this Agreement shall terminate without liability of any party to any other party except that the provisions of Section 5, Section 7, Section 9 and Section 10 hereof shall at all times be effective and shall survive such termination. In any such case either the Initial Purchasers or the Issuers shall have the right to postpone the Closing Date, as the case may be, but in no event for longer than seven days in order that the required changes, if any, to the Offering Memorandum or any other documents or arrangements may be effected.
As used in this Agreement, the term “Initial Purchaser” shall be deemed to include any person substituted for a defaulting Initial Purchaser under this Section 19. Any action taken under this Section 19 shall not relieve any defaulting Initial Purchaser from liability in respect of any default of such Initial Purchaser under this Agreement.
20.
No Advisory or Fiduciary Responsibility. Each of the Issuers and the Escrow Guarantor acknowledges and agrees and, upon execution and delivery of the Joinder Agreement, each of the Surviving Issuers and each Guarantor will acknowledge and agree that: the purchase and sale of the Securities pursuant to this Agreement, including the determination of the offering price of the Securities and any related discounts and commissions, is an arm’s-length commercial transaction between the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, on the one hand, and the several Initial Purchasers, on the other hand, and the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated by this Agreement; in connection with each transaction contemplated hereby and the process leading to such transaction, each Initial Purchaser is and has been acting solely as a principal and is not the agent or fiduciary of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors or their respective affiliates, stockholders, creditors or employees or any other party; no Initial Purchaser has assumed or will assume an advisory or fiduciary responsibility in favor of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors with respect to any of the transactions contemplated hereby or the process leading thereto (irrespective of whether such Initial Purchaser has advised or is currently advising the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors on other matters) or any other obligation to the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors except the obligations expressly set forth in this Agreement; the several Initial Purchasers and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, and the several Initial Purchasers have no obligation to disclose any of such interests by virtue of any fiduciary or advisory relationship; and the Initial Purchasers have not provided any legal, accounting, regulatory or tax advice with respect to the Offering, and the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors have consulted their own legal, accounting, regulatory and tax advisors to the extent they deemed appropriate.
This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, on the one hand, and the several Initial Purchasers, or any of them, on the other hand with respect to the Offering. The Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors hereby waive and release, to the fullest extent permitted by law, any claims that the Issuers, the Escrow Guarantor, the Surviving Issuers or the Guarantors may have against the several Initial Purchasers with respect to any breach or alleged breach of fiduciary duty in connection with the purchase and sale of the Securities pursuant to this Agreement.
21.
Consent to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United States of America located in the City and County of New York or the
30
courts of the State of New York in each case located in the City and County of New York (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any Specified Court in a Related Proceeding, as to which such jurisdiction is non-exclusive) of the Specified Courts in any Related Proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any Related Proceeding brought in any Specified Court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any Related Proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any Specified Court that any Related Proceeding brought in any Specified Court has been brought in an inconvenient forum.
22.
Compliance with USA PATRIOT Act. In accordance with the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Initial Purchasers are required to obtain, verify and record information that identifies their respective clients, including the Issuers, the Escrow Guarantor, the Surviving Issuers and the Guarantors, which information may include the name and address of their respective clients, as well as other information that will allow the Initial Purchasers to properly identify their respective clients.
23.
General Provisions. This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. The section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.
[Remainder of Page Intentionally Blank]
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If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Parent the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.
Very truly yours,
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Hilton Grand Vacations Borrower Escrow, LLC
By: Hilton Grand Vacations Borrower LLC,
its Managing Member and Sole Member
By: Hilton Grand Vacations Parent LLC,
its Managing Member and Sole Member
By: Hilton Grand Vacations Inc.,
its Managing Member and Sole Member
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By:
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/s/ Ben Loper
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|
|
Name: Ben Loper
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|
|
Title: Vice President
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Hilton Grand Vacations Borrower Escrow, Inc.
|
|
By:
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/s/ Ben Loper
|
|
|
Name: Ben Loper
|
|
|
Title: Vice President and Treasurer
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|
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|
|
Hilton Grand Vacations Borrower LLC
By: Hilton Grand Vacations Parent LLC,
its Managing Member and Sole Member
By: Hilton Grand Vacations Inc.,
its Managing Member and Sole Member
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By:
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/s/ Ben Loper
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|
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Name: Ben Loper
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|
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Title: Vice President
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The foregoing Purchase Agreement is hereby confirmed and accepted by the Initial Purchasers as of the date first above written.
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Deutsche Bank Securities, Inc.
Acting on behalf of itself
and as the Representative of
the several Initial Purchasers
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By:
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Deutsche Bank Securities, Inc.
|
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By:
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/s/ Shaun Ryan
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|
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Name: Shaun Ryan
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|
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Title: Director
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By:
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/s/ Ryan Corning
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Name: Ryan Corning
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Title: Managing Director
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ANNEX A
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Initial Purchasers
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Aggregate Principal Amount of Notes to be Purchased
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Deutsche Bank Securities Inc.
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$ 122,500,000
|
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BofA Securities, Inc.
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$ 110,000,000
|
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Barclays Capital Inc.
|
$ 110,000,000
|
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Credit Suisse Securities (USA) LLC
|
$ 21,250,000
|
|
Goldman Sachs & Co. LLC
|
$ 21,250,000
|
|
J.P. Morgan Securities LLC
|
$ 21,250,000
|
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MUFG Securities Americas Inc.
|
$ 21,250,000
|
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Citizens Capital Markets, Inc.
|
$ 15,000,000
|
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Fifth Third Securities, Inc.
|
$ 15,000,000
|
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Regions Securities LLC
|
$ 15,000,000
|
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Wells Fargo Securities, LLC
|
$ 15,000,000
|
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HSBC Securities (USA) Inc.
|
$ 6,250,000
|
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Mizuho Securities USA LLC
|
$ 6,250,000
|
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Total
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$500,000,000
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34
ANNEX B
Resale Pursuant to Regulation S or Rule 144A. Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that:
Such Initial Purchaser has not offered or sold and will not offer or sell the Securities in the United States or to, or for the benefit or account of, a U.S. person (other than a distributor), in each case, as defined in Rule 902 of Regulation S (i) as part of its distribution at any time and (ii) otherwise until 40 days after the later of the commencement of the Offering and the Closing Date, other than in accordance with Regulation S or another exemption from the registration requirements of the Securities Act. Such Initial Purchaser agrees that, during such 40-day restricted period, it will not cause any advertisement with respect to the Securities (including any “tombstone” advertisement) to be published in any newspaper or periodical or posted in any public place and will not issue any circular relating to the Securities, except such advertisements as are permitted by and include the statements required by Regulation S.
Such Initial Purchaser agrees that, at or prior to confirmation of a sale of Securities by it to any distributor, dealer or person receiving a selling concession, fee or other remuneration during the 40-day restricted period referred to in Rule 903 of Regulation S, it will send to such distributor, dealer or person receiving a selling concession, fee or other remuneration a confirmation or notice to substantially the following effect:
“The Securities covered hereby have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered and sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of your distribution at any time or (ii) otherwise until 40 days after the later of the date the Securities were first offered to persons other than distributors in reliance upon Regulation S and the Closing Date, except in either case in accordance with Regulation S under the Securities Act (or in accordance with Rule 144A under the Securities Act or to accredited investors in transactions that are exempt from the registration requirements of the Securities Act), and in connection with any subsequent sale by you of the Securities covered hereby in reliance on Regulation S under the Securities Act during the period referred to above to any distributor, dealer or person receiving a selling concession, fee or other remuneration, you must deliver a notice to substantially the foregoing effect. Terms used above have the meanings assigned to them in Regulation S under the Securities Act.”
None of such Initial Purchaser or any of its affiliates or any other person acting on its or their behalf has engaged or will engage in any directed selling efforts with respect to the Securities.
In connection with cash resale pursuant to Rule 144A, such Initial Purchaser has taken or will take reasonable steps to ensure that each purchaser of Securities is aware that such sale is being made in reliance on Rule 144A.
Such Initial Purchaser agrees that the Securities offered and sold in reliance on Regulation S will be represented upon issuance by a global security that may not be exchanged for definitive securities until the expiration of the 40 day restricted period referenced in Rule 903 of Regulation S and only upon certification of beneficial ownership of such Securities by non-U.S. persons or U.S. persons who purchased such Securities in transactions that were exempt from the registration requirements of the Securities Act.
35
36
SCHEDULE I-1
Anticipated Subsidiary Guarantors (Existing Parent Subsidiaries)
|
|
|
|
Entity Name
|
Jurisdiction
|
|
HILTON GRAND VACATIONS PARENT LLC
|
Delaware
|
|
HILTON GRAND VACATIONS INC.
|
Delaware
|
|
48TH STREET HOLDING LLC
|
Delaware
|
|
GRAND VACATIONS REALTY, LLC
|
Delaware
|
|
GRAND VACATIONS TITLE, LLC
|
Delaware
|
|
HILTON GRAND VACATIONS CLUB, LLC
|
Delaware
|
|
HILTON GRAND VACATIONS COMPANY, LLC
|
Delaware
|
|
HILTON GRAND VACATIONS FINANCING, LLC
|
Delaware
|
|
HILTON GRAND VACATIONS MANAGEMENT, LLC
|
Nevada
|
|
HILTON KINGSLAND 1, LLC
|
Delaware
|
|
HILTON RESORTS CORPORATION
|
Delaware
|
|
HILTON TRAVEL, LLC
|
Delaware
|
|
HRC ISLANDER LLC
|
Delaware
|
|
GRAND VACATIONS SERVICES LLC
|
Delaware
|
|
HILTON RESORTS MARKETING CORP.
|
Delaware
|
|
2400 PRINCE EDWARD, LLC
|
Delaware
|
|
CUSTOMER JOURNEY, LLC
|
Delaware
|
|
KUPONO PARTNERS LLC
|
Hawaii
|
37
SCHEDULE I-2
Anticipated Subsidiary Guarantors (Diamond Entities)
|
|
|
|
Entity Name
|
Jurisdiction
|
|
Diamond Resorts International, Inc.
|
Delaware
|
|
AB Blue Acquisition, LLC
|
Delaware
|
|
AHC Professionals US Majority, LLC
|
Nevada
|
|
AHC Professionals US Minority, LLC
|
Nevada
|
|
AKGI St. Maarten N.V.
|
Delaware/Dutch West Indies
|
|
Crescent One, LLC
|
Florida
|
|
DestinationXchange, LLC
|
Delaware
|
|
Diamond Asia Development, Inc.
|
Delaware
|
|
Diamond Resorts Beach Quarters Development, LLC
|
Delaware
|
|
Diamond Resorts Beachwoods Development, LLC
|
Delaware
|
|
Diamond Resorts Boardwalk Development, LLC
|
Delaware
|
|
Diamond Resorts California Collection Development, LLC
|
Delaware
|
|
Diamond Resorts Centralized Services Company
|
Delaware
|
|
Diamond Resorts Citrus Share Holding, LLC
|
Delaware
|
|
Diamond Resorts Coral Sands Development, LLC
|
Delaware
|
|
Diamond Resorts Corporation
|
Maryland
|
|
Diamond Resorts Cypress Pointe I Development, LLC
|
Delaware
|
|
Diamond Resorts Cypress Pointe II Development, LLC
|
Delaware
|
|
Diamond Resorts Cypress Pointe III Development, LLC
|
Delaware
|
|
Diamond Resorts Desert Isle Development, LLC
|
Nevada
|
|
Diamond Resorts Developer and Sales Holding Company
|
Delaware
|
|
Diamond Resorts DPM Development, LLC
|
Nevada
|
|
Diamond Resorts Epic Mortgage Holdings, LLC
|
Delaware
|
|
Diamond Resorts Fall Creek Development, LLC
|
Delaware
|
|
Diamond Resorts Finance Holding Company
|
Delaware
|
|
Diamond Resorts Franz Klammer Development, LLC
|
Delaware
|
|
Diamond Resorts GK Development, LLC
|
Delaware
|
|
Diamond Resorts Grand Beach I Development, LLC
|
Delaware
|
|
Diamond Resorts Grand Beach II Development, LLC
|
Delaware
|
|
Diamond Resorts Greensprings Development, LLC
|
Delaware
|
|
Diamond Resorts Hawaii Collection Development, LLC
|
Delaware
|
|
Diamond Resorts Hilton Head Development, LLC
|
Delaware
|
|
Diamond Resorts Holdings, LLC
|
Nevada
|
|
Diamond Resorts International Club, Inc.
|
Florida
|
|
Diamond Resorts International Golf, LLC
|
Delaware
|
|
Diamond Resorts International Marketing, Inc.
|
California
|
|
Diamond Resorts International Marketing Mexico, LLC
|
Nevada
|
|
Diamond Resorts International, LLC
|
Nevada
|
|
Diamond Resorts IW Holding Company
|
Delaware
|
|
Diamond Resorts IW Resort Ownership U.S. Corporation
|
Delaware
|
|
Diamond Resorts IW Trading Company
|
Delaware
|
|
Diamond Resorts IW Ventures, Inc.
|
Delaware
|
|
Diamond Resorts Kona Development, LLC
|
Delaware
|
|
Diamond Resorts Kona II Development, LLC
|
Delaware
|
|
Diamond Resorts Las Vegas Development, LLC
|
Delaware
|
38
|
|
|
|
Diamond Resorts Management & Exchange Holding Company
|
Delaware
|
|
Diamond Resorts Management, Inc.
|
Arizona
|
|
Diamond Resorts MGV Development, LLC
|
Nevada
|
|
Diamond Resorts Mortgage Holdings, LLC
|
Delaware
|
|
Diamond Resorts Mystic Dunes Development, LLC
|
Nevada
|
|
Diamond Resorts Ocean Beach Club Development, LLC
|
Delaware
|
|
Diamond Resorts Oceanaire Development, LLC
|
Delaware
|
|
Diamond Resorts Palm Springs Development, LLC
|
Delaware
|
|
Diamond Resorts Poco Diablo Development, LLC
|
Delaware
|
|
Diamond Resorts Poipu Development, LLC
|
Delaware
|
|
Diamond Resorts Polo Development, LLC
|
Nevada
|
|
Diamond Resorts Port Royal Development, LLC
|
Delaware
|
|
Diamond Resorts Powhatan Development, LLC
|
Delaware
|
|
Diamond Resorts Rancho Manana Development, LLC
|
Delaware
|
|
Diamond Resorts Real Estate Academy, LLC
|
Delaware
|
|
Diamond Resorts Residual Assets Development, LLC
|
Delaware
|
|
Diamond Resorts Residual Assets Finance, LLC
|
Delaware
|
|
Diamond Resorts Residual Assets M&E, LLC
|
Delaware
|
|
Diamond Resorts Ridge on Sedona Development, LLC
|
Delaware
|
|
Diamond Resorts Ridge Pointe Development, LLC
|
Delaware
|
|
Diamond Resorts River Club Development, LLC
|
Delaware
|
|
Diamond Resorts San Luis Bay Development, LLC
|
Delaware
|
|
Diamond Resorts Santa Fe Development, LLC
|
Delaware
|
|
Diamond Resorts Sapphire Valley Development, LLC
|
Delaware
|
|
Diamond Resorts Scottsdale Development, LLC
|
Delaware
|
|
Diamond Resorts Sedona Springs Development, LLC
|
Delaware
|
|
Diamond Resorts Sedona Summit Development, LLC
|
Delaware
|
|
Diamond Resorts St. Croix Development, LLC
|
Delaware
|
|
Diamond Resorts Steamboat Development, LLC
|
Delaware
|
|
Diamond Resorts Tahoe Beach & Ski Development, LLC
|
Delaware
|
|
Diamond Resorts Tahoe Seasons Development, LLC
|
Delaware
|
|
Diamond Resorts Teton Club Development, LLC
|
Nevada
|
|
Diamond Resorts Turtle Cay Development, LLC
|
Delaware
|
|
Diamond Resorts U.S. Collection Development, LLC
|
Delaware
|
|
Diamond Resorts U.S. Collection-Hawaii Development, LLC
|
Delaware
|
|
Diamond Resorts Villa Mirage Development, LLC
|
Delaware
|
|
Diamond Resorts Villas of Sedona Development, LLC
|
Delaware
|
|
Diamond Resorts West Maui Development, LLC
|
Delaware
|
|
Diamond Resorts, LLC
|
Nevada
|
|
DPM Acquisition, LLC
|
Delaware
|
|
DPM Holdings, LLC
|
Delaware
|
|
DPM RP Subsidiary, LLC
|
Delaware
|
|
Extraordinary Escapes Corporation
|
Delaware
|
|
Four C’s Hospitality, LLC
|
Nevada
|
|
Galaxy Exchange Company
|
Florida
|
|
George Acquisition Subsidiary, Inc.
|
Nevada
|
|
Grand Escapes, LLC
|
Delaware
|
|
Hospitality Management and Consulting Service, L.L.C.
|
Nevada
|
|
ILX Acquisition, Inc.
|
Delaware
|
|
ILX Acquisition, LLC
|
Delaware
|
|
International Timeshares Marketing, LLC
|
Delaware
|
39
|
|
|
|
Island One Development, LLC
|
Nevada
|
|
Lake Tahoe Resort Partners, LLC
|
California
|
|
Mazatlan Development Inc.
|
Washington
|
|
MMG Development Corp.
|
Florida
|
|
Mystic Dunes Myrtle Beach, LLC
|
Delaware
|
|
Mystic Dunes, LLC
|
Delaware
|
|
Navigo Vacation Club, Inc.
|
Florida
|
|
Poipu Resort Partners, L.P.
|
Hawaii
|
|
Resort Management International, Inc.
|
California
|
|
Resort Ventures, L.P.
|
California
|
|
Resorts Development International, Inc.
|
Nevada
|
|
Tempus Acquisition, LLC
|
Delaware
|
|
Tempus Holdings, LLC
|
Delaware
|
|
Vacation OTA, LLC
|
Nevada
|
|
West Maui Resort Partners, L.P.
|
Delaware
|
|
World Discovery Kids Club, LLC
|
Delaware
|
|
Diamond Resorts Financial Services, Inc.
|
Nevada
|
|
Bridgespire Financial Services, Inc.
|
Nevada
|
|
Diamond Resorts HK, LLC
|
Nevada
|
|
HK F&B Services, LLC
|
Delaware
|
|
Diamond Resorts Daytona Development, LLC
|
Delaware
|
|
Nevada HK F&B Services, LLC
|
Nevada
|
|
Florida Diamond Resorts Management, LLC
|
Florida
|
|
Island One Resorts Management Corporation
|
Florida
|
|
Island One, Inc.
|
Florida
|
|
Diamond Resorts Waikiki Development, LLC
|
Delaware
|
|
DR Modern Spa, LLC
|
Hawaii
|
|
Amber Group, Inc.
|
Florida
|
|
Amber Vacation Realty, Inc.
|
Florida
|
|
Amber Vacation Realty of Tennessee, Inc.
|
Tennessee
|
|
Poinciana Vacation Resorts, Inc.
|
Florida
|
|
Sunrise Ridge Resort, Inc.
|
Tennessee
|
|
Diamond Resorts St. Louis Development, LLC
|
Delaware
|
|
Diamond Resorts Kahana Development, LLC
|
Delaware
|
|
Diamond Resorts Real Estate Academy-Hawaii, LLC
|
Delaware
|
|
Diamond Resorts River Club Members, LLC
|
Delaware
|
40
EXHIBIT A
Pricing Supplement
P R I C I N G S U P P L E M E N T C O N F I D E N T I A L
$500,000,000
4.875% Senior Notes due 2031
__________________________
Pricing Supplement dated June 14, 2021
to the
Preliminary Offering Memorandum dated June 14, 2021
(the “Preliminary Offering Memorandum”)
This Pricing Supplement is qualified in its entirety by reference to the Preliminary Offering Memorandum. The information in this Pricing Supplement supplements the Preliminary Offering Memorandum and supersedes the information in the Preliminary Offering Memorandum to the extent inconsistent with the information in the Preliminary Offering Memorandum. Other information (including financial information) presented in the Preliminary Offering Memorandum is deemed to have changed to the extent affected by the changes described herein. Capitalized terms used herein but not defined shall have the meanings assigned to them in the Preliminary Offering Memorandum.
The total size of the offering has been increased from $425,000,000 to $500,000,000.
Concurrently with the closing of the offering of the 2031 Notes, the gross proceeds received from the issuance of the Notes, including the increase of $75,000,000 in the total offering size of the 2031 Notes, will be deposited into an Escrow Account, and the Issuer (as defined below) will agree to pay (the “HGV Escrow Guarantee”) an amount up to the amount necessary to fund the interest due on the 2031 Notes, including on such increased total offering size, from the Settlement Date (as defined below) to, but excluding, the Special Mandatory Redemption Date, which, when taken together with the Escrowed Funds, will be sufficient to fund the Special Mandatory Redemption Price of the 2031 Notes on the third business day following the Escrow End Date, if a Special Mandatory Redemption were to occur on such date. Upon satisfaction of the Escrow Release Conditions and release of the Escrowed Funds as described in the Preliminary Offering Memorandum, the net proceeds received from the increase of $75,000,000 in the total offering size are expected to be used to repay additional amounts outstanding under our Revolving Credit Facility (as defined in the Preliminary Offering Memorandum). If the Escrow Release Conditions are not satisfied, the gross proceeds received from the 2031 Notes, including from such increase of $75,000,000, will be used to redeem the 2031 Notes pursuant to the Special Mandatory Redemption as described under “Description of the Notes—Special Mandatory Redemption” in the Preliminary Offering Memorandum.
As a result of the increase in the aggregate principal amount of the 2031 Notes and the intended use of proceeds from such increase as described above, the aggregate principal amount to be outstanding under our Revolving Credit Facility following the consummation of the Transactions, on a pro forma basis, as set forth under “Capitalization,” “Unaudited Pro Forma Condensed Combined Financial Information of HGV and Diamond” and other sections of the Preliminary Offering Memorandum, is expected to be approximately $269,000,000. Corresponding changes will be deemed to be made wherever applicable throughout the Preliminary Offering Memorandum.
The 2031 Notes (as defined below) have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) or any other applicable securities laws, and are being offered and sold only to persons reasonably
41
believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act and to certain non-U.S. person in transactions outside the United States in reliance on Regulation S under the Securities Act.
|
|
|
|
Escrow Issuers and Issuers:
|
Hilton Grand Vacations Borrower Escrow, LLC and Hilton Grand Vacations Borrower Escrow, Inc. (collectively, the “Escrow Issuers”); their obligations to be assumed by Hilton Grand Vacations Borrower LLC (the “Issuer”) and Hilton Grand Vacations Borrower Inc., respectively (collectively with the Issuer, the “Issuers”).
|
|
Title of Securities:
|
4.875% Senior Notes due 2031 (the “2031 Notes”).
|
|
Principal Amount:
|
$500,000,000.
|
|
Final Maturity Date:
|
July 1, 2031.
|
|
Issue Price:
|
100.0%, plus accrued interest, if any, from June 28, 2021.
|
|
Coupon:
|
4.875%.
|
|
Yield to Maturity:
|
4.875%.
|
|
Spread to Benchmark Treasury:
|
+ 339 basis points
|
|
Benchmark Treasury:
|
1.625% UST due May 15, 2031
|
|
Interest Payment Dates:
|
January 1 and July 1.
|
|
Record Dates:
|
December 15 and June 15.
|
|
First Interest Payment Date:
|
January 1, 2022.
|
|
Optional Redemption:
|
The Issuers may, at their option, redeem at any time and from time to time prior to July 1, 2026, some or all of the 2031 Notes at 100% of the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, plus a “make-whole premium” calculated based on the applicable Treasury Rate + 50 bps.
From and after July 1, 2026, the Issuers may, at their option, redeem at any time and from time to time some or all of the 2031 Notes at the following redemption prices (expressed as a percentage of the principal amount of the 2031 Notes to be redeemed), plus accrued and unpaid interest to, but excluding, the redemption date, if redeemed during the 12-month period beginning on July 1 of each of the years set forth below:
Year Percentage
2026.............................. 102.438%
2027.............................. 101.625%
2028.............................. 100.813%
2029 and thereafter....... 100.000%
|
42
|
|
|
|
|
|
|
Optional Redemption with Equity Proceeds:
|
On or prior to July 1, 2024, the Issuers may, at their option, redeem an aggregate principal amount of the 2031 Notes not to exceed the net cash proceeds from certain equity offerings at the redemption price of 104.875% of the principal amount of the 2031 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date; provided that the amount to be redeemed shall not exceed 40% of the aggregate principal amount of the 2031 Notes.
|
|
Change of Control Triggering Event:
|
Put right at 101% of the aggregate principal amount of the 2031 Notes, plus accrued and unpaid interest to, but excluding, the repurchase date.
|
|
CUSIP Numbers/ISINs:
|
144A: 43284M AB4 / US43284MAB46
Reg S: U4329K AB4 / USU4329KAB45
|
|
Ratings*:
|
B2 (Moody’s) / B- (S&P) / BB- (Fitch)
|
|
Escrow of Gross Proceeds; Mandatory Redemption:
|
Concurrently with the closing of the offering of the 2031 Notes, the Escrow Issuers will deposit the gross proceeds of the offering into an Escrow Account and the Issuer will provide the HGV Escrow Guarantee.
If any Special Mandatory Redemption Event occurs, the Escrow Issuers will be required to redeem the 2031 Notes at a redemption price of 100% of the issue price of the 2031 Notes, plus accrued and unpaid interest to, but excluding, the redemption date. The Escrowed Funds would be released and applied to pay for such redemption.
|
|
Distribution:
|
144A and Reg S with no registration rights.
|
|
Bookrunners:
|
Deutsche Bank Securities Inc.
BofA Securities, Inc.
Barclays Capital Inc.
Credit Suisse Securities (USA) LLC
Goldman Sachs & Co. LLC
J.P. Morgan Securities LLC
MUFG Securities Americas Inc.
|
|
Co-Managers:
|
Citizens Capital Markets, Inc.
Fifth Third Securities, Inc.
Regions Securities LLC
Wells Fargo Securities, LLC
HSBC Securities (USA) Inc.
Mizuho Securities USA LLC
|
|
Trade Date:
|
June 14, 2021
|
43
|
|
|
|
Settlement Date:
|
June 28, 2021 (T+10) (the “Settlement Date”)
The Escrow Issuers expect that delivery of the 2031 Notes will be made to investors on or about June 28, 2021, which will be the tenth business day following the date of pricing of the 2031 Notes (such settlement being referred to as “T+10”). Under Rule 15c6-1 under the Securities Exchange Act of 1934, as amended, trades in the secondary market are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade 2031 Notes prior to the second business day before the delivery of the 2031 Notes will be required, by virtue of the fact that the 2031 Notes will not initially settle in T+2, to specify an alternate settlement arrangement at the time of any such trade to prevent a failed settlement. Purchasers of the 2031 Notes who wish to trade the 2031 Notes prior to their date of delivery hereunder should consult their advisors.
|
* A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
This material is confidential and is for your information only and is not intended to be used by anyone other than you. This information does not purport to be a complete description of the 2031 Notes or the offering. Please refer to the Preliminary Offering Memorandum for a complete description.
This communication is being distributed solely to persons reasonably believed to be qualified institutional buyers, as defined in Rule 144A under the Securities Act, and to non-U.S. persons outside the United States, as defined under Regulation S.
This communication does not constitute an offer to sell the 2031 Notes and is not a solicitation of an offer to buy the 2031 Notes in any jurisdiction where the offer or sale is not permitted.
Any disclaimers or other notices that may appear below are not applicable to this communication and should be disregarded. Such disclaimers or other notices were automatically generated as a result of this communication being sent via Bloomberg email or another communication system.
44
EXHIBIT C
Form of Joinder Agreement
$500,000,000 of 4.875% Senior Notes due 2031
WHEREAS, Hilton Grand Vacations Borrower LLC, Hilton Grand Vacations Borrower Escrow, LLC, a Delaware limited liability company, Hilton Grand Vacations Borrower Escrow, Inc., a Delaware corporation, and Deutsche Bank Securities, Inc. (the “Representative”), for itself and the other Initial Purchasers named in the Purchase Agreement referenced below (the “Initial Purchasers”), heretofore executed and delivered a Purchase Agreement, dated June 14, 2021 (the “Purchase Agreement”), providing for the issuance and sale of the Securities (as defined therein); and
WHEREAS, in connection therewith, the Surviving Issuers and each Guarantor (as defined in the Purchase Agreement) has agreed to join in the Purchase Agreement pursuant to this agreement (this “Joinder Agreement”) on the Completion Date.
Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Purchase Agreement.
NOW, THEREFORE, each Surviving Issuer and each Guarantor hereby agrees for the benefit of the Initial Purchasers, as follows:
1. Joinder. Each of the undersigned hereby acknowledges that it has received a copy of the Purchase Agreement and acknowledges and agrees with the Initial Purchasers that by its execution and delivery hereof it shall: (i) join and become a party to the Purchase Agreement; (ii) be bound by all covenants, agreements, representations, warranties and acknowledgements applicable to the Surviving Issuer, the Surviving Co-Issuer or a Guarantor, as applicable, in the Purchase Agreement as if made by such party as set forth in and in accordance with the terms of the Purchase Agreement; and (iii) perform all obligations and duties of the Surviving Issuer, the Surviving Co-Issuer or a Guarantor, as applicable, in accordance with the Purchase Agreement.
2. Representations and Warranties. The undersigned hereby represents and warrants to and agrees with the Initial Purchasers that it has all requisite corporate or limited liability company power and authority to execute, deliver and perform its obligations under the Transaction Agreements and it has duly and validly taken all necessary action for the consummation of the transactions contemplated hereby and by the Purchase Agreement.
3. Counterparts. This Joinder Agreement may be executed in two or more counterparts each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
4. Amendments. No amendment, modification or waiver of any provision of this Joinder Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by all of the parties thereto.
45
5. Headings. The section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Joinder Agreement.
6. GOVERNING LAW. THIS JOINDER AGREEMENT, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS JOINDER AGREEMENT, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
[Remainder of Page Intentionally Blank]
46
IN WITNESS WHEREOF, the undersigned has executed this agreement this____ day of _________________ 2021.
|
|
|
|
|
SUBSIDIARY GUARANTORS:
|
[___________]
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
SURVIVING ISSUER:
|
Hilton Grand Vacations Borrower LLC
|
|
|
By: __________________________________
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
SURVIVING CO-ISSUER:
|
Hilton Grand Vacations Borrower Inc.
|
|
|
By: __________________________________
|
|
|
Name:
|
|
|
Title:
|
47
The foregoing Joinder Agreement is hereby confirmed and accepted by the Initial Purchasers as of the date first above written.
|
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Deutsche Bank Securities, Inc.
Acting on behalf of itself
and as the Representative of
the several Initial Purchasers
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By:
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Deutsche Bank Securities, Inc.
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By:
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Name:
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Title:
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