Contract analysis

ARTICLE I — DEFINITIONS AND RECITALS

Section 1.1 — Parties Mortgagor. PALMETTO BEACHFRONT HOTELS LLC, a Florida limited liability company, having its principal office at 8200 West Palmetto Park Road, Suite 1500, Boca Raton, Florida 33433 (the "Mortgagor"). Mortgagor is a wholly owned subsidiary of Verimark Hospitality Group Inc., a Delaware corporation ("VHG" or the "Borrower"). Mortgagor was organized under the laws of the State of Florida and has been

Section 1.2 — Recitals WHEREAS, Verimark Hospitality Group Inc. ("Borrower"), a Delaware corporation listed on the New York Stock Exchange under the ticker symbol "VMRK," has entered into that certain Credit Agreement dated as of July 21, 2022 (as the same may be amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among the Borrower, the Guarantors party thereto (includi

Section 1.3 — Defined Terms Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement dated as of July 21, 2022. For convenience of reference, the following terms shall have the following meanings when used in this Mortgage: "Administrative Agent" means Crescent Harbor Bank, National Association, in its capacity as administrative agent under the Cre

Section 1.4 — Rules of Construction (a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine, and neuter forms. The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation." The word "will" shall be construed to ha

Section 2.1 — Grant of Mortgage Lien Palmetto Beachfront Hotels LLC, in consideration of the premises and for good and valuable consideration, including the making of the Term Loan B in the aggregate principal amount of Seven Hundred Million Dollars ($700,000,000) to the Borrower under the Credit Agreement, the guarantee obligations assumed by Palmetto Beachfront Hotels LLC under the Guarantee Agreement, and the sum

Section 2.2 — Habendum Clause TO HAVE AND TO HOLD the Mortgaged Property, together with all and singular the rights, privileges, and appurtenances thereunto belonging or in anywise appertaining, unto Crescent Harbor Bank, National Association, as Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, forever; PROVIDED, HOWEVER, that if the Borrower and the Guarantors (including Palmetto

Section 2.3 — Secured Obligations This Mortgage is given to secure the full and prompt payment, performance, and observance of each and all of the following (collectively, the "Secured Obligations"): (i) All principal, interest (including interest accruing at the applicable rate, as well as default interest at the applicable rate plus two hundred (200) basis points per annum), fees, premiums, and all other amounts ow

ARTICLE III — REPRESENTATIONS, WARRANTIES, AND COVENANTS OF MORTGAGOR Palmetto Beachfront Hotels LLC hereby represents, warrants, and covenants to and with the Collateral Agent (for the benefit of the Secured Parties) as follows:

Section 3.1 — Title and Ownership Palmetto Beachfront Hotels LLC represents and warrants that it is the owner of and holds good and marketable fee simple title to each of the twelve (12) Mortgaged Properties described in Exhibit A attached hereto, free and clear of all liens, encumbrances, claims, charges, security interests, and defects of title of any kind whatsoever, except for Permitted Liens (as defined in the C

Section 3.2 — Authority and Enforceability (a) Palmetto Beachfront Hotels LLC is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Florida, and has all requisite power and authority to own its properties and to carry on its business as now conducted and as proposed to be conducted. (b) The execution, delivery, and performance by Palmetto Beachfront Hotel

Section 3.3 — No Conflicts The execution, delivery, and performance of this Mortgage by Palmetto Beachfront Hotels LLC does not and will not: (a) violate, contravene, or conflict with the articles of organization, operating agreement, or other organizational documents of Palmetto Beachfront Hotels LLC; (b) violate, contravene, or conflict with any law, statute, rule, regulation, order, judgment, injunction, decree, o

Section 3.4 — Payment of Obligations Palmetto Beachfront Hotels LLC covenants and agrees that it shall cause the Borrower (Verimark Hospitality Group Inc.) to promptly pay and perform the Obligations when due and payable, in accordance with the terms of the Credit Agreement and the other Loan Documents, including, without limitation: (a) quarterly amortization payments in the amount of One Million Seven Hundred Fifty

Section 3.5 — Maintenance and Repair (a) Palmetto Beachfront Hotels LLC covenants and agrees to maintain and preserve each of the twelve (12) Mortgaged Properties in good order, condition, and repair, consistent with the standards of operation and maintenance of first-class hospitality properties of comparable size and quality in the relevant market. Palmetto Beachfront Hotels LLC shall promptly make all necessary re

Section 3.6 — Insurance (a) Palmetto Beachfront Hotels LLC covenants and agrees to obtain and maintain, at its sole cost and expense, insurance on the Mortgaged Properties in accordance with the requirements set forth in the Credit Agreement, including, without limitation: (i) property and casualty insurance (including coverage for fire, windstorm, hurricane, and extended coverage perils) in amounts not less than the

Section 3.7 — Taxes and Assessments (a) Palmetto Beachfront Hotels LLC covenants and agrees to pay and discharge, or cause to be paid and discharged, before the same shall become delinquent, all real estate taxes, assessments, water and sewer charges, governmental charges, and other impositions of every kind and nature levied, assessed, or imposed upon the Mortgaged Properties or any part thereof, or upon the revenue

Section 3.8 — Compliance with Laws (a) Palmetto Beachfront Hotels LLC covenants and agrees to comply, and to cause all persons occupying or using the Mortgaged Properties to comply, with all applicable federal, state, and local laws, statutes, ordinances, codes, rules, regulations, and requirements, including, without limitation: (i) all environmental laws, including the Comprehensive Environmental Response, Compensa

Section 3.9 — No Further Encumbrances Palmetto Beachfront Hotels LLC covenants and agrees that it will not create, incur, assume, or permit to exist any lien, mortgage, pledge, assignment, security interest, charge, or encumbrance on or with respect to the Mortgaged Properties or any part thereof, or any interest therein, or any rents, revenues, or other income therefrom, other than Permitted Liens as defined in the

Section 3.10 — Preservation of Lien Priority Palmetto Beachfront Hotels LLC covenants and agrees that it will take all actions and execute and deliver all documents reasonably necessary or desirable to maintain the first-priority lien of this Mortgage on the Mortgaged Properties, including, without limitation: (a) cooperating with the Collateral Agent in the recording of this Mortgage and any amendments, supplements,

Section 3.11 — Leasing Restrictions Palmetto Beachfront Hotels LLC covenants and agrees that it will not enter into any new lease, sublease, license, concession agreement, occupancy agreement, or hotel management agreement affecting any Mortgaged Property, or amend, modify, terminate, or surrender any existing Lease, except in accordance with the provisions of the Credit Agreement regarding Permitted Leases (as defin

Section 3.12 — Financial Reporting Palmetto Beachfront Hotels LLC covenants and agrees to comply, and to cause the Borrower to comply, with all financial reporting, compliance certificate, and information delivery obligations set forth in the Credit Agreement, including, without limitation, the delivery of (a) annual audited consolidated financial statements of the Borrower and its subsidiaries, (b) quarterly unaudit

ARTICLE IV — ASSIGNMENT OF LEASES AND RENTS

Section 4.1 — Assignment (a) As additional security for the Obligations, Palmetto Beachfront Hotels LLC hereby absolutely and unconditionally assigns, transfers, and sets over to the Collateral Agent, for the benefit of the Secured Parties, all of Palmetto Beachfront Hotels LLC's right, title, and interest in and to all Leases and all Rents now existing or hereafter arising with respect to the twelve (12) Mortgaged P

Section 4.2 — Revocation of License Upon Event of Default (a) Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may, without notice to Palmetto Beachfront Hotels LLC (to the extent permitted by applicable law) or with such notice as may be required by Florida Statutes § 697.07: (i) Revoke the License granted to Palmetto Beachfront Hotels LLC to collect Rents; (ii) Enter upon

Section 4.3 — Subordination of Management Agreements All hotel management agreements affecting the Mortgaged Properties shall be subordinate to this Mortgage. Palmetto Beachfront Hotels LLC shall use commercially reasonable efforts to cause each hotel manager, operator, or franchisor party to a hotel management agreement affecting any Mortgaged Property to enter into a subordination, non-disturbance, and attornment a

ARTICLE V — SECURITY AGREEMENT AND FIXTURE FILING

Section 5.1 — Grant of Security Interest In addition to the mortgage lien and assignment of leases and rents granted in Articles II and IV hereof, Palmetto Beachfront Hotels LLC hereby grants to Crescent Harbor Bank, National Association, as Collateral Agent for the benefit of the Secured Parties, a first-priority security interest (subject to Permitted Liens) in all personal property and fixtures located on, used in

Section 5.2 — Fixture Filing This Mortgage shall be filed for record as a fixture filing, pursuant to Florida Statutes § 679.5021, in the Official Records of each county in the State of Florida in which a Mortgaged Property is located. The following information is provided for fixture filing purposes: Name and Address of Debtor: Palmetto Beachfront Hotels LLC 8200 West Palmetto Park Road, Suite 1500 Boca Raton, Flori

Section 5.3 — Financing Statement Authorization Palmetto Beachfront Hotels LLC hereby authorizes the Collateral Agent, at the cost and expense of Palmetto Beachfront Hotels LLC, to file (and refile, as necessary) UCC financing statements, UCC continuation statements, and any amendments thereto, in any filing office as the Collateral Agent may determine, naming Palmetto Beachfront Hotels LLC as debtor and Crescent Har

ARTICLE VI — DEFAULTS AND REMEDIES

Section 6.1 — Events of Default Each of the following shall constitute an "Event of Default" under this Mortgage: any Event of Default as defined in the Credit Agreement. Without limiting the generality of the foregoing, the Events of Default include, but are not limited to: (a) Payment Default. Failure by the Borrower to pay any principal of the Term Loan B when due and payable, whether at stated maturity, upon mand

Section 6.2 — Remedies Upon Default Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent, acting at the direction of the Required Lenders (unless otherwise provided in the Credit Agreement), may exercise any one or more of the following remedies: (a) Acceleration. The Collateral Agent may declare all Obligations immediately due and payable (without presentment, demand, protest,

Section 6.3 — Application of Proceeds All proceeds received by the Collateral Agent from any foreclosure sale, exercise of remedies, collection of Rents, disposition of Personal Property Collateral, or otherwise in connection with the enforcement of this Mortgage shall be applied in the following order of priority: First, to the payment of all costs and expenses of foreclosure, sale, collection, and administration, i