Contract analysis

I. Purpose and Executive Summary This memorandum summarizes the status of ALTA/NSPS land title surveys and FEMA flood zone determinations for the forty-two (42) hotel properties (collectively, the "Mortgaged Properties") owned by Verimark Resort Properties LLC, a Delaware limited liability company ("VRP"), and Palmetto Beachfront Hotels LLC, a Florida limited liability company ("Palmetto"), that constitute the mortga

II. Background — Transaction Context A. Transaction Overview The refinancing transaction involves the establishment of a $700,000,000 Senior Secured Term Loan B facility (the "Term Loan B" or the "Facility") to replace the existing $625,000,000 term loan B facility (the "Existing TLB") that was originated on February 14, 2020, with Greystone Federal Credit Corp. ("Greystone") serving as the administrative agent under

III. Survey Methodology and Standards A. ALTA/NSPS Survey Requirements All surveys obtained for the forty-two Mortgaged Properties comply with the 2021 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys (the "2021 Standards"), jointly established by the American Land Title Association ("ALTA") and the National Society of Professional Surveyors ("NSPS"), effective February 23, 2021. The 2021 Standar

IV. Survey Status — Property-by-Property Summary A. Summary Table Structure A detailed property-by-property schedule setting forth the survey status for each of the forty-two (42) Mortgaged Properties is attached hereto as Exhibit A. The schedule is organized in tabular format and includes the following columns for each property: • Property Number / Identifier (e.g., FL-01 through FL-12; NY-01 through NY-06; etc.) •

V. Flood Zone Determinations — Methodology A. Flood Determination Standard Life-of-Loan Standard Flood Hazard Determination Forms ("SFHDFs"), as prescribed by FEMA, have been obtained for all forty-two (42) Mortgaged Properties. The flood determinations were performed by CoreFlood Services LLC, a qualified third-party flood certification vendor, in accordance with applicable federal law, including: • The National Flo

VI. Flood Zone Determination Results — Property-by-Property Summary A. Summary Table Structure A detailed property-by-property flood zone determination schedule is attached hereto as Exhibit B. The schedule is organized in tabular format and includes the following columns for each of the forty-two (42) Mortgaged Properties: • Property Number / Identifier • Property Name / Address • State / County • FEMA Community Num

VII. Flood Insurance Compliance Analysis A. Federal Mandatory Purchase Requirement Under the Flood Disaster Protection Act of 1973 (as amended), the National Flood Insurance Reform Act of 1994, and the Biggert-Waters Flood Insurance Reform Act of 2012, any building or manufactured (mobile) home (including any personal property securing the loan) located or to be located in a Special Flood Hazard Area in a community t

VIII. Borrower's Notice Obligations For each of the four (4) SFHA properties (FL-03, FL-07, FL-11, and TX-02), VHG has been provided written notice of the SFHA designation and the mandatory flood insurance purchase requirement, as required by applicable federal regulations. Specifically, under 42 U.S.C. § 4104a and the implementing regulations promulgated by the OCC (12 C.F.R. § 22.9), a regulated lending institution

IX. Outstanding Action Items and Post-Closing Deliverables A. Items Completed As of the date of this memorandum, the following survey and flood certification deliverables have been completed:

1. All forty-two (42) ALTA/NSPS surveys (34 recertifications and 8 new surveys) have been completed and delivered as of July 12, 2022.

2. All forty-two (42) Life-of-Loan Standard Flood Hazard Determinations have been completed and delivered by CoreFlood Services LLC.

3. All four (4) SFHA properties (FL-03, FL-07, FL-11, TX-02) have been confirmed to have active NFIP flood insurance policies in force with adequate coverage levels.

4. Written borrower notices regarding SFHA designation and mandatory flood insurance purchase requirements have been delivered to VHG for all four SFHA properties, and executed acknowledgments have been received and included in the closing deliverables package. B. Items Pending (Post-Closing — Due August 5, 2022) The following items remain outstanding as of the date of this memorandum and are required to be completed

1. Updated Flood Insurance Loss Payee/Mortgagee Endorsements (4 SFHA Properties). Loss payee/mortgagee endorsements on the NFIP flood insurance policies for Properties FL-03, FL-07, FL-11, and TX-02 must be updated to designate Crescent Harbor Bank, N.A. (as Collateral Agent) as the loss payee/mortgagee, replacing Greystone Federal Credit Corp. (the prior collateral agent under the Existing TLB). VHG's insurance brok

2. Corrective Instrument for Legal Description Gap — Property TX-01 (Houston, TX). A Correction Special Warranty Deed must be prepared and recorded to correct the minor 0.1-foot gap between the surveyed boundary and the recorded legal description at Property TX-01 (Houston, Harris County, Texas). Local Texas counsel (Whitfield & Moreno PLLC, Houston) is preparing the corrective instrument, which must be recorded in t

3. Final Surveyor Recertification Affidavits (3 Properties). Continental Fidelity Title Company has requested updated surveyor affidavits in a form specified by Continental Fidelity's underwriting department for three properties: FL-02 (Palm Beach County, Florida), NY-04 (Westchester County, New York), and CA-03 (Los Angeles County, California). The affidavits confirm that the surveyors personally visited the propert

4. Deadline. All of the foregoing items must be completed on or before August 5, 2022, in accordance with Section 2(a) of the Post-Closing Letter Agreement. Failure to timely deliver any such items shall constitute an Event of Default under Section 9.01(d) of the Credit Agreement, subject to a five (5) business day cure period as provided therein.

X. Recommendations Based on our review of the surveys and flood certifications for the forty-two Mortgaged Properties, we make the following recommendations:

1. Title Insurance Confirmation. Confirm with Continental Fidelity Title Company that all forty-two surveys are acceptable for issuance of the mortgagee title insurance policies and all survey-related endorsements (including ALTA 25 — Survey/Same as Survey, ALTA 28.2 — Encroachments, and other applicable endorsements) for the forty-two Mortgaged Properties. While Continental Fidelity has provided preliminary confirma

2. Flood Insurance Loss Payee Endorsement Coordination. Coordinate with VHG's insurance broker (Sundial Benefits Consulting) to ensure that the flood insurance loss payee/mortgagee endorsements for the four SFHA properties (FL-03, FL-07, FL-11, TX-02) are updated promptly following the recording of the new mortgages. We recommend that the deal team establish a tracking mechanism to monitor the status of these endorse

3. Corrective Instrument Monitoring. Monitor the preparation and recording of the Correction Special Warranty Deed for Property TX-01 (Houston, Harris County, Texas) to resolve the minor legal description gap identified in the new survey. Local Texas counsel (Whitfield & Moreno PLLC) should be contacted weekly to confirm progress and ensure timely recording by the August 5, 2022 deadline.

4. Permanent Closing Binder. Maintain copies of all flood determinations (SFHDFs), flood insurance evidence (policies, endorsements, and proof of coverage), surveys, and related documentation in the permanent closing binder maintained by the firm. The Administrative Agent may request copies of these materials in connection with its ongoing collateral monitoring obligations, and orderly maintenance of these records wi

5. Future Property Acquisitions. The Credit Agreement permits the Borrower to make certain permitted acquisitions (including hotel property acquisitions) funded with the incremental $75,000,000 in net proceeds from the Term Loan B. For any future property acquisition that will be added to the mortgaged collateral pool, similar survey and flood certification diligence will be required prior to the granting of a mortga

XI. Exhibits The following Exhibits are attached hereto and incorporated by reference into this memorandum: Exhibit A — Property-by-Property Survey Schedule Exhibit A contains a detailed table covering all forty-two (42) Mortgaged Properties with the following information for each property: Exhibit A is attached separately. Exhibit B — Property-by-Property Flood Zone Determination Schedule Exhibit B contains a detail