Contract analysis

1. Introduction and Background Calderwood & Harkness LLP ("C&H" or this "Firm") represents Verimark Hospitality Group Inc. ("VHG"), a corporation duly organized and existing under the laws of the State of Delaware, publicly listed on the New York Stock Exchange under the ticker symbol "VMRK," with its principal executive offices located at 8200 West Palmetto Park Road, Suite 1500, Boca Raton, Florida 33433, in its ca

2. Identification of Insured and Named Insured The named insured on each mortgagee title insurance policy issued in connection with the Term Loan B shall be: Crescent Harbor Bank, N.A., as Collateral Agent for the benefit of the Secured Parties (as such term is defined in the Credit Agreement) The policies shall insure the interest of Crescent Harbor Bank, N.A. solely in its capacity as Collateral Agent and not in it

3. Amount of Insurance The aggregate insured amount across all mortgagee title insurance policies to be issued in connection with the Term Loan B shall be Seven Hundred Million Dollars ($700,000,000), which represents the full principal amount of the Term Loan B as of the Closing Date. The insurance amount for each individual mortgagee title policy shall be allocated among the forty-two (42) mortgaged properties as s

4. Identification of Mortgaged Properties and Mortgagor Entities 4.1 Overview. The Term Loan B is secured by first-priority mortgage liens on forty-two (42) hotel properties located across twelve (12) states: Florida, New York, California, Texas, Georgia, Colorado, Arizona, Illinois, Washington, Oregon, Nevada, and Virginia. The properties comprise a diversified portfolio of full-service and select-service hotels, re

5. Required Form of Mortgagee Title Insurance Policies Each mortgagee title insurance policy issued in connection with the Term Loan B shall be in the form of an ALTA 2006 Loan Policy (06-17-06), or the most current ALTA Loan Policy form available and accepted in the applicable state at the time of issuance. In states where a modified or state-specific version of the ALTA Loan Policy form is required or customarily u

6. Required Endorsements The following endorsements are required for each mortgagee title insurance policy, to the extent available in the applicable state. Where a particular endorsement form is not available in a given state, CFTC shall provide the closest equivalent endorsement form, or shall issue an affirmative assurance or coverage modification within the body of the policy itself, in each case providing substa

1. ALTA 9.0 — Comprehensive (Restrictions, Encroachments, Minerals) or the applicable state equivalent, providing comprehensive coverage against loss arising from violations of covenants, conditions, and restrictions; encroachments of improvements onto easements or beyond boundary lines; and damage from the exercise of subsurface mineral rights.

2. ALTA 3.0 / 3.1 — Zoning. The ALTA 3.1 endorsement (for improved land with zoning compliance) is preferred for all properties. The endorsement shall confirm that the existing use of the property as a hotel is a permitted use under the applicable zoning ordinance and that the property complies with applicable zoning requirements, including setback, height, floor area ratio, and parking requirements. The ALTA 3.0 end

3. ALTA 4.0 / 4.1 — Condominium. This endorsement is required only for those properties that include condominium elements, as identified in Schedule A. If no property is subject to a condominium regime, this endorsement may be omitted.

4. ALTA 5.0 / 5.1 — Planned Unit Development. This endorsement is required only for those properties that are located within a planned unit development, as identified in Schedule A. If no property is part of a planned unit development, this endorsement may be omitted.

5. ALTA 6.0 / 6.2 — Variable Rate Mortgage. This endorsement is required for all policies, confirming coverage for the variable-rate nature of the interest rate applicable to the Term Loan B, which bears interest at Adjusted Term SOFR (as defined in the Credit Agreement) plus 375 basis points (3.75%) per annum. The endorsement shall insure that the variable interest rate provisions of the mortgage or deed of trust do

6. ALTA 8.1 — Environmental Protection Lien. This endorsement (or the applicable state equivalent, such as the Texas T-36 endorsement) shall provide coverage against loss arising from the existence of environmental protection liens, including liens arising under federal or state environmental laws (e.g., CERCLA, RCRA, or applicable state environmental lien statutes) that are given priority over the insured mortgage l

7. ALTA 9.0 — Restrictions, Encroachments, Minerals — Comprehensive Coverage. To the extent not duplicative of endorsement (1) above, this endorsement shall provide full mineral and subsurface rights coverage, insuring against loss or damage arising from the exercise of any right to extract or develop minerals, water, or other subsurface substances that may exist with respect to the insured property.

8. ALTA 11.0 / 11.2 — Mortgage Modification. This endorsement is not required at closing but shall be issued post-recording in the event that any amendments, modifications, or supplements are made to any mortgage or deed of trust after the original recording date. CFTC should note this requirement and confirm its willingness to issue such endorsements upon request.

9. ALTA 13.0 / 13.1 — Leasehold (Loan Policy). This endorsement is required for any mortgaged property held under a ground lease or long-term leasehold interest. Based on our current understanding, none of the forty-two (42) properties is held under a ground lease; however, CFTC should confirm this through its title search and, if any ground lease is identified, issue the appropriate ALTA 13.0 or 13.1 endorsement.

10. ALTA 14.0 / 14.3 — Future Advance. This endorsement shall confirm coverage for future advances under the Term Loan B, to the extent that the Credit Agreement or any related loan document contemplates additional advances, including any revolving or delayed-draw features. The endorsement shall insure that the lien of the mortgage secures all advances (whether obligatory or optional) made by the Lenders under the Cr

11. ALTA 17.0 / 17.2 — Access and Entry. This endorsement shall insure that each mortgaged property has actual vehicular and pedestrian access to and from a physically open and publicly maintained street or highway. The ALTA 17.2 form (insuring access to a specific street identified in the endorsement) is preferred where available.

12. ALTA 19.0 / 19.1 — Contiguity. This endorsement is required for any mortgaged property consisting of two or more contiguous parcels, as identified in Schedule A. The endorsement shall insure that the parcels are contiguous along specified boundaries and that there are no gaps or gores between or among such parcels.

13. ALTA 20.0 — First Loss. If available in the applicable jurisdiction, this endorsement shall be issued to facilitate the coordination of coverage across multiple policies in connection with the aggregate insured amount of $700,000,000. The ALTA 20.0 endorsement addresses first-loss allocation in co-insurance arrangements and is an important component of the tie-in/co-insurance structure described in endorsement (2

14. ALTA 22.0 — Location. This endorsement shall confirm that the land described in Schedule A of the policy is the same land identified on the applicable survey, as depicted and described thereon.

15. ALTA 25.0 / 25.1 — Same as Survey. This endorsement shall tie the legal description in the policy to the legal description shown on the applicable ALTA/NSPS survey, confirming that the two descriptions are identical or that the survey depicts the same land as that described in the policy. The ALTA 25.1 form, which also addresses the depiction of easements, is preferred where available.

16. ALTA 28.0 / 28.1 — Easement — Damage or Enforced Removal. This endorsement is required for any property where improvements encroach upon an easement or where there is a risk that improvements may be required to be removed due to the exercise of easement rights. CFTC should evaluate the applicability of this endorsement for each property based on the title search results and survey.

17. ALTA 32.0 / 32.1 — Construction Loan. This endorsement is required only for any mortgaged property that is currently undergoing construction, renovation, or improvement at a level that would implicate construction loan title insurance coverage. Based on our current understanding, none of the forty-two (42) properties is currently undergoing material construction; CFTC should confirm and, if applicable, issue the

18. ALTA 35.0 / 35.1 — Collateral Assignment of Beneficial Interest. For properties located in deed of trust states (California, Texas, Colorado, Arizona, Washington, Oregon, Nevada, and Virginia), this endorsement shall insure against loss arising from a collateral assignment of the beneficial interest in the deed of trust.

19. Usury Endorsement. Where available under applicable state law, a usury endorsement shall be issued insuring that the interest rate charged under the Term Loan B does not violate applicable usury laws and that any such violation would not impair the enforceability or priority of the insured lien.

20. Tax Parcel Endorsement. This endorsement shall confirm that the land described in the policy is assessed for real property tax purposes under a specified tax parcel identification number (or numbers), and that no other land is included within such tax parcel. This endorsement supports the Agent's ability to monitor real property tax payments and ensure compliance with the Credit Agreement's tax covenant.

21. Tie-In / Co-Insurance Endorsement. A tie-in or co-insurance endorsement shall be issued in connection with each individual policy to aggregate coverage across all forty-two (42) properties up to the full $700,000,000 aggregate policy amount. The effect of this endorsement shall be that, in the event of a loss or claim affecting any one or more of the mortgaged properties, the insured may recover up to the full ag

7. Release / Discharge of Existing Greystone Liens As described in Section 1 above, the proceeds of the Term Loan B will be used in part to refinance in full the Existing Term Loan B, which was originated on February 14, 2020, with Greystone Federal Credit Corp. ("Greystone") serving as administrative agent. The Existing Term Loan B is secured by mortgages, deeds of trust, and security deeds on the same forty-two (42

8. Survey Requirements Updated ALTA/NSPS surveys have been ordered and are being obtained for each of the forty-two (42) mortgaged properties in connection with the Term Loan B transaction. Surveys for certain properties have already been completed and delivered to the parties; the remaining surveys are in progress and are expected to be completed no later than July 25, 2022. Each survey must comply in all respects w

9. Flood Zone Determinations Standard flood zone determinations (FEMA flood zone certifications) are required for each of the forty-two (42) mortgaged properties. The flood zone determinations shall be performed by a FEMA-recognized flood zone determination provider and shall identify, for each property, the applicable flood zone classification(s), the FEMA Flood Insurance Rate Map ("FIRM") community panel number(s),

10. Title Searches and Exceptions CFTC is instructed to conduct full and complete title searches for each of the forty-two (42) mortgaged properties. The scope of each title search shall encompass the applicable statutory period under the law of the state in which the property is located, or a minimum period of fifty (50) years if no specific statutory period is prescribed. The title search for each property shall in

11. Delivery and Timing The following delivery schedule applies to the title-related deliverables in connection with the Term Loan B: July 18, 2022 (Three Business Days Before Closing): CFTC is requested to deliver marked-up title commitments for all forty-two (42) mortgaged properties, reflecting the current state of title and all proposed exceptions, together with copies of all exception documents referenced therei

12. Premium and Fee Instructions Title insurance premiums and endorsement fees incurred in connection with the issuance of the mortgagee title insurance policies and endorsements described herein are the responsibility of the Borrower, VHG, as specified in Section 10.04 of the Credit Agreement. The Borrower has agreed to pay all title insurance charges, search fees, survey costs, recording fees, and related expenses

13. Contact Information for Coordination For purposes of coordination on all title-related matters in connection with the Term Loan B, the following contacts are designated: Calderwood & Harkness LLP (Borrower's Counsel): Sophie Tremblay, Lead Associate Telephone: (212) 555-7822 Email: sophie.tremblay@calderwoodharkness.com Daniel Obi, Associate Telephone: (212) 555-7835 Email: daniel.obi@calderwoodharkness.com Verim

14. Authorization and Reservation of Rights This letter constitutes CFTC's authorization to proceed immediately with (a) full title searches for all forty-two (42) mortgaged properties, (b) preparation and issuance of marked-up title commitments, (c) coordination of the recording and release of existing Greystone liens, and (d) issuance of all mortgagee title insurance policies and endorsements described herein, in e