Contract analysis

1. Unencumbered Status Confirmed. All eight (8) Collateral Properties listed above have been confirmed as unencumbered by Ironclad National Bank mortgage liens. Ironclad National Bank holds first-lien mortgages on the other eighteen (18) properties in the Coastal Palms portfolio (out of a total of twenty-two (22) properties), with an aggregate outstanding mortgage balance of approximately $94,000,000. The eight (8) p

2. Retained Franchise Properties. These eight (8) properties are the retained franchise properties under the Settlement Agreement and Mutual Release dated April 22, 2024. Pursuant to the Settlement Agreement, Coastal Palms Franchise Holdings LLC will continue to operate these properties under the Verimark Suites and/or Verimark Select brand families, subject to new ten (10)-year Franchise License Agreements ("FLAs")

3. Enhanced Audit Protocols. Each new FLA incorporates enhanced audit protocols, including: (a) quarterly financial audits (increased from annual audits under the prior franchise agreements); (b) real-time point-of-sale ("POS") integration with Verimark's proprietary revenue-management system, enabling the Secured Party to monitor Gross Room Revenue and other revenue metrics on a continuous basis; and (c) Coastal Pal

4. Addresses and Room Counts Pending. Specific street addresses and approximate room counts for each Collateral Property are pending confirmation from the client. Coordination is required with Deidre Langston, Senior Vice President, Franchise Operations, Verimark Hospitality Group Inc. Total room count across the entire twenty-two (22) property portfolio is approximately 3,740 rooms; the breakdown attributable to the

5. Ownership Entity Verification. The identity of the legal entity holding title to each Collateral Property — and the entity owning the personal property and fixtures located thereon — is subject to verification. It is possible that certain properties are held by Gulf Breeze Hospitality LLC or other property-level sub-entities rather than directly by Coastal Palms Franchise Holdings LLC. See Section 7 and Drafting N

6. Appraised Values. Individual appraised values for each Collateral Property are to be inserted upon receipt of final appraisal reports. The aggregate appraised value of $71,200,000 is based on preliminary appraisal data and is subject to confirmation. END OF DRAFT UCC-1 FINANCING STATEMENT This document is a DRAFT prepared by Calderwood & Harkness LLP for internal review purposes only. This draft is subject to atto