Extract to table

CONTRACTUAL OBLIGATIONS — REVENUE REPORTING AND PAYMENT Under each of the twenty-two FLAs, Coastal Palms is required to report Gross Room Revenue on a monthly basis and to remit the following payments to Verimark: (a) Royalty Fee

2 further provides that if such an audit reveals that the franchisee has underpaid amounts owed to Verimark by more than two percent (2%) of reported Gross Room Revenue for any audited period, the franchisee shall bear all costs of the audit, including reasonable fees and expenses of auditors and consultants retained by Verimark

2(c) expressly provides that "systematic underreporting of Gross Room Revenue shall constitute a material breach that is incapable of cure

Nothing in this letter, in the accompanying Notice of Material Breach, or in any prior or subsequent communication between the parties or their counsel shall be construed as a waiver, release, limitation, or modification of any of Verimark's rights, claims, or remedies, all of which are expressly and fully reserved

1 shall not be deemed a waiver of its rights under FLA Section 14