Contract analysis

1. Introduction and Purpose Calderwood & Harkness LLP writes on behalf of its clients, Verimark Hospitality Group Inc. ("VHG") and Coral Palms Resort Holdings LLC (the "Borrower"), in response to the revised term proposal (the "Repriced Terms") delivered by Pinnacle Atlantic Capital, LLC ("PAC") on January 27, 2023, with respect to the above-referenced proposed first mortgage loan (the "Loan") secured by the Coral Pa

2. Summary of PAC's Repriced Terms (January 27, 2023) For ease of reference and to establish a clear basis for comparison, VHG recites PAC's Repriced Terms as delivered on January 27, 2023, as follows: (a) Loan Amount: $139,000,000, reduced from the originally committed amount of $160,000,000, representing a loan-to-value ratio ("LTV") of approximately 72.40% based on the Appraised Value of $192,000,000. (b) Interest

3. VHG's Position on the Repriced Terms VHG views several elements of the Repriced Terms as commercially untenable, both individually and in combination. The Repriced Terms, taken as a whole, represent a fundamental departure from the economics and structure of the transaction as originally negotiated and committed by PAC. VHG's specific concerns are as follows. Rate Increase is Disproportionate. The 155 basis point

4. VHG's Counter-Proposal — Modified Terms VHG respectfully submits the following Counter-Proposal, which represents a good-faith effort to bridge the gap between the original Commitment Letter terms and the Repriced Terms on a basis that is commercially reasonable for both parties. 4.1 Loan Amount VHG proposes a loan amount of $145,000,000, which represents a compromise between the originally committed amount of $16

5. Summary Comparison Table The following table presents a side-by-side comparison of the original Commitment Letter terms, PAC's Repriced Terms, and VHG's Counter-Proposal for ease of reference: Note: Estimated net cash-out under VHG Counter-Proposal calculated as: $145,000,000 − $118,500,000 (Tidewater payoff) − $1,185,000 (prepayment premium) − $3,250,000 (estimated closing costs) − $4,800,000 (original upfront re

6. Timing and Process VHG notes that VHG's good faith deposit in the amount of $1,600,000 and rate lock deposit in the amount of $800,000 — a combined total of $2,400,000 — remain on deposit with Meridian Title & Escrow, Inc., held by Lisa Portman, Title Officer, located at 9100 South Dadeland Boulevard, Suite 1500, Miami, Florida 33156. VHG expects these deposits to continue to be held in accordance with the terms o

7. Reservation of Rights VHG and the Borrower expressly reserve all rights, claims, remedies, and defenses under the Commitment Letter dated December 9, 2022, including without limitation: (a) The right to terminate the Commitment Letter and the transactions contemplated thereby in accordance with the terms thereof; (b) The right to a refund of all deposits, including the good faith deposit and rate lock deposit, in

1. Summary comparison table (included in body of letter — Section 5)

2. Claybourne Advisory Group LLC preliminary appraisal review findings (to be transmitted separately upon completion of Claybourne's formal review) Term | Original Commitment (12/9/22) | PAC Repriced Terms (1/27/23) | VHG Counter-Proposal Loan Amount | $160,000,000 | $139,000,000 | $145,000,000 Interest Rate | 5.35% fixed | 6.90% fixed | 5.95% fixed LTV (at $192M Appraised Value) | 83.33% | 72.40% | 75.52% Debt Yield