Contract analysis

I. Introduction and Purpose This firm represents Verimark Hospitality Group Inc. ("VHG") and its subsidiary, Coral Palms Resort Holdings LLC (the "Borrower"), as borrower's counsel in connection with a proposed $160,000,000 first mortgage refinancing of the Coral Palms Grand Resort & Spa (the "Property"), located at 99000 Overseas Highway, Key Largo, Monroe County, Florida 33037. The Borrower is a Florida limited lia

II. Property Description For your reference and for use in coordinating with the applicable insurance carriers, the following is a description of the Property and its key characteristics: Property Name: Coral Palms Grand Resort & Spa Street Address: 99000 Overseas Highway, Key Largo, Monroe County, Florida 33037 Tax Folio Number: 00460780-000100 Property Type: Full-service luxury oceanfront resort hotel with conferen

III. Existing Insurance Carriers We understand that the following insurance carriers currently provide coverage on the Property. We ask that Castlegate confirm the accuracy of this information and, in particular, verify the current policy numbers, policy periods (including inception and expiration dates), and coverage limits for all existing policies: (a) Property, General Liability, and Windstorm Insurance: Southlan

IV. Summary of Lender's Insurance Requirements The following is a comprehensive summary of the insurance coverages required by PAC as conditions to the closing and ongoing maintenance of the proposed $160,000,000 first mortgage loan. These requirements are derived from the draft Loan Agreement circulated by Whitford Baines & Driscoll LLP on December 19, 2022, and from the lender's insurance requirements schedule atta

V. Required Endorsements and Policy Provisions In addition to the coverages described in Section IV above, the lender requires that specific endorsements and policy provisions be included in or added to the applicable insurance policies. The following is a summary of the required endorsements, each of which must be in place as of the closing date: 5.1 Mortgagee / Lender's Loss Payee Clause All property insurance poli

VI. Required Deliverables and Certificates We respectfully request that Castlegate procure and deliver the following documentation to Calderwood & Harkness LLP (with copies to lender's counsel at Whitford Baines & Driscoll LLP) as soon as practicable, and in any event prior to the anticipated closing date of the refinancing:

1. ACORD 28 — Evidence of Commercial Property Insurance for all property, windstorm, and flood insurance policies, reflecting all required mortgagee and loss payee endorsements naming Pinnacle Atlantic Capital, LLC as first mortgagee and loss payee as described in Section 5.1 above.

2. ACORD 25 — Certificate of Liability Insurance for the CGL, umbrella/excess liability, business automobile liability, and workers' compensation and employer's liability policies, reflecting all required additional insured endorsements naming Pinnacle Atlantic Capital, LLC as additional insured on a primary and non-contributory basis as described in Section 5.2 above.

3. Copies of All Required Endorsements, including the mortgagee clause endorsement, additional insured endorsement, waiver of subrogation endorsement, and notice of cancellation/non-renewal endorsement for each applicable policy, as described in Section V above.

4. Copies of Current Full Insurance Policies (or certified binders, if renewal policies have not yet been issued for the current policy period) for the following coverages: all-risk property, windstorm (if separate), flood (NFIP and excess), CGL, umbrella/excess liability, business income/loss of rents, workers' compensation and employer's liability, business automobile liability, equipment breakdown, and terrorism/T

5. Evidence of NFIP Flood Insurance, including the NFIP declarations page, and Bayfront Specialty Insurance Corp. Excess Flood Coverage, including the declarations page and evidence of policy limits sufficient to meet the lender's requirements.

6. Evidence of Terrorism/TRIA Coverage on all applicable property, business income, and liability policies, including confirmation that coverage is certified under the Terrorism Risk Insurance Act.

7. Written Confirmation of Compliance with all deductible caps and coverage limits specified in the draft Loan Agreement, including a comparison schedule showing the lender's required minimums alongside the Borrower's current coverage amounts and deductibles. We wish to note that lender's counsel at Whitford Baines & Driscoll LLP will conduct a thorough review of all insurance documentation submitted in connection wi

VII. Carrier Ratings and Acceptable Insurers The Loan Agreement requires that all insurance carriers providing coverage on the Property meet specified minimum financial strength rating requirements. Specifically, all insurers must maintain a rating of not less than A- (Excellent) from A.M. Best Company, with a Financial Size Category of VII or larger, or an equivalent rating from a nationally recognized statistical r

VIII. Coordination and Timing We wish to emphasize the time-sensitive nature of the insurance deliverables described in this letter. The closing of the $160,000,000 refinancing is being coordinated on an expedited basis, and the procurement and approval of compliant insurance documentation is a critical path item on the closing checklist. Any delays in obtaining the required endorsements, certificates, or policy docu

IX. Enclosures The following documents are enclosed herewith for your reference:

1. Excerpt of insurance requirements from the draft Loan Agreement (Article IX — Insurance), as circulated by Whitford Baines & Driscoll LLP on December 19, 2022.

2. Lender's insurance requirements schedule, provided as Exhibit F to the Commitment Letter dated November 14, 2022, between Pinnacle Atlantic Capital, LLC and Coral Palms Resort Holdings LLC.

3. Property description and key statistics for underwriting reference. We trust that the foregoing provides Castlegate with a comprehensive overview of the lender's insurance requirements for this transaction. Should you have any questions regarding the requirements set forth in this letter, the enclosed loan document excerpts, or the specific endorsement language required by the lender, please do not hesitate to con