Contract analysis

I. PURPOSE The purpose of this memorandum is to document the final disposition and closure of Matter No. 1021-00007, and to provide a comprehensive summary of the engagement, the underlying transaction, the reasons for the termination of the transaction, the financial settlement reached between the parties, Calderwood & Harkness LLP's ("C&H") fees and expenses incurred in connection with the engagement, and all file

II. ENGAGEMENT SUMMARY A. Client Information Verimark Hospitality Group Inc. VHG is a Delaware corporation, publicly traded on the Nasdaq Stock Market under the ticker symbol "VMRK." VHG's principal executive offices are located at 1400 Bayshore Boulevard, Suite 2200, Miami, Florida 33131. VHG is a hospitality and real estate company that owns and operates a portfolio of fourteen luxury and upscale resort properties

III. TRANSACTION OVERVIEW A. The Property The subject property in the Transaction is the Coral Palms Grand Resort & Spa, a full-service luxury oceanfront resort hotel with conference center, full-service spa, marina, and ancillary commercial uses, located at 99000 Overseas Highway, Key Largo, Monroe County, Florida 33037. Legal Description. The Property is legally described as a portion of Section 27, Township 60 Sou

IV. KEY DATES TIMELINE The following table sets forth a chronological listing of all significant dates in connection with the engagement and the Transaction:

V. APPRAISAL SHORTFALL AND REPRICING — SUMMARY OF EVENTS LEADING TO TERMINATION A. Appraisal Shortfall Pursuant to the terms of the Commitment Letter, PAC commissioned an independent appraisal of the Property from Hargrove & Whitley Valuation Services LLC ("Hargrove & Whitley"). The appraiser assigned to the engagement was Scott Tremaine, MAI, MRICS, a partner in Hargrove & Whitley's hospitality valuation practice, l

VI. DEPOSIT SETTLEMENT A. Deposit Dispute As of the date of termination, the total deposits held by Meridian Title & Escrow, Inc. in connection with the Transaction were $2,400,000, consisting of: (a) Good Faith Deposit: $1,600,000 (1.0% of the loan amount), deposited on December 12, 2022; and (b) Rate Lock Deposit: $800,000 (0.50% of the loan amount), deposited on January 5, 2023. Upon receipt of VHG's termination n

VII. CALDERWOOD & HARKNESS FEES AND EXPENSES A. Fee Summary The engagement was conducted on an hourly fee basis, as set forth in the engagement letter dated December 5, 2022. The applicable hourly rates for the engagement team were as follows: At the time of engagement, the estimated legal fees for the Transaction, assuming a full closing, were $350,000 to $475,000. The fee estimate contemplated the full scope of bor

VIII. STATUS OF THIRD-PARTY ENGAGEMENTS AND WORK PRODUCT A. Title and Escrow Title Company: Meridian Title & Escrow, Inc. (Lisa Portman, Title Officer), 9100 South Dadeland Boulevard, Suite 1500, Miami, Florida 33156. Meridian Title was engaged to provide title and escrow services in connection with the Proposed Refinancing. During the course of the engagement, Meridian Title issued a title commitment for the Propert

IX. EXISTING TIDEWATER LOAN — REMAINING CONSIDERATIONS The existing $125,000,000 first mortgage loan from Tidewater National Bank, N.A. (with an outstanding principal balance of approximately $118,500,000 as of October 2022) remains in place as the first priority lien on the Property. The key terms and the near-term implications of the existing loan are summarized as follows: Interest Rate: SOFR plus 2.25% (floating

X. OUTSTANDING ITEMS AND OPEN ISSUES As of the date of this memorandum, March 3, 2023, there are no outstanding items, unresolved disputes, or open deliverables in connection with Matter No. 1021-00007. The deposit settlement letter agreement dated February 28, 2023, resolves all claims between VHG/CPRH and PAC related to the terminated Transaction. The mutual release of claims executed as part of the Settlement Agre

XI. FILE CLOSING PROCEDURES A. Document Retention All transaction documents, drafts, markups, correspondence, and work product generated in connection with Matter No. 1021-00007 are to be organized and stored in accordance with Calderwood & Harkness LLP's firm-wide document retention policy. The following key documents are to be retained in the matter file:

1. Engagement letter, dated December 5, 2022

2. Conflict check memorandum, dated October 19, 2022

3. PAC term sheet, dated November 14, 2022

4. Executed term sheet, dated November 28, 2022

5. PAC Commitment Letter, dated December 9, 2022, together with all side letters and exhibits

6. All loan document drafts, including WBD's initial loan document package dated December 19, 2022 and C&H's borrower markup transmitted on or about January 9, 2023

7. Good faith deposit escrow instructions and wire confirmations

8. Rate lock deposit escrow instructions and wire confirmations

9. Title commitment issued by Meridian Title & Escrow, Inc., together with all Schedule B exceptions, endorsements, and supporting documentation

10. Title commitment review memorandum prepared by C&H

11. Title objection letter prepared by C&H

12. ALTA/NSPS Land Title Survey prepared by Landis & Shaw Surveying, Inc.

13. Survey review memorandum prepared by C&H

14. Insurance compliance memorandum prepared by C&H

15. Insurance broker correspondence (Castlegate Risk Advisors LLC)

16. Existing Tidewater loan review memorandum prepared by C&H

17. Payoff request letter directed to Tidewater National Bank, N.A.

18. Payoff calculation memorandum prepared by C&H

19. Hargrove & Whitley appraisal report, dated January 20, 2023 (effective date of value: January 6, 2023)

20. Appraisal review memorandum prepared by C&H

21. Letter to PAC (via WBD) regarding appraisal challenge

22. Repricing analysis memorandum prepared by C&H

23. PAC repriced terms letter, dated January 27, 2023

24. Counter-proposal letter to PAC, dated February 3, 2023

25. PAC rejection of counter-proposal, dated February 7, 2023

26. Board presentation materials — termination recommendation (prepared for VHG board meeting on February 10, 2023)

27. Formal termination notice, dated February 15, 2023, with proof of delivery

28. PAC response regarding deposit retention, dated February 22, 2023

29. Deposit settlement letter agreement, dated February 28, 2023

30. Draft Borrower authorizing resolutions (unexecuted)

31. Draft Guarantor authorizing resolutions (unexecuted)

32. Good standing certificates (to the extent received)

33. All internal memoranda, issues memoranda, and research memoranda

34. All email correspondence among the engagement team, with VHG, and with third parties All physical documents, to the extent any exist, should be transferred to the firm's off-site document storage facility in accordance with the firm's retention schedule. Electronic documents are maintained on the firm's document management system and are indexed under Matter No. 1021-00007. B. Client Notification A final closing

XII. LESSONS LEARNED / OBSERVATIONS This section records observations and lessons learned from the engagement that may be useful for future client representations and transaction management. Valuation Risk in Cash-Out Refinancings. The Transaction was terminated due to a $43,000,000 (18.30%) valuation shortfall between VHG's internal projection of the Property's value ($235,000,000) and the lender-commissioned Hargro

XIII. APPROVALS AND DISTRIBUTION Prepared by: Grace Nakamura, Lead Associate Calderwood & Harkness LLP Real Estate Practice Group Factual Verification: Rafael Dominguez, Working Associate Calderwood & Harkness LLP Real Estate Practice Group Distribution: Douglas Fairchild, Responsible Partner — for review and approval Angela Fontaine, Billing Partner — for review and approval CONFIDENTIAL — NOT FOR DISTRIBUTION OUTSI