Contract analysis

I. PURPOSE AND SCOPE This memorandum summarizes Calderwood & Harkness LLP's review and analysis of the title commitment (the "Title Commitment") issued by Meridian Title & Escrow, Inc. (Title Officer: Lisa Portman) in connection with the proposed $160,000,000 first mortgage refinancing loan (the "Loan") from Pinnacle Atlantic Capital, LLC ("PAC") to Coral Palms Resort Holdings LLC (the "Borrower" or "CPRH"), a Florid

II. TITLE COMMITMENT OVERVIEW A. Commitment Identification The Title Commitment bears Commitment No. MT-2022-FL-048771 and was issued by Meridian Title & Escrow, Inc. with an effective date of November 22, 2022 at 8:00 a.m. (Eastern Time), reflecting the date and time through which Meridian Title's search of the Public Records of Monroe County, Florida was conducted. The proposed policy amount is $160,000,000.00 for

III. SCHEDULE A — INSURED INTEREST AND PARTIES A. Fee Simple Owner Schedule A of the Title Commitment identifies Coral Palms Resort Holdings LLC, a Florida limited liability company, as the fee simple owner of the Property. The vesting instrument is a Warranty Deed recorded in Official Records Book 2847, Page 1122, Public Records of Monroe County, Florida, dated March 14, 2019 (the "Vesting Deed"). The Vesting Deed c

IV. SCHEDULE B-I — REQUIREMENTS A. Overview. Schedule B-I of the Title Commitment sets forth the conditions and requirements that must be satisfied prior to the issuance of the lender's title insurance policy. These requirements are standard for a commercial mortgage refinancing transaction in Florida, with certain property-specific and transaction-specific conditions that warrant particular attention. We have review

1. Recording of Proposed Mortgage. Schedule B-I requires the execution and recording of the PAC Mortgage in the Public Records of Monroe County, Florida, in proper form, with all requisite documentary stamp taxes and intangible taxes paid at the time of recording. Under Florida law, the following transfer taxes apply to the recording of the PAC Mortgage: (a) Florida Documentary Stamp Tax on the Mortgage. Pursuant to

2. Satisfaction and Discharge of Existing Tidewater Mortgage. Schedule B-I requires that the existing mortgage held by Tidewater National Bank, N.A., recorded at Official Records Book 2892, Page 0445, Public Records of Monroe County, Florida (the "Tidewater Mortgage"), be satisfied and discharged of record at or prior to closing. This is the single most critical title requirement for the transaction, as the PAC Mortg

3. Evidence of Entity Existence and Authorization. Schedule B-I requires evidence of the legal existence and good standing of the Borrower and the Guarantor, as well as evidence of authorization for the transaction. Specifically, the following are required: (a) A Certificate of Good Standing (or Certificate of Status) for Coral Palms Resort Holdings LLC from the Florida Department of State, Division of Corporations,

4. Satisfactory Survey. Schedule B-I requires receipt by Meridian Title of a current ALTA/NSPS Land Title Survey of the Property, certified to Meridian Title & Escrow, Inc., Pinnacle Atlantic Capital, LLC, Calderwood & Harkness LLP, and Whitford Baines & Driscoll LLP. Landis & Shaw Surveying, Inc. (Robert Tran, PLS) has been engaged by the Borrower, with PAC's approval, to prepare the Survey. A preliminary version of

5. Real Property Tax Clearance. Schedule B-I requires evidence that all ad valorem real property taxes and non-ad valorem assessments on the Property (Folio No. 00460780-000100) are current, with no delinquencies, outstanding tax sale certificates, or unpaid special assessments. We have requested a tax search from the Monroe County Tax Collector's office, and preliminary results indicate that all taxes and assessment

6. Judgments and Liens Search. Schedule B-I requires a satisfactory judgment, lien, and litigation search against both CPRH and VHG. The search must cover: (a) Monroe County, Florida (county of property location) — state court judgments, state tax liens, and lis pendens; (b) Miami-Dade County, Florida (county of CPRH's registered office and VHG's principal Florida office) — state court judgments, state tax liens, and

7. Gap Coverage / Bring-Down. Schedule B-I provides that Meridian Title will furnish gap coverage or a bring-down endorsement from the effective date of the Title Commitment (November 22, 2022) through the recording date of the PAC Mortgage. This is a standard requirement and ensures that no intervening liens, encumbrances, or adverse filings recorded between the effective date and the closing date will impair the pr

8. Payment of Title Insurance Premiums. Schedule B-I requires payment of all title insurance premiums, endorsement premiums, and related charges for the lender's title insurance policy. Under Florida's promulgated rate schedule, the premium for a $160,000,000 lender's policy is calculated based on the Florida Department of Financial Services rate schedule, which provides for tiered pricing based on the policy amount.

V. SCHEDULE B-II — EXCEPTIONS FROM COVERAGE A. Standard / Pre-Printed Exceptions The following standard or pre-printed exceptions appear in Schedule B-II of the Title Commitment. These are boilerplate exceptions that appear in most title commitments and are subject to deletion or modification through the provision of appropriate documentation, endorsements, and/or affidavits.

1. Rights or Claims of Parties in Possession. Schedule B-II, Exception 1 sets forth the standard exception for "rights or claims of parties in possession not shown by the public records." This exception, if retained, would exclude from coverage any possessory interests in the Property held by parties whose rights are not reflected in the recorded documents. Analysis and Recommendation: This exception should be delete

2. Encroachments, Overlaps, Boundary Line Disputes, and Matters of Survey. Schedule B-II, Exception 2 is the standard survey exception covering "encroachments, overlaps, boundary line disputes, or other matters which would be disclosed by an accurate survey and inspection of the premises." Analysis and Recommendation: This exception should be deleted and replaced with a survey-based exception that references the spec

3. Easements or Claims of Easements Not Shown by Public Records. Schedule B-II, Exception 3 is the standard exception for "easements or claims of easements not shown by the public records." Analysis and Recommendation: This exception should be deleted upon delivery of an affidavit from the Borrower confirming that the Borrower has no knowledge of any unrecorded easements or claims of easements affecting the Property.

4. Mechanic's Liens and Materialmen's Liens. Schedule B-II, Exception 4 is the standard exception for "any lien, or right to a lien, for services, labor or material heretofore or hereafter furnished, imposed by law and not shown by the public records." Analysis and Recommendation: The Borrower completed a comprehensive renovation of the Property in August 2021 at a cost of approximately $47,000,000. The renovation in

5. Taxes and Assessments. Schedule B-II, Exception 5 excepts from coverage "taxes and assessments for the year 2023 and subsequent years, not yet due and payable." Analysis and Recommendation: This is a standard exception that is typically retained in the final title policy. However, the exception language should be reviewed to confirm that it does not except taxes for the year 2022 or any prior year, as all such tax

6. Matters That Would Be Disclosed by an Accurate Survey. Schedule B-II, Exception 6 overlaps substantially with Exception 2 above and similarly references "matters that would be disclosed by an accurate survey and inspection of the premises." Analysis and Recommendation: This exception is duplicative of Exception 2 and should be deleted in its entirety and consolidated with the survey-based replacement exception des

7. Existing Tidewater National Bank Mortgage. Schedule B-II, Exception 7 references the Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing from Coral Palms Resort Holdings LLC to Tidewater National Bank, N.A., recorded in Official Records Book 2892, Page 0445, Public Records of Monroe County, Florida, securing a Promissory Note in the original principal amount of $125,000,000.00 (with an

8. UCC Financing Statement — Tidewater. Schedule B-II, Exception 8 references a UCC-1 Financing Statement filed with the Florida Secured Transaction Registry (Florida Department of State, Division of Corporations), File No. 202219087643, naming Coral Palms Resort Holdings LLC as debtor and Tidewater National Bank, N.A. as secured party. The UCC-1 covers personal property collateral associated with the existing Tidewa

9. Restrictive Covenants / Declaration of Covenants, Conditions and Restrictions. Schedule B-II, Exception 9 references certain restrictive covenants and/or a Declaration of Covenants, Conditions and Restrictions ("CC&Rs") applicable to the Property or the broader development area within Key Largo. The specific recorded instrument(s) referenced in this exception include: (a) Declaration of Covenants, Conditions, and

10. Easements of Record. Schedule B-II, Exception 10 references multiple recorded easements affecting the Property. Based on our review, the following specific easements have been identified: (a) Utility Easements — Electrical. Easement in favor of the Calderon Partners LLC ("FKEC"), recorded at Official Records Book 1987, Page 0334, Public Records of Monroe County, Florida, granting FKEC the right to install, operat

11. Zoning and Land Use Restrictions. Schedule B-II contains a reference to compliance with local zoning ordinances and land development regulations, including the Monroe County Land Development Code and the Florida Keys Area of Critical State Concern designation applicable to all of Monroe County. Analysis: This reference is somewhat unusual in a Schedule B-II exception, as zoning and land use compliance is typicall

12. Environmental and Coastal Regulatory Matters. Schedule B-II contains informational references to state and federal environmental regulations affecting properties in the Florida Keys, including: (a) Florida Keys National Marine Sanctuary restrictions (administered by the National Oceanic and Atmospheric Administration); (b) United States Army Corps of Engineers jurisdiction over wetlands and navigable waterways ad

13. Flood Zone Designation. Schedule B-II contains a notation that the Property is located within a Special Flood Hazard Area ("SFHA") as designated by the Federal Emergency Management Agency ("FEMA") on the applicable Flood Insurance Rate Map ("FIRM") for Monroe County, Florida. Based on the Property's oceanfront Key Largo location, the flood zone designation is anticipated to be Zone AE (areas subject to inundation

14. Mineral Rights / Submerged Lands Reservations. Schedule B-II, Exception 14 contains a standard Florida exception for state-retained mineral rights and/or sovereign submerged lands reservations. Under Florida law, the State of Florida has historically reserved mineral rights in certain conveyances, and sovereign submerged lands below the mean high-water line are held by the State in trust for the public. Analysis:

15. Prior Deed Restrictions or Conditions. Schedule B-II, Exception 15 references conditions, reservations, or restrictions contained in the Vesting Deed (O.R. Book 2847, Page 1122) or in prior deeds in the chain of title. Analysis: We have reviewed the Vesting Deed and have not identified any reverter clauses, conditions subsequent, use restrictions, consent-to-encumbrance provisions, or rights of first refusal that

16. Potential Condominium / HOA Matters. Analysis: We have confirmed through our review of the Monroe County Official Records that no Declaration of Condominium has been recorded against the Property and that the Property is not subject to a homeowners association or condominium association. The Property is a single-owner resort property, and the Title Commitment does not identify any condominium or HOA-related instr

VI. ENDORSEMENTS TO BE REQUESTED A. Lender's Endorsements Required by PAC Based on PAC's title and endorsement requirements as specified in the Commitment Letter, the draft Loan Agreement, and WBD's title requirements letter dated November 28, 2022, the following endorsements should be obtained from Meridian Title & Escrow, Inc. in connection with the issuance of the lender's title insurance policy:

1. ALTA 3.1 — Zoning (with Parking and Loading). This endorsement will confirm that the Property's zoning classification under the Monroe County Land Development Code permits resort hotel use with all ancillary uses (including restaurant, spa, marina, conference center, and related commercial activities) and that the existing improvements, including approximately 1,200 parking spaces and loading facilities, comply wi

2. ALTA 9 — Restrictions, Encroachments, Minerals. This comprehensive endorsement will provide coverage with respect to the recorded restrictive covenants identified in Exception 9 above, confirming that the covenants do not contain provisions that would result in a forfeiture or reversion of title, and will address any encroachment issues identified by the Survey and any mineral reservations affecting the Property.

3. ALTA 9.7 — Land Under Development. This endorsement should be obtained if any portions of the Property are subject to continuing development, phased improvements, or planned future construction. Based on our current understanding, no active development is underway; however, we will confirm with VHG whether any future development plans (such as additional guest room towers, expanded conference facilities, or marina

4. ALTA 17 — Access. This endorsement will confirm that the Property has both legal and physical access to Overseas Highway (U.S. Route 1), a publicly maintained roadway. Given the Property's location in the Florida Keys, where access is limited and dependent on U.S. Route 1, this endorsement is critically important. We will provide Meridian Title with the Survey showing the access points and the recorded access ease

5. ALTA 17.2 — Access and Entry. If access to the marina facility involves separate or distinct access rights (such as the marina access easement recorded at O.R. Book 2311, Page 0901), this endorsement may be necessary to confirm that the marina access is legally established and insured. We will evaluate the need for this endorsement based on our detailed review of the marina access easement.

6. ALTA 19 — Contiguity. If the Property consists of multiple tax parcels or legally distinct parcels that together form the resort property, this endorsement will confirm that the parcels are contiguous. Based on our preliminary review, the Property appears to be assessed under a single folio number (00460780-000100), suggesting a single parcel. However, if the legal description encompasses multiple parcels or lots,

7. ALTA 22 — Location. This endorsement will confirm that the Property is located at the street address of 99000 Overseas Highway, Key Largo, Florida 33037, as identified in the Loan Agreement and other loan documents. This is a straightforward endorsement and should be readily available.

8. ALTA 25 — Same as Survey. This endorsement will confirm that the legal description in the lender's title policy is the same as the property depicted on the Landis & Shaw ALTA/NSPS Survey. This endorsement is essential to confirm consistency between the insured property and the surveyed property and is required by PAC under the Lender's Title Requirements.

9. ALTA 28 — Easement. If specific easement benefits are appurtenant to the Property (such as the access easement to Overseas Highway and the marina access easement), this endorsement will provide affirmative coverage confirming those easement benefits. We will identify the specific easements for which this endorsement is appropriate based on our detailed review of the easement instruments.

10. ALTA 35 — Minerals (Surface Damage). This endorsement will provide coverage against loss or damage to the surface of the Property resulting from the exercise of any reserved mineral rights. While the risk of mineral extraction in the Florida Keys is negligible, this endorsement is standard for commercial mortgage transactions and is included in PAC's endorsement requirements.

11. Comprehensive (Florida Form 9) Endorsement. The Florida-specific comprehensive endorsement provides a broad range of additional coverage, including coverage against loss from certain specified matters such as violations of restrictive covenants, encroachments, and failure to provide legal access. This endorsement is widely used in Florida commercial transactions and is required by PAC.

12. Usury Endorsement. If available under Florida title insurance regulations and Meridian Title's underwriting guidelines, this endorsement would provide coverage against loss arising from a determination that the interest rate or other terms of the PAC Loan are usuri