1021-00007 · Verimark Hospitality Group · Engagement

engagement-letter.docx DOCUMENT Real Estate

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CALDERWOOD & HARKNESS LLP Attorneys at Law

100 Southeast Second Street, Suite 3800 Miami, Florida 33131 Telephone: (305) 555-7200 Facsimile: (305) 555-7201 www.calderwoodharkness.com

December 5, 2022

VIA ELECTRONIC MAIL AND HAND DELIVERY

Mr. Conrad W. Elliston Chairman & Chief Executive Officer Verimark Hospitality Group Inc. 1400 Bayshore Boulevard, Suite 2200 Miami, Florida 33131

Re: Engagement of Calderwood & Harkness LLP — Representation of Verimark Hospitality Group Inc. and Coral Palms Resort Holdings LLC in Connection with $160,000,000 Refinancing of Coral Palms Grand Resort & Spa, Key Largo, Florida

Client Matter Number: 1021-00007

Dear Mr. Elliston:

1. Purpose and Introduction

We are pleased that Verimark Hospitality Group Inc. ("VHG" or the "Company") has selected Calderwood & Harkness LLP ("Calderwood & Harkness," the "Firm," "we," "us," or "our") as its legal counsel in connection with the transaction described below. We greatly value the confidence you and your team have placed in our Firm, and we look forward to working with you to bring this matter to a successful conclusion.

This letter (the "Engagement Letter") sets forth the terms and conditions under which Calderwood & Harkness will represent VHG and confirms the scope, staffing, fee arrangements, and other material terms of our engagement. We ask that you review this Engagement Letter carefully and, if the terms are acceptable, execute and return a copy to our office as described in Section 16 below.

This Engagement Letter confirms that Calderwood & Harkness has been engaged to represent Verimark Hospitality Group Inc., a Delaware corporation whose shares are publicly traded on the Nasdaq Stock Market under the ticker symbol "VMRK," and its wholly owned indirect subsidiary, Coral Palms Resort Holdings LLC, a Florida limited liability company (collectively, the "Clients"), as borrower's counsel in connection with the proposed $160,000,000 first mortgage refinancing (the "Refinancing" or the "Transaction") of the property commonly known as the Coral Palms Grand Resort & Spa, located at 99000 Overseas Highway, Key Largo, Monroe County, Florida 33037 (the "Property").

The proposed lender for the Refinancing is Pinnacle Atlantic Capital, LLC ("PAC" or the "Lender"). As you are aware, the Refinancing is intended to replace the existing first mortgage loan currently held by Tidewater National Bank, N.A. ("Tidewater"), which has an outstanding principal balance of approximately $118,500,000 as of the date hereof. We understand that the Transaction is being structured in accordance with the term sheet issued by PAC dated November 14, 2022, which was executed by VHG on November 28, 2022 (the "Term Sheet"), and the commitment letter anticipated to be issued by PAC in the near term (the "Commitment Letter"). Our representation will encompass all borrower-side legal matters necessary to effectuate the Refinancing through closing and the completion of post-closing deliverables, as further described below.

2. Scope of Representation

Calderwood & Harkness will represent Coral Palms Resort Holdings LLC, as borrower (the "Borrower"), and Verimark Hospitality Group Inc., as guarantor (the "Guarantor"), in connection with all aspects of the Refinancing, including, without limitation, the following:

(a) Commitment Letter and Side Letters. Review, analysis, and negotiation of the Commitment Letter to be issued by PAC, together with any fee letters, side letters, or related agreements, to ensure that the terms thereof are consistent with the Term Sheet and are acceptable to the Clients.

(b) Loan Documents. Review, drafting, markup, and negotiation of all loan documents (collectively, the "Loan Documents"), which are anticipated to include the following:

(i) Loan Agreement (and any supplements or amendments thereto);

(ii) Promissory Note;

(iii) Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (the "Mortgage"), to be recorded in the Official Records of Monroe County, Florida;

(iv) Guaranty Agreement (including any carve-out guaranty, completion guaranty, or other guaranty instruments required by PAC);

(v) Environmental Indemnity Agreement;

(vi) Cash Management Agreement (including provisions related to lockbox accounts, operating accounts, and deposit account control agreements);

(vii) Reserve Agreement (covering tax and insurance reserves, FF&E reserves, and any other required reserves);

(viii) Assignment of Contracts, Licenses, and Permits;

(ix) UCC-1 Financing Statements;

(x) Subordination, Non-Disturbance, and Attornment Agreements ("SNDAs"), if applicable;

(xi) All ancillary certificates, opinions, and closing documents required by PAC and its counsel.

(c) Coordination with Lender's Counsel. Active coordination and negotiation with the Lender's outside counsel, Whitford Baines & Driscoll LLP ("WBD"), attention Philip Tarrant Corporation, Partner, including participation in negotiation calls, document exchanges, and the resolution of open business and legal points throughout the transaction process.

(d) Title and Survey Matters. Review and analysis of the title commitment issued in connection with the Refinancing, together with all underlying exception documents; review of the most recent ALTA/NSPS survey of the Property; preparation and delivery of title objection letters to the title company; and coordination with the title company and escrow agent, Meridian Title & Escrow, Inc. ("Meridian Title"), regarding resolution of title matters, endorsement requirements, and closing and escrow arrangements.

(e) Insurance Review. Review of the insurance requirements set forth in the Loan Documents and coordination with VHG's insurance broker, Castlegate Risk Advisors LLC ("Castlegate"), to ensure that evidence of insurance satisfies the Lender's requirements, including coverage amounts, policy endorsements, and additional insured designations.

(f) Environmental Reports. Review of the Phase I Environmental Site Assessment ("Phase I ESA") of the Property prepared by Oakridge Environmental Consulting Group, Inc. ("Oakridge"), including evaluation of any recognized environmental conditions ("RECs"), controlled recognized environmental conditions ("CRECs"), or historical recognized environmental conditions ("HRECs") identified therein, and assessment of the implications of the Phase I ESA findings on the Loan Documents and the Environmental Indemnity Agreement.

(g) Organizational and Authorization Documents. Preparation, review, and coordination of all borrower and guarantor organizational and authorization documents required by the Lender, including certificates of formation, operating agreements (or relevant excerpts thereof), certificates of good standing, incumbency certificates, secretary's or authorized officer's certificates, and entity resolutions authorizing the Refinancing.

(h) Payoff of Existing Indebtedness. Coordination of the payoff and defeasance (or discharge) of the existing Tidewater National Bank first mortgage loan, including preparation and submission of the payoff request letter, review and verification of the payoff statement, and coordination of the release and recording of mortgage satisfactions, UCC-3 termination statements, and any other instruments required to evidence the full discharge of the existing indebtedness.

(i) Appraisal and Valuation Matters. Review of the Lender's appraisal of the Property, to the extent made available to the Borrower, and assessment of appraisal-related matters as they affect loan terms, loan-to-value ratios, reserve requirements, and other provisions of the Loan Documents.

(j) Closing and Post-Closing. Preparation of a closing checklist and pre-closing document checklist; attendance at the closing (whether in person or virtually); coordination of the execution, delivery, and recording of all closing documents; and management of post-closing deliverables, including recording confirmations, policy issuance follow-up, and delivery of post-closing items to all parties.

Matters Outside the Scope of This Engagement. The scope of our engagement is specifically limited to the legal services described above in connection with the Refinancing. Without limiting the generality of the foregoing, our representation does not include the following:

(i) Tax Advice. We will not be providing tax advice in connection with this engagement, including advice regarding the federal, state, or local tax consequences of the Refinancing, transfer taxes, intangible taxes, or documentary stamp taxes. We recommend that VHG consult with its independent auditors, Keswick & Holt LLP, or other qualified tax advisors regarding any tax matters arising from the Transaction.

(ii) Securities Law Advice. We will not be providing advice regarding securities law compliance, including any disclosure obligations VHG may have under federal or state securities laws in connection with the Refinancing or otherwise.

(iii) Litigation. We will not be representing VHG or the Borrower in any litigation, arbitration, or other dispute arising from or relating to the Transaction or the Property unless we are separately engaged to do so under a separate engagement letter with terms to be agreed upon.

This engagement is limited to the specific Transaction described herein. Nothing in this Engagement Letter shall be construed to create an ongoing attorney-client relationship between Calderwood & Harkness and VHG or any of its affiliates for any other matter. Should VHG wish to retain Calderwood & Harkness for any additional or future matters, we would be pleased to discuss the terms of such engagement at that time.

3. Engagement Team and Responsible Attorneys

Calderwood & Harkness has assembled a dedicated team of professionals from its Real Estate Practice Group to staff this engagement. The following attorneys have been assigned to the matter:

Douglas Fairchild — Responsible Partner, Real Estate Practice Group. Douglas will serve as the primary relationship partner and supervising attorney for the engagement. He will maintain overall responsibility for the strategic direction and quality of our work product, provide senior-level oversight on all key transaction issues, and be available for escalation of material negotiation points and executive-level discussions.

Angela Fontaine — Billing Partner, Real Estate Practice Group. Angela will actively participate in document review and negotiation, with particular focus on the Loan Agreement, Guaranty Agreement, and Cash Management Agreement. She will work closely with Douglas in managing the Lender's counsel relationship and will supervise the billing and administrative aspects of the engagement.

Grace Nakamura — Lead Associate, Real Estate Practice Group. Grace will be responsible for the day-to-day management of the Transaction. She will serve as the primary drafter of borrower-side documents and will prepare markups of and comments to all Loan Documents prepared by Lender's counsel. Grace will be the primary point of contact for routine transaction matters, working-level calls with WBD, and coordination with Meridian Title, Castlegate, and other third-party service providers.

Rafael Dominguez — Working Associate, Real Estate Practice Group. Rafael will provide due diligence, legal research, and document preparation support. His responsibilities will include review of title and survey materials, preparation of organizational and authorization documents, coordination of UCC and lien searches, and assistance with closing logistics and post-closing matters.

From time to time, additional attorneys, paralegals, or other paraprofessional staff may be assigned to the engagement as workload and subject-matter expertise require. Any such additional personnel will be assigned at billing rates consistent with their respective experience levels. We will provide advance notice to VHG of any material additions to the engagement team.

We understand that the primary client contacts for this engagement will be as follows:

• Derek Huang, Senior Vice President — Capital Markets & Treasury, who will serve as the principal day-to-day business contact for the Transaction;

• Natasha Ricard, Chief Financial Officer, who will be involved in financial, accounting, and treasury-related matters; and

• Conrad W. Elliston, Chairman & Chief Executive Officer, who will be available for executive-level matters as needed.

We request that VHG designate Derek Huang as the individual authorized to provide routine instructions and approvals on behalf of VHG with respect to the engagement, subject to any limitations VHG may wish to impose. Unless otherwise advised, we will rely on instructions from Mr. Huang as authorized by VHG.

4. Fees and Hourly Rates

Calderwood & Harkness will charge for legal services rendered in connection with this engagement on an hourly basis. The current hourly rates for the attorneys assigned to this matter are set forth below:

In the event that paralegals or other professional support staff are utilized in connection with the engagement, their time will be billed at the Firm's prevailing rates for such personnel, which currently range from $275.00 to $400.00 per hour depending on the individual's experience and seniority.

The hourly rates set forth above are the Firm's standard rates currently in effect. These rates are subject to annual adjustment, which typically becomes effective on January 1 of each calendar year. Any rate increase will be communicated to VHG in advance and will apply to services rendered on or after the effective date of the adjustment. We do not anticipate any rate changes before January 1, 2024, but we will notify you promptly should any adjustments be implemented prior to that date.

All professional time is recorded and billed in increments of one-tenth (0.1) of an hour (i.e., six-minute increments). Each timekeeper maintains contemporaneous time records reflecting the date of service, a description of the work performed, and the time expended.

5. Fee Estimate

Based on our current understanding of the Transaction's scope and complexity, including the terms set forth in the Term Sheet, the structure of the Refinancing, the nature of the Property, and our experience with comparable hospitality financing transactions, Calderwood & Harkness estimates that total legal fees for this engagement will be in the range of $350,000 to $475,000, assuming a full transaction closing occurs.

This estimate is provided for planning and budgeting purposes only and does not constitute a cap, guarantee, maximum fee, or fixed-fee arrangement. Actual fees may be higher or lower than the estimated range depending upon a number of factors, including, without limitation:

• The complexity and duration of loan document negotiations with WBD on behalf of PAC, including the number of document drafts, markup rounds, and negotiation sessions required to reach final agreement on the Loan Documents;

• The nature and extent of any title defects, survey discrepancies, or title objection issues that may arise in connection with the Property;

• The scope and depth of due diligence required by the Lender, including any supplemental reports, certifications, or investigations that may be requested;

• Appraisal-related matters, including any disputes regarding appraised value, adjustments to loan terms, or the need for supplemental valuation work;

• The number and complexity of any SNDA negotiations with tenants, concessionaires, or other parties;

• Any unforeseen issues, including environmental concerns, zoning or land use complications, or changes in the Lender's underwriting requirements; and

• Any delays in closing or material changes to the Transaction structure.

In the event it becomes apparent during the course of the engagement that total fees are likely to materially exceed the upper end of the estimated range, Calderwood & Harkness will promptly notify VHG and discuss the circumstances giving rise to the additional fees. We will work with VHG to manage costs effectively throughout the engagement and will be mindful of billing efficiency at all times.

Lender's Counsel Fees. VHG should be aware that, as is customary in transactions of this nature, the Borrower is separately responsible for payment of the Lender's outside legal fees and disbursements. Pursuant to the Term Sheet and the anticipated Commitment Letter, the Borrower has agreed to pay the legal fees and expenses of WBD in an amount not to exceed $275,000 plus reasonable out-of-pocket disbursements. These fees are a separate obligation of the Borrower payable directly to WBD and are not part of, and are in addition to, the fees of Calderwood & Harkness described in this Engagement Letter.

6. Retainer

Upon execution of this Engagement Letter, VHG shall deposit an evergreen retainer in the amount of Fifty Thousand Dollars ($50,000.00) (the "Retainer") with Calderwood & Harkness LLP. The Retainer shall be deposited into the Firm's client trust account, which is an Interest on Trust Account ("IOTA") maintained in accordance with the requirements of the Rules Regulating The Florida Bar. Any interest earned on the Retainer will be remitted to The Florida Bar Foundation in accordance with applicable rules and will not accrue to the benefit of VHG.

The Retainer is intended to serve as security for payment of fees and disbursements incurred in connection with this engagement. The Retainer will not be applied against monthly invoices as they are rendered during the ordinary course of the engagement. Rather, the Retainer will be maintained in the Firm's trust account and will be applied only against the final invoice rendered upon conclusion of the engagement or upon termination of the engagement, as described in Section 11 below.

If, for any reason, the Retainer balance falls below Twenty-Five Thousand Dollars ($25,000.00) as a result of application against outstanding fees or disbursements, VHG agrees to replenish the Retainer to the full amount of Fifty Thousand Dollars ($50,000.00) within ten (10) business days following Calderwood & Harkness's written request therefor.

Any unused portion of the Retainer remaining after application against all outstanding fees and disbursements will be refunded to VHG promptly upon the conclusion of the matter and the payment in full of all outstanding invoices.

We note for the record that VHG deposited the Retainer in the amount of $50,000.00 on December 7, 2022, by wire transfer to the Firm's client trust account.

7. Billing and Payment Terms

Calderwood & Harkness will render monthly invoices for professional fees and disbursements incurred during the immediately preceding calendar month. Invoices will typically be issued within fifteen (15) days following the end of the applicable billing period.

All invoices are due and payable within thirty (30) days from the date of the invoice (i.e., Net 30). Payment shall be made by wire transfer or check, directed to the account specified on the invoice.

Each invoice will include a reasonably detailed description of the services rendered, including the date of each service, the identity of the attorney or professional performing each task, a narrative description of the work performed, the time expended (in one-tenth of an hour increments), and the applicable hourly rate. Disbursements will be itemized separately. We are happy to accommodate any specific billing format or coding requirements that VHG may have, including LEDES or other electronic billing formats, provided we are advised of such requirements in advance.

In the event that any invoice remains unpaid beyond thirty (30) days from the date of invoice, Calderwood & Harkness reserves the right to assess a late charge of 1.0% per month on the outstanding balance (or the maximum rate permitted under applicable Florida law, whichever is less), calculated from the original due date of the invoice until payment is received in full.

Calderwood & Harkness further reserves the right to suspend or discontinue work on the engagement if any invoices remain unpaid for more than sixty (60) days from the date of invoice, upon not less than ten (10) business days' prior written notice to VHG. We will, of course, endeavor to resolve any billing questions or disputes informally before exercising this right, and we will take all reasonable steps to protect VHG's interests in the event that a suspension of work becomes necessary.

8. Disbursements and Expenses

In addition to professional fees for legal services, VHG will be responsible for the reimbursement of all reasonable out-of-pocket expenses and disbursements incurred by Calderwood & Harkness in connection with this engagement. Such disbursements may include, but are not limited to, the following:

• Filing fees, recording fees (including documentary stamp tax and intangible tax remittances, if applicable), and search fees, including UCC searches, judgment lien searches, tax lien searches, and other public record searches conducted in connection with the Transaction;

• Title search and examination charges, to the extent such charges are incurred by Calderwood & Harkness directly and are not otherwise covered by or billed through Meridian Title & Escrow, Inc.;

• Overnight courier, express mail, and delivery charges (Severin Partners LLC, Halcyon Partners LLC, Tarrant & Co., or similar services);

• Travel expenses incurred in connection with the engagement, including airfare, hotel accommodations, meals, and ground transportation for trips to Key Largo, Florida (for property inspections or closing), New York, New York (for meetings with the Lender and/or Lender's counsel), and other locations as reasonably necessary in furtherance of the Transaction;

• Photocopying, scanning, printing, and document production charges at the Firm's prevailing internal rates;

• Charges for computerized legal research conducted through Westlaw, Sundial Solutions, or other electronic research platforms;

• Long-distance telephone charges and charges for conference call services; and

• Any other reasonable out-of-pocket expenses directly attributable to the engagement.

To the extent any individual disbursement is expected to exceed Five Thousand Dollars ($5,000.00), Calderwood & Harkness will obtain VHG's prior written approval before incurring such expense. VHG's approval may be provided by e-mail from any of the designated client contacts identified in Section 3 above.

9. Confidentiality and Privilege

Calderwood & Harkness will maintain the confidentiality of all information, documents, and materials provided by VHG or any of its affiliates, officers, directors, employees, or agents in connection with this engagement (collectively, "Confidential Information"), in accordance with applicable Rules of Professional Conduct, including Rule 4-1.6 of the Rules Regulating The Florida Bar. We will not disclose Confidential Information to any person or entity outside the Firm without VHG's authorization, except as may be required by law, court order, or the applicable rules of professional conduct.

All communications between Calderwood & Harkness and VHG relating to the provision of legal advice in connection with this engagement are intended to be, and shall be treated as, protected by the attorney-client privilege and the work product doctrine. VHG should be aware that these protections may be waived if privileged communications or work product are voluntarily disclosed to third parties outside the scope of the privilege. We encourage VHG to consult with us before disclosing any materials or communications that may be subject to privilege.

Notwithstanding the foregoing, VHG hereby authorizes Calderwood & Harkness to share Confidential Information with the following parties to the extent reasonably necessary to effectuate the Transaction:

• Members of the Calderwood & Harkness engagement team and such other Firm personnel as are reasonably required to provide support services;

• Pinnacle Atlantic Capital, LLC and its counsel, Whitford Baines & Driscoll LLP, to the extent required in connection with the loan underwriting, due diligence, document negotiation, and closing process;

• Meridian Title & Escrow, Inc., in connection with title clearance, escrow, and closing matters; and

• Such other third parties (e.g., Oakridge Environmental Consulting Group, Inc.; Castlegate Risk Advisors LLC; Tidewater National Bank, N.A.) as are reasonably necessary to advance the Transaction, provided that any such disclosures are limited to information necessary for the specific purpose at hand and do not waive any applicable privileges.

We will exercise professional judgment in determining the scope of any disclosures to third parties and will take reasonable precautions to preserve applicable privileges to the fullest extent practicable.

10. Conflicts of Interest

Calderwood & Harkness has conducted a comprehensive conflicts check in accordance with the Firm's internal policies and procedures and the applicable Rules of Professional Conduct, including Rules 4-1.7 and 4-1.9 of the Rules Regulating The Florida Bar, governing concurrent and successive conflicts of interest. The conflict check was conducted using the Firm's proprietary conflicts clearance system and included a review of the Firm's client and matter databases.

Based on the results of the conflicts check, the Firm confirms that no conflicts of interest have been identified that would prevent or impair our representation of Verimark Hospitality Group Inc. and Coral Palms Resort Holdings LLC in connection with this matter. The parties and entities checked in connection with this engagement include, without limitation:

• Pinnacle Atlantic Capital, LLC;

• Greystone Peak Asset Management LP (an affiliate and/or investment manager associated with PAC);

• Tidewater National Bank, N.A.;

• Whitford Baines & Driscoll LLP;

• Meridian Title & Escrow, Inc.;

• Oakridge Environmental Consulting Group, Inc.;

• Castlegate Risk Advisors LLC; and

• Other individuals and entities identified as transaction participants.

A detailed conflict check memorandum has been prepared and is on file with the Firm's General Counsel's office, dated on or about October 19, 2022.

VHG acknowledges that Calderwood & Harkness is a large, full-service law firm that represents a substantial number of clients across a broad range of practice areas and industries. The Firm may currently represent, or may in the future represent, other clients in matters that are unrelated to this engagement but that may involve one or more of the parties to this Transaction. VHG hereby consents to such unrelated representations, provided that they do not involve a matter that is substantially related to this engagement and that is adverse to VHG or any of its affiliates.

In the event that an actual conflict of interest arises during the course of this engagement, Calderwood & Harkness will promptly notify VHG and take appropriate steps to address the conflict in accordance with the applicable Rules of Professional Conduct, which may include seeking informed written consent from the affected parties, erecting an ethical screen, or, if necessary, withdrawing from the representation.

11. Termination of Engagement

Either VHG or Calderwood & Harkness may terminate this engagement at any time, with or without cause, upon written notice to the other party. In the case of termination by the Firm, we will comply with all applicable ethical obligations, including providing reasonable notice to VHG and taking such steps as are reasonably practicable to avoid prejudice to VHG's interests.

In the event of termination, whether by VHG or by Calderwood & Harkness, VHG will remain responsible for the payment of all professional fees and disbursements incurred through the effective date of termination, in accordance with the fee arrangements and billing terms set forth in this Engagement Letter. Any outstanding invoices shall become due and payable in full upon termination, and the Retainer shall be applied against any unpaid balance as described in Section 6 above.

Upon termination, Calderwood & Harkness will take reasonable steps to protect VHG's interests and to facilitate an orderly transition to successor counsel, if applicable, including the timely transfer of files, documents, and work product, and cooperation with successor counsel as reasonably requested by VHG.

Calderwood & Harkness will promptly return or make available to VHG all client files, original documents, and client property upon written request following termination of the engagement, subject to the Firm's right to retain copies of such materials for its own files and records, and subject to any retaining or charging lien rights for unpaid fees and disbursements to which the Firm may be entitled under applicable Florida law, including Section 68.081, Florida Statutes, and applicable case law.

12. No Guarantee of Outcome

Calderwood & Harkness will devote its best professional efforts and diligent attention to the representation of VHG in connection with this Transaction. Our attorneys assigned to the engagement possess substantial experience in complex real estate finance transactions, and we will bring the full resources of our Real Estate Practice Group to bear in pursuing a successful outcome for VHG.

However, VHG acknowledges and agrees that Calderwood & Harkness cannot and does not guarantee that the Refinancing will close, that any particular loan terms will be obtained, or that any specific outcome or result will be achieved. The successful consummation of the Transaction depends upon numerous factors that are beyond the control of the Firm, including, without limitation, the Lender's final credit approval and underwriting decisions, the results of the appraisal and other third-party reports, prevailing interest rate and capital market conditions, the satisfactory resolution of title, survey, and environmental matters, and the actions and decisions of third parties involved in the Transaction.

Nothing in this Engagement Letter or in any communication by Calderwood & Harkness shall be construed as a representation, warranty, or guarantee regarding the outcome of the Transaction or any aspect thereof.

13. Document Retention

Following the conclusion of this engagement, whether by closing of the Transaction, termination, or otherwise, Calderwood & Harkness will retain the engagement file (including correspondence, working papers, memoranda, draft documents, and related materials) in accordance with the Firm's document retention policy, which generally provides for a minimum retention period of seven (7) years from the date of conclusion of the engagement.

VHG may request the return of original documents in the Firm's possession at any time during or after the engagement by providing written notice to the Firm.

After the expiration of the applicable retention period, Calderwood & Harkness may destroy or dispose of the engagement file, including any copies of documents, without further notice to VHG, unless VHG has provided written instructions to the Firm requesting that the file be preserved beyond the standard retention period or returned to VHG. We encourage VHG to advise us in writing of any specific document preservation requirements.

14. Governing Law and Dispute Resolution

This Engagement Letter and the terms and conditions of the engagement described herein shall be governed by and construed in accordance with the laws of the State of Florida, without regard to principles of conflicts of law.

Any dispute, controversy, or claim arising out of or relating to this Engagement Letter, the engagement, or the Firm's representation of VHG, including any claim for fees or disbursements and any claim of malpractice or professional liability (collectively, a "Dispute"), shall be resolved through binding arbitration administered in Miami-Dade County, Florida, in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") then in effect, unless the parties mutually agree in writing to an alternative dispute resolution mechanism.

The arbitration shall be conducted by a single arbitrator selected in accordance with the AAA rules who possesses experience in legal malpractice or legal fee disputes, as applicable. The arbitrator's decision shall be final and binding upon the parties and may be entered as a judgment in any court of competent jurisdiction.

Each party shall bear its own attorneys' fees, costs, and expenses incurred in connection with any such arbitration or other dispute resolution proceeding, unless the arbitrator determines that an award of fees and costs to the prevailing party is warranted under applicable law.

15. Entire Agreement and Amendments

This Engagement Letter constitutes the entire agreement between Calderwood & Harkness LLP and Verimark Hospitality Group Inc. with respect to the terms and conditions of the engagement described herein. This Engagement Letter supersedes all prior and contemporaneous oral or written negotiations, proposals, representations, understandings, and agreements between the parties relating to the subject matter hereof.

No modification, amendment, supplement, or waiver of any provision of this Engagement Letter shall be effective unless made in writing and signed by an authorized representative of each party.

If any provision of this Engagement Letter is found to be invalid, illegal, or unenforceable, the remaining provisions shall continue in full force and effect to the fullest extent permitted by law.

16. Acceptance and Signature block

If the terms set forth in this Engagement Letter are acceptable to VHG, please indicate your acceptance by countersigning this letter in the space provided below and returning an executed copy to the undersigned by hand delivery, overnight courier, or e-mail (PDF scan) at your earliest convenience. We ask that the executed copy and the retainer deposit (if not already received) be transmitted no later than December 9, 2022, so that we may begin work promptly.

We are excited about the opportunity to represent VHG and Coral Palms Resort Holdings LLC in this important transaction. Please do not hesitate to contact me or any member of the engagement team if you have any questions regarding this Engagement Letter or any aspect of the engagement.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Douglas Fairchild, Partner Real Estate Practice Group Telephone: (305) 555-7218 E-mail: dfairchild@calderwoodharkness.com

Date: ________

ACCEPTED AND AGREED:

VERIMARK HOSPITALITY GROUP INC.

By: ________

Name: Conrad W. Elliston

Title: Chairman & Chief Executive Officer

Date: December 5, 2022

17. Enclosures

The following documents are enclosed with this Engagement Letter for your reference and records:

1. Calderwood & Harkness LLP — Firm Privacy Notice

2. Client Identification Form and IRS Form W-9 (to be completed and returned by VHG, if applicable)

3. Wire Transfer Instructions for Retainer Deposit ($50,000.00 to Calderwood & Harkness LLP Client Trust Account, IOTA Account)

cc: Natasha Ricard, Chief Financial Officer, Verimark Hospitality Group Inc. cc: Derek Huang, Senior Vice President — Capital Markets & Treasury, Verimark Hospitality Group Inc. cc: Angela Fontaine, Partner, Calderwood & Harkness LLP cc: Grace Nakamura, Associate, Calderwood & Harkness LLP

This Engagement Letter is confidential and is intended solely for the use of the addressee. If you have received this letter in error, please notify the sender immediately.

Attorney	Position	Hourly Rate
Douglas Fairchild	Partner	$1,150.00
Angela Fontaine	Partner	$1,100.00
Grace Nakamura	Associate	$725.00
Rafael Dominguez	Associate	$625.00

CALDERWOOD & HARKNESS LLP Attorneys at Law
100 Southeast Second Street, Suite 3800 Miami, Florida 33131 Telephone: (305) 555-7200 Facsimile: (305) 555-7201 www.calderwoodharkness.com
December 5, 2022
VIA ELECTRONIC MAIL AND HAND DELIVERY
Mr. Conrad W. Elliston Chairman & Chief Executive Officer Verimark Hospitality Group Inc. 1400 Bayshore Boulevard, Suite 2200 Miami, Florida 33131
Re: Engagement of Calderwood & Harkness LLP — Representation of Verimark Hospitality Group Inc. and Coral Palms Resort Holdings LLC in Connection with $160,000,000 Refinancing of Coral Palms Grand Resort & Spa, Key Largo, Florida
Client Matter Number: 1021-00007
Dear Mr. Elliston:
1. Purpose and Introduction
We are pleased that Verimark Hospitality Group Inc. ("VHG" or the "Company") has selected Calderwood & Harkness LLP ("Calderwood & Harkness," the "Firm," "we," "us," or "our") as its legal counsel in connection with the transaction described below. We greatly value the confidence you and your team have placed in our Firm, and we look forward to working with you to bring this matter to a successful conclusion.
This letter (the "Engagement Letter") sets forth the terms and conditions under which Calderwood & Harkness will represent VHG and confirms the scope, staffing, fee arrangements, and other material terms of our engagement. We ask that you review this Engagement Letter carefully and, if the terms are acceptable, execute and return a copy to our office as described in Section 16 below.
This Engagement Letter confirms that Calderwood & Harkness has been engaged to represent Verimark Hospitality Group Inc., a Delaware corporation whose shares are publicly traded on the Nasdaq Stock Market under the ticker symbol "VMRK," and its wholly owned indirect subsidiary, Coral Palms Resort Holdings LLC, a Florida limited liability company (collectively, the "Clients"), as borrower's counsel in connection with the proposed $160,000,000 first mortgage refinancing (the "Refinancing" or the "Transaction") of the property commonly known as the Coral Palms Grand Resort & Spa, located at 99000 Overseas Highway, Key Largo, Monroe County, Florida 33037 (the "Property").
The proposed lender for the Refinancing is Pinnacle Atlantic Capital, LLC ("PAC" or the "Lender"). As you are aware, the Refinancing is intended to replace the existing first mortgage loan currently held by Tidewater National Bank, N.A. ("Tidewater"), which has an outstanding principal balance of approximately $118,500,000 as of the date hereof. We understand that the Transaction is being structured in accordance with the term sheet issued by PAC dated November 14, 2022, which was executed by VHG on November 28, 2022 (the "Term Sheet"), and the commitment letter anticipated to be issued by PAC in the near term (the "Commitment Letter"). Our representation will encompass all borrower-side legal matters necessary to effectuate the Refinancing through closing and the completion of post-closing deliverables, as further described below.
2. Scope of Representation
Calderwood & Harkness will represent Coral Palms Resort Holdings LLC, as borrower (the "Borrower"), and Verimark Hospitality Group Inc., as guarantor (the "Guarantor"), in connection with all aspects of the Refinancing, including, without limitation, the following:
(a) Commitment Letter and Side Letters. Review, analysis, and negotiation of the Commitment Letter to be issued by PAC, together with any fee letters, side letters, or related agreements, to ensure that the terms thereof are consistent with the Term Sheet and are acceptable to the Clients.
(b) Loan Documents. Review, drafting, markup, and negotiation of all loan documents (collectively, the "Loan Documents"), which are anticipated to include the following:
(i) Loan Agreement (and any supplements or amendments thereto);
(ii) Promissory Note;
(iii) Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (the "Mortgage"), to be recorded in the Official Records of Monroe County, Florida;
(iv) Guaranty Agreement (including any carve-out guaranty, completion guaranty, or other guaranty instruments required by PAC);
(v) Environmental Indemnity Agreement;
(vi) Cash Management Agreement (including provisions related to lockbox accounts, operating accounts, and deposit account control agreements);
(vii) Reserve Agreement (covering tax and insurance reserves, FF&E reserves, and any other required reserves);
(viii) Assignment of Contracts, Licenses, and Permits;
(ix) UCC-1 Financing Statements;
(x) Subordination, Non-Disturbance, and Attornment Agreements ("SNDAs"), if applicable;
(xi) All ancillary certificates, opinions, and closing documents required by PAC and its counsel.
(c) Coordination with Lender's Counsel. Active coordination and negotiation with the Lender's outside counsel, Whitford Baines & Driscoll LLP ("WBD"), attention Philip Tarrant Corporation, Partner, including participation in negotiation calls, document exchanges, and the resolution of open business and legal points throughout the transaction process.
(d) Title and Survey Matters. Review and analysis of the title commitment issued in connection with the Refinancing, together with all underlying exception documents; review of the most recent ALTA/NSPS survey of the Property; preparation and delivery of title objection letters to the title company; and coordination with the title company and escrow agent, Meridian Title & Escrow, Inc. ("Meridian Title"), regarding resolution of title matters, endorsement requirements, and closing and escrow arrangements.
(e) Insurance Review. Review of the insurance requirements set forth in the Loan Documents and coordination with VHG's insurance broker, Castlegate Risk Advisors LLC ("Castlegate"), to ensure that evidence of insurance satisfies the Lender's requirements, including coverage amounts, policy endorsements, and additional insured designations.
(f) Environmental Reports. Review of the Phase I Environmental Site Assessment ("Phase I ESA") of the Property prepared by Oakridge Environmental Consulting Group, Inc. ("Oakridge"), including evaluation of any recognized environmental conditions ("RECs"), controlled recognized environmental conditions ("CRECs"), or historical recognized environmental conditions ("HRECs") identified therein, and assessment of the implications of the Phase I ESA findings on the Loan Documents and the Environmental Indemnity Agreement.
(g) Organizational and Authorization Documents. Preparation, review, and coordination of all borrower and guarantor organizational and authorization documents required by the Lender, including certificates of formation, operating agreements (or relevant excerpts thereof), certificates of good standing, incumbency certificates, secretary's or authorized officer's certificates, and entity resolutions authorizing the Refinancing.
(h) Payoff of Existing Indebtedness. Coordination of the payoff and defeasance (or discharge) of the existing Tidewater National Bank first mortgage loan, including preparation and submission of the payoff request letter, review and verification of the payoff statement, and coordination of the release and recording of mortgage satisfactions, UCC-3 termination statements, and any other instruments required to evidence the full discharge of the existing indebtedness.
(i) Appraisal and Valuation Matters. Review of the Lender's appraisal of the Property, to the extent made available to the Borrower, and assessment of appraisal-related matters as they affect loan terms, loan-to-value ratios, reserve requirements, and other provisions of the Loan Documents.
(j) Closing and Post-Closing. Preparation of a closing checklist and pre-closing document checklist; attendance at the closing (whether in person or virtually); coordination of the execution, delivery, and recording of all closing documents; and management of post-closing deliverables, including recording confirmations, policy issuance follow-up, and delivery of post-closing items to all parties.
Matters Outside the Scope of This Engagement. The scope of our engagement is specifically limited to the legal services described above in connection with the Refinancing. Without limiting the generality of the foregoing, our representation does not include the following:
(i) Tax Advice. We will not be providing tax advice in connection with this engagement, including advice regarding the federal, state, or local tax consequences of the Refinancing, transfer taxes, intangible taxes, or documentary stamp taxes. We recommend that VHG consult with its independent auditors, Keswick & Holt LLP, or other qualified tax advisors regarding any tax matters arising from the Transaction.
(ii) Securities Law Advice. We will not be providing advice regarding securities law compliance, including any disclosure obligations VHG may have under federal or state securities laws in connection with the Refinancing or otherwise.
(iii) Litigation. We will not be representing VHG or the Borrower in any litigation, arbitration, or other dispute arising from or relating to the Transaction or the Property unless we are separately engaged to do so under a separate engagement letter with terms to be agreed upon.
This engagement is limited to the specific Transaction described herein. Nothing in this Engagement Letter shall be construed to create an ongoing attorney-client relationship between Calderwood & Harkness and VHG or any of its affiliates for any other matter. Should VHG wish to retain Calderwood & Harkness for any additional or future matters, we would be pleased to discuss the terms of such engagement at that time.
3. Engagement Team and Responsible Attorneys
Calderwood & Harkness has assembled a dedicated team of professionals from its Real Estate Practice Group to staff this engagement. The following attorneys have been assigned to the matter:
Douglas Fairchild — Responsible Partner, Real Estate Practice Group. Douglas will serve as the primary relationship partner and supervising attorney for the engagement. He will maintain overall responsibility for the strategic direction and quality of our work product, provide senior-level oversight on all key transaction issues, and be available for escalation of material negotiation points and executive-level discussions.
Angela Fontaine — Billing Partner, Real Estate Practice Group. Angela will actively participate in document review and negotiation, with particular focus on the Loan Agreement, Guaranty Agreement, and Cash Management Agreement. She will work closely with Douglas in managing the Lender's counsel relationship and will supervise the billing and administrative aspects of the engagement.
Grace Nakamura — Lead Associate, Real Estate Practice Group. Grace will be responsible for the day-to-day management of the Transaction. She will serve as the primary drafter of borrower-side documents and will prepare markups of and comments to all Loan Documents prepared by Lender's counsel. Grace will be the primary point of contact for routine transaction matters, working-level calls with WBD, and coordination with Meridian Title, Castlegate, and other third-party service providers.
Rafael Dominguez — Working Associate, Real Estate Practice Group. Rafael will provide due diligence, legal research, and document preparation support. His responsibilities will include review of title and survey materials, preparation of organizational and authorization documents, coordination of UCC and lien searches, and assistance with closing logistics and post-closing matters.
From time to time, additional attorneys, paralegals, or other paraprofessional staff may be assigned to the engagement as workload and subject-matter expertise require. Any such additional personnel will be assigned at billing rates consistent with their respective experience levels. We will provide advance notice to VHG of any material additions to the engagement team.
We understand that the primary client contacts for this engagement will be as follows:
•  Derek Huang, Senior Vice President — Capital Markets & Treasury, who will serve as the principal day-to-day business contact for the Transaction;
•  Natasha Ricard, Chief Financial Officer, who will be involved in financial, accounting, and treasury-related matters; and
•  Conrad W. Elliston, Chairman & Chief Executive Officer, who will be available for executive-level matters as needed.
We request that VHG designate Derek Huang as the individual authorized to provide routine instructions and approvals on behalf of VHG with respect to the engagement, subject to any limitations VHG may wish to impose. Unless otherwise advised, we will rely on instructions from Mr. Huang as authorized by VHG.
4. Fees and Hourly Rates
Calderwood & Harkness will charge for legal services rendered in connection with this engagement on an hourly basis. The current hourly rates for the attorneys assigned to this matter are set forth below:
In the event that paralegals or other professional support staff are utilized in connection with the engagement, their time will be billed at the Firm's prevailing rates for such personnel, which currently range from $275.00 to $400.00 per hour depending on the individual's experience and seniority.
The hourly rates set forth above are the Firm's standard rates currently in effect. These rates are subject to annual adjustment, which typically becomes effective on January 1 of each calendar year. Any rate increase will be communicated to VHG in advance and will apply to services rendered on or after the effective date of the adjustment. We do not anticipate any rate changes before January 1, 2024, but we will notify you promptly should any adjustments be implemented prior to that date.
All professional time is recorded and billed in increments of one-tenth (0.1) of an hour (i.e., six-minute increments). Each timekeeper maintains contemporaneous time records reflecting the date of service, a description of the work performed, and the time expended.
5. Fee Estimate
Based on our current understanding of the Transaction's scope and complexity, including the terms set forth in the Term Sheet, the structure of the Refinancing, the nature of the Property, and our experience with comparable hospitality financing transactions, Calderwood & Harkness estimates that total legal fees for this engagement will be in the range of $350,000 to $475,000, assuming a full transaction closing occurs.
This estimate is provided for planning and budgeting purposes only and does not constitute a cap, guarantee, maximum fee, or fixed-fee arrangement. Actual fees may be higher or lower than the estimated range depending upon a number of factors, including, without limitation:
•  The complexity and duration of loan document negotiations with WBD on behalf of PAC, including the number of document drafts, markup rounds, and negotiation sessions required to reach final agreement on the Loan Documents;
•  The nature and extent of any title defects, survey discrepancies, or title objection issues that may arise in connection with the Property;
•  The scope and depth of due diligence required by the Lender, including any supplemental reports, certifications, or investigations that may be requested;
•  Appraisal-related matters, including any disputes regarding appraised value, adjustments to loan terms, or the need for supplemental valuation work;
•  The number and complexity of any SNDA negotiations with tenants, concessionaires, or other parties;
•  Any unforeseen issues, including environmental concerns, zoning or land use complications, or changes in the Lender's underwriting requirements; and
•  Any delays in closing or material changes to the Transaction structure.
In the event it becomes apparent during the course of the engagement that total fees are likely to materially exceed the upper end of the estimated range, Calderwood & Harkness will promptly notify VHG and discuss the circumstances giving rise to the additional fees. We will work with VHG to manage costs effectively throughout the engagement and will be mindful of billing efficiency at all times.
Lender's Counsel Fees. VHG should be aware that, as is customary in transactions of this nature, the Borrower is separately responsible for payment of the Lender's outside legal fees and disbursements. Pursuant to the Term Sheet and the anticipated Commitment Letter, the Borrower has agreed to pay the legal fees and expenses of WBD in an amount not to exceed $275,000 plus reasonable out-of-pocket disbursements. These fees are a separate obligation of the Borrower payable directly to WBD and are not part of, and are in addition to, the fees of Calderwood & Harkness described in this Engagement Letter.
6. Retainer
Upon execution of this Engagement Letter, VHG shall deposit an evergreen retainer in the amount of Fifty Thousand Dollars ($50,000.00) (the "Retainer") with Calderwood & Harkness LLP. The Retainer shall be deposited into the Firm's client trust account, which is an Interest on Trust Account ("IOTA") maintained in accordance with the requirements of the Rules Regulating The Florida Bar. Any interest earned on the Retainer will be remitted to The Florida Bar Foundation in accordance with applicable rules and will not accrue to the benefit of VHG.
The Retainer is intended to serve as security for payment of fees and disbursements incurred in connection with this engagement. The Retainer will not be applied against monthly invoices as they are rendered during the ordinary course of the engagement. Rather, the Retainer will be maintained in the Firm's trust account and will be applied only against the final invoice rendered upon conclusion of the engagement or upon termination of the engagement, as described in Section 11 below.
If, for any reason, the Retainer balance falls below Twenty-Five Thousand Dollars ($25,000.00) as a result of application against outstanding fees or disbursements, VHG agrees to replenish the Retainer to the full amount of Fifty Thousand Dollars ($50,000.00) within ten (10) business days following Calderwood & Harkness's written request therefor.
Any unused portion of the Retainer remaining after application against all outstanding fees and disbursements will be refunded to VHG promptly upon the conclusion of the matter and the payment in full of all outstanding invoices.
We note for the record that VHG deposited the Retainer in the amount of $50,000.00 on December 7, 2022, by wire transfer to the Firm's client trust account.
7. Billing and Payment Terms
Calderwood & Harkness will render monthly invoices for professional fees and disbursements incurred during the immediately preceding calendar month. Invoices will typically be issued within fifteen (15) days following the end of the applicable billing period.
All invoices are due and payable within thirty (30) days from the date of the invoice (i.e., Net 30). Payment shall be made by wire transfer or check, directed to the account specified on the invoice.
Each invoice will include a reasonably detailed description of the services rendered, including the date of each service, the identity of the attorney or professional performing each task, a narrative description of the work performed, the time expended (in one-tenth of an hour increments), and the applicable hourly rate. Disbursements will be itemized separately. We are happy to accommodate any specific billing format or coding requirements that VHG may have, including LEDES or other electronic billing formats, provided we are advised of such requirements in advance.
In the event that any invoice remains unpaid beyond thirty (30) days from the date of invoice, Calderwood & Harkness reserves the right to assess a late charge of 1.0% per month on the outstanding balance (or the maximum rate permitted under applicable Florida law, whichever is less), calculated from the original due date of the invoice until payment is received in full.
Calderwood & Harkness further reserves the right to suspend or discontinue work on the engagement if any invoices remain unpaid for more than sixty (60) days from the date of invoice, upon not less than ten (10) business days' prior written notice to VHG. We will, of course, endeavor to resolve any billing questions or disputes informally before exercising this right, and we will take all reasonable steps to protect VHG's interests in the event that a suspension of work becomes necessary.
8. Disbursements and Expenses
In addition to professional fees for legal services, VHG will be responsible for the reimbursement of all reasonable out-of-pocket expenses and disbursements incurred by Calderwood & Harkness in connection with this engagement. Such disbursements may include, but are not limited to, the following:
•  Filing fees, recording fees (including documentary stamp tax and intangible tax remittances, if applicable), and search fees, including UCC searches, judgment lien searches, tax lien searches, and other public record searches conducted in connection with the Transaction;
•  Title search and examination charges, to the extent such charges are incurred by Calderwood & Harkness directly and are not otherwise covered by or billed through Meridian Title & Escrow, Inc.;
•  Overnight courier, express mail, and delivery charges (Severin Partners LLC, Halcyon Partners LLC, Tarrant & Co., or similar services);
•  Travel expenses incurred in connection with the engagement, including airfare, hotel accommodations, meals, and ground transportation for trips to Key Largo, Florida (for property inspections or closing), New York, New York (for meetings with the Lender and/or Lender's counsel), and other locations as reasonably necessary in furtherance of the Transaction;
•  Photocopying, scanning, printing, and document production charges at the Firm's prevailing internal rates;
•  Charges for computerized legal research conducted through Westlaw, Sundial Solutions, or other electronic research platforms;
•  Long-distance telephone charges and charges for conference call services; and
•  Any other reasonable out-of-pocket expenses directly attributable to the engagement.
To the extent any individual disbursement is expected to exceed Five Thousand Dollars ($5,000.00), Calderwood & Harkness will obtain VHG's prior written approval before incurring such expense. VHG's approval may be provided by e-mail from any of the designated client contacts identified in Section 3 above.
9. Confidentiality and Privilege
Calderwood & Harkness will maintain the confidentiality of all information, documents, and materials provided by VHG or any of its affiliates, officers, directors, employees, or agents in connection with this engagement (collectively, "Confidential Information"), in accordance with applicable Rules of Professional Conduct, including Rule 4-1.6 of the Rules Regulating The Florida Bar. We will not disclose Confidential Information to any person or entity outside the Firm without VHG's authorization, except as may be required by law, court order, or the applicable rules of professional conduct.
All communications between Calderwood & Harkness and VHG relating to the provision of legal advice in connection with this engagement are intended to be, and shall be treated as, protected by the attorney-client privilege and the work product doctrine. VHG should be aware that these protections may be waived if privileged communications or work product are voluntarily disclosed to third parties outside the scope of the privilege. We encourage VHG to consult with us before disclosing any materials or communications that may be subject to privilege.
Notwithstanding the foregoing, VHG hereby authorizes Calderwood & Harkness to share Confidential Information with the following parties to the extent reasonably necessary to effectuate the Transaction:
•  Members of the Calderwood & Harkness engagement team and such other Firm personnel as are reasonably required to provide support services;
•  Pinnacle Atlantic Capital, LLC and its counsel, Whitford Baines & Driscoll LLP, to the extent required in connection with the loan underwriting, due diligence, document negotiation, and closing process;
•  Meridian Title & Escrow, Inc., in connection with title clearance, escrow, and closing matters; and
•  Such other third parties (e.g., Oakridge Environmental Consulting Group, Inc.; Castlegate Risk Advisors LLC; Tidewater National Bank, N.A.) as are reasonably necessary to advance the Transaction, provided that any such disclosures are limited to information necessary for the specific purpose at hand and do not waive any applicable privileges.
We will exercise professional judgment in determining the scope of any disclosures to third parties and will take reasonable precautions to preserve applicable privileges to the fullest extent practicable.
10. Conflicts of Interest
Calderwood & Harkness has conducted a comprehensive conflicts check in accordance with the Firm's internal policies and procedures and the applicable Rules of Professional Conduct, including Rules 4-1.7 and 4-1.9 of the Rules Regulating The Florida Bar, governing concurrent and successive conflicts of interest. The conflict check was conducted using the Firm's proprietary conflicts clearance system and included a review of the Firm's client and matter databases.
Based on the results of the conflicts check, the Firm confirms that no conflicts of interest have been identified that would prevent or impair our representation of Verimark Hospitality Group Inc. and Coral Palms Resort Holdings LLC in connection with this matter. The parties and entities checked in connection with this engagement include, without limitation:
•  Pinnacle Atlantic Capital, LLC;
•  Greystone Peak Asset Management LP (an affiliate and/or investment manager associated with PAC);
•  Tidewater National Bank, N.A.;
•  Whitford Baines & Driscoll LLP;
•  Meridian Title & Escrow, Inc.;
•  Oakridge Environmental Consulting Group, Inc.;
•  Castlegate Risk Advisors LLC; and
•  Other individuals and entities identified as transaction participants.
A detailed conflict check memorandum has been prepared and is on file with the Firm's General Counsel's office, dated on or about October 19, 2022.
VHG acknowledges that Calderwood & Harkness is a large, full-service law firm that represents a substantial number of clients across a broad range of practice areas and industries. The Firm may currently represent, or may in the future represent, other clients in matters that are unrelated to this engagement but that may involve one or more of the parties to this Transaction. VHG hereby consents to such unrelated representations, provided that they do not involve a matter that is substantially related to this engagement and that is adverse to VHG or any of its affiliates.
In the event that an actual conflict of interest arises during the course of this engagement, Calderwood & Harkness will promptly notify VHG and take appropriate steps to address the conflict in accordance with the applicable Rules of Professional Conduct, which may include seeking informed written consent from the affected parties, erecting an ethical screen, or, if necessary, withdrawing from the representation.
11. Termination of Engagement
Either VHG or Calderwood & Harkness may terminate this engagement at any time, with or without cause, upon written notice to the other party. In the case of termination by the Firm, we will comply with all applicable ethical obligations, including providing reasonable notice to VHG and taking such steps as are reasonably practicable to avoid prejudice to VHG's interests.
In the event of termination, whether by VHG or by Calderwood & Harkness, VHG will remain responsible for the payment of all professional fees and disbursements incurred through the effective date of termination, in accordance with the fee arrangements and billing terms set forth in this Engagement Letter. Any outstanding invoices shall become due and payable in full upon termination, and the Retainer shall be applied against any unpaid balance as described in Section 6 above.
Upon termination, Calderwood & Harkness will take reasonable steps to protect VHG's interests and to facilitate an orderly transition to successor counsel, if applicable, including the timely transfer of files, documents, and work product, and cooperation with successor counsel as reasonably requested by VHG.
Calderwood & Harkness will promptly return or make available to VHG all client files, original documents, and client property upon written request following termination of the engagement, subject to the Firm's right to retain copies of such materials for its own files and records, and subject to any retaining or charging lien rights for unpaid fees and disbursements to which the Firm may be entitled under applicable Florida law, including Section 68.081, Florida Statutes, and applicable case law.
12. No Guarantee of Outcome
Calderwood & Harkness will devote its best professional efforts and diligent attention to the representation of VHG in connection with this Transaction. Our attorneys assigned to the engagement possess substantial experience in complex real estate finance transactions, and we will bring the full resources of our Real Estate Practice Group to bear in pursuing a successful outcome for VHG.
However, VHG acknowledges and agrees that Calderwood & Harkness cannot and does not guarantee that the Refinancing will close, that any particular loan terms will be obtained, or that any specific outcome or result will be achieved. The successful consummation of the Transaction depends upon numerous factors that are beyond the control of the Firm, including, without limitation, the Lender's final credit approval and underwriting decisions, the results of the appraisal and other third-party reports, prevailing interest rate and capital market conditions, the satisfactory resolution of title, survey, and environmental matters, and the actions and decisions of third parties involved in the Transaction.
Nothing in this Engagement Letter or in any communication by Calderwood & Harkness shall be construed as a representation, warranty, or guarantee regarding the outcome of the Transaction or any aspect thereof.
13. Document Retention
Following the conclusion of this engagement, whether by closing of the Transaction, termination, or otherwise, Calderwood & Harkness will retain the engagement file (including correspondence, working papers, memoranda, draft documents, and related materials) in accordance with the Firm's document retention policy, which generally provides for a minimum retention period of seven (7) years from the date of conclusion of the engagement.
VHG may request the return of original documents in the Firm's possession at any time during or after the engagement by providing written notice to the Firm.
After the expiration of the applicable retention period, Calderwood & Harkness may destroy or dispose of the engagement file, including any copies of documents, without further notice to VHG, unless VHG has provided written instructions to the Firm requesting that the file be preserved beyond the standard retention period or returned to VHG. We encourage VHG to advise us in writing of any specific document preservation requirements.
14. Governing Law and Dispute Resolution
This Engagement Letter and the terms and conditions of the engagement described herein shall be governed by and construed in accordance with the laws of the State of Florida, without regard to principles of conflicts of law.
Any dispute, controversy, or claim arising out of or relating to this Engagement Letter, the engagement, or the Firm's representation of VHG, including any claim for fees or disbursements and any claim of malpractice or professional liability (collectively, a "Dispute"), shall be resolved through binding arbitration administered in Miami-Dade County, Florida, in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") then in effect, unless the parties mutually agree in writing to an alternative dispute resolution mechanism.
The arbitration shall be conducted by a single arbitrator selected in accordance with the AAA rules who possesses experience in legal malpractice or legal fee disputes, as applicable. The arbitrator's decision shall be final and binding upon the parties and may be entered as a judgment in any court of competent jurisdiction.
Each party shall bear its own attorneys' fees, costs, and expenses incurred in connection with any such arbitration or other dispute resolution proceeding, unless the arbitrator determines that an award of fees and costs to the prevailing party is warranted under applicable law.
15. Entire Agreement and Amendments
This Engagement Letter constitutes the entire agreement between Calderwood & Harkness LLP and Verimark Hospitality Group Inc. with respect to the terms and conditions of the engagement described herein. This Engagement Letter supersedes all prior and contemporaneous oral or written negotiations, proposals, representations, understandings, and agreements between the parties relating to the subject matter hereof.
No modification, amendment, supplement, or waiver of any provision of this Engagement Letter shall be effective unless made in writing and signed by an authorized representative of each party.
If any provision of this Engagement Letter is found to be invalid, illegal, or unenforceable, the remaining provisions shall continue in full force and effect to the fullest extent permitted by law.
16. Acceptance and Signature block
If the terms set forth in this Engagement Letter are acceptable to VHG, please indicate your acceptance by countersigning this letter in the space provided below and returning an executed copy to the undersigned by hand delivery, overnight courier, or e-mail (PDF scan) at your earliest convenience. We ask that the executed copy and the retainer deposit (if not already received) be transmitted no later than December 9, 2022, so that we may begin work promptly.
We are excited about the opportunity to represent VHG and Coral Palms Resort Holdings LLC in this important transaction. Please do not hesitate to contact me or any member of the engagement team if you have any questions regarding this Engagement Letter or any aspect of the engagement.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Douglas Fairchild, Partner Real Estate Practice Group Telephone: (305) 555-7218 E-mail: dfairchild@calderwoodharkness.com
Date: ________
ACCEPTED AND AGREED:
VERIMARK HOSPITALITY GROUP INC.
By: ________
Name: Conrad W. Elliston
Title: Chairman & Chief Executive Officer
Date: December 5, 2022
17. Enclosures
The following documents are enclosed with this Engagement Letter for your reference and records:
1.  Calderwood & Harkness LLP — Firm Privacy Notice
2.  Client Identification Form and IRS Form W-9 (to be completed and returned by VHG, if applicable)
3.  Wire Transfer Instructions for Retainer Deposit ($50,000.00 to Calderwood & Harkness LLP Client Trust Account, IOTA Account)
cc: Natasha Ricard, Chief Financial Officer, Verimark Hospitality Group Inc. cc: Derek Huang, Senior Vice President — Capital Markets & Treasury, Verimark Hospitality Group Inc. cc: Angela Fontaine, Partner, Calderwood & Harkness LLP cc: Grace Nakamura, Associate, Calderwood & Harkness LLP
This Engagement Letter is confidential and is intended solely for the use of the addressee. If you have received this letter in error, please notify the sender immediately.
Attorney | Position | Hourly Rate
Douglas Fairchild | Partner | $1,150.00
Angela Fontaine | Partner | $1,100.00
Grace Nakamura | Associate | $725.00
Rafael Dominguez | Associate | $625.00

CALDERWOOD & HARKNESS LLP Attorneys at Law

VIA ELECTRONIC MAIL AND HAND DELIVERY

CALDERWOOD & HARKNESS LLP

ACCEPTED AND AGREED:

VERIMARK HOSPITALITY GROUP INC.

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