Contract analysis

ARTICLE I — DEFINITIONS As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meanings ascribed to them elsewhere in this Agreement.

Section 1.1 "Act" means the Florida Revised Limited Liability Company Act, Chapter 605, Florida Statutes, as amended from time to time, and any successor statute thereto.

Section 1.2 "Agreement" means this Amended and Restated Operating Agreement of Palmetto Grand Ventures LLC, as it may be further amended, restated, supplemented, or otherwise modified from time to time in accordance with the provisions hereof.

Section 1.3 "Aurelian Franchise Agreement" means that certain Franchise Agreement, dated as of July 15, 2017, between the Company and Aurelian Hotels & Resorts Inc., a Delaware corporation ("Aurelian"), with an initial term of twenty (20) years (expiring on July 14, 2037), pursuant to which the Company operates the Property under the Aurelian Hotels & Resorts brand and is obligated to pay a franchise fee equal to fiv

Section 1.4 "Capital Contribution" means any cash, property, or other assets contributed to the Company by the Member (or any predecessor member), as reflected in the books and records of the Company.

Section 1.5 "Company" means Palmetto Grand Ventures LLC, a Florida limited liability company, formed under the Act with Filing No. L17000124583 with the Secretary of State of the State of Florida.

Section 1.6 "Effective Date" means July 15, 2024.

Section 1.7 "EIN" means the Company's federal employer identification number, which is 82-5063921.

Section 1.8 "GANB Loan" means the loan from Gulf Atlantic National Bank (Loan No. CRE-2017-06284), originally dated August 1, 2017, in the original principal amount of Sixty-One Million Two Hundred Fifty Thousand Dollars ($61,250,000), bearing interest at SOFR plus 2.25% per annum (converted from LIBOR plus 2.25% per annum pursuant to a rate conversion amendment effective January 1, 2022), with a maturity date of Aug

Section 1.9 "GAAP" means United States generally accepted accounting principles as in effect from time to time, consistently applied.

Section 1.10 "Manager" means PCG, in its capacity as the sole manager of the Company, and any successor manager appointed in accordance with this Agreement.

Section 1.11 "Member" means PCG, as the sole member of the Company, and any Person admitted as an additional or substitute member of the Company in accordance with this Agreement and the Act.

Section 1.12 "Membership Interest" means the entire ownership interest of a member in the Company, including all economic rights (including the right to share in profits, losses, and distributions), all governance rights (including voting and consent rights), and all other rights and obligations arising under this Agreement or the Act.

Section 1.13 "MSH" means Meridian Shores Hospitality LLC, a Delaware limited liability company, a former member of the Company whose thirty-five percent (35%) Membership Interest was redeemed and assigned to PCG effective June 28, 2024.

Section 1.14 "Original Operating Agreement" means the Operating Agreement of Palmetto Grand Ventures LLC, dated as of June 15, 2017, entered into by and between PCG and MSH, as amended prior to the Effective Date, which is hereby superseded in its entirety by this Agreement.

Section 1.15 "PCG" means Pellegrino Capital Group LLC, a Florida limited liability company, with its principal office at 1900 Bayshore Boulevard, Suite 1400, Tampa, Florida 33606, and federal employer identification number 83-2147605.

Section 1.16 "Person" means any individual, corporation, limited liability company, partnership, limited partnership, joint venture, trust, estate, unincorporated association, governmental authority, or other entity.

Section 1.17 "Property" means The Palmetto Grand Resort & Spa, a 312-room luxury beachfront resort (including forty-two (42) suites), together with all improvements, fixtures, furniture, equipment, and personal property associated therewith, located at 650 Mandalay Avenue, Clearwater Beach, Florida 33767, as more particularly described in Exhibit B attached hereto.

Section 1.18 "Redemption" means the purchase by PCG of MSH's thirty-five percent (35%) Membership Interest in the Company for a total redemption price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000), which closed on June 28, 2024, pursuant to the terms of the Redemption Agreement.

Section 1.19 "Redemption Agreement" means that certain Redemption Agreement, dated as of May 20, 2024, by and between PCG and MSH, pursuant to which PCG agreed to purchase, and MSH agreed to sell, MSH's entire thirty-five percent (35%) Membership Interest in the Company.

Section 1.20 "Treasury Regulations" means the regulations promulgated under the Internal Revenue Code of 1986, as amended, by the United States Department of the Treasury, as in effect from time to time.

Section 2.1 — Formation. The Company was formed as a Florida limited liability company on June 15, 2017, by the filing of Articles of Organization with the Secretary of State of the State of Florida, and was assigned Filing No. L17000124583. The Company is, and shall continue to be, governed by the Act and this Agreement. In the event of any conflict between the provisions of this Agreement and the non-mandatory prov

Section 2.2 — Name. The legal name of the Company is "Palmetto Grand Ventures LLC." The Manager may cause the Company to conduct business under such assumed or fictitious names as the Manager may determine from time to time, provided that appropriate filings are made in accordance with applicable law.

Section 2.3 — Registered Office and Registered Agent. (a) The registered office of the Company in the State of Florida is located at 1900 Bayshore Boulevard, Suite 1400, Tampa, Florida 33606. (b) The registered agent of the Company for service of process in the State of Florida is CT Agents of Florida LLC, located at 1201 Hays Street, Tallahassee, Florida 32301. (c) The Manager may change the registered office or the

Section 2.4 — Principal Office. The principal office of the Company shall be located at 1900 Bayshore Boulevard, Suite 1400, Tampa, Florida 33606, or at such other place or places as the Manager may designate from time to time. The Manager shall give notice to all Persons entitled thereto of any change in the Company's principal office.

Section 2.5 — Purpose. The Company is organized for the purpose of: (a) Owning, operating, managing, maintaining, renovating, improving, financing, refinancing, encumbering, and disposing of The Palmetto Grand Resort & Spa, a 312-room full-service luxury beachfront resort located at 650 Mandalay Avenue, Clearwater Beach, Florida 33767, including its forty-two (42) suites, two (2) restaurants, rooftop bar, approximate

Section 2.6 — Term. The Company shall have perpetual existence and shall continue in full force and effect until dissolved and terminated in accordance with the provisions of Article IX of this Agreement or the Act. The death, dissolution, retirement, resignation, expulsion, or bankruptcy of a Member shall not cause the dissolution of the Company.

Section 2.7 — EIN and Tax Classification. (a) The Company's federal employer identification number is 82-5063921. (b) For so long as the Company has a single member, the Company shall be treated as a disregarded entity for federal income tax purposes pursuant to Treasury Regulations Section 301.7701-3, unless PCG, as the sole Member, elects otherwise by filing IRS Form 8832 (Entity Classification Election). In the ev

Section 3.1 — Sole Member. The sole member of the Company as of the Effective Date is: Pellegrino Capital Group LLC A Florida limited liability company Principal Address: 1900 Bayshore Boulevard, Suite 1400, Tampa, Florida 33606 Federal EIN: 83-2147605 Membership Interest: 100% PCG holds one hundred percent (100%) of the Membership Interests in the Company, including all economic rights, governance rights, and all ot

Section 3.2 — Admission of Additional Members. No additional members shall be admitted to the Company except with the prior written consent of the Manager (i.e., PCG in its capacity as sole Manager) and upon the execution of an amendment to this Agreement reflecting the admission of such additional member and the terms upon which such member is admitted, including the Membership Interest to be held by such additional

Section 3.3 — Liability of Member. PCG, as the sole Member, shall not be personally liable for the debts, obligations, or liabilities of the Company, whether arising in contract, tort, or otherwise, solely by reason of being a member or manager of the Company. The liability of PCG shall be limited to the fullest extent provided under the Act, including Sections 605.04073 and 605.0304 of the Florida Statutes. Nothing

ARTICLE IV — CAPITAL CONTRIBUTIONS

Section 4.1 — Prior Capital Contributions. For purposes of historical reference and completeness of the Company's records, the following Capital Contributions were made to the Company prior to the Effective Date: (a) Acquisition Capital. At the time of the Company's acquisition of the Property on August 1, 2017, the total equity required (after application of proceeds from the GANB Loan in the original principal amou

Section 4.2 — Additional Capital Contributions. PCG may, in its sole and absolute discretion, make additional Capital Contributions to the Company at any time and from time to time. PCG shall have no obligation to make any additional Capital Contributions to the Company unless PCG, in its capacity as sole Member and Manager, determines otherwise. Any additional Capital Contributions made by PCG shall be credited to P

Section 4.3 — Capital Account. A single capital account shall be maintained for PCG in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv) (to the extent applicable) and the provisions of this Agreement. The capital account shall reflect all Capital Contributions made by PCG, all allocations of income, gain, loss, deduction, and credit to PCG, all distributions made to PCG, and all adjustments resulting fr

Section 4.4 — No Interest on Capital. No interest shall accrue or be paid on any Capital Contribution made by PCG or any other member. The Company shall have no obligation to pay any return on any Capital Contribution, except as may be distributed in accordance with Article V of this Agreement.

Section 4.5 — No Return of Capital. PCG shall not have the right to withdraw or demand the return of its Capital Contribution, in whole or in part, except (a) as may be distributed to PCG in accordance with Article V of this Agreement, or (b) upon the dissolution and winding up of the Company in accordance with Article IX of this Agreement. No member shall have any priority over any other member with respect to the r

ARTICLE V — ALLOCATIONS AND DISTRIBUTIONS

Section 5.1 — Allocations. All items of income, gain, loss, deduction, and credit of the Company for any taxable year or other period shall be allocated one hundred percent (100%) to PCG, as the sole Member. For so long as the Company is treated as a single-member limited liability company that is disregarded as an entity separate from PCG for federal income tax purposes, all items of income, gain, loss, deduction, a

Section 5.2 — Distributions. (a) The Manager may, in its sole and absolute discretion, cause the Company to make distributions to PCG at any time and in any amount, subject to (i) the requirements of applicable law, including Section 605.04061 of the Florida Statutes (prohibiting distributions that would render the Company unable to pay its debts as they become due in the ordinary course of business), and (ii) the te

Section 5.3 — Tax Distributions. The Manager shall cause the Company to distribute to PCG, at least quarterly (and in any event no later than the fifteenth (15th) day preceding each quarterly estimated tax payment due date), amounts sufficient to cover PCG's estimated tax liability attributable to Company income, calculated at the highest applicable combined federal and state marginal tax rates for the relevant taxab

Section 6.1 — Manager. The Company shall be managed by PCG, which shall serve as the sole Manager of the Company. PCG, acting in its capacity as Manager, shall have full, exclusive, and complete authority, power, and discretion to manage, control, and direct the business and affairs of the Company, including all powers granted to a manager of a limited liability company under the Act. No Person other than the Manager

Section 6.2 — Authority of Manager. Without limiting the generality of Section 6.1, the Manager shall have the authority, on behalf of the Company, to: (a) Acquire, own, hold, operate, manage, improve, renovate, mortgage, pledge, hypothecate, lease, sublease, license, sell, exchange, or otherwise dispose of the Property and any other assets of the Company, upon such terms and conditions as the Manager shall determine

Section 6.3 — Consent Rights (Superseded). The consent and approval rights of MSH under the Original Operating Agreement, including, without limitation, consent rights with respect to (a) capital calls in excess of Two Million Dollars ($2,000,000), (b) dispositions of all or substantially all of the Company's assets, (c) refinancings of the GANB Loan or any other indebtedness of the Company, (d) the incurrence of new

Section 6.4 — Officers. The Manager may, from time to time, appoint one or more officers, agents, or delegates of the Company, with such titles, responsibilities, and duties as the Manager shall determine in its sole discretion. Any officer so appointed shall serve at the pleasure of the Manager and may be removed by the Manager at any time, with or without cause. The appointment of an officer shall not, in itself, c

Section 6.5 — Compensation. (a) The Manager shall not receive any compensation from the Company for serving in its capacity as Manager, except as the Manager may determine in its sole discretion and in accordance with applicable law; provided, that any compensation paid to the Manager shall be on terms that are fair and reasonable and consistent with the terms of any applicable third-party agreements. (b) The Company

Section 6.6 — Standard of Care and Exculpation. (a) The Manager shall manage the business and affairs of the Company in good faith and in a manner that the Manager reasonably believes to be in the best interests of the Company. The Manager shall exercise such care as an ordinarily prudent person in a like position would exercise under similar circumstances. (b) Notwithstanding the foregoing, the Manager shall not be

Section 6.7 — Indemnification. (a) The Company shall indemnify, defend, and hold harmless the Manager, its members, managers, officers, employees, and agents (including, without limitation, Dominic R. Pellegrino, Adriana Pellegrino-Voss, and Marcus Thiel) (each, an "Indemnified Person") from and against any and all losses, claims, damages, liabilities, judgments, fines, penalties, costs, and expenses (including reaso

ARTICLE VII — BOOKS, RECORDS, AND TAX MATTERS

Section 7.1 — Books and Records. The Manager shall cause to be maintained full, complete, and accurate books and records of the Company at the Company's principal office, located at 1900 Bayshore Boulevard, Suite 1400, Tampa, Florida 33606, or at such other location as the Manager may determine. The books and records of the Company shall be maintained on an accrual basis in accordance with GAAP, consistently applied,

Section 7.2 — Fiscal Year. The fiscal year of the Company shall be the calendar year, beginning on January 1 and ending on December 31 of each year.

Section 7.3 — Tax Matters. (a) PCG shall serve as the "Tax Matters Member" of the Company (or "Partnership Representative" within the meaning of Section 6223 of the Internal Revenue Code, if applicable, in the event the Company is reclassified as a partnership for federal income tax purposes) and shall have full authority to act on behalf of the Company in connection with any tax audit, examination, proceeding, or di

Section 7.4 — Bank Accounts. All funds of the Company shall be deposited in one or more bank accounts, money market accounts, or other deposit accounts maintained at financial institutions selected by the Manager. As of the Effective Date, the Company maintains operating accounts and reserve accounts at Gulf Atlantic National Bank, 201 East Pine Street, Orlando, Florida 32801. The Manager may, in its sole discretion,

ARTICLE VIII — PROPERTY AND INDEBTEDNESS

Section 8.1 — Company Property. The principal asset of the Company is The Palmetto Grand Resort & Spa (the "Property"), located at 650 Mandalay Avenue, Clearwater Beach, Florida 33767, as more fully described in Exhibit B attached hereto and incorporated herein by reference. The Property includes: (a) A 312-room luxury beachfront resort, including forty-two (42) suites; (b) Two (2) full-service restaurants, one (1) r

Section 8.2 — Existing Indebtedness. As of the Effective Date, the Company's existing indebtedness consists of the GANB Loan, the material terms of which are as follows: (a) Lender: Gulf Atlantic National Bank, 201 East Pine Street, Orlando, Florida 32801. Loan Officer: Christine Delacroix, Senior Vice President, Commercial Real Estate. (b) Loan Number: CRE-2017-06284. (c) Original Loan Date: August 1, 2017. (d) Orig

Section 8.3 — Capital Expenditures and Maintenance. The Manager shall maintain the Property in first-class condition consistent with the standards required by the Aurelian Hotels & Resorts brand and commensurate with competitive luxury resort properties located on the Gulf Coast of Florida. Without limiting the foregoing, the Manager shall: (a) Establish and fund reserves for capital expenditures, including the repla