Contract analysis

I. PURPOSE AND EXECUTIVE SUMMARY A. Purpose of This Memorandum This memorandum sets forth our analysis and review of the title commitment (Commitment No. PTX-2025-0714892) issued by Palmetto Title & Escrow Company, located at 200 Clematis Street, Suite 400, West Palm Beach, Florida 33401 (the "Title Agent" or "Palmetto Title"), with Commonwealth Southern Title Insurance Company, a Georgia-domiciled title insurance co

1. Exception No. 2 — Beach Access Easement, City of Delray Beach (OR Book 31245, Page 1822): A governmental easement for public pedestrian beach access along the eastern boundary of the Property, typical for oceanfront parcels in Delray Beach, which does not encumber any building footprint, parking area, or other improvement, and is consistent with the Property's use as an oceanfront boutique hotel.

2. Exception No. 3 — FPL Utility Easement (OR Book 22017, Page 934): A standard 10-foot utility easement along the western boundary of the Property in favor of Vireo Group for the installation, maintenance, and operation of electrical utility facilities. The easement does not encumber any building footprint and is necessary for continued utility service.

3. Exception No. 4 — CC&R Declaration (OR Book 18904, Page 455): A Declaration of Covenants, Conditions, and Restrictions recorded by the original developer of the Property, restricting the use of the Property to hotel and resort purposes, which is fully consistent with the Property's current use, the applicable zoning designation, and Buyer's intended continued operation as a boutique hotel. Objectionable Exceptions

4. Exception No. 1 — Seaview National Lending Corp. Mortgage Lien: An existing first-mortgage lien securing an original principal indebtedness of $16,800,000.00, with a current approximate payoff balance of $14,350,000.00. This monetary lien must be satisfied and released of record at or prior to closing from Seller's proceeds, as Seller is obligated under the PSA to deliver title free and clear of all monetary liens

5. Exception No. 5 — Standard/General Title Exceptions: The standard pre-printed Schedule B exceptions relating to parties in possession, survey matters, unrecorded easements, mechanic's liens, and taxes/assessments. These exceptions can and should be deleted or modified through the provision of an ALTA/NSPS survey, a Seller's affidavit, and evidence of tax payment. Deletion of these standard exceptions is a customar

II. TRANSACTION OVERVIEW A. The Buyer The purchaser of the Property is PCG Delray Hotel LLC, a Florida limited liability company that is to be formed prior to closing (the "Buyer"). Upon formation, the Buyer will be a single-member limited liability company whose sole member is Pellegrino Capital Group LLC ("PCG"), a Florida limited liability company with its principal offices located at 2400 Ponce de Leon Boulevard,

III. TITLE COMMITMENT — SCHEDULE A REVIEW A. Commitment Details The title commitment was issued by Palmetto Title & Escrow Company as Title Agent, with Commonwealth Southern Title Insurance Company as Underwriter. The salient identification and dating information is as follows: Title Commitment Number: PTX-2025-0714892 Effective Date of Commitment: July 14, 2025, at 8:00 a.m. Eastern Time Date of Commitment Issuance:

IV. TITLE COMMITMENT — SCHEDULE B-I (REQUIREMENTS) Schedule B-I of the title commitment sets forth the requirements that must be satisfied as conditions to the issuance of the Owner's Policy and the Loan Policy at closing. We have reviewed each requirement and provide our analysis and comments below. A. Standard Requirements The following requirements are listed in Schedule B-I and are customary for a commercial real

1. Payment of Full Consideration and Recording of Deed The commitment requires payment of the full purchase price of $35,000,000.00 and the recording of a deed conveying fee-simple title from Saltaire Hospitality Holdings LLC to PCG Delray Hotel LLC in the Official Records of Palm Beach County, Florida. This is a standard requirement and will be satisfied at closing through the disbursement of funds by Palmetto Title

2. Execution and Delivery of Special Warranty Deed The commitment requires the execution and delivery of a special warranty deed from Saltaire Hospitality Holdings LLC, as grantor, to PCG Delray Hotel LLC, as grantee. Pursuant to Section 5.2(a) of the PSA, Seller has agreed to deliver a special warranty deed at closing, in recordable form, duly executed and acknowledged by Seller in accordance with the requirements o

3. Payment of Documentary Stamp Taxes and Intangible Tax The commitment requires payment of all applicable transfer taxes in connection with the recording of the deed and the mortgage. Under Florida law, the following taxes are due: (a) Documentary Stamp Tax on Deed: Pursuant to Florida Statutes Section 201.02, documentary stamp tax is imposed on the deed at the rate of $0.70 per $100.00 (or fraction thereof) of the

4. Evidence of Formation and Good Standing — Buyer The commitment requires satisfactory evidence of the formation and good standing of PCG Delray Hotel LLC, including (a) filed articles of organization from the Florida Division of Corporations, (b) a copy of the operating agreement, (c) an authorization resolution from the sole member, Pellegrino Capital Group LLC, authorizing the acquisition of the Property and the

5. Evidence of Authority — Seller The commitment requires satisfactory evidence of the authority of Saltaire Hospitality Holdings LLC to convey the Property, including: (a) A certificate of good standing from the Secretary of State of Delaware, confirming Seller's existence and good standing in its state of formation; (b) A certificate of authorization (or equivalent) from the Florida Department of State, confirming

6. Payoff and Recorded Satisfaction of Existing Seaview National Lending Corp. Mortgage Lien The commitment requires the payoff and recorded satisfaction or release of the existing first-mortgage lien in favor of Seaview National Lending Corp. (original principal: $16,800,000.00; current approximate payoff: $14,350,000.00), together with all modifications, amendments, assignments, and extensions thereof, as a conditi

7. Owner's Affidavit / Gap Affidavit The commitment requires the delivery by Seller of an owner's affidavit (sometimes referred to as a "gap affidavit" or "no-lien affidavit") in a form satisfactory to the Title Agent and the Underwriter. The owner's affidavit typically contains representations by the Seller regarding the following matters: (a) There are no parties in possession of the Property other than Seller and

8. FIRPTA Affidavit or Withholding Compliance The commitment requires delivery of a non-foreign person affidavit pursuant to Section 1445 of the Internal Revenue Code (the "Foreign Investment in Real Property Tax Act" or "FIRPTA"). Because Saltaire Hospitality Holdings LLC is a domestic limited liability company formed under the laws of the State of Delaware, Seller should be able to provide a standard FIRPTA affidav

9. Payment of All Outstanding Real-Estate Taxes and Assessments The commitment requires payment of all outstanding real-estate taxes and assessments against the Property. The current tax status is as follows: The 2024 annual property tax assessed by the Palm Beach County Tax Collector against Parcel ID 12-43-46-27-01-005-0010 was approximately $432,000.00, based on a total assessed value of $24,000,000.00 (land: $14,

1. Recording of Mortgage and Related Loan Documents The commitment requires the execution, delivery, and recording in the Official Records of Palm Beach County, Florida, of a mortgage, assignment of rents and leases, and security agreement (the "Mortgage") in favor of Meridian Coast Bank, N.A., securing the indebtedness evidenced by the promissory note in the original principal amount of $24,500,000.00. The Mortgage

2. UCC-1 Financing Statement Filing The commitment requires the filing of a UCC-1 financing statement with the Florida Secured Transaction Registry (Florida Department of State) and/or the appropriate county recording office, perfecting Meridian Coast Bank's security interest in all furniture, fixtures, equipment (FF&E), and other personal property associated with the hotel operation. The UCC-1 filing is necessary to

3. Evidence of Flood Insurance The commitment notes that the Property is located in FEMA Flood Zone AE (Special Flood Hazard Area), as shown on FEMA Flood Insurance Rate Map (FIRM) Panel 12099C0826J, with an effective date of December 4, 2020. Under the National Flood Insurance Act and the Flood Disaster Protection Act, as amended by the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner Flood Insura

4. Evidence of Property/Casualty Insurance The commitment requires evidence that the Property is insured against casualty loss (including fire, windstorm, and other perils) with coverage amounts and forms acceptable to Meridian Coast Bank, N.A. Property/casualty insurance is being coordinated through Harborview Risk Advisors LLC and is expected to be placed with Atlantic Keystone Insurance Company. Given the Property

V. TITLE COMMITMENT — SCHEDULE B-II (EXCEPTIONS FROM COVERAGE) Overview Schedule B-II of the title commitment identifies the exceptions from coverage that will appear in the Owner's Policy and the Loan Policy unless cured, released, or otherwise addressed prior to closing. The commitment lists five (5) specific exceptions in addition to the standard pre-printed exceptions that are customary in Florida title commitmen