engagement-letter-pcg.docx

1027-00001 · Client 1027 · Engagement

engagement-letter-pcg.docx DOCUMENT Capital Markets

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CALDERWOOD & HARKNESS LLP Attorneys at Law 425 Lexington Avenue New York, NY 10017 Telephone: (212) 554-7000 Facsimile: (212) 554-7001 www.calderwoodharkness.com

September 27, 2021

Matter No. 1027-00001

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION

Mr. Marco A. Pellegrino Managing Member & Founder Pellegrino Capital Group LLC 1440 Gulf Shore Boulevard North, Suite 600 Naples, FL 34102

Dear Mr. Pellegrino:

We appreciate the opportunity to work with you and your team. This letter sets forth the terms and conditions upon which Calderwood & Harkness LLP (referred to herein as "we," "us," or the "Firm") will represent Pellegrino Capital Group LLC ("PCG" or the "Client"), a Delaware limited liability company registered to do business in the State of Florida, in connection with the matters described below. We ask that you review this letter carefully and, if you agree with the terms set forth herein, sign and return a copy to us as described in Section 14 below.

1. Engagement and Scope of Representation

Calderwood & Harkness LLP is pleased to confirm our engagement by Pellegrino Capital Group LLC to serve as issuer's counsel in connection with the following matters:

(a) Formation and Organization of SPAC. The formation and organization of a special purpose acquisition company to be organized as a corporation under the laws of the State of Delaware under the name Pellegrino Hospitality Acquisition Corp. ("PHAC"), a blank-check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses in the hospitality and leisure sector.

(b) Registration Statement and Initial Public Offering. The preparation, filing, and pursuit to effectiveness of a Registration Statement on Form S-1 under the Securities Act of 1933, as amended (the "Securities Act"), with the United States Securities and Exchange Commission (the "SEC") in connection with the initial public offering (the "IPO") of units of PHAC (the "Units") on the Nasdaq Stock Market LLC ("Nasdaq"). As currently contemplated, the IPO targets gross proceeds of approximately One Hundred Fifty Million Dollars ($150,000,000) through the sale of Units, with each Unit expected to consist of one share of Class A common stock and a fraction of one redeemable warrant to purchase one share of Class A common stock, with PHAC focused on identifying and completing a business combination with a target operating in the hospitality and leisure sector, including but not limited to hotels, resorts, restaurants, food service, travel, entertainment, and related industries.

Without limiting the generality of the foregoing, the specific deliverables within the scope of this engagement include the following:

(i) Drafting and filing of PHAC's Certificate of Incorporation and Bylaws with the Delaware Secretary of State, and the preparation of an Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, each to become effective upon the closing of the IPO;

(ii) Preparation and filing of the Registration Statement on Form S-1 and all amendments and supplements thereto, including but not limited to pre-effective and post-effective amendments, as well as the final prospectus to be filed pursuant to Rule 424(b)(4) under the Securities Act;

(iii) Review and analysis of all comments received from the SEC Division of Corporation Finance in connection with the Registration Statement, including the drafting and filing of all responsive amendments, correspondence, and supplemental submissions;

(iv) Negotiation and drafting of the Underwriting Agreement by and between PHAC and Meridian Tidewater Securities LLC, as lead underwriter and book-running manager, and any co-managers that may be added to the underwriting syndicate, including customary representations, warranties, covenants, indemnification provisions, and conditions to closing;

(v) Drafting of the Investment Management Trust Agreement by and between PHAC and a trustee to be selected by PHAC, governing the deposit and management of IPO proceeds held in trust pending the completion of a business combination;

(vi) Drafting of the Warrant Agreement by and between PHAC and a transfer agent and warrant agent to be selected by PHAC, governing the terms and conditions of the warrants included in the Units and the private placement warrants;

(vii) Drafting of each of the following ancillary transaction documents: (A) a Registration Rights Agreement among PHAC and the initial stockholders, (B) a Letter Agreement (commonly referred to as the "Insider Letter") among PHAC and the initial stockholders, officers, and directors, (C) a Private Placement Warrants Purchase Agreement between PHAC and PCG (or its designees) with respect to the purchase of private placement warrants, and (D) an Administrative Services Agreement between PHAC and PCG providing for the reimbursement of certain administrative and support services;

(viii) Preparation and delivery of customary legal opinions, including (A) a validity of securities opinion with respect to the shares of Class A common stock and warrants included in the Units and (B) a negative assurance letter pursuant to Section 10(b) and Rule 10b-5 under the Securities Exchange Act of 1934, as amended, for the benefit of the underwriters;

(ix) Preparation of closing checklists, funds flow memoranda, officer certificates, secretary's certificates, good standing certificates, and other customary closing deliverables required in connection with the closing of the IPO;

(x) Coordination with Nasdaq regarding the preparation and filing of listing applications for the Units, the shares of Class A common stock, and the warrants, and assistance with responding to any Nasdaq listing inquiries or requests for additional information;

(xi) Coordination with the Financial Industry Regulatory Authority, Inc. ("FINRA") regarding the review and clearance of the underwriting compensation and arrangements in connection with the IPO, including the preparation and filing of all required submissions to the FINRA Corporate Financing Department; and

(xii) Assistance with the over-allotment closing, if the underwriters exercise their over-allotment option in whole or in part, including the preparation and delivery of any supplemental closing deliverables required in connection therewith.

In addition to representing PCG in connection with the foregoing matters, the Firm will also represent PHAC directly upon its incorporation. For purposes of this engagement, PCG and PHAC shall be co-clients of the Firm, and the terms and conditions of this engagement letter shall apply with equal force to PHAC upon its formation, as more fully described in Section 7 below.

2. Engagement Team

The following attorneys will be principally responsible for this engagement and will serve as your primary points of contact:

Theodore Langston, Partner — Mr. Langston will serve as the Responsible Partner for this engagement. He will have overall supervisory responsibility for the representation and will be your principal point of contact for all strategic and substantive legal matters arising in connection with the IPO. Mr. Langston can be reached at (212) 554-7112 or tlangston@calderwoodharkness.com.

Vivienne St. Claire, Partner — Ms. St. Claire will serve as the Billing Partner for this engagement. She will be responsible for the administration of billing and invoicing matters, and will also contribute substantively to the preparation and negotiation of key transaction documents. Ms. St. Claire can be reached at (212) 554-7248 or vstclaire@calderwoodharkness.com.

Audrey Zhou, Associate — Ms. Zhou will serve as the Lead Associate on this engagement. She will be responsible for day-to-day drafting and project management, including coordination with the SEC, Nasdaq, FINRA, and the underwriters' counsel. Ms. Zhou can be reached at (212) 554-7431 or azhou@calderwoodharkness.com.

Brendan Walsh, Associate — Mr. Walsh will serve as a Working Associate on this engagement and will assist with drafting, due diligence, and closing logistics. Mr. Walsh can be reached at (212) 554-7519 or bwalsh@calderwoodharkness.com.

From time to time, other attorneys and professional staff of the Firm, including associates, counsel, paralegals, and legal assistants, may contribute to the engagement as the needs of the matter require. We will endeavor to staff this matter efficiently and to ensure that work is performed at the appropriate level of seniority.

3. Fees and Billing Rates

3.1 Hourly Rates

Fees for our professional services will be charged on an hourly basis at the following current standard rates for the identified timekeepers:

Rates for any other attorneys or professional staff of the Firm who may work on this matter from time to time will be charged at their then-current standard hourly rates, which vary depending on the seniority and experience of the individual. Paralegal and legal assistant time, if applicable, is billed at rates currently ranging from $250.00 to $450.00 per hour.

The Firm's hourly rates are subject to periodic adjustment, typically on an annual basis effective January 1 of each year. We will communicate any adjustments to hourly rates in advance of their taking effect. Any such adjustments will apply to services rendered on or after the effective date of the adjustment.

3.2 Fee Cap

Notwithstanding the foregoing hourly rates, the total fees billed for the IPO transaction — including the formation and organization of PHAC, the preparation and filing of the Registration Statement, the IPO closing, and any over-allotment closing — shall not exceed Seven Hundred Fifty Thousand Dollars ($750,000) (the "Fee Cap"). Should the aggregate fees for professional services, calculated on the basis of the hourly rates described in Section 3.1 above, reach the Fee Cap, no additional fees for professional services within the scope of this engagement will be billed to the Client, regardless of the additional time expended by the Firm's attorneys and professional staff.

The Fee Cap applies solely to legal fees for professional services rendered in connection with the matters described in Section 1 of this engagement letter and does not include, limit, or cap disbursements, filing fees, or other out-of-pocket expenses as described in Section 5 below. All such disbursements and expenses remain the responsibility of the Client and will be billed separately.

The Fee Cap is contingent upon the transaction proceeding on the timeline and terms reasonably contemplated as of the date of this letter. In the event of material changes in the scope, complexity, or nature of the engagement — including, by way of example and not limitation, the addition of post-IPO business combination advisory work, de-SPAC transaction advisory or documentation, litigation, SEC enforcement proceedings, regulatory inquiries unrelated to the IPO registration process, or FINRA investigations — such additional matters are not covered by the Fee Cap and would be billed at the Firm's then-current standard hourly rates pursuant to a separate engagement letter or a written amendment to this engagement letter.

3.3 Billing Cycle

Invoices for fees and disbursements will be rendered on a monthly basis, generally during the first two weeks of each calendar month for services performed and disbursements incurred during the preceding calendar month. All invoices are payable within thirty (30) days of the date of receipt. Invoices will include reasonable detail regarding the nature of the services performed, the identity of the timekeepers involved, and the hours expended by each timekeeper.

In the event that any invoice is not paid within the thirty (30) day period specified above, the Firm reserves the right to charge interest on the outstanding balance at a rate of one percent (1%) per month, or the maximum rate permitted by applicable law, whichever is less. We will make reasonable efforts to discuss any billing concerns with you before pursuing any collection remedies, and we encourage you to raise any questions regarding an invoice promptly upon receipt.

4. Retainer

PCG agrees to pay an advance retainer in the amount of One Hundred Thousand Dollars ($100,000) (the "Retainer") upon execution of this engagement letter. The Retainer shall be remitted by wire transfer of immediately available funds to the Firm's client trust account, the details of which will be provided under separate cover. We ask that you contact Ms. St. Claire or Mr. Langston to obtain wire instructions prior to effecting any transfer.

The Retainer will be deposited into and held in the Firm's Interest on Lawyer Trust Account ("IOLTA") in accordance with the applicable rules of professional conduct governing the handling of client funds. The Retainer will be applied against invoices for fees and disbursements as they are rendered. As invoices are generated, the Firm will draw upon the Retainer in satisfaction of such invoices and will provide PCG with a statement reflecting the application of the Retainer and the remaining balance.

Any unused portion of the Retainer will be refunded to PCG promptly upon the conclusion of the engagement or upon earlier termination of the engagement by either party, net of any outstanding fees and disbursements then owed to the Firm.

The Firm reserves the right to request replenishment of the Retainer in the event that the Retainer balance is substantially depleted prior to the completion of the engagement. In such event, the Firm will provide PCG with written notice of the request for replenishment, and PCG shall use commercially reasonable efforts to replenish the Retainer within fifteen (15) business days of such notice.

5. Disbursements and Expenses

In addition to the legal fees described in Section 3 above, PCG will be responsible for the payment of all reasonable out-of-pocket expenses and disbursements incurred by the Firm in connection with this engagement. Such expenses and disbursements include, but are not limited to, the following:

(a) SEC filing fees, including fees payable in connection with the filing of the Registration Statement on Form S-1, any amendments thereto, and any post-effective amendments;

(b) Delaware Secretary of State filing fees and franchise tax fees incurred in connection with the formation of PHAC and the filing of its Certificate of Incorporation and any amendments thereto;

(d) FINRA filing fees payable to the Corporate Financing Department in connection with the review and clearance of the underwriting compensation and arrangements;

(e) Printing, copying, and binding costs for transaction documents, including any required EDGAR conversion and filing agent fees;

(f) Messenger, courier, overnight delivery, and postage costs;

(g) Travel expenses, including airfare, hotel accommodations, ground transportation, and meals, if travel is required in connection with the engagement (e.g., for SEC or FINRA conferences, Nasdaq meetings, or road show presentations), provided that we will seek your prior approval before incurring any travel expense in excess of $2,500;

(h) Computerized legal research charges, including fees for Westmark Data Systems, Sundial Solutions, Cascade Services Inc., and other legal database services utilized in connection with the engagement; and

(i) Any other reasonable out-of-pocket costs and expenses directly attributable to this engagement.

Expenses and disbursements are not subject to the Fee Cap described in Section 3.2 and will be billed at cost without markup. Disbursements will be reflected on the monthly invoices described in Section 3.3 and are payable on the same terms.

6. Scope Limitations

This engagement is limited exclusively to the matters described in Section 1 of this engagement letter. PCG and PHAC should be aware of the following important limitations on the scope of our representation:

(a) Tax Advice. We are not engaged to provide tax advice of any kind in connection with this engagement, including advice regarding federal, state, local, or foreign income tax, franchise tax, transfer tax, or any other tax implications of the formation of PHAC, the IPO, or any subsequent business combination. PCG and PHAC should consult their own independent tax advisors with respect to all tax matters.

(b) Business, Financial, and Accounting Matters. We are not engaged to provide advice on business, financial, or accounting matters, including questions relating to the financial projections, business plans, or financial statements of PCG, PHAC, or any potential acquisition target. PCG and PHAC should consult their own financial advisors and independent auditors with respect to such matters.

(c) Subsequent Business Combination. We are not engaged to represent PCG or PHAC in connection with any subsequent business combination, de-SPAC transaction, merger, acquisition, or related matters. If PCG or PHAC wishes to engage the Firm in connection with any such subsequent transaction, such engagement would need to be the subject of a separate engagement letter setting forth the scope, terms, and conditions of that representation.

(d) Third-Party Representation. We do not represent and will not be representing any of the following parties in connection with the IPO or any related transaction: Meridian Tidewater Securities LLC or any other underwriter or co-manager; the trustee under the Investment Management Trust Agreement; the transfer agent or warrant agent under the Warrant Agreement; the independent registered public accounting firm of PCG or PHAC; or any other third party. Each such party is expected to engage its own legal counsel.

7. Client Identity and Joint Representation

Our clients in this engagement are Pellegrino Capital Group LLC and Pellegrino Hospitality Acquisition Corp. (upon its formation and incorporation under the laws of the State of Delaware). We emphasize the following important points regarding the identity of our clients and the nature of the joint representation:

(a) No Individual Representation. We do not represent any individual officer, director, manager, member, equity holder, or employee of PCG or PHAC in his or her personal or individual capacity. Our duties of loyalty, confidentiality, and competent representation run to PCG and PHAC as entities, not to any individual associated with either entity. If any individual associated with PCG or PHAC requires personal legal advice or representation, that individual should retain separate counsel.

(b) Co-Client Status of PHAC. PCG acknowledges that as of the date of this engagement letter, PHAC does not yet exist as a legal entity. Upon the filing of PHAC's Certificate of Incorporation with the Delaware Secretary of State and PHAC's incorporation as a Delaware corporation, the Firm's representation will extend to PHAC as a co-client of the Firm, and PHAC will be bound by the terms and conditions of this engagement letter to the same extent as PCG. All communications between the Firm and PHAC will be subject to the attorney-client privilege to the same extent as communications between the Firm and PCG.

(c) Potential Conflicts Between Co-Clients. PCG acknowledges that the joint representation of PCG and PHAC involves inherent potential for conflicts of interest, particularly given that PCG will serve as the sponsor of PHAC and will have interests that may, in certain circumstances, differ from the interests of PHAC and its public stockholders. In the event that an actual conflict of interest arises between PCG and PHAC during the course of this engagement, the Firm will promptly advise both parties of the nature of the conflict and will take such steps as are required by the applicable rules of professional conduct, which may include the Firm's withdrawal from representing one or both parties.

8. Conflicts of Interest

We have conducted a conflicts check based on the information currently available to us and are not presently aware of any conflict of interest that would preclude our undertaking this engagement. However, PCG should be aware of the following:

Calderwood & Harkness LLP is a large, multi-office law firm with a diverse client base. The Firm currently represents, and expects to continue to represent, other clients whose interests may differ from or be adverse to those of PCG and/or PHAC in matters that are unrelated to this engagement. By way of example and not limitation, the Firm may represent other clients in transactions involving the hospitality and leisure industry, in other SPAC formations and initial public offerings, or in business combination transactions with targets that may also be of interest to PHAC.

PCG agrees that the Firm may continue to represent such other clients in matters that are unrelated to this engagement, provided that (a) there is no direct adversity to PCG or PHAC in this specific engagement and (b) the Firm complies with its obligations of confidentiality with respect to all client information. Nothing in this engagement letter shall be construed to prevent the Firm from representing any other client, including a client whose interests may be adverse to those of PCG or PHAC, in any matter other than this engagement, subject to the applicable rules of professional conduct.

If we become aware of any conflict of interest that may affect our ability to continue this engagement, we will promptly notify PCG and take appropriate steps in accordance with our professional obligations.

9. Confidentiality

We will treat all information received from PCG and PHAC in connection with this engagement as confidential, in accordance with our professional obligations under the applicable rules of professional conduct. We will not disclose such confidential information to any third party without the prior consent of PCG, except as follows:

(a) as required by applicable law, regulation, court order, or subpoena;

(b) as required or contemplated in connection with the SEC filings, Nasdaq listing applications, FINRA submissions, and other public documents and regulatory filings related to the IPO, each of which will be prepared in consultation with and subject to the review and approval of PCG and PHAC;

(c) as necessary to the Firm's engagement of service providers (such as printing companies, EDGAR filing agents, and legal research services) who may have incidental access to confidential information in the course of providing services to the Firm in connection with this engagement, provided that such service providers are subject to confidentiality obligations; or

(d) as otherwise required by the Firm's professional obligations, including in connection with conflict checks or as necessary to defend against claims by or on behalf of a client.

PCG acknowledges that a significant portion of the information provided by PCG in connection with this engagement will ultimately be disclosed in the Registration Statement and related public filings with the SEC, and that such information, once filed or otherwise made publicly available, will no longer be subject to the confidentiality obligations described herein.

10. Document Retention

Upon the conclusion of this matter, the Firm will retain engagement files — including internal work product, correspondence, and copies of documents generated or received in connection with the engagement — in accordance with the Firm's standard document retention policies. The Firm's current policy provides for the retention of closed matter files for a period of not less than seven (7) years following the close of the matter, after which time the Firm may destroy or dispose of such files in accordance with its standard procedures.

Client documents — meaning original documents provided by PCG or PHAC to the Firm in connection with the engagement — will be returned to PCG upon written request at any time during the retention period. If PCG does not request the return of such documents, they will be retained and ultimately disposed of in accordance with the Firm's document retention policies.

If PCG wishes to arrange for extended retention of any engagement files beyond the Firm's standard retention period, PCG should provide written instructions to the Firm prior to the expiration of the seven-year retention period. The Firm may charge a reasonable fee for extended storage if requested.

11. Termination

Either party may terminate this engagement at any time upon written notice to the other party. No specific reason need be stated for such termination. In the event of termination:

(a) PCG will remain responsible for all fees and expenses incurred through the date of termination, subject to the Fee Cap described in Section 3.2 with respect to fees for professional services within the scope of this engagement;

(b) The Firm will take reasonable steps to protect PCG's and PHAC's interests during the transition period following termination, including the orderly transfer of files and work product to successor counsel designated by PCG; and

(c) Any unused portion of the Retainer will be refunded to PCG promptly following termination, net of any outstanding fees and disbursements owed to the Firm.

The Firm reserves the right to withdraw from the engagement in accordance with the applicable rules of professional conduct, including but not limited to circumstances in which (i) PCG fails to pay fees or expenses when due, (ii) PCG fails to cooperate with the Firm or to provide information reasonably necessary for the Firm to fulfill its professional obligations, (iii) a conflict of interest arises that cannot be resolved by appropriate measures, or (iv) continued representation would violate the applicable rules of professional conduct or other law. In the event of withdrawal, the Firm will provide PCG with reasonable advance notice and will seek to minimize any disruption to the engagement.

12. Governing Law

This engagement letter and the relationship between the Firm and the Client shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict of laws principles. Any dispute arising out of or in connection with this engagement letter or the Firm's representation of PCG and/or PHAC shall be subject to the exclusive jurisdiction of the state and federal courts located in the State of Delaware.

13. Entire Agreement; Amendments

This letter constitutes the entire agreement between Calderwood & Harkness LLP and Pellegrino Capital Group LLC with respect to the engagement described herein and supersedes all prior or contemporaneous understandings, agreements, representations, and warranties, whether written or oral, relating to the subject matter of this letter.

No amendment, modification, or waiver of any provision of this engagement letter shall be effective unless set forth in a written instrument signed by both Calderwood & Harkness LLP and Pellegrino Capital Group LLC. No failure or delay by either party in exercising any right under this engagement letter shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any further exercise of that right or any other right.

14. Acceptance and Countersignature

If the foregoing terms are acceptable to you and accurately reflect our mutual understanding of the terms of this engagement, please indicate your acceptance by signing this letter in the space provided below and returning a fully executed copy to the undersigned at Calderwood & Harkness LLP, 425 Lexington Avenue, New York, NY 10017, or by email to tlangston@calderwoodharkness.com. An executed copy transmitted by electronic mail in PDF format shall have the same force and effect as an original executed copy.

In addition, we ask that the advance retainer in the amount of One Hundred Thousand Dollars ($100,000) be remitted to the Firm's client trust account upon execution of this engagement letter. Please contact Theodore Langston or Vivienne St. Claire to obtain wire transfer instructions.

We are enthusiastic about the opportunity to represent PCG and PHAC in connection with the IPO and look forward to working with you and your team. Please do not hesitate to contact Theodore Langston or Vivienne St. Claire if you have any questions regarding this engagement letter or any other aspect of the engagement.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Theodore Langston

Title: Partner, Capital Markets

425 Lexington Avenue New York, NY 10017 Telephone: (212) 554-7112

Email: tlangston@calderwoodharkness.com

ACKNOWLEDGED AND AGREED:

PELLEGRINO CAPITAL GROUP LLC

By: ________

Name: Marco A. Pellegrino

Title: Managing Member & Founder

Date: ________

cc: Vivienne St. Claire, Partner, Calderwood & Harkness LLP cc: Audrey Zhou, Associate, Calderwood & Harkness LLP

Timekeeper	Position	Hourly Rate
Theodore Langston	Partner	$1,575.00
Vivienne St. Claire	Partner	$1,525.00
Audrey Zhou	Associate	$895.00
Brendan Walsh	Associate	$675.00

CALDERWOOD & HARKNESS LLP Attorneys at Law 425 Lexington Avenue New York, NY 10017 Telephone: (212) 554-7000 Facsimile: (212) 554-7001 www.calderwoodharkness.com
September 27, 2021
Matter No. 1027-00001
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
Mr. Marco A. Pellegrino Managing Member & Founder Pellegrino Capital Group LLC 1440 Gulf Shore Boulevard North, Suite 600 Naples, FL 34102
Dear Mr. Pellegrino:
We appreciate the opportunity to work with you and your team. This letter sets forth the terms and conditions upon which Calderwood & Harkness LLP (referred to herein as "we," "us," or the "Firm") will represent Pellegrino Capital Group LLC ("PCG" or the "Client"), a Delaware limited liability company registered to do business in the State of Florida, in connection with the matters described below. We ask that you review this letter carefully and, if you agree with the terms set forth herein, sign and return a copy to us as described in Section 14 below.
1. Engagement and Scope of Representation
Calderwood & Harkness LLP is pleased to confirm our engagement by Pellegrino Capital Group LLC to serve as issuer's counsel in connection with the following matters:
(a) Formation and Organization of SPAC. The formation and organization of a special purpose acquisition company to be organized as a corporation under the laws of the State of Delaware under the name Pellegrino Hospitality Acquisition Corp. ("PHAC"), a blank-check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses in the hospitality and leisure sector.
(b) Registration Statement and Initial Public Offering. The preparation, filing, and pursuit to effectiveness of a Registration Statement on Form S-1 under the Securities Act of 1933, as amended (the "Securities Act"), with the United States Securities and Exchange Commission (the "SEC") in connection with the initial public offering (the "IPO") of units of PHAC (the "Units") on the Nasdaq Stock Market LLC ("Nasdaq"). As currently contemplated, the IPO targets gross proceeds of approximately One Hundred Fifty Million Dollars ($150,000,000) through the sale of Units, with each Unit expected to consist of one share of Class A common stock and a fraction of one redeemable warrant to purchase one share of Class A common stock, with PHAC focused on identifying and completing a business combination with a target operating in the hospitality and leisure sector, including but not limited to hotels, resorts, restaurants, food service, travel, entertainment, and related industries.
Without limiting the generality of the foregoing, the specific deliverables within the scope of this engagement include the following:
(i) Drafting and filing of PHAC's Certificate of Incorporation and Bylaws with the Delaware Secretary of State, and the preparation of an Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, each to become effective upon the closing of the IPO;
(ii) Preparation and filing of the Registration Statement on Form S-1 and all amendments and supplements thereto, including but not limited to pre-effective and post-effective amendments, as well as the final prospectus to be filed pursuant to Rule 424(b)(4) under the Securities Act;
(iii) Review and analysis of all comments received from the SEC Division of Corporation Finance in connection with the Registration Statement, including the drafting and filing of all responsive amendments, correspondence, and supplemental submissions;
(iv) Negotiation and drafting of the Underwriting Agreement by and between PHAC and Meridian Tidewater Securities LLC, as lead underwriter and book-running manager, and any co-managers that may be added to the underwriting syndicate, including customary representations, warranties, covenants, indemnification provisions, and conditions to closing;
(v) Drafting of the Investment Management Trust Agreement by and between PHAC and a trustee to be selected by PHAC, governing the deposit and management of IPO proceeds held in trust pending the completion of a business combination;
(vi) Drafting of the Warrant Agreement by and between PHAC and a transfer agent and warrant agent to be selected by PHAC, governing the terms and conditions of the warrants included in the Units and the private placement warrants;
(vii) Drafting of each of the following ancillary transaction documents: (A) a Registration Rights Agreement among PHAC and the initial stockholders, (B) a Letter Agreement (commonly referred to as the "Insider Letter") among PHAC and the initial stockholders, officers, and directors, (C) a Private Placement Warrants Purchase Agreement between PHAC and PCG (or its designees) with respect to the purchase of private placement warrants, and (D) an Administrative Services Agreement between PHAC and PCG providing for the reimbursement of certain administrative and support services;
(viii) Preparation and delivery of customary legal opinions, including (A) a validity of securities opinion with respect to the shares of Class A common stock and warrants included in the Units and (B) a negative assurance letter pursuant to Section 10(b) and Rule 10b-5 under the Securities Exchange Act of 1934, as amended, for the benefit of the underwriters;
(ix) Preparation of closing checklists, funds flow memoranda, officer certificates, secretary's certificates, good standing certificates, and other customary closing deliverables required in connection with the closing of the IPO;
(x) Coordination with Nasdaq regarding the preparation and filing of listing applications for the Units, the shares of Class A common stock, and the warrants, and assistance with responding to any Nasdaq listing inquiries or requests for additional information;
(xi) Coordination with the Financial Industry Regulatory Authority, Inc. ("FINRA") regarding the review and clearance of the underwriting compensation and arrangements in connection with the IPO, including the preparation and filing of all required submissions to the FINRA Corporate Financing Department; and
(xii) Assistance with the over-allotment closing, if the underwriters exercise their over-allotment option in whole or in part, including the preparation and delivery of any supplemental closing deliverables required in connection therewith.
In addition to representing PCG in connection with the foregoing matters, the Firm will also represent PHAC directly upon its incorporation. For purposes of this engagement, PCG and PHAC shall be co-clients of the Firm, and the terms and conditions of this engagement letter shall apply with equal force to PHAC upon its formation, as more fully described in Section 7 below.
2. Engagement Team
The following attorneys will be principally responsible for this engagement and will serve as your primary points of contact:
Theodore Langston, Partner — Mr. Langston will serve as the Responsible Partner for this engagement. He will have overall supervisory responsibility for the representation and will be your principal point of contact for all strategic and substantive legal matters arising in connection with the IPO. Mr. Langston can be reached at (212) 554-7112 or tlangston@calderwoodharkness.com.
Vivienne St. Claire, Partner — Ms. St. Claire will serve as the Billing Partner for this engagement. She will be responsible for the administration of billing and invoicing matters, and will also contribute substantively to the preparation and negotiation of key transaction documents. Ms. St. Claire can be reached at (212) 554-7248 or vstclaire@calderwoodharkness.com.
Audrey Zhou, Associate — Ms. Zhou will serve as the Lead Associate on this engagement. She will be responsible for day-to-day drafting and project management, including coordination with the SEC, Nasdaq, FINRA, and the underwriters' counsel. Ms. Zhou can be reached at (212) 554-7431 or azhou@calderwoodharkness.com.
Brendan Walsh, Associate — Mr. Walsh will serve as a Working Associate on this engagement and will assist with drafting, due diligence, and closing logistics. Mr. Walsh can be reached at (212) 554-7519 or bwalsh@calderwoodharkness.com.
From time to time, other attorneys and professional staff of the Firm, including associates, counsel, paralegals, and legal assistants, may contribute to the engagement as the needs of the matter require. We will endeavor to staff this matter efficiently and to ensure that work is performed at the appropriate level of seniority.
3. Fees and Billing Rates
3.1 Hourly Rates
Fees for our professional services will be charged on an hourly basis at the following current standard rates for the identified timekeepers:
Rates for any other attorneys or professional staff of the Firm who may work on this matter from time to time will be charged at their then-current standard hourly rates, which vary depending on the seniority and experience of the individual. Paralegal and legal assistant time, if applicable, is billed at rates currently ranging from $250.00 to $450.00 per hour.
The Firm's hourly rates are subject to periodic adjustment, typically on an annual basis effective January 1 of each year. We will communicate any adjustments to hourly rates in advance of their taking effect. Any such adjustments will apply to services rendered on or after the effective date of the adjustment.
3.2 Fee Cap
Notwithstanding the foregoing hourly rates, the total fees billed for the IPO transaction — including the formation and organization of PHAC, the preparation and filing of the Registration Statement, the IPO closing, and any over-allotment closing — shall not exceed Seven Hundred Fifty Thousand Dollars ($750,000) (the "Fee Cap"). Should the aggregate fees for professional services, calculated on the basis of the hourly rates described in Section 3.1 above, reach the Fee Cap, no additional fees for professional services within the scope of this engagement will be billed to the Client, regardless of the additional time expended by the Firm's attorneys and professional staff.
The Fee Cap applies solely to legal fees for professional services rendered in connection with the matters described in Section 1 of this engagement letter and does not include, limit, or cap disbursements, filing fees, or other out-of-pocket expenses as described in Section 5 below. All such disbursements and expenses remain the responsibility of the Client and will be billed separately.
The Fee Cap is contingent upon the transaction proceeding on the timeline and terms reasonably contemplated as of the date of this letter. In the event of material changes in the scope, complexity, or nature of the engagement — including, by way of example and not limitation, the addition of post-IPO business combination advisory work, de-SPAC transaction advisory or documentation, litigation, SEC enforcement proceedings, regulatory inquiries unrelated to the IPO registration process, or FINRA investigations — such additional matters are not covered by the Fee Cap and would be billed at the Firm's then-current standard hourly rates pursuant to a separate engagement letter or a written amendment to this engagement letter.
3.3 Billing Cycle
Invoices for fees and disbursements will be rendered on a monthly basis, generally during the first two weeks of each calendar month for services performed and disbursements incurred during the preceding calendar month. All invoices are payable within thirty (30) days of the date of receipt. Invoices will include reasonable detail regarding the nature of the services performed, the identity of the timekeepers involved, and the hours expended by each timekeeper.
In the event that any invoice is not paid within the thirty (30) day period specified above, the Firm reserves the right to charge interest on the outstanding balance at a rate of one percent (1%) per month, or the maximum rate permitted by applicable law, whichever is less. We will make reasonable efforts to discuss any billing concerns with you before pursuing any collection remedies, and we encourage you to raise any questions regarding an invoice promptly upon receipt.
4. Retainer
PCG agrees to pay an advance retainer in the amount of One Hundred Thousand Dollars ($100,000) (the "Retainer") upon execution of this engagement letter. The Retainer shall be remitted by wire transfer of immediately available funds to the Firm's client trust account, the details of which will be provided under separate cover. We ask that you contact Ms. St. Claire or Mr. Langston to obtain wire instructions prior to effecting any transfer.
The Retainer will be deposited into and held in the Firm's Interest on Lawyer Trust Account ("IOLTA") in accordance with the applicable rules of professional conduct governing the handling of client funds. The Retainer will be applied against invoices for fees and disbursements as they are rendered. As invoices are generated, the Firm will draw upon the Retainer in satisfaction of such invoices and will provide PCG with a statement reflecting the application of the Retainer and the remaining balance.
Any unused portion of the Retainer will be refunded to PCG promptly upon the conclusion of the engagement or upon earlier termination of the engagement by either party, net of any outstanding fees and disbursements then owed to the Firm.
The Firm reserves the right to request replenishment of the Retainer in the event that the Retainer balance is substantially depleted prior to the completion of the engagement. In such event, the Firm will provide PCG with written notice of the request for replenishment, and PCG shall use commercially reasonable efforts to replenish the Retainer within fifteen (15) business days of such notice.
5. Disbursements and Expenses
In addition to the legal fees described in Section 3 above, PCG will be responsible for the payment of all reasonable out-of-pocket expenses and disbursements incurred by the Firm in connection with this engagement. Such expenses and disbursements include, but are not limited to, the following:
(a) SEC filing fees, including fees payable in connection with the filing of the Registration Statement on Form S-1, any amendments thereto, and any post-effective amendments;
(b) Delaware Secretary of State filing fees and franchise tax fees incurred in connection with the formation of PHAC and the filing of its Certificate of Incorporation and any amendments thereto;
(c) Nasdaq listing application fees for the Units, the shares of Class A common stock, and the warrants;
(d) FINRA filing fees payable to the Corporate Financing Department in connection with the review and clearance of the underwriting compensation and arrangements;
(e) Printing, copying, and binding costs for transaction documents, including any required EDGAR conversion and filing agent fees;
(f) Messenger, courier, overnight delivery, and postage costs;
(g) Travel expenses, including airfare, hotel accommodations, ground transportation, and meals, if travel is required in connection with the engagement (e.g., for SEC or FINRA conferences, Nasdaq meetings, or road show presentations), provided that we will seek your prior approval before incurring any travel expense in excess of $2,500;
(h) Computerized legal research charges, including fees for Westmark Data Systems, Sundial Solutions, Cascade Services Inc., and other legal database services utilized in connection with the engagement; and
(i) Any other reasonable out-of-pocket costs and expenses directly attributable to this engagement.
Expenses and disbursements are not subject to the Fee Cap described in Section 3.2 and will be billed at cost without markup. Disbursements will be reflected on the monthly invoices described in Section 3.3 and are payable on the same terms.
6. Scope Limitations
This engagement is limited exclusively to the matters described in Section 1 of this engagement letter. PCG and PHAC should be aware of the following important limitations on the scope of our representation:
(a) Tax Advice. We are not engaged to provide tax advice of any kind in connection with this engagement, including advice regarding federal, state, local, or foreign income tax, franchise tax, transfer tax, or any other tax implications of the formation of PHAC, the IPO, or any subsequent business combination. PCG and PHAC should consult their own independent tax advisors with respect to all tax matters.
(b) Business, Financial, and Accounting Matters. We are not engaged to provide advice on business, financial, or accounting matters, including questions relating to the financial projections, business plans, or financial statements of PCG, PHAC, or any potential acquisition target. PCG and PHAC should consult their own financial advisors and independent auditors with respect to such matters.
(c) Subsequent Business Combination. We are not engaged to represent PCG or PHAC in connection with any subsequent business combination, de-SPAC transaction, merger, acquisition, or related matters. If PCG or PHAC wishes to engage the Firm in connection with any such subsequent transaction, such engagement would need to be the subject of a separate engagement letter setting forth the scope, terms, and conditions of that representation.
(d) Third-Party Representation. We do not represent and will not be representing any of the following parties in connection with the IPO or any related transaction: Meridian Tidewater Securities LLC or any other underwriter or co-manager; the trustee under the Investment Management Trust Agreement; the transfer agent or warrant agent under the Warrant Agreement; the independent registered public accounting firm of PCG or PHAC; or any other third party. Each such party is expected to engage its own legal counsel.
7. Client Identity and Joint Representation
Our clients in this engagement are Pellegrino Capital Group LLC and Pellegrino Hospitality Acquisition Corp. (upon its formation and incorporation under the laws of the State of Delaware). We emphasize the following important points regarding the identity of our clients and the nature of the joint representation:
(a) No Individual Representation. We do not represent any individual officer, director, manager, member, equity holder, or employee of PCG or PHAC in his or her personal or individual capacity. Our duties of loyalty, confidentiality, and competent representation run to PCG and PHAC as entities, not to any individual associated with either entity. If any individual associated with PCG or PHAC requires personal legal advice or representation, that individual should retain separate counsel.
(b) Co-Client Status of PHAC. PCG acknowledges that as of the date of this engagement letter, PHAC does not yet exist as a legal entity. Upon the filing of PHAC's Certificate of Incorporation with the Delaware Secretary of State and PHAC's incorporation as a Delaware corporation, the Firm's representation will extend to PHAC as a co-client of the Firm, and PHAC will be bound by the terms and conditions of this engagement letter to the same extent as PCG. All communications between the Firm and PHAC will be subject to the attorney-client privilege to the same extent as communications between the Firm and PCG.
(c) Potential Conflicts Between Co-Clients. PCG acknowledges that the joint representation of PCG and PHAC involves inherent potential for conflicts of interest, particularly given that PCG will serve as the sponsor of PHAC and will have interests that may, in certain circumstances, differ from the interests of PHAC and its public stockholders. In the event that an actual conflict of interest arises between PCG and PHAC during the course of this engagement, the Firm will promptly advise both parties of the nature of the conflict and will take such steps as are required by the applicable rules of professional conduct, which may include the Firm's withdrawal from representing one or both parties.
8. Conflicts of Interest
We have conducted a conflicts check based on the information currently available to us and are not presently aware of any conflict of interest that would preclude our undertaking this engagement. However, PCG should be aware of the following:
Calderwood & Harkness LLP is a large, multi-office law firm with a diverse client base. The Firm currently represents, and expects to continue to represent, other clients whose interests may differ from or be adverse to those of PCG and/or PHAC in matters that are unrelated to this engagement. By way of example and not limitation, the Firm may represent other clients in transactions involving the hospitality and leisure industry, in other SPAC formations and initial public offerings, or in business combination transactions with targets that may also be of interest to PHAC.
PCG agrees that the Firm may continue to represent such other clients in matters that are unrelated to this engagement, provided that (a) there is no direct adversity to PCG or PHAC in this specific engagement and (b) the Firm complies with its obligations of confidentiality with respect to all client information. Nothing in this engagement letter shall be construed to prevent the Firm from representing any other client, including a client whose interests may be adverse to those of PCG or PHAC, in any matter other than this engagement, subject to the applicable rules of professional conduct.
If we become aware of any conflict of interest that may affect our ability to continue this engagement, we will promptly notify PCG and take appropriate steps in accordance with our professional obligations.
9. Confidentiality
We will treat all information received from PCG and PHAC in connection with this engagement as confidential, in accordance with our professional obligations under the applicable rules of professional conduct. We will not disclose such confidential information to any third party without the prior consent of PCG, except as follows:
(a) as required by applicable law, regulation, court order, or subpoena;
(b) as required or contemplated in connection with the SEC filings, Nasdaq listing applications, FINRA submissions, and other public documents and regulatory filings related to the IPO, each of which will be prepared in consultation with and subject to the review and approval of PCG and PHAC;
(c) as necessary to the Firm's engagement of service providers (such as printing companies, EDGAR filing agents, and legal research services) who may have incidental access to confidential information in the course of providing services to the Firm in connection with this engagement, provided that such service providers are subject to confidentiality obligations; or
(d) as otherwise required by the Firm's professional obligations, including in connection with conflict checks or as necessary to defend against claims by or on behalf of a client.
PCG acknowledges that a significant portion of the information provided by PCG in connection with this engagement will ultimately be disclosed in the Registration Statement and related public filings with the SEC, and that such information, once filed or otherwise made publicly available, will no longer be subject to the confidentiality obligations described herein.
10. Document Retention
Upon the conclusion of this matter, the Firm will retain engagement files — including internal work product, correspondence, and copies of documents generated or received in connection with the engagement — in accordance with the Firm's standard document retention policies. The Firm's current policy provides for the retention of closed matter files for a period of not less than seven (7) years following the close of the matter, after which time the Firm may destroy or dispose of such files in accordance with its standard procedures.
Client documents — meaning original documents provided by PCG or PHAC to the Firm in connection with the engagement — will be returned to PCG upon written request at any time during the retention period. If PCG does not request the return of such documents, they will be retained and ultimately disposed of in accordance with the Firm's document retention policies.
If PCG wishes to arrange for extended retention of any engagement files beyond the Firm's standard retention period, PCG should provide written instructions to the Firm prior to the expiration of the seven-year retention period. The Firm may charge a reasonable fee for extended storage if requested.
11. Termination
Either party may terminate this engagement at any time upon written notice to the other party. No specific reason need be stated for such termination. In the event of termination:
(a) PCG will remain responsible for all fees and expenses incurred through the date of termination, subject to the Fee Cap described in Section 3.2 with respect to fees for professional services within the scope of this engagement;
(b) The Firm will take reasonable steps to protect PCG's and PHAC's interests during the transition period following termination, including the orderly transfer of files and work product to successor counsel designated by PCG; and
(c) Any unused portion of the Retainer will be refunded to PCG promptly following termination, net of any outstanding fees and disbursements owed to the Firm.
The Firm reserves the right to withdraw from the engagement in accordance with the applicable rules of professional conduct, including but not limited to circumstances in which (i) PCG fails to pay fees or expenses when due, (ii) PCG fails to cooperate with the Firm or to provide information reasonably necessary for the Firm to fulfill its professional obligations, (iii) a conflict of interest arises that cannot be resolved by appropriate measures, or (iv) continued representation would violate the applicable rules of professional conduct or other law. In the event of withdrawal, the Firm will provide PCG with reasonable advance notice and will seek to minimize any disruption to the engagement.
12. Governing Law
This engagement letter and the relationship between the Firm and the Client shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict of laws principles. Any dispute arising out of or in connection with this engagement letter or the Firm's representation of PCG and/or PHAC shall be subject to the exclusive jurisdiction of the state and federal courts located in the State of Delaware.
13. Entire Agreement; Amendments
This letter constitutes the entire agreement between Calderwood & Harkness LLP and Pellegrino Capital Group LLC with respect to the engagement described herein and supersedes all prior or contemporaneous understandings, agreements, representations, and warranties, whether written or oral, relating to the subject matter of this letter.
No amendment, modification, or waiver of any provision of this engagement letter shall be effective unless set forth in a written instrument signed by both Calderwood & Harkness LLP and Pellegrino Capital Group LLC. No failure or delay by either party in exercising any right under this engagement letter shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any further exercise of that right or any other right.
14. Acceptance and Countersignature
If the foregoing terms are acceptable to you and accurately reflect our mutual understanding of the terms of this engagement, please indicate your acceptance by signing this letter in the space provided below and returning a fully executed copy to the undersigned at Calderwood & Harkness LLP, 425 Lexington Avenue, New York, NY 10017, or by email to tlangston@calderwoodharkness.com. An executed copy transmitted by electronic mail in PDF format shall have the same force and effect as an original executed copy.
In addition, we ask that the advance retainer in the amount of One Hundred Thousand Dollars ($100,000) be remitted to the Firm's client trust account upon execution of this engagement letter. Please contact Theodore Langston or Vivienne St. Claire to obtain wire transfer instructions.
We are enthusiastic about the opportunity to represent PCG and PHAC in connection with the IPO and look forward to working with you and your team. Please do not hesitate to contact Theodore Langston or Vivienne St. Claire if you have any questions regarding this engagement letter or any other aspect of the engagement.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Theodore Langston
Title: Partner, Capital Markets
425 Lexington Avenue New York, NY 10017 Telephone: (212) 554-7112
Email: tlangston@calderwoodharkness.com
ACKNOWLEDGED AND AGREED:
PELLEGRINO CAPITAL GROUP LLC
By: ________
Name: Marco A. Pellegrino
Title: Managing Member & Founder
Date: ________
cc: Vivienne St. Claire, Partner, Calderwood & Harkness LLP cc: Audrey Zhou, Associate, Calderwood & Harkness LLP
Timekeeper | Position | Hourly Rate
Theodore Langston | Partner | $1,575.00
Vivienne St. Claire | Partner | $1,525.00
Audrey Zhou | Associate | $895.00
Brendan Walsh | Associate | $675.00

CALDERWOOD & HARKNESS LLP

ACKNOWLEDGED AND AGREED:

PELLEGRINO CAPITAL GROUP LLC

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