CLOSING CERTIFICATE OF MERIDIAN SHORES HOSPITALITY LLC
Delivered Pursuant to Section 7.2(c) of the Redemption Agreement dated May 20, 2024
Date: June 28, 2024
Reference is made to that certain Redemption Agreement, dated as of May 20, 2024 (as may be amended, supplemented, or otherwise modified from time to time, the "Redemption Agreement"), by and between Pellegrino Capital Group LLC, a Florida limited liability company ("PCG"), and Meridian Shores Hospitality LLC, a Delaware limited liability company ("MSH"), providing for the redemption of MSH's thirty-five percent (35%) membership interest (the "Redeemed Interest") in Palmetto Grand Ventures LLC, a Florida limited liability company ("PGV" or the "Company"), at a redemption price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000) (the "Redemption Price"). Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Redemption Agreement.
RECITALS
The undersigned, Nathaniel Cordero, in his capacity as the duly authorized Managing Member of Meridian Shores Hospitality LLC, a Delaware limited liability company, with its principal office located at 220 Royal Palm Way, Suite 300, Palm Beach, Florida 33480, hereby certifies as follows in connection with the closing (the "Closing") of the transactions contemplated by the Redemption Agreement on the date hereof (the "Closing Date"):
WHEREAS, PCG and MSH entered into the Redemption Agreement, dated as of May 20, 2024, pursuant to which PCG agreed to redeem, and MSH agreed to surrender, MSH's 35% membership interest in Palmetto Grand Ventures LLC (Florida Division of Corporations Filing No. L17000124583) for the Redemption Price of $52,850,000;
WHEREAS, PGV was organized and is governed by that certain Amended and Restated Operating Agreement of Palmetto Grand Ventures LLC, dated as of June 15, 2017 (as amended, supplemented, or otherwise modified from time to time prior to the date hereof, the "Original Operating Agreement"), among PCG and MSH as members thereof;
WHEREAS, Section 7.2(c) of the Redemption Agreement requires that MSH deliver to PCG, as a condition to the Closing, a certificate executed by a duly authorized representative of MSH certifying as to certain matters set forth therein; and
WHEREAS, this Closing Certificate is delivered by the undersigned on behalf of MSH in satisfaction of such condition and in connection with the consummation of the Closing on the date hereof.
NOW, THEREFORE, the undersigned hereby certifies to PCG as follows:
Section 1. Organization and Good Standing
MSH is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware. MSH was formed pursuant to a Certificate of Formation filed with the Secretary of State of the State of Delaware, and MSH's organizational documents remain in full force and effect and have not been amended or modified in any manner that would adversely affect MSH's ability to consummate the transactions contemplated by the Redemption Agreement. MSH is duly qualified and authorized to do business as a foreign limited liability company in the State of Florida, and holds all licenses, permits, and authorizations necessary for the conduct of its business and the performance of its obligations under the Redemption Agreement and the related transaction documents. MSH's Employer Identification Number, as assigned by the Internal Revenue Service, is 84-3298174.
MSH has full limited liability company power and authority to execute, deliver, and perform its obligations under the Redemption Agreement, the Mutual Release and Settlement Agreement, the Assignment of Membership Interest, and each other document, instrument, agreement, and certificate delivered (or to be delivered) by MSH at the Closing (collectively, the "MSH Transaction Documents"). MSH has not been dissolved, and no proceeding for the dissolution, liquidation, winding up, or termination of MSH has been commenced or is pending or, to the knowledge of the undersigned, threatened.
Section 2. Authorization
The execution, delivery, and performance by MSH of each of the MSH Transaction Documents, and the consummation of the transactions contemplated thereby, including, without limitation, the transfer, assignment, and conveyance of MSH's 35% membership interest in PGV to PCG, have been duly authorized by all necessary limited liability company action on the part of MSH, including such approvals and consents as are required by MSH's Certificate of Formation, its operating agreement, and applicable law.
Nathaniel Cordero, in his capacity as Managing Member of MSH, has been duly authorized to execute and deliver each of the MSH Transaction Documents on behalf of MSH and to take all actions and execute all further instruments as may be necessary or desirable to consummate the transactions contemplated thereby. Elena Cordero, as a Member holding forty percent (40%) of MSH's membership interests, has duly and validly consented in writing to the transactions contemplated by the Redemption Agreement, including the redemption and transfer of the Redeemed Interest and the execution, delivery, and performance of the MSH Transaction Documents, and such consent remains in full force and effect as of the Closing Date.
No other approval, consent, authorization, or other action by, or filing with or notice to, any member, manager, officer, or other person (including, without limitation, any governmental authority) is required in connection with the execution, delivery, and performance by MSH of the MSH Transaction Documents, or the consummation by MSH of the transactions contemplated thereby, other than such approvals, consents, and authorizations as have been duly obtained and are in full force and effect on the date hereof.
Section 3. Representations and Warranties
Each of the representations and warranties made by MSH in Article IV of the Redemption Agreement is true and correct in all material respects as of the date of the Redemption Agreement (May 20, 2024) and as of the Closing Date (June 28, 2024), with the same force and effect as though each such representation and warranty had been made on and as of the Closing Date, except to the extent that any such representation or warranty expressly relates to an earlier date, in which case such representation or warranty is true and correct in all material respects as of such earlier date.
Without limiting the generality of the foregoing, the undersigned, on behalf of MSH, specifically certifies the truth and accuracy as of the Closing Date of the representations and warranties of MSH regarding each of the following:
(a) Ownership of Membership Interest. MSH is the sole legal and beneficial owner of a thirty-five percent (35%) membership interest in PGV, free and clear of all liens, pledges, encumbrances, security interests, claims, options, charges, restrictions on transfer, or other restrictions of any kind or nature whatsoever, other than (i) restrictions on transfer set forth in Article X of the Original Operating Agreement and (ii) the terms and conditions of that certain loan agreement by and between Palmetto Grand Ventures LLC and Gulf Atlantic National Bank, dated as of June 30, 2017 (as amended, the "GANB Loan Agreement"), including the related pledge, collateral assignment, and security documents executed in connection therewith (collectively, the "GANB Loan Documents"). MSH's membership interest in PGV constitutes a valid and enforceable membership interest in PGV in accordance with the terms of the Original Operating Agreement and applicable law.
(b) No Prior Transfers or Encumbrances. There has been no transfer, assignment, pledge, hypothecation, grant of a security interest in, or other disposition of MSH's 35% membership interest in PGV (or any portion thereof), and no agreement, arrangement, understanding, or commitment (whether written or oral, formal or informal) to effect any of the foregoing, other than the transfer and assignment being consummated pursuant to the Redemption Agreement on the Closing Date.
(c) No Litigation. There is no pending or, to the knowledge of the undersigned, threatened litigation, arbitration, mediation, administrative proceeding, investigation, or other legal or equitable action or proceeding relating to or affecting MSH's membership interest in PGV, the validity or enforceability of MSH's ownership thereof, or the ability of MSH to consummate the transactions contemplated by the Redemption Agreement, other than JAMS Reference No. 1440032871, captioned Meridian Shores Hospitality LLC v. Pellegrino Capital Group LLC (the "Arbitration Proceeding"), which is being dismissed with prejudice contemporaneously herewith in accordance with Section 7 of this Certificate and the terms of the Mutual Release and Settlement Agreement.
(d) No Conflicts. MSH is not a party to, and is not bound by, any agreement, arrangement, understanding, order, judgment, decree, or instrument that would (i) conflict with or be violated by the execution, delivery, or performance of the MSH Transaction Documents, (ii) result in the creation or imposition of any lien or encumbrance upon the Redeemed Interest, or (iii) impair, restrict, or otherwise adversely affect the ability of MSH to consummate the transactions contemplated by the Redemption Agreement.
Section 4. Compliance with Covenants
MSH has performed and complied in all material respects with all covenants, obligations, and agreements required by the Redemption Agreement to be performed or complied with by MSH on or prior to the Closing Date, including, without limitation, those covenants set forth in Article V and Article VI of the Redemption Agreement.
Without limiting the generality of the foregoing, MSH has cooperated fully and in good faith with PCG and with Gulf Atlantic National Bank ("GANB"), as the senior secured lender to the Company under the GANB Loan Documents, in connection with (i) obtaining GANB's consent to the transfer and assignment of MSH's 35% membership interest in PGV from MSH to PCG (or PCG's designee), and (ii) facilitating the incremental draw on PGV's revolving credit facility (GANB Loan No. CRE-2017-06284) as contemplated by the Redemption Agreement and the related amendments to the GANB Loan Documents. MSH acknowledges that GANB has issued its written consent to the transfer and that such consent is in full force and effect as of the Closing Date.
Section 5. No Material Adverse Change
Since the date of the Redemption Agreement (May 20, 2024) through and including the Closing Date, there has been no material adverse change in (a) MSH's ability to consummate the transactions contemplated by the Redemption Agreement and the other MSH Transaction Documents, (b) the condition, status, validity, or enforceability of MSH's 35% membership interest in PGV, or (c) the financial condition, business, assets, or operations of MSH, in each case that would reasonably be expected to have a material adverse effect on MSH's ability to perform its obligations under the MSH Transaction Documents or to consummate the Closing. To the knowledge of the undersigned, no event, circumstance, development, or occurrence has occurred since May 20, 2024 that, individually or in the aggregate, has had or would reasonably be expected to have such a material adverse effect.
Section 6. Delivery of Closing Documents
MSH has executed and delivered (or is delivering concurrently herewith) each of the following documents, instruments, and certificates required to be delivered by MSH at the Closing pursuant to Section 7.2 of the Redemption Agreement:
(a) The Assignment of Membership Interest, dated as of the Closing Date, duly executed by MSH, pursuant to which MSH irrevocably assigns, transfers, conveys, and delivers to PCG all of MSH's right, title, and interest in and to the 35% membership interest in Palmetto Grand Ventures LLC, together with all rights, privileges, benefits, and obligations appurtenant thereto (the "Assignment");
(b) The Mutual Release and Settlement Agreement, dated as of the Closing Date, duly executed by MSH, Nathaniel Cordero (individually), and Elena Cordero (individually), providing for the mutual release and discharge of claims among the parties as more particularly set forth therein (the "Mutual Release");
(c) This Closing Certificate, duly executed by the undersigned on behalf of MSH;
(d) A certificate of good standing (or equivalent certificate) for MSH issued by the Secretary of State of the State of Delaware, dated no earlier than five (5) business days prior to the Closing Date;
(e) A certificate of qualification and good standing (or equivalent certificate) for MSH issued by the Florida Department of State, Division of Corporations, dated no earlier than five (5) business days prior to the Closing Date; and
(f) Such other documents, instruments, certificates, and agreements as are required by the Redemption Agreement or as may be reasonably requested by PCG to be delivered by MSH at the Closing in order to effectuate the transactions contemplated by the Redemption Agreement.
Section 7. Dismissal of Arbitration
MSH hereby confirms that it has irrevocably authorized and directed its legal counsel, Hargrove, Dunlap & Castillo LLP (Victoria Castillo, Partner), to execute and file the Joint Stipulation of Dismissal with Prejudice (the "Stipulation of Dismissal") in connection with the Arbitration Proceeding, JAMS Reference No. 1440032871, pending before Hon. Margaret Liu Chen (Ret.) at the JAMS Jacksonville, Florida Resolution Center, located at 1 Independent Drive, Suite 1600, Jacksonville, Florida 32202. MSH acknowledges and agrees that such filing shall be made promptly following the Closing, and in no event later than two (2) business days after the Closing Date, in accordance with the terms of the Mutual Release and Settlement Agreement.
MSH further acknowledges and agrees that the Mutual Release and Settlement Agreement constitutes a full, final, and irrevocable release and discharge of any and all claims, counterclaims, cross-claims, demands, causes of action, suits, proceedings, obligations, liabilities, damages, losses, costs, and expenses (including attorneys' fees) that were asserted or which could have been asserted by or on behalf of MSH, Nathaniel Cordero, or Elena Cordero in connection with the Arbitration Proceeding, including, without limitation:
(i) MSH's claims for bad-faith valuation under Section 12.7 of the Original Operating Agreement;
(ii) MSH's claims for breach of fiduciary duty against PCG and its principals;
(iii) MSH's claims for breach of Section 8.3 of the Original Operating Agreement (relating to distributions and capital accounts); and
(iv) any and all other claims, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, arising out of or relating to the formation, operation, management, or governance of PGV, the Original Operating Agreement, or the business relationship between MSH and PCG.
Section 8. Receipt of Redemption Price
MSH acknowledges and confirms that on the Closing Date, MSH is receiving from PCG, by wire transfer of immediately available funds in United States dollars to the account designated by MSH in writing to PCG in accordance with the wire transfer instructions previously delivered, the aggregate Redemption Price of $52,850,000.00 (Fifty-Two Million Eight Hundred Fifty Thousand Dollars and No/100) in full, complete, and final satisfaction of all amounts owed, payable, or otherwise due from PCG to MSH in connection with the redemption of MSH's 35% membership interest in Palmetto Grand Ventures LLC.
MSH further confirms that such payment constitutes payment in full of (a) MSH's 35% share of PGV's joint venture equity, (b) all accrued and unpaid preferred return due to MSH under the Original Operating Agreement through the Closing Date, (c) all unreturned capital contributions of MSH, and (d) all other amounts, payments, distributions, fees, reimbursements, or other sums to which MSH may be entitled under the Original Operating Agreement, the GANB Loan Documents, the Redemption Agreement, or otherwise, whether arising under contract, at law, in equity, or by statute. Following the receipt of the Redemption Price, MSH shall have no further claim to any payment, distribution, or other amount from PCG, PGV, or any of their respective affiliates in connection with MSH's former membership interest in PGV.
Section 9. Fees and Costs
MSH confirms that, pursuant to the terms of Section 9.4 of the Redemption Agreement and Section 6 of the Mutual Release and Settlement Agreement, each party shall bear its own attorneys' fees, costs, expenses, and disbursements incurred in connection with (a) the Arbitration Proceeding (JAMS Ref. No. 1440032871), including all fees, costs, and expenses of JAMS and the arbitrator, and (b) the negotiation, preparation, execution, and consummation of the Redemption Agreement, the Mutual Release and Settlement Agreement, and the transactions contemplated thereby. MSH acknowledges that no party has any right to seek or recover from the other party any such fees, costs, or expenses, and MSH hereby waives any and all claims for reimbursement of fees and costs in connection with the foregoing matters.
Section 10. No Brokers
No broker, finder, investment banker, financial advisor, or other person is entitled to receive any brokerage commission, finder's fee, financial advisory fee, or similar fee or commission in connection with the transactions contemplated by the Redemption Agreement based upon any arrangement, agreement, or understanding made by or on behalf of MSH or any of its affiliates, members, managers, officers, agents, or representatives. MSH agrees to indemnify and hold harmless PCG from and against any claim, liability, loss, damage, cost, or expense (including reasonable attorneys' fees) arising out of or relating to any claim by any broker, finder, investment banker, or other person for any such fee or commission based upon any arrangement alleged to have been made by or on behalf of MSH.
Section 11. Survival
This Certificate is delivered in accordance with and subject to the terms and conditions of the Redemption Agreement, and nothing contained herein shall be deemed to expand, enlarge, amend, modify, supplement, or otherwise alter the representations, warranties, covenants, agreements, or other obligations of MSH set forth in the Redemption Agreement. The representations and certifications contained in this Certificate shall survive the Closing only to the extent and for such periods as the corresponding representations, warranties, and covenants in the Redemption Agreement survive the Closing, as set forth in Article VIII of the Redemption Agreement.
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SIGNATURE PAGE TO CLOSING CERTIFICATE OF MERIDIAN SHORES HOSPITALITY LLC
IN WITNESS WHEREOF, the undersigned has executed this Closing Certificate as of the date first set forth above, on behalf of Meridian Shores Hospitality LLC.
MERIDIAN SHORES HOSPITALITY LLC, a Delaware limited liability company
By: ________
Name: Nathaniel Cordero
Title: Managing Member
Date: June 28, 2024
Address for Notices:
Meridian Shores Hospitality LLC 220 Royal Palm Way, Suite 300 Palm Beach, Florida 33480
Attention: Nathaniel Cordero, Managing Member